PIGS' economic situation is not new. Greece's economy is preparing for its second bailout, after the first one, worth €110bn, failed to boost it. In 2010 its sovereign crisis peaked at a 120% of its GDP (€216bn) and over €20bn were thought to be evaded every year from the Greek tax system. Ireland and Portugal are going through a bailout process, Italy recently announced the biggest spending cuts in decades in an effort to tackle the financial crisis in the country and Spain's economy keeps sinking, with the highest unemployment rate of the whole European Union (almost a 21%), with the collapse of its main industry (building industry) and with financial problems that forced small banks to merge in big entities capable of resisting the crisis.
What is rather new, however, is the situation of some of their former colonies. European powers created a vast network of supplying colonies all around the world, that they exploited for centuries. After lengthy struggles (most of them violent), almost all of these colonies became sovereign states, but in most cases what remained after European colonialism were lawless territories with rivalries that led to bloody civil wars, unexisting economies, and a massive dependence from the ex Metropolis.
Now, tables have turned in some cases. In 2011 Portugal and Spain have become some of the most badly hit economies of the whole European Union. But some of its ex colonies, such as Angola, Paraguay or Brazil are experiencing an economic boom despite the financial crisis.
The difficult situation in Portugal has forced many Portuguese to leave their country, some of them transferring to the ex colonies, trying to find a new life. Exactly the same that people from the ex colonies did until recently, but all the way round.
According to The Economist, in 2007-08 there were 45,000 Portuguese registered in Angola. Only one year later, they were 92,000. Also Angolan banks have started buying stakes in Portuguese banks, as Banco BIC has just done with Banco Português de Negócios. The IMF has forecasted a growth of a 7.8% of Angolan GDP in 2011 and a 10.5% in 2012.
The same can be applied to Brazil, where its two economic giant hubs, Sao Paulo and Rio de Janeiro, fight to be considered the most appealing centre where to invest in the country.
Rio has been designed to host the 2016 Olympics, which will bring millions in cash and investments to Brazil's Treasury. Also, in 2010 foreign direct investment peaked at $7.27bn in Rio and $2.73bn in Sao Paulo. The cost of living in both cities has increased in the last year. In 2011 Rio was the 12th most expensive city where to live in the world (it had been the 29th in 2010). Sao Paulo fared even better, entering the top 10 most expensive cities in the world this year (from the 21st position in 2010).
Spain, formerly regarded as one of the most powerful economies of the world (its GDP grew an average of a 3.5% before the crisis and it was the fourth biggest economy of the European Union), is now surpassed by some of its former colonies. According to the CIA World Factbook, in 2009 Spain entered recession, growing a -3.7%. Last year its GDP still grew a -0.1%. On the other hand, in 2010 Paraguay's GDP grew a 15.3%, Argentina's a 9.2%, Peru's an 8.8% and Uruguay an 8.5%.
On the other hand, it is said that the financial crisis is a worldwide crisis affecting every country, but figures show that the hardest-hit economies are those of the so-called developed countries, such as in Western Europe, US, Canada and Japan. South America, Southern Africa, China and even Eastern Europe are doing relatively well (see map above).
Seeing these figures it is easy to understand why foreign investment is shifting to new markets, and why migration trends might have changed.