PORTUGAL

Portuguese Republic

República Portuguesa

CAPITAL: Lisbon (Lisboa)

FLAG: The national flag, adopted in 1911, consists of a green field at the hoist and a larger red field. At the junction of the two, in yellow, red, blue, and white, is the national coat of arms.

ANTHEM: A Portuguesa (The Portuguese).

MONETARY UNIT: The escudo (e) was replaced by the euro as official currency as of 2002. The euro is divided into 100 cents. There are coins in denominations of 1, 2, 5, 10, 20, and 50 cents and 1 euro and 2 euros. There are notes of 5, 10, 20, 50, 100, 200, and 500 euros. €1 = $1.25475 (or $1 = €0.79697) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard.

HOLIDAYS: New Year's Day, 1 January; Carnival Day, 15 February; Anniversary of the Revolution, 25 April; Labor Day, 1 May; National Day, 10 June; Assumption, 15 August; Republic Day, 5 October; All Saints' Day, 1 November; Independence Day, 1 December; Immaculate Conception, 8 December; Christmas, 25 December. Movable religious holidays include Carnival Day, Good Friday, and Corpus Christi.

TIME: GMT.

LOCATION, SIZE, AND EXTENT

The westernmost country of Europe, Portugal occupies the greater portion of the western littoral of the Iberian Peninsula. Portugal has an area of 92,391 sq km (35,672 sq mi), including the Azores (Açores) Archipelago, and Madeira and Porto Santo. Comparatively, the area occupied by Portugal is slightly smaller than the state of Indiana. The mainland of Portugal extends 561 km (349 mi) n–s and 218 km (135 mi) e–w. Bordered on the n and e by Spain and on the s and w by the Atlantic Ocean, Portugal has a total boundary length of 3,007 km (1,868 mi), of which 1,793 km (1,114 mi) is coastline.

Portugal's capital city, Lisbon, is located on Portugal's west coast.

TOPOGRAPHY

Portugal exhibits sharp topographic contrasts. Although the north is largely lowland or land of medium altitude, the distribution of highlands is unequal north and south of the Tagus (Tejo) River. From north to south, the principal mountain ranges are the Peneda (reaching a maximum height of 1,416 m/4,646 ft), Gerêz (1,507 m/4,944 ft), Marão (1,415 m/4,642 ft), Montemuro (1,382 m/4,534 ft), the Açor (1,340 m/4,396 ft), and Lousã (1,204 m/3,950 ft), all north of the Tagus. The uplands of Beira, traversed by the Tagus on its way to the sea, contain Portugal's highest peak, Estrêla (1,991 m/6,532 ft). Westward lies the low coast of the Beira Littoral. The Tagus and Sado basins lie adjacent to the hilly area of Estremadura and rise to the hills of Alentejo on the east.

The interior lowland of lower Alentejo, farther south, is limited by the hills of Algarve. The south coast, from the mouth of the Guadiana to Cape St. Vincent, is mainly steep, but northward from Cape St. Vincent to the Tagus, including the great Bay of Setúbal and the estuary of the Tagus, the coast is low. North of the Tagus, it rises steeply toward the hills of Sintra, beyond which is a low coast of dunes interrupted by the marshes of Aveiro. Beyond the mouth of the Douro River, the coast is steep all the way to the Spanish frontier and the mouth of the Minho River. The larger rivers—the Minho, the Douro, the Tagus, and the Guadiana—all rise in Spain. The Douro has the longest course in Portugal (322 km/200 mi).

Portugal is located on the Eurasian Tectonic Plate near its southern boundary with the African plate. The region is seismically active, but fortunately, most earthquakes within the last century have been fairly moderate and were primarily centered in the northern part of the country. One of the most destructive earthquakes in history occurred in Lisbon on 1 November 1755 when an 8.7 magnitude earthquake was felt throughout the country and triggered a tsunami. The destruction from these events caused the deaths of about 70,000 people.

CLIMATE

Marked seasonal and regional variations within temperate limits characterize the climate. In the north, an oceanic climate prevails: cool summers and rainy winters (average rainfall 125–150 cm/50–60 in annually), with occasional snowfall. Central Portugal has hot summers and cool, rainy winters, with 50–75 cm (20–30 in) average annual rainfall. The southern climate is very dry, with rainfall not exceeding 50 cm (20 in) along the coast. In Lisbon, the average temperature is about 24°c (75°f) in July and 4°c (39°f) in January. The annual mean temperature in Portugal is 16°c (61°f).

FLORA AND FAUNA

Three types of vegetation can be distinguished in Portugal: the green forests of eucalyptus, pine, and chestnut in the north; the open dry grasslands, interrupted by stands of cork and other types of evergreen oak, in the central areas; and the dry, almost steppelike grasslands and evergreen brush in the south. Few wild animals remain in Portugal. The coastal waters abound with fish, sardines and tuna being among the most common species. As of 2002, there were at least 63 species of mammals, 235 species of birds, and over 5,000 species of plants throughout the country.

