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It’s the middle of nowhere, and it’s closer than you might think. The splendid remoteness of the Azores is just over two hours by air from Lisbon, about three from London, a little more than four from Boston.

The nine islands were discovered in stages in the mid-15th century by a succession of Portuguese explorers. Today, the Azores are an autonomous region of Portugal, home to about 250,000 souls – and possibly the single most under-valued, under-exploited asset in the world.

The admittedly unscientific sample of taxi drivers, shopkeepers and bartenders consulted while visiting São Miguel, the largest and most populated of the islands, confirm that the Azores are a nice place to live: temperate, friendly, safe, peaceful, inexpensive, offering ready access to beaches, countryside and mountains. However, it is not necessary to spend much time there to begin wondering why Portugal doesn’t do more with the Azores, especially given the presently cobwebbed state of the national coffers. It seems a bit like going out panhandling when you have an attic full of Rembrandts.

Which is not to say that the Azores are themselves rich. “We’re among the most depressed economic regions in the country,” says José Damiao Rodrigues, a professor of history at the University of Azores, and he’s correct; in August, Lisbon was obliged to announce a €135m bailout for the islands. But nor does São Miguel seem obviously poor – just a bit dishevelled and disinterested.

Even Ponta Delgada, the biggest town on São Miguel, the biggest island, feels careworn and sleepy, the kind of town where the people have long been so unpressed for time that they’ve built intricate patterned mosaics into the footpaths: checks and whorls and stars in the same black and white as the oldest of the buildings. Ponta Delgada’s architectural signature of foundations and frames of dark volcanic rock cradling bright white brickwork makes the city look like it has been constructed exclusively from the last Liquorice Allsorts left in the box.

Ponta Delgada is recognisably a tourist town, but manages to be endearingly half-hearted about it. Though there are souvenir shops, there’s almost nothing to buy in them but t-shirts and magnet representations of such regional totems as whales, cows and hydrangeas, and shelf after shelf of religious tat ghastly even by the standards of southern European Catholicism (during Lent, São Miguel is beset by groups of pilgrims, known as romeiros, who undertake an eight-day schlep around the island). Though there are manifold opportunities during daylight hours to take to the surrounding ocean to gawp at whales or annoy dolphins there is almost nothing to do after sunset.

São Miguel is, indeed, the kind of place where, for want of much in the way of competition, agricultural smallholdings are able to pass themselves off as tourist attractions. In Faja de Baixo, on the outskirts of Ponta Delgada, coaches stack up outside the Arruda Pineapple Plantation – where, unusually, the fruit is grown indoors in triangular white greenhouses. The plantation is owned by the descendents of its founder, Augusto Arruda; an attached gift shop sells pineapple jams, shampoos, liqueurs and cosmetics. Arruda doesn’t export: it doesn’t have to. “We get nearly 200 tourists a day,” explains Margarida Moniz, who works there. “So we don’t have enough left over to sell anywhere else.”

On the north side of São Miguel, near the village of São Bras, the 32 hectares of the Gorreana tea plantation are also surrounded by tourist buses. Gorreana’s employees and fabulous Heath Robinson machinery do their work beneath the constant scrutiny of package-holidaying interlopers. Gorreana does have a legitimate claim on notoriety, however: it’s the only place in Europe that grows tea. “We don’t have frost here,” explains Hermano Mota, who has worked at Gorreana all his life and now owns the plantation. The tea, as Mota explains it, is a product of the sort of engagement with the world that could make the Azores a powerhouse.

“São Miguel used to produce oranges. It was a good business and it made people rich. But then the oranges were killed by a blight in the 1860s. Rich people are not in the habit of being poor, so they tried to think of something else – and for the first time, people from São Miguel had travelled, to Europe and India especially. The first tea seeds were planted here in the 1870s.”

Back in Ponta Delgada, in an office overlooking the town’s small artificial harbour, Gualter Couto, the president of the Azores’ investment agency, apia, wants to see more of this kind of enterprise and perceives almost limitless possibilities. The key, he explains, is the potential expansion of the Azores’ Exclusive Economic Zone (eez). At the moment, it comprises nearly a million square kilometres of Atlantic Ocean. Portugal has applied to the UN to expand its eez to a contiguous area including the territorial waters of Portugal itself, the Azores and Madeira – adding another two million square kilometres of continental shelf to Portugal’s eez. “It could,” says Couto, one of few Azoreans who wears a tie to work, “create a complete transformation.

This could be a global centre for innovation and research in all sorts of areas. And that sea cluster would put us in an important geo-strategic position, to be a platform between the United States and Europe.”

The possibilities seem immense, perhaps even returning Portugal to its 15th/16th-century role as a great maritime power (though this may necessitate a refurbishment of Portugal’s Navy, represented in Ponta Delgada’s harbour by the 40-year-old corvette NRP Afonso Cerqueira).

“Our future is like our history,” nods Couto. “In the last few decades – ever since Portugal’s revolution in 1974, really – we haven’t paid attention to the sea. We have strong support now from the EU. We have ports. We don’t have a strong navy, or the technology to exploit the deep sea properly, so that’s why we need investment.”

The Azores can cope, Couto insists, with the expansion – as many as 380,000 people lived on the islands in the 1960s, a third more than the present population. It is only for the want of start-up cash, he says, that the Azores are not something much, much more than an interruption of the ocean views of overflying trans-Atlantic passengers. “We’re a diamond,” says Couto. “What do the Canaries have? Just sun.” — (m)

Ten modest suggestions for uses for the Azores

01. Conference centre

Meeting on Terceira may have been the only good idea to have emerged from the summit between Tony Blair, George W Bush and José María Aznar on the eve of the invasion of Iraq. The Azores are convenient to both sides of the Atlantic, and easy to secure: Nato, the G20 and any number of other transnational bodies could be repeatedly tempted, especially when they consider how far protestors would need to row.

02. Prison

The residents may need convincing, but one of the Azores could set itself up as a sort of Atlantic Alcatraz. The most obvious candidates for transportation would be those convicted by the International Criminal Court, echoing Napoleon’s exile on St Helena. The ICC itself could also be relocated to a spot handy for both Africa and Europe. Such an arrangement might permit a useful furtherance of the experiment undertaken by Norway with more common criminals on Bastoey Island, the liberal prison farm that has recorded a re-offending rate of 16 per cent – Europe’s lowest.

03. Observatory/launchpad

The European Space Agency already has a station with a 5.5 metre antenna on Santa Maria, which tracks launches from the ESA spaceport in French Guiana. But, assuming the locals don’t object to their windows being rattled occasionally, one of the Azores could become a launchpad to the stars in itself, perhaps a European answer to the spaceport Virgin Galactic is currently building in New Mexico for tourist flights. And others could visit to watch blast-off.

04. Lusophone news network

Portuguese is spoken by roughly 250 million people in Europe, Africa, South America and South-East Asia: it’s one of the half-dozen most understood languages on Earth. The Azores, an easy hop to almost all those datelines – separate bureaux may be required in Timor-Leste and Macau – would be an ideal base for a global Portuguese broadcaster, and its Anglophone cousin. Just as Al Jazeera has revolutionised coverage of the Middle East, so an Azores-based network could shine fresh light on Brazil, Angola, Mozambique and others.

05. Lusophone Uni

The Azores already have a university – the University of the Azores, whose oceanography department in particular is highly regarded. But the islands could become a centre for education for the entire Lusophone world. Brazilians and Angolans could swap oil exploration expertise. Lecturers from São Tomé and Príncipe and Cape Verde could offer students from Mozambique lessons in governance.

06. Wildlife reserve/incubator

The Azores’ temperate climate and remoteness could make it a suitable halfway house for the breeding of threatened species as conservationists prepare them for a return to their own habitats. Also, a few Asian elephants, scimitar-horned oryxs, clouded leopards, giant pandas and maned wolves would enliven the Azores’ somewhat pedestrian native wildlife and would please tourists who’ve decided that there are only so many whales they can watch.

07. Shipbuilding

Plenty of ships call on the Azores; none of them were built there. The Azores, perfectly placed to act as a service station for the North Atlantic, could be a global hub for maritime construction and repair. Portugal’s established shipbuilders – Lisnave at Setubal, ENVC at Viana do Castelo – could be encouraged to establish outposts. Others would surely follow.

08.Organic farming

There’s already a fair bit of this – Gorreana, to name just one example, grows all its tea without herbicides, fungicides or pesticides. The Azores’ tradition of family-owned smallholdings and concentration of expertise (agriculture accounts for nearly a third of jobs on the islands) could make the Azores the perfect global centre for the study and promotion of humane farming. The Azores already produce 30 per cent of Portugal’s milk and 50 per cent of its cheese. With some further investment, the islands could become Europe’s organic larder.

09. Renewable energy

The Azores are unbeatably placed to harvest the wind, the sun and the waves. Sections of islands could be festooned with solar panels, while offshore windfarms hug the coastlines. The foundations are there – 52 per cent of the Azores’ electricity is provided by the geothermic park at Ribeira Grande on São Miguel. Under the Green Islands Protocol, the Azores already hope to provide 75 per cent of their energy from renewable resources by 2018. Why shouldn’t they export?

10. An actually pleasant resort

The world is already surfeited with holiday spots serving the same food, playing the same music and selling the same identikit rubbish. On at least one of the islands, pass swingeing edicts banning gruesome souvenirs and deafening nightclubs, and encouraging artisan-run businesses and world-class restaurants: attract people who like civilisation with their sunshine.

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