July 21, 2017 / 11:57 AM / 2 years ago

Portugal says reform effort still on, more efficient than before

LISBON (Reuters) - Portugal’s government sees no need to further downsize the state sector and expects its plan of targeted investment and efficiency improvements there to reap more economic benefits than previous tougher but largely fruitless reform attempts.

Portugal's Minister of the Presidency and of Administrative Modernisation Maria Manuel Leitao Marques attends a interview with Reuters in Lisbon, Portugal July 17, 2017. REUTERS/Rafael Marchante

The senior government minister in charge of reforms, Maria Leitao Marques, told Reuters the measures by the left-leaning administration, which require over 470 million euros ($547 million) in technology investment, would bring savings for the state and businesses, making the latter more competitive.

She also rejected criticism from the International Monetary Fund and some ratings agencies that the pace of reforms has slowed under this administration, in power since late 2015.

“There is no waning of the reform effort, quite the opposite,” she said. “If their concept of reform is sacking employees, then the IMF will keep saying that we are not reforming the state.

“If the IMF is satisfied just with promises made and bills published, it’s their problem. To me, reforms mean results.”

The previous center-right government implemented tough austerity measures dictated by the terms of Portugal’s 2011-14 international bailout following a severe debt crisis. Many of the reforms designed to permanently rein in spending and boost revenues never left the drawing board, however.

The Socialist government reversed many of the austerity policies but has managed to further cut the budget deficit.

“It is not this government’s understanding that reform means thinning down the state and sacking public servants ... We need public investment,” Leitao Marques said.

She said the only reduction in the public sector workforce is expected to come from closing at least half of positions held by those retiring.

“Having an efficient and effective state is good for the functioning of the country as a whole and the market ... Obviously, we need a state that we can sustain, but we need it to be efficient so that the market can work,” she added.

Leitao Marques, who is minister for cabinet coordination and administrative modernization, said measures like simplified online procedures for companies and individuals to obtain legal documents, licenses and other assisted digital services were already saving millions of euros and thousands of man-hours.

A flagship program in this field is a network of so-called Citizen Spaces providing a one-stop service for individuals to pay bills, file tax returns or renew a driver’s license.

The government expects net savings from the new technology investment in 2017-2020 to exceed 1.3 billion euros at the end of the period, adding to already substantial annual corporate cost savings from simplified procedures of some 560 million.

“The Simplex program has always been very focused on helping the competitiveness of companies,” Leitao Marques said.

“We do not make them more competitive but we remove the bureaucracy that takes competitiveness away from them during their whole life-cycle.”

She said time saved by civil servants, estimated to have already reached 470,000 hours, will be put to better use after they are retrained to work with digital data rather than paper archives.

Writing by Andrei Khalip; Editing by Catherine Evans

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