The School of Economics and Management of the University of Porto (FEP) and the University of Saint Gallen (Switzerland), in collaboration with an international network of partners and academic institutions, have just launched the fourth edition of the Elites Quality Index (EQx) 2023, an international political economy ranking that provides a unique perspective on value creation, categorising countries by the quality of their elites.

Among the 151 countries analysed in this study, Portugal appears in 30th position, degrading its position in the global index (in 2022 it occupied 22nd position) and increasingly below the European Union average, in a year marked by an unprecedented rise in inflation and war in Europe.

“The data reveal that, in Portugal, the elites continue to reveal an increasingly extractive trend, which needs to be corrected, remaining an uncompetitive country, very open to the outside, very dependent on the economic situation of its main partners, indebted and centralist, being heavily dependent on tourism,” highlights FEP’s Dean Óscar Afonso and Professor Cláudia Ribeiro, responsible for the study at national level.

The index is based on 134 indicators and on four conceptual areas – economic power, economic value, political power and political value – categorising elites into “very high quality” (position from 1 to 10), “high quality elites” (position from 11 to 25), “quality elites” (position from 26 to 75), “medium quality elites” (position from 76 to 124) and “backward elites” (position higher than 125).

Compared to the previous ranking, Portugal maintained its position in terms of political power (19th position), but saw its created value deteriorate (37th position in 2023 and 11th position in 2022); in economic terms, it registered a higher concentration of economic power (42nd position in 2023 and 25th position in 2022), with no reflection on the economic value created (39th position in 2023 and 37th position in 2022).

“Portugal is a country with a significant public debt, which requires significant austerity, as revealed by the enormous tax burden. The constraints that debt imposes prevent the government from having the capacity to promote economic activity, even with the help of EU funds. We must also recognise that inflation has been making economic activity very difficult, as the costs of planned investments have increased compared to initial budgets,” explain FEP professors.

The classification obtained by Portugal as “quality elite” results from the positive performance obtained in different indicators, which translate into tolerance to the inclusion of minorities, academic freedom and religious freedom (political power), as well as the ease of closing a business, the dispersion of exports by firms and the dispersion of added value by the universe of firms (economic power).

In political value, the performance in food security, the low wage gap between the public and private sectors and environmental quality stood out positively, while in economic value, the absence of barriers to Foreign Direct Investment and the growth rate of labour productivity should be highlighted.

Change at the top

Switzerland beat out Singapore for the first time in the history of the index however the two nations continue to lead in elite quality as they have done for the past four years. Japan (rank # 4, up 14 places) and Germany (rank # 8, up 3 places) have made impressive advances. The same is true of India (rank # 59, up 38 places), Brazil (rank # 69, up 12 places) and South Africa (rank # 83, up 16 places). These achievements stand in stark contrast to fellow BRICS nation Russia (rank # 103, down 36 places).

The US (rank # 21, down 6 positions) and China (rank # 22, up 5 positions) are now running neck to neck. In times of the building geo-political rivalry between the two powers, this becomes a matter of international interest as the sustainable value creation of elites is a foundation for future national strength and competitiveness.

It was not a good year for other Anglo-Saxon nations with the UK at rank # 9 dropping one place and Australia at rank # 7 down 4 places; the notable exception is New Zealand at #3, up 11 places.