JUNE 2012 |
www.opp.org.uk
THE LAST WORD ROSEMARY DE ROUGEMONT | 63 Developer profi le
clients were wanting to buy property in the Islands and couldn’t fi nd anyone to service their needs.” Was this because there were no lawyers? “No. There were relatively few lawyers but it was as much a case of the lawyers who were there not really being able to communicate with their clients in ways that the client could understand. In addition, few would be able to help with the specifi c issues that arose in international transactions involving people from England.” So do most of Rosemary’s clients come from England? “The majority are probably from England but we also have clients in many other countries.” When the opportunity arose to work
in Cape Verde, what were Rosemary’s feelings? “I thought about it long and hard. Life was already quite complicated and I didn’t know whether I wanted this challenge. In the end, I decided that I did and so, after a couple of false starts, we opened an offi ce in Sal.”
Where does the fi rm do the majority of its work? “The offi ce in London was, until recently, very much a training school for our young lawyers from Portugal. They came here to see English legal practice and to improve their English language skills. Most of the legal work was actually done at our offi ces in Portugal. “Now it is different. With the
emergence of the work in Cape Verde more is done in the UK but we are still, fi rst and foremost, a Portuguese law fi rm and it is as a Portuguese law fi rm that we operate in the UK and Cape Verde.” Clearly, these are diffi cult times for the economy in general and disastrous times for most of the overseas property industry. How does Rosemary see what is happening in Portugal? “Portugal is girding its loins. It is facing the reality of austerity and it is doing well. You don’t see much about Portugal and its problems in the newspapers any more. Things remain tough and, depending upon what happens in the rest of Europe, they could get a lot tougher – but Portugal will survive” What about the property sector? “The property industry in Portugal and, in particular, the banks have got to face up to their problems more directly than they have done so far. “They have to fi nd a way of packaging and selling their product. There is a lot of property on the market. I don’t think we are anything like as bad as Spain but we did go too far and build too much in the late 90s and the early part of this century. Fortunately, we have a quality product. Our planning and administrative systems did not permit the excesses that happened in Spain.” What does she think is likely to happen to prices? “Obviously, prices have already fallen. In some places
this has been much more apparent than others. If the big banks accept that their problem is not going to go away – that it needs to be dealt with and that they need to take steps to dispose of some of the stock that they hold and the stock held by their customers who owe them money – then it is likely to put downward pressure on prices, but we are not looking at a collapse of the type seen in other countries. “This is, partly, because this is all likely to take some time. It will be a slow process. Many of the big Portuguese banks seem only now to be starting to think about the steps that they must take. Most do not take decisions quickly and so the release of the bank controlled product into the market place will take place gradually over a number of years.”
Are there steps that the government should be taking to help with this situation? “Well, often when governments interfere they make it worse but I think there are steps that would be a good idea. We need a stimulus for the property industry, which is a very important part of our economy. I think that it would be a good idea to encourage buyers by reducing income tax, capital gains tax and stamp duty for foreign buyers.” Just for foreign buyers? “Yes.”
“On the whole, Cape Verde has done well. Most of its problems came from inexperience”
What about the European law issues associated with that? Would this distinction be legal? “That would need some work,” she replies. “We would need to fi nd ways to make it happen.” Would this not be very costly to Portugal at a time when its people are already suffering the affects of the Government’s austerity measures? “Not really. At the moment there are relatively few sales and so reductions in stamp duty would not cost much – but the foreigners encouraged to buy would spend lots of money in Portugal, not just in terms of the cost of living or staying there but also in terms of legal fees, estate agents’ commissions and so on.”
Is the strengthening of the Pound and US Dollar against the Euro making a difference? “Yes, we are seeing a small difference; but this change is relatively new and so we won’t really see the impact of it yet. I think that if the rate of the British pound went to 1.35 we would see a big difference.” What about the prospect of Portugal being forced to leave the Euro? “That is not going to happen,” she says. Turning to Cape Verde, how does she see the future? “Cape Verde is coming from a very, very low base. It has no
Tropical paradise | Cape Verde has a lot going for it as a top tourist destination
natural resources and desperately needs income from tourism. I think it will make a success of it.”
Many professionals are aware that a lot of the projects started in Cape Verde at the beginning of its journey to being a tourist destination have fallen apart. What impact does she think this will have? “I think that Cape Verde has been unlucky,” she says. “They did many things right and most things quite well but they had the misfortune to have most of their developments started shortly before the fi nancial crash of 2007.
“As a result, none of the projects
were fi nished by the time of the crash. Some have been seriously delayed but will still be fi nished – possibly under new ownership. Others will not happen at all. Cape Verde now almost has to start again.”
Even so, how much damage has this done to Cape Verde’s reputation? “I think the damage is serious but, fortunately, there were not too many projects involved as it was at the beginning of the development of this industry. I think that it will still take fi ve or ten years for the Islands to recover – and that assumes that the world economy gets better.”
This is very sad because, if you look at the basics, Cape Verde has a lot going for it. “Yes,” she agrees. “It has a fantastic climate. It is politically and socially stable. It is ‘user friendly’. It is only fi ve or six hours away by air and, of course, it has got the turtles – more accurately, it has got a lot of interesting and unspoiled natural features which the Government is determined to protect for the enjoyment of the tourists and for future generations of its own people.” So, is Rosemary optimistic about the future? “On the whole, Cape Verde has done well and it is recognised around the world as a place that has
done well. It is to be congratulated. It needs to sort out the problems that have occurred but we all need to recognise that most of those came about because of inexperience.”
What is the biggest challenge for developing tourism in Cape Verde? “It is making the transition in Boa Vista. Everybody recognises that the future of tourism in Cape Verde is high quality tourism, fi rst in Boa Vista and then on various other islands. At the moment they only have all inclusive resorts. “That is perfectly understandable
as tourism has to start somewhere and Boa Vista has no facilities to attract or support regular residential tourism. However, these resorts cannot be the future. It is true that they generate lots of employment [the population of Boa Vista has doubled or tripled in the last couple of years, mainly as a result of people moving there from the other islands - ed] but the employment is mainly low grade, low paid work. “Almost all of the money generated by the tour operators is taken back to their own home countries. The average salary in these resorts is about €200 per month. Yet there is no cheap housing. Renting an apartment will cost €300 a month. We are already seeing the start of some favelas (shanty towns). “This cannot be allowed to continue.
We need development where at least some of the profi ts are retained in the country and which is linked to the provision of affordable housing and other facilities for local people.” As ever, Rosemary seems to have got it pretty much spot on. I’m looking forward to raising her concerns when I speak to the minister responsible (see next month’s OPP).
In the meantime, we leave Rosemary with her hands full, dealing with the tsunami of legal issues developing in Portugal and Cape Verde.
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