ENVIRONMENT

Air and water pollution are significant environmental problems especially in Portugal's urban centers. Industrial pollutants include nitrous oxide, sulfur dioxides, and carbon emissions. In 1996, industrial carbon dioxide emissions totaled 47.9 million metric tons. In 2000, the total of carbon dioxide emissions was at 59.8 million metric tons.

The nation's water supply, especially in coastal areas, is threatened by pollutants from the oil and cellulose industries. Portugal has 38 cu km of renewable water, of which 48% of the annual withdrawal is used to support farming and 37% is for industrial activity. The nation's wildlife and agricultural activities are threatened by erosion and desertification of the land. The principal environmental agencies in Portugal include the Ministry of Quality of Life and the Office of the Secretary of State for the Environment. The nation's basic environmental legislation dates from 1976.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 15 types of mammals, 15 species of birds, 1 type of reptile, 20 species of fish, 67 types of mollusks, 15 species of other invertebrates, and 15 species of plants. Threatened species in Portugal include the Spanish Lynx, rosalia, Mediterranean monk seal, and Spanish imperial eagle. The São Miguel bullfinch and three species of turtle (green sea, hawksbill, and leatherback) were endangered in the Azores. The Mediterranean monk seal and four species of turtle (green sea, hawksbill, Kemp's ridley, and leatherback) were endangered in Madeira. The Madeiran land snail and the Canarian black oyster catcher have become extinct.

POPULATION

The population of Portugal in 2005 was estimated by the United Nations (UN) at 10,576,000, which placed it at number 76 in population among the 193 nations of the world. In 2005, approximately 17% of the population was over 65 years of age, with another 16% of the population under 15 years of age. There were 94 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be stagnant at 0.0%, a rate the government viewed as too low. The projected population for the year 2025 was 10,356,000. The overall population density was 115 per sq km (298 per sq mi), with approximately two-thirds of the population living in coastal areas.

The UN estimated that 53% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 0.93%. The capital city, Lisbon (Lisboa), had a population of 1,962,000 in that year. Porto, the next largest city, had a metropolitan population of 1,551,950. These two metropolitan areas account for most of the urban dwellers in the country.

MIGRATION

Portuguese emigration, which decreased from an annual average of 48,000 persons during the decade 1904–13 to 37,562 in 1961, increased sharply after 1963 as a result of acute labor shortages in other European countries, especially in France and the Federal Republic of Germany (FRG). By 1970, it was estimated that more than 100,000 Portuguese were emigrating yearly. Legal emigration to the FRG continued to increase until November 1973, when the FRG suspended non-EC immigration. Overall, more than 130,000 Portuguese emigrated in 1973. Because of the loss of Portugal's African colonies in 1975, an estimated 800,000 Portuguese settlers returned to Portugal. Since then at least 25,000 generally return from abroad each year, mostly from other European countries or America. As of 1989, some 4,000,000 Portuguese were living abroad, mainly in France, Germany, Brazil, South Africa, Canada, Venezuela, and the United States. In 2003, remittances home came to $2.8 billion.

In 2001, Portugal introduced major innovations to its immigration law, together with multiple and flexible visa arrangements, duties were clarified and the legalization process streamlined. Children born to immigrants living in the country legally for at least six years would automatically be granted citizenship. In 2003, Ukrainians displaced Brazilians as the dominant nationality. There were 466,000 legal migrants at the end of 2004, including 52,037 Africans. In 2004, there were a total of 377 refugees and no asylum applications were filed. In 1999 the net migration rate was -1.51 migrants per 1,000 population; by 2005 it was an estimated 3.49 per 1,000 population.

ETHNIC GROUPS

The Portuguese people represent a mixture of various ethnic strains. In the north are traces of Celtic influence; in the south, Arab and Berber influence is considerable. Other groups—Lusitanians, Phoenicians, Carthaginians, Romans, Visigoths, and Jews—also left their mark on the Portuguese people. The present-day Portuguese population is one of the most homogeneous in Europe. Minority groups are primarily made up of immigrants, both legal and illegal, from Brazil, African colonies, and Eastern Europe. Legal immigrants account for about 5% of the total population. There are about 50,000 Roma in the country.

LANGUAGES

Portuguese, the national language, evolved from ancient dialects of Latin; its rules of orthography were reformulated in 1911. Portuguese is also the official language of Brazil and the former African provinces. Mirandese is a second official language, but is not as widely used. Spanish, French, and English are the most common second languages.

RELIGIONS

According to 2004 reports, about 80% of the population aged 12 or older identified themselves as Roman Catholic; though many claimed that they are not active participants in the church. Protestants constituted about 4% of the populace; and various other groups made up about 1%. Nearly 3% claimed no religious affiliation. Christian groups include Seventh-Day Adventists, the Church of Jesus Christ of Latter-day Saints, Orthodox Christians, and Brazilian syncretic Catholic churches. There are about 35,000 Muslims, 700 Jews, and small groups of Buddhists, Taoists, and Zoroastrians. About 7,000 people are Hindus. There are also congregations of the Igreja Universal do Reino de Deus (the Universal Church of the Kingdom of God), which originated in Brazil. The Church of Scientology claims to have about 200 active members.

