American Club Lunch

Anne, thank you for your introduction.

Before I begin, I want to acknowledge the President of the American Club of Lisbon, John Scott Johnson, the President of the American Chamber of Commerce in Portugal, José Joaquim Oliveira, and the President of the Portuguese American Friendship Association, Antonio Neto da Silva.

I want to thank you all for collecting this group of the best and the brightest from both sides of the Atlantic. America and Portugal are great friends and allies, but true personal friendships can only be formed through this kind of face to face interaction. Thank you to all of today’s sponsors, as well. Muito obrigado a todos.

I am honored to be here in this room, in this city, and in this country. People often ask me how I came to be the U.S. Ambassador to Portugal. The answer is easy: I requested it. Why? Part of the reason was my own history: While growing up in southeastern Massachusetts, where there is a large, vibrant Portuguese community, I learned early on that we share the same values: hard work, family, and tolerance. Another part of the reason was Portugal’s history: this is an ancient land whose people once shaped the world’s future. I believe the country is poised to do so again.

I like to run in the mornings, and sometimes I run along the Tejo to the Tower of Belem. No matter how many times I am there, I am still awed by the fact that five centuries before, the first maritime explorers departed from that very spot.

These adventurers, with unfathomable courage, and incredible navigational skills, set sail into deep, dark, and unchartered waters. They stared down fear, tamed hostile seas, and conquered the unknown—discovering new worlds and new opportunities. The Portuguese people are the heirs of this great history. Within your hearts lives the bravery of Fernao de Magalhaes. And within your souls, lives the spirit of Luis de Camoes.

Like your ancestors, today you have faced great challenges. Economic headwinds have swept through this country and indeed through your entire continent. Waves of debt have battered the foundation of your economy. The government made hard choices—often unpopular choices—but the economic crisis has stabilized. Portugal has emerged from the bailout still standing.

But while Portugal weathered the worst of the storm, in its wake remains lingering damage. Businesses have closed, access to capital has dried up, and many people have lost jobs– youth unemployment in particular is dangerously high. People are still hurting, so there is more work to be done. But if Portugal is to succeed, it must overcome a more insidious and more debilitating crisis than the one it has already faced. And that is the crisis of confidence that exits this country.

Five hundred years ago, Vasco de Gama or Henry the Navigator had no sophisticated tools—there was no GPS, no satellite radio. There weren’t even any reliable maps. They had only the stars above them as a guide. Yet they possessed a supreme will to succeed and the unwavering confidence to do so. And they did. Their story is hailed in the history books of every nation in the world.

But today, a different and sadder story is told here in Portugal. In the 10 weeks I have been here, the message that I keep hearing is that Portugal does not belong on the world economic stage. And that the next generation of Portuguese, rather than being lifted up, must lower its expectations.

Two weeks ago, I gave brief remarks at an incubator here in Lisbon–a place brimming with innovation–and then took a few questions. The very first question I was asked came from an economic reporter who said: “Do Americans have a negative opinion of Portugal?” My answer was: “No, it’s the Portuguese who have a negative opinion of Portugal. Americans don’t know Portugal.”

That kind of pessimism is cancerous. Yet it haunts every Portuguese business person, politician and citizen. It is replayed by journalists in the Portuguese media, and I see it spray painted disrespectfully as graffiti on the walls of buildings. And I hear it when I talk to Portuguese people about trade opportunities: “We can’t do that because we are only a small country.” Or, “We can’t be a wine exporter because we don’t produce enough grapes.” Or, “We can only sell to the Portuguese in America because no one else will buy our products.”

There is even a Portuguese word Sebastianismo, which refers to Sebastian, the 15th century boy king who, carrying the hopes of a nation, led 17,000 Portuguese on a crusade to conquer Morocco, but the army was defeated and he was killed in battle. He is known as “O Desejado” — the Desired One a word that reflects a longing for the day when Sebastian will return and save Portugal from its darkest hour.

Prosperity in Portugal will not come from miracles; it will come, from the inner drive of its people—the will to succeed just as the explorers had, and the confidence to do so. The collective national psyche must change from “can’t do” instead of “can do.” And there are so many great things Portugal can do. There are so many opportunities here right now.

This weekend I played golf in Estoril. The course which ran along the ocean was as beautiful as the best courses in the U.S. Americans love to play golf and will travel to do so. But they do not know that Portugal is the number one golfing destination in Europe. Nor do they know that Portugal has some of the most beautiful beaches in the world—including 2 of the top 10 in Europe, medieval walled cities, majestic Roman ruins, fabulous wines and delicious cheeses. Combine all of that with the warm temperatures and sunny days which compare favorably with Palm Beach and Los Angeles and there should be flocks of American tourists here. But there are not.

I mentioned just that to an official at the ministry of tourism who responded: “We’re a small country, we cannot afford to advertise in the United States.”

Putting aside the fact that many small countries advertise successfully in the United States, there is another way, which costs very little and that is the power of social media? In America, we now sell everything from soap to Presidential candidates, using social media. The theory is simple. If I tell my friend that I like a product, a candidate, or a vacation spot, that is much more persuasive than seeing a generic advertisement.

I have seen the power firsthand. My offhand act of sending a Galo de Barcelos to Steve Pagliuca, the owner of the Boston Celtics for luck in the NBA draft generated one small blog in the U.S. which was picked up on twitter and re-tweeted, and which resulted in over 40 articles in the national media all mentioning Portugal and many telling the legend behind the Galo.

The attention the Galo received was totally unplanned. Maybe it was dumb luck, or maybe, Sebastian has returned, because an even more amazing opportunity for Portugal will take place next March.

I have been working with The Kennedy Center in Washington, the premier cultural arts center in the country which will devote 3 weeks next March to a festival for Portugal and Spain. It will feature visual arts exhibitions, film, literature, dance, architecture, cuisine, and products showing the cultural roots of Portugal and Spain that have spread around the world. Fado will come to America!!

The Kennedy Center has in past years hosted similar exhibitions for Japan, India, and the 5 Nordic countries. 400, 000 visitors have physically come to the Center for the festivals, and the media campaign has reached 7 million people.

There is work to be done here to make this event a reality. Some of the fundraising for the event has to come from corporate sponsors here in Portugal and from the Portuguese government. But this is an amazing marketing opportunity to tell America about Portugal.

Moving from tourism, I am here to tell you that I also see the return of Sebastian in an emerging generation of young government and business leaders in areas like energy, the environment, and entrepreneurship which tells me that Portugal does indeed belong on the world economic stage. I not only see that clearly, I see it in color.

The first color I see is green. Portugal is already a world leader in green technology and clean energy. I’ve met with the Minister of Environment, Spatial Planning, and Energy Jorge Moreira da Silva. He has a vision of Portugal as a leader in exporting renewable energy. He foresees Portugal being an innovator in harnessing the power of wave energy in the same way Denmark was a pioneer in wind energy. He sees Portugal as a possible solution to the energy security of Europe, not just with the exporting of renewable energy, but using the Port of Sines and working in an alliance already formed with Spain as a European hub in LNG distribution, making European countries less dependent on Russian gas and creating a more competitive energy market. When we met, the Minister was on his way to Washington to meet U.S. Energy Secretary Moniz about his plan for Green Growth. He is not just talking, he is doing.

The next color I see is blue. I met with the Minister of Agriculture Assunção Cristas, who is working on harnessing the economic potential in Portugal’s vast ocean. She is focused on the creation of a blue economy for Portugal, which involves commercializing the ocean’s assets, living and non-living, from the mining of underwater minerals to the harvesting of organic material for the life sciences industry. She too recently traveled to Washington to speak at Secretary Kerry’s Oceans conference, because the United States and Portugal share a priority in the Oceans. Portugal is looking to expand its maritime economic zone. An expanded zone would enhance these commercial opportunities. Yet some worry that the country does not have the naval vessels to patrol the expanded zone or to conduct oceanographic exploration.

But again, the solution to that problem may already exist, right here in Portugal. I met with a research team based in the University of Porto which, with support from scientists from the United States, has developed low cost underwater drones. These drones, which look like torpedoes, run on battery power and communicate with each other and with a control center using satellite technology. They are already being tested in the tracking of sunfish migration in the Algarve.

Instead of big expensive ships, cutting-edge, made-in-Portugal drones can be used for underwater mapping projects and for maintaining maritime security—not just in Portugal, but in any country in the world that borders an ocean.

The people who started that underwater drone technology company are an example of a new generation of Portuguese explorers and adventurers. They no longer sail the Atlantic in caravels, but they are risk takers confident in the power of their ideas. They are called entrepreneurs.

No less an authority than MIT, which has a Portugal program, says that the highest quality of innovation and technology coming out of Portuguese universities is equal to any American university.

I have personally visited innovation incubators and accelerators in Lisbon for and I have seen first-hand the growth of the tech sector in Portugal. From the development of new massive online educational services in the south, to nanotechnology research in the north.

The solutions are already here. Not only will this new economy create jobs, it will also inspire young, smart Portuguese to stay and innovate. So how can the United States help? In two ways.

First, while discovery may be in your DNA, entrepreneurship is in ours. The notion of risk taking is not yet engrained in Portuguese culture–in fact failure carries a stigma.

So while there is strong innovation, there is not a vibrant venture capital ecosystem in Portugal to allow those companies to scale up.

I have already brought American venture capitalists to Portugal to start the process of training and mentoring. In fact, in August, a young Portuguese venture capital executive will spend a month at an established U.S. venture capital firm learning risk evaluation and investment strategy.

Next month, I will bring a delegation of American entrepreneurs and investors to Portugal. This is a State Department sponsored trip, organized by our embassy here in Lisbon. Two countries were picked in this round: A delegation went to Greece in April, and based on our advocacy, a delegation will come to Portugal in July.

The group will visit Lisbon, Aveiro and Porto. They will meet with government officials and angel investors to discuss the investment climate in Portugal. They will also offer mentoring sessions with entrepreneurs, and judge a pitch event for startups. Most importantly, it will expose successful American entrepreneurs and investors to Portuguese innovators.

Secondly, we can open up markets for Portuguese goods in the United States by working together to advance the Trans-Atlantic Trade and Investment Partnership, or TTIP, which is President Obama’s number one trade priority.

This initiative, which is being negotiated with the EU and is strongly supported by the Portuguese government, is designed to lower tariffs and reduce trade barriers. Its beneficiaries will principally be small and medium sized companies—which are more than 95 percent of the companies here in Portugal.

Big companies can always find ways to compete. They can navigate the regulations to sell their products. It is the small businesses that really need assistance. TTIP will help these small Portuguese companies to access a market of more than 350 million Americans. It will also add to the 13 million jobs already supported by Trans-Atlantic trade.

So my answer to the question of whether Portugal belongs on the world economic stage, is a resounding yes. This is a great country with great things happening. Portugal doesn’t need Sebastian to return. Sebastian is here. With a renewed spirit of confidence and drawing on the expertise of long standing allies such as the United States, Portugal is poised to once again take its place in shaping the world’s future.

Thank you very much.