Portugal History
 

The part of Iberia which is now Portugal was occupied by a people known as the Lusitanos, who are thought to be direct ancestors of the Portuguese people. The region was invaded and occupied by the Romans and later the Moors; it remained under the latter’s control until the 11th century, when Ferdinand, ruler of the Kingdom of Leon and Castilla (in what is now Spain) conquered much of the territory. Over the next 200 years, the remaining Moors were driven out and the boundaries of Portugal fixed; and it was during this period (in 1143) that Portugal first became recognized as an independent entity, under the rule of King Afonso Henriques.

The Castilians were themselves expelled in 1385 after defeat at the hands of João of Aviz (who became King João I) at the Battle of Aljubarrota. From this point, the Portuguese went on to build a colonial empire in Africa, Latin America, India and the Far East. One of the most famous figures during this period was Prince Henry the Navigator, amongst whose acquisitions were the Azores and Madeira. One of the best-known visitors to Madeira was Christopher Columbus, who married a daughter of one of the island’s governors and lived for some time on Porto Santo. The island survived a brief invasion by a French pirate in 1566, but in 1580, along with the rest of Portugal, came under Spanish domination.

This arose from the recurring friction between the two kingdoms, particularly after the union of Aragon and Castilla in the late 15th century. In the 16th century, with the Portuguese regime weakened by a struggle for the succession to the throne and the legacy of a disastrous ‘crusade’ against the Moors, Philip II of Spain (who had a claim to the Portuguese crown) invaded. Spanish rule lasted just 60 years until 1640, when the Portuguese launched a successful uprising and seceded from Spain. However, by the time they recovered their independence, the Portuguese had lost the bulk of their empire, including most of the valuable East Indies territories, which had been occupied by the Dutch.

Portugal ceased to be a major player in the European colonial scramble thereafter. The Braganza dynasty, which took power after the defeat of the Spanish, lasted until the mid-19th century, presiding over a weak economy and a largely feudal society. One of the princesses of the royal house, Catherine, married Charles II of England, confirming the friendly relations between the two countries which date back to the 14th century. This brought many advantages to English merchants in Portugal, and also on the island of Madeira where the treaty helped the rapid development of the trade in the island’s wine which became popular in England. Portuguese political development lagged behind that of many European states during this period and it remained comparatively untouched by the Enlightenment until the emergence in the late 18th century of the Marquis de Pombal.

The Marquis de Pombal was both dictatorial and enlightened (by the standards of the time) on matters of social reform. He did much to break the power of the landed aristocracy over the country. Occasional conflicts with the Spanish and French – sometimes in alliance – threatened the country’s autonomy, but the Portuguese always managed to preserve their independence, often with the support of the British. The monarchy was finally overthrown in 1910 by republican forces, who particularly resented the strong influence of the Catholic church on the regime. Portugal supported the Allied Powers during World War I, but contributed little due to the presence of a strong pro-German element in the armed forces, which made several coup attempts. Finally, a right-wing dictatorship took power in 1926.

Though military in composition, the key figure in the new regime was finance minister Antonio de Oliveira Salazar. Having addressed Portugal’s chaotic financial situation, Salazar became President in 1932. Salazar was influenced by the populist fascism of Benito Mussolini in Italy and founded a party, the National Union, to prepare the way for an Estado Novo. Despite its Government’s sympathies, Portugal, like Spain, stayed neutral during World War II. Salazar remained in power until 1968 without effecting any of the post-war reforms which had been forced upon or embraced by other European countries: the economy remained largely agricultural and under-industrialized, while the Portuguese colonies were subject to regimes more consistent with the conditions of the 19th and early 20th centuries.

Salazar’s eventual successor, Marcello Caetano, eased the restrictions on domestic political activity, but otherwise altered little. His downfall six years later was connected with the colonial policies inherited from his predecessor: specifically, that Portugal’s overseas possessions were an ‘inalienable’ part of the country. The strain of fighting several different nationalist movements simultaneously (see Angola, Guinea-Bissau, Indonesia and Mozambique sections) strained both army morale and the Government’s finances. On April 25, 1974 (a date of great significance in Portugal), a group of radical army officers deposed Caetano in a bloodless coup. The African colonies were immediately abandoned: indeed, they were left with such haste that internal crises were almost inevitable.
Portugal was governed for two years by a leftist military junta led by members of the Movimento das Forcas Armadas, the instigators of the revolution, while civilian politicians re-emerged and crystallised around the Socialist and Communist Parties and the right-wing Partido Popular Democratico. Under the constitution adopted in 1976, Portugal was nominally committed to a path of socialist development, but the country has since followed a standard Western European model of political pluralism. Portugal has been a member of NATO since its inception in 1949 and a member of the EC, now the EU, since 1986. The Government of Anibal Cavaco Silva which took office in 1987 concentrated on bridging the economic gap between Portugal and its richer fellow Community members. With average annual growth of around 5 per cent in the last four years, the Government was broadly successful on the economic front.

This as much as anything else won Cavaco Silva’s center-right Partido Social Democrata (PSD, Social Democrats) a further endorsement from the electorate in October 1991. Since the election, the Government has been pursuing a controversial austerity program which aims to dispose of almost the entire state sector as part of a drive to increase competitiveness and reduce structural inefficiency. The unpopularity of this program became apparent in the October 1995 general election at which the Socialists were returned as the largest single party with sufficient parliamentary seats to form a minority government. The new Prime Minister was Antonio Guterres, who reformed his party after taking it over in 1991 in much the same direction as the British Labor Party leader, although without the benefit of Tony Blair’s huge parliamentary majority. The party thus had to make accommodations at various stages with communist and environmentalist parties. But by March 2002, the electorate had tired of the Socialists and re-elected the center-right alliance. José Manuel Durao Barroso, leader of the Social Democrats – the main center-right party – took over as premier. Like his Socialist predecessor, Barroso lacked an overall majority, and brought the far-right Partido Popular Democratico (PPD) into government. As elsewhere in Western Europe, the far right has been gaining ground in Portugal, although its historical background means that the PPD often seems more interested in rekindling ancient rivalries between Portugal and Spain than in pursuing the customary ultra-right themes of race, immigration and crime. Barroso was appointed as President of the European Commission in Brussels and Pedro Santana Lopes was elected as Portugal's Prime Minster in 2004.

Portugal is a relatively contented participant in the post-Maastricht integration process, and joined the European Monetary Union at the beginning of 1999. EU reforms were a principal motivation for the constitutional changes effected by the government in 1997, of which the most important was a measure allowing for referendums on important matters of national interest.

Outside Europe, the Portuguese Foreign Ministry contributed substantially to the various political settlements in Angola and, co-operating closely with Italian diplomats, Mozambique. Relations with the government of Indonesia suffered from the latter’s appalling behavior in the former Portuguese colony of East Timor. However, since East Timor became an independent nation in May 2002 (see Indonesia section), the issue is effectively closed. The future of Macau, which reverted to Chinese possession in December 1999, was settled far more amicably between Beijing and Lisbon than the parallel negotiations between the British and Chinese governments over the future of Hong Kong.

Government
Since 1982, when the Military Council of the Revolution was abolished, Portugal has been formally governed by a directly elected President, who is head of state and appoints a Prime Minister and Council of Ministers. Legislation is handled by the unicameral 230-member Assembly which, like the President, is elected for a five-year term. Following constitutional amendments promulgated in 1997, the number of deputies will probably be reduced further to between 180 and 200. The Azores and Madeira are integral parts of the Portuguese republic, but since 1976 have had autonomous governments. Macau, now a Special Administrative Region of China, is governed by special statute (see Macau section).

Economy
GDP: &Euro; 129.9 billion (2003).

Main exports: Clothing and footwear, machinery, chemicals, cork and paper products, and hides.

Main imports: Machinery and transport equipment, chemicals, petroleum, textiles and agricultural products.

Main trade partners: Spain, Germany, France, UK, Italy and The Netherlands.

ECONOMY: Portugal was traditionally an agrarian economy but since joining the EU in 1986, the industrial and especially the service sectors of the economy have grown considerably by comparison. Agriculture still employs 12 per cent of the workforce – unusually high by Western European standards – and contributes 3 per cent of GDP, producing wheat, maize, tomatoes, potatoes and grapes. Production has undergone a relative decline so that Portugal now imports a sizeable proportion of its foodstuffs after having long been self-sufficient. The manufacturing sector is dominated by the textile and footwear industries and automobiles, which now account for 15 per cent of total exports. Other important products are paper, cork and other wood products, electrical appliances, chemicals and ceramics. Both foreign and internal investment have been high, attracted by Portugal’s relatively low labor costs and the recent modernization of much of the country’s infrastructure. Many former state-owned industries have been sold off under a gradual privatization program which began in 1989. During the last five years, unemployment has hovered around 5 per cent while inflation has fell to 2.4 per cent in 2004. Portugal joined the Eurozone upon its inauguration in 1999. Unfortunately, since then, the economy has stagnated – growth fell to below 1 per cent in 2001/2 – before contracting by 1.1 per cent in 2003, and growing only a little in 2004 at 1 per cent. The main reasons have been a reduction in domestic demand and Government spending cuts – demanded under the terms of Eurozone membership – to tackle the country’s large budget deficit.