In 2001, a new law on religious freedom was passed to extend to minority religions more of the privileges previously granted only to the Roman Catholic Church. The Catholic Church has, however, maintained a special status with the government through a 1940 concordat which was amended in 2004. Certain Catholic holidays are recognized as national holidays.

TRANSPORTATION

The Portuguese railways are almost entirely owned and operated by the state-owned Portuguese Railway Company. As of 2004, the railway system, which is adequate for Portugal's needs, totals 2,850 km (1,771 mi) of broad and narrow gauge track. Of that total, broad gauge accounts for 2,576 km (1,602 mi), of which 623 km (387 mi) have been electrified.

The length of usable highways in 2002 was 17,135 km (10,657 mi), of which 14,736 km (9,165 mi) were paved, including 1,659 km (1,031 mi) of expressways. The principal highways connect Lisbon and Porto with La Coruña in Spain, and Lisbon with Madrid via Badajoz. Bus service links all Portuguese cities, towns, and principal villages. In 2003 there were 5,241,100 motor vehicles registered in continental Portugal, including 3,966,000 passenger cars, and 1,275,100 commercial vehicles.

As of 2005, the Portuguese merchant fleet had 114 oceangoing vessels of 1,000 GRT or more, totaling 872,557 GRT. The main shipping firm is the Portuguese Maritime Transport Co., created after the private shipping companies were nationalized in 1975. It maintains scheduled services to the Azores, Madeira, Macao, and the former overseas territories in Africa. There is also regular service to Brazil and North America. The chief ports—Lisbon (the largest), Porto, Ponta Delgada, and Sines—are all fully equipped and have adequate warehousing facilities. Portugal has created a captive register of convenience on Madeira for Portuguese-owned ships, allowing for taxation and crewing benefits. As of 2003, Portugal's internal waterway system consisted of a 210 km (130 mi) stretch on the Douro River from Porto.

In 2004, Portugal had an estimated 65 airports, 42 of which had paved runways as of 2005. Because of their geographical position, Lisbon's Portela Airport and Santa Maria in the Azores are of great importance in international aviation. Portela is one of the principal airports for overseas flights to North and South America and to western and central Africa; Santa Maria is a stopping point for transoceanic flights from Europe to North America. The most important aviation company in Portugal is Transportes Aereos Portugueses (TAP), which was nationalized in 1975. In 2003, about 7.590 million passengers were carried on domestic and international scheduled flights.

HISTORY

Portugal derives its name from ancient Portus Cale (now Porto), at the mouth of the Douro River, where the Portuguese monarchy began. The country's early history is indistinguishable from that of the other Iberian peoples. Lusitanians were successively overrun by Celts, Romans, Visigoths, and Moors (711). In 1094, Henry of Burgundy was given the county of Portugal by the king of Castile and León for his success against the Moors; his son, Alfonso I (Alfonso Henriques), became king and achieved independence for Portugal in 1143, beginning the Burgundy dynasty. By the mid13th century, the present boundaries of Portugal were established, and Lisbon became the capital.

During the reign of King John (João) I, the founder of the powerful Aviz dynasty and husband of the English princess Philippa of Lancaster, the Portuguese defeated the Spanish in a war over the throne (1385), established a political alliance with England (by the Treaty of Windsor in 1386) that has endured to the present day, and inaugurated their most brilliant era. Prince Henry the Navigator (Henrique o Navegador), a son of John I, founded a nautical school at Sagres, where he gathered the world's best navigators, cosmographers, geographers, and astronomers and commenced a series of voyages and explorations that culminated in the formation of the Portuguese Empire. In the 15th and 16th centuries, the golden age of Portugal, Portuguese explorers sailed most of the world's seas; made the European discovery of the Cape of Good Hope, Brazil, and Labrador; founded Portugal's overseas provinces in western and eastern Africa, India, Southeast Asia, and Brazil; and poured the vast riches of the empire into the homeland. In 1580–81, Philip II of Spain, claiming the throne, conquered Portugal and acquired its empire, but national sovereignty was restored by the revolution of 1640 and the accession of John IV, founder of the Bragança dynasty, to the Portuguese throne. John IV ushered in Portugal's silver age, the 17th and 18th centuries, when the wealth of Brazil once more made Lisbon one of the most brilliant of European capitals. The city was largely destroyed by a great earthquake in 1755 but was subsequently rebuilt. During the Napoleonic wars, Portugal, faithful to its British alliance, was the base of British operations against the French in the Iberian Peninsula. The royal family, however, withdrew to Brazil, and from 1807 to 1821, Río de Janeiro was the seat of the Portuguese monarchy. In 1822, Brazil, ruled by Pedro, the son of King John VI of Portugal, formally declared its independence; Pedro became Emperor Pedro I of Brazil but was deposed in 1831.

The Bragança dynasty, which had ruled Portugal since 1640, came to an end with the revolution of 1910, when the monarchy was replaced by a republican regime. Lack of stability under the new republic led to a military dictatorship in 1926. Marshal António Carmona served as president from 1926 to 1951. António de Oliveira Salazar, brought to the government in 1928 as minister of finance, emerged as Portugal's prime minister in 1932. In 1933, Salazar proclaimed a new constitution, which consolidated his regime and established Portugal as a corporative state. During World War II, Portugal supported the Allies but did not take part in combat; it subsequently became a member of NATO.

Despite its reduced status as a European power, Portugal attempted to maintain its overseas empire, especially its resourcerich African provinces. In 1961, Portugal surrendered Goa, Daman, and Diu to India. In the same year, uprisings in Angola began, organized by the Union of Angolan Peoples in protest against Portugal's oppressive policies in the territory. These uprisings led to serious disagreements between the UN and Portugal; following Portugal's refusal to heed its recommendations for liberalization of policies with a view toward eventual self-government, the UN General Assembly passed a resolution in 1965 calling for a worldwide economic and arms boycott of Portugal in order to force it to grant independence to its African dependencies. Subsequently, the Assembly passed a number of resolutions condemning Portugal for its policies in its African territories. Meanwhile, guerrilla movements in Angola, Mozambique, and Guinea-Bissau were met by a steadily increasing commitment of Portuguese troops and supplies.

Salazar, who served as prime minister of Portugal from 1932 to 1968, died in July 1970 at the age of 81. When he was incapacitated in September 1968, he was succeeded by Marcello Caetano. The unwillingness of the Caetano regime to institute democratic and economic reforms, coupled with growing discontent over the continuance of the ever more costly colonial war in Africa, led to a military coup by the left-wing Armed Forces Movement in April 1974. Broad democratic liberties were immediately granted and opposition political parties legalized, while the corporate state apparatus was gradually dismantled. A decolonization program was also begun, resulting by November 1975 in the independence of all of Portugal's African provinces.

The first provisional coalition government came to power in May 1974, with Gen. António Sebastião Ribeiro de Spínola, whose book Portugal and the Future had played a key role in focusing antiwar sentiment among the military, as president. In September 1974, after a power struggle with the leftist forces, Gen. Spínola resigned and was replaced by Gen. Francisco da Costa Gomes. Following an unsuccessful right-wing coup attempt in March 1975, Gen. Spínola was forced to flee the country, along with a number of officers. The continued dissension between right and left—and between Communist and Socialist factions on the left—was evidenced by the numerous provisional governments that followed the coup. In April 1975, general elections were held for a Constituent Assembly, whose task was to draw up a new constitution. Legislative elections were held in April 1976 and presidential elections in June. Gen. António dos Santos Ramalho Eanes was elected president, and the leader of the Portuguese Socialist Party, Mário Alberto Nobre Lopes Soares, became prime minister. Mainly as a result of policy differences within the governing coalition, this administration fell in July 1978 and was replaced by a caretaker cabinet.

After a succession of different coalitions, the Socialist Party won a 35% plurality in the parliamentary elections of April 1983, and Soares was again named prime minister, forming a coalition government with the center-right Social Democratic Party (Partido Social Democratico—PSD). Political turbulence increased after the election, and in 1984, urban terrorism appeared. In the following year, Portugal entered the EC, boosting the economy. Political instability continued, however, and a general election was called in October 1985. The vote brought the PSD to power with a slim plurality; Prof. Aníbal Cavaço Silva was able to form a minority government. In 1986, four candidates ran for president; none was able to win a majority, and in the ensuing runoff election, former Prime Minister Soares won a narrow victory to become the nation's first civilian president in 60 years. In 1987, the government lost a vote of confidence, and Soares called a general election; the PSD under Silva won a majority in the Assembly, achieving the first such government since democracy was restored in 1974.

The PSD was returned to power in 1991 and Mário Soares was reelected president for a second five-year term on 13 January 1991. Economic recession, government deficits, and regional development initiatives were major concerns in the 1990s.

Following the success of the Socialist Party (Partido Socialist—PS) in the legislative elections held in October 1995, Socialist Jorge Sampaio defeated Silva to succeed Soares as president on 14 January 1996. (Sampaio won reelection for a second five-year term in January 2001.) Antonio Guterres was reappointed prime minister. The goal of the Guterres government was to prepare Portugal for entry into the European economic and monetary union. Successive austerity measures were legislated, with the support of the center-right PSD, to guarantee Portugal's participation in the euro zone (this took place in 1999). The socialist government at the same time presided over a remarkable economic recovery after 1996. Thanks to strong economic growth and a real drop in unemployment, the PS retained power after the 10 October 1999 Assembly elections. Its program for the succeeding four years was to speed up Portugal's economic and bureaucratic modernization in order to attract investment and promote export-led growth.

The Socialist government's ability to manage a slowing economy deteriorated in Guterres' second term, and the PS suffered a major defeat in local elections held in December 2001. Guterres resigned, and early elections were held in March 2002. They resulted in a change in government, with the center-right PSD forming a coalition with the conservative Popular Party. PSD leader José Manuel Durão Barroso was named prime minister. Durão Barroso experienced his own troubles with the economy, as Portugal headed into a recession at the end of 2002 and into 2003. Portugal's economy was forecast to grow by 0.4% in 2003, the worst performance in the euro currency zone. As well, Portugal's budget deficit in 2002 was far above the 3% of GDP limit established by the EU's Growth and Stability Pact, putting it in jeopardy of punitive sanctions from the EU. In 2005, GDP growth was forecast at just 0.5%, and the budget deficit was 6.8% of GDP.

Portugal's overseas possession, Macau, was turned over to Chinese administration on 20 December 1999. Portugal supported independence for its former colony of East Timor; this was achieved in May 2002. Portugal took steps to normalize relations with Indonesia following the independence of East Timor.

Barroso supported the United States in its war in Iraq which began in 2003. The prime minister faced criticism from within parliament and among the Portuguese electorate for his stance. In July 2004, Barroso resigned as prime minister to become president of the European Commission. Pedro Santana Lopes, his successor as leader of the PSD, formed a new government. Four months into Lopes's government, President Sampaio called for early elections amidst growing public dissent over the center-right government's inability to tackle the country's economic problems. The general elections were held in February 2005; the Socialists swept to victory and José Sócrates became prime minister. The Socialists secured their first absolute majority in parliament since democracy returned to Portugal in 1974. Sócrates said his primary objective would be to boost the economy by investing in training and technology. His government had to face the task of bringing the budget deficit under control and putting a stop to rising unemployment.

The government declared a national calamity in August 2003 as forest fires swept across vast areas of woodlands; an area the size of Luxembourg was lost to the fires. At least 18 people were killed, and the damages were estimated at €1 billion. Portugal was plagued by deadly wildfires once again in August 2005. They were said to be the worst in recent times. Portugal appealed to the EU for emergency financial aid to cover the costs to farmers of lost harvests in the wake of the fires.

Presidential elections were held on 22 January 2006. Social Democratic Party candidate and former Prime Minister Aníbal Cavaco Silva won with 50.54% of the vote. Independent candidate Manuel Alegre Duarte came in second with 20.74% of the vote.

GOVERNMENT

A constitution made public on 9 April 1975 and effective 25 April 1976 stipulated that the Armed Forces Movement would maintain governmental responsibilities as the guarantor of democracy and defined Portugal as a republic "engaged in the formation of a classless society." The document provided for a strong, popularly elected president, empowered to appoint the prime minister and cabinet. This constitution was substantially revised in 1982 and later in 1989; the most important new provisions were the elimination of the military Council of the Revolution and the limitation of presidential power. The new government system is parliamentary.

According to the constitution as amended (further amendments were added in 1992, to accommodate the Maastricht Treaty on European Union; in 1997, to allow referendums; and in 2001, to facilitate extradition), the president is elected by popular vote for a five-year term. The president appoints the prime minister and, at the prime minister's proposal, a Council of Ministers. A Council of State advises the president. The main lawmaking body is the unicameral Assembly of the Republic, the 230 members of which are directly elected to four-year terms, subject to dissolution. Suffrage is universal from age 18.

POLITICAL PARTIES

Under the Salazar regime, although the constitution did not prohibit political activity, the National Union (União Nacional) was the only political party represented in the legislature. Candidates of the old Center parties, which had been active prior to 1926–28, were allowed to participate in national elections starting in 1932, although none were ever elected.

After the 1974 revolution, several right-wing parties were banned, and various left-wing parties that had functioned underground or in exile were recognized. Among these was the Portuguese Communist Party (Partido Comunista Português—PCP), which was founded in 1921 and is Portugal's oldest political party. It is especially strong among industrial workers and southern farm workers. The government also recognized the Portuguese Socialist Party (Partido Socialista Português—PSP), founded in exile in 1973, and the Popular Democratic Party (Partido Popular Democrático—PPD), formed during the Caetano regime; both the PSP and the PPD favored the establishment of a Western European-style social democracy. Tied to the policies of the Caetano regime was the Social Democratic Center (Centro Democrático Social—CDS), founded in 1974, which held its first conference in January 1975 and became a target for left-wing disruptions. In June 1976, Gen. António Ramalho Eanes, the army chief of staff, who was supported by the major non-communist parties, won election as Portugal's first president.

In 1979, the right-of-center Democratic Alliance (Aliança Democrática—AD) was formed by the Social Democratic Party (Partido Social Democrático—PSD), founded in 1974; the CDS; and the People's Monarchist Party (Partido Popular Monárquico—PPM). The leftist United People's Alliance (Aliança Povo Unido), also formed in 1979, included the People's Democratic Movement (Movimento Democrático Popular—MDP), dating from 1969, and the PCP.

The Republican and Socialist Front (Frente Republicana e Socialista—FRS), formed in 1980, consists of the PSP, the Union of the Socialist and Democratic Left (União da Esquerda Socialista Democrática—UESD), founded in 1978, and Social Democratic Independent Action (Acção Social Democrata Independente—ASDI), founded in 1980. The People's Democratic Union (União Democrática Popular—UDP), dating from 1974, comprises political groups of the revolutionary left.

In October 1985, former President Eanes's centrist Democratic Renewal Party (Partido Renovador Democrático—PRD) entered the ballot for the first time, taking 18% of the vote. In 1991, the seats were distributed as follows: PSO, 135; PSP, 72; CDU, 17; Center Democrats, 5; National Solidarity, 1. The latter was formed in 1990 to address the needs of pensioners.

In the legislative elections of 10 October 1999, the seats were distributed as follows: PS, 114; PSD, 83; CDU, 17; CDS/PP, 15, and Left Bloc, 2. Antonio Manuel de Oliviera Guterres was reappointed prime minister. The first PS victory in October 1995 carried through to the presidential elections of 14 January 1996, when Jorge Sampaio was elected president, with 53.8% of the vote to Aníbal Silva's 46.2%.

Guterres ruled during a downturn in the global economy in his second term, and in December 2001 he resigned following a defeat for the PS in municipal elections. The PSD, led by José Manuel Durão Barroso, won 40.1% of the vote and took 105 seats in parliament in the 17 March 2002 elections, to the PS's 37.9% and 96 seats. The Popular Party (PP) won 8.8% of the vote and secured 14 seats; the PSD formed a coalition government with the PP. Also winning seats were the CDU (Unitarian Democratic Coalition, comprised of the Portuguese Communist Party and the Greens), 7% of the vote and 12 seats; and the Left Bloc (BE—comprised of the communist Democratic People's Union, the Revolutionary Socialist Party, and the extreme left party Politics XXI), 2.8% of the vote and 3 seats.

Sampaio called for early legislative elections in December 2004 because he lacked confidence in the governing center-right government of Pedro Santana Lopes (who became prime minister in July 2004 after Barroso stepped down to become president of the European Commission). The elections were held in February 2005. The results were as follows: PS, 45.1% of the vote (121 seats); PSD, 28.7% (75 seats); CDU, 7.6% (14 seats); PP, 7.3% (12 seats); BE, 6.4% (8 seats). The next elections were scheduled for February 2009.

LOCAL GOVERNMENT

Portugal is grouped into districts, including 18 on the mainland and the autonomous regions of the Azores and Madeira islands. Each district has a governor, appointed by the minister of the interior, and an assembly. There are more than 300 municipalities, subdivided into parishes.

JUDICIAL SYSTEM

Justice is administered by ordinary and special courts, including a Constitutional Tribunal; the Supreme Court of Justice in Lisbon, consisting of a president and some 60 judges; five courts of appeal, at Lisbon, Porto, Coimbra, Évora and Guimarães; courts of first instance in every district; and special courts. The jury system was reintroduced in 1976, but it is used only when requested by either the prosecutor or the defendant.

The judiciary is independent and impartial. Citizens enjoy a wide range of protections of fundamental civil and political rights which are outlined in the constitution with specific reference to the Universal Declaration of Human Rights. An Ombudsman, elected by the Assembly of the Republic (legislature) to a four-year term, serves as the nation's chief civil and human rights officer.

The legal system is based on the civil law system. Portugal accepts compulsory jurisdiction of the International Court of Justice with reservations.

ARMED FORCES

As of 2005, the total armed forces of Portugal numbered 44,900 active personnel. Reservists numbered 210,930 for all services. The army had 26,700 personnel, with equipment that included 187 main battle tanks, 40 reconnaissance vehicles, 353 armored personnel carriers, and over 350 artillery pieces. The navy had 10,950 active members, including 1,980 marines. The navy operated two tactical submarines, six frigates, and 29 patrol/coastal vessels. The air force had 7,250 active personnel and was equipped with 50 combat capable aircraft, including 19 fighters, two reconnaissance and six maritime patrol aircraft. Paramilitary police and republican guards numbered 47,700. The United States maintains a military presence with 1,008 personnel. Armed forces personnel are deployed to eight different countries either in a support role or as part of UN, European Union or NATO missions. The 2005 defense budget totaled $2.43 billion.

INTERNATIONAL COOPERATION

Portugal joined the United Nations on 14 December 1955 and participates in ECE and several nonregional specialized agencies, such as the FAO, IAEA, the World Bank, ILO, UNESCO, UNIDO, and the WHO. The nation is one of the 12 original signatories to NATO. Portugal is a member of the WTO, the OECD, the African Development Bank, the Asian Development Bank, the Council of Europe, the Euro-Atlantic Partnership Council, the European Bank for Reconstruction and Development, the OSCE, and the Western European Union. Portugal joined the European Union in 1986. It also has observer status in the OAS and the Latin American Integration Association (LAIA).

Portugal has offered support to UN missions and operations in Kosovo (est. 1999), East Timor (est. 2002), and Burundi (est. 2004).

Portugal belongs to the Australia Group, the Zangger Committee, the European Organization for Nuclear Research (CERN), the Nuclear Suppliers Group (London Group), the Nuclear Energy Agency, and the Organization for the Prohibition of Chemical Weapons. In environmental cooperation, Portugal is part of the Basel Convention, Conventions on Biological Diversity and Air Pollution, Ramsar, CITES, the London Convention, International Tropical Timber Agreements, the Kyoto Protocol, the Montréal Protocol, MARPOL, and the UN Conventions on the Law of the Sea, Climate Change and Desertification.

ECONOMY

Manufacturing and construction together accounted for 30.2% of Portugal's GDP in 2004. The largest industries are clothing, textiles, and footwear; food processing; wood pulp, paper, and cork; metal working; oil refining; chemicals; fish canning; wine; and tourism. Agriculture, forestry, hunting and fishing employs about 12.5% of the work force (down from 26.2% in 1971) but contributed about 5.9% of the GDP in 2004. The percent of the labor force in services rose from 39% in 1971 to 52.4% in 2000, accounting for about 63.9% of GDP in 2004. Traditionally, productivity has been hampered by low investment and a lack of machinery and fertilizers. The economy experienced robust growth after 1993, however, primarily due to increased investment and domestic consumption, both in turn traceable to advantages Portugal gained through its entry into the European Community in 1986. In 1986, Portuguese income was about 52% of the EU average; by 2002, GDP per capita on a purchasing power parity basis had risen to over 70% of the EU average. In 2005, it was expected to be 65.1%. Economic growth, which had been above the EU average for most of the 1990s, fell back during 2001–04.

From the end of 1973 through 1983, the energy crisis and insufficient liquidity jeopardized economic growth, which dropped still further following the overthrow of the Caetano regime in April 1974. GNP growth in 1974 fell to 2.3% from 8.1% in the previous year. The decline was caused by a sharp drop in new offers of investment and credit from abroad (investors feared rising Communist influence and government takeovers of private firms), coupled with a decline in tourism and a massive increase in unemployment primarily resulting from the return of Portuguese settlers and soldiers from newly independent Angola. During the late 1970s, Portugal adopted an austerity program and succeeded in lowering inflation to 16.6% and increasing GDP growth to 5.5% in 1980. However, adverse interest and exchange rates and a severe drought during 1980–81 resulted in a resurgence of inflation (an estimated 22.5% in 1982) and sluggish economic growth (1.7% in 1981 and 2% in 1982).

In mid-1983, the Soares government implemented an IMF stabilization plan of drastic internal tightening, which brought steady economic improvement. The persistent current account deficits ended in 1985, partially as a result of the decline in world oil prices and entry into the EC. The Silva government's economic liberalization emphasized competitiveness and accountability. From 1987 to 1999 Portugal was the net recipient of financial inflow from the EU of about $27 billion, most disbursed through the European Regional Development Fund. The money was spent on infrastructural improvements, most notably the highway system. With the accession into the EU of 10 new central and east European countries in 2004, Portugal lost its historic competitive advantage in Europe due to low labor costs in the new EU members.

Through the 1990s, until the beginning of 2001, Portugal enjoyed strong economic growth generally above the EU average. The economy grew 4.2% in 1998, at 3.1% in 1999, and at 3.3% in 2000. Unemployment was at 5% in 1998, but dropped to 4.5% in 1999 and then to 4% in 2000. Even as growth slowed to 2.2% in 2001, unemployment in Portugal remained below most of its neighbors, at 4.2%. In 2002, growth slowed to 0.4% and unemployment increased to 5.05%. Inflation in Portugal has been moderate but growing, increasing from 2.4% in 1998 to 4.6% in 2000. Consumer prices rose 4.4% in 2001 and about 3.7% in 2002. The Socialist government pledged its dedication both to meeting the Maastricht monetary convergence criteria and to increasing social spending, including provision of a guaranteed minimum income. This policy bore fruit when Portugal qualified for the first round of entry into the Economic and Monetary Union (EMU) in 1999. As of January 2002, the euro became Portugal's only official currency. The government's privatization program reduced the public sector to 7.5% of GDP and 2.6% of employment by the end of 1999 from 19.7% of GDP and 5.5% of employment in 1988.

In 2003, the economy was officially in a recession, with the GDP declining by 1.1%. Unemployment shot up to 6.5%. In 2004, real GDP growth was in the positive figures once again, albeit estimated at a paltry 1.1%. Unemployment that year remained at 6.5%. After weak growth in 2005, GDP growth was expected to rise modestly in 2006, to 1%, and to 1.6% in 2007, as domestic demand picked up. Inflation was forecast to remain comparatively low in 2006–07 (the inflation rate stood at 2.4% in 2004), although increases in the rate of value-added tax (VAT) and in excise duties in mid-2005—in addition to high oil prices—was forecast to lead to a sharp increase in inflation in early 2006.

The unofficial, or underground, economy is estimated at 20% of official GDP, about the same level as that of Spain and Italy.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Portugal's gross domestic product (GDP) was estimated at $194.8 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $18,400. The annual growth rate of GDP was estimated at 0.7%. The average inflation rate in 2005 was 2.4%. It was estimated that agriculture accounted for 5.2% of GDP, industry 28.9%, and services 65.9%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $3.024 billion or about $291 per capita and accounted for approximately 2.0% of GDP.

The World Bank reports that in 2003 household consumption in Portugal totaled $74.27 billion or about $7,141 per capita based on a GDP of $147.9 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 2.8%. In 2001 it was estimated that approximately 29% of household consumption was spent on food, 7% on fuel, 2% on health care, and 19% on education.

LABOR

The labor force in Portugal in 2005 totaled an estimated 5.52 million. As of 2003, the services sector employed 55.8% of the country's workforce, with industry at 32.6% and agriculture at 12.7%. In 2005, the estimated unemployment rate was 7.3%.

As of 2005, workers in Portugal can form and join unions, can engage in collective bargaining and strikes. About 35% of the nation's workforce was unionized as of 2005. Armed forces and police personnel are banned from striking, but they have unions and have legal mechanisms to settle grievances. The government approves all collective bargaining contracts and regulates such matters as social insurance, pensions, hours of labor, and vacation provisions. Strikes are generally resolved quickly through negotiations.

A minimum wage was established in 1975. In 2005, the minimum monthly salary was about $449, which is not sufficient to provide a decent standard of living to a worker and family. However, rent controls and subsidized food and utilities help increase the standard of living. In addition, most workers earn more than this amount. The maximum legal workday is 10 hours, with the workweek set at 40 hours with a minimum of 12 hours between workdays. Overtime is limited to two hours per day up to 200 hours annually. Minimum standards of occupational safety and health are set by law, but they are not adequately enforced and workplace accidents do occur, particularly in the construction industry. The minimum working age is 16 years.

AGRICULTURE

In 2003, 25.3% of the land was considered arable. Of the 2.3 million hectares (5.7 million acres), 74% was cultivated with seasonal crops and 26% was under permanent crops. In 2003, the gross agricultural product accounted for 4% of GDP. Estimates of agriculture production in 2004 included potatoes, 1,250,000 tons; tomatoes, 1,100,000 tons; corn, 798,000 tons; wheat, 251,000 tons; olives, 270,000 tons; rice, 148,000 tons; and rye, 27,000 tons. Production of olive oil reached 30,000 tons in 2004/05. Wine, particularly port and Madeira from the Douro region and the Madeira islands, is an important agricultural export; production totaled 724 million liters in 2004. Portugal is the world's ninth-largest producer of wine, although Portugal's wines are mostly unknown internationally apart from port and rosé. Under the influence of EU policies, vineyard areas have been reduced in recent years. In 2004, the value of agricultural products imported by Portugal exceeded that of agricultural exports by $3.36 billion.

According to government estimates, about 900,000 hectares (2,200,000 acres) of agricultural land were occupied between April 1974 and December 1975 in the name of land reform; about 32% of the occupations were ruled illegal. In January 1976, the government pledged to restore the illegally occupied land to its owners, and in 1977, it promulgated the Land Reform Review Law. Restoration of illegally occupied land began in 1978.

Agriculture is the main problem area of the economy; yields per hectare are less than one-third of the European average, with a severe drought in 1991/92 only exacerbating the problem. The situation has actually been deteriorating since the mid-1970s, with many yields falling and arable and permanent crop areas declining. By 1999, crop output was only 87% of what it had been on average during 1989–91. However, during 2002–04, crop output was down 1.8% from 1999–2001. With the reform of the EU's Common Agriculture Policy (CAP), a significant reduction in the number of producers through consolidation (especially in the north) will result in the end of traditional, subsistence-like based agriculture. Between 1995 and 2003, the number of agricultural holdings decreased from 450,600 to 359,200, while the value of crop output increased from €3.7 billion to €4.33 billion during that time.

ANIMAL HUSBANDRY

The Alentejo region is Portugal's grazing heartland. In 2005, Portuguese livestock population estimates included 5,000,000 sheep, 2,248,000 hogs, and 1,443,000 head of cattle. There were 547,000 goats, 125,000 donkeys, 40,000 mules, 17,000 horses, 35,000,000 chickens, and 7,000,000 turkeys in 2005. Mules and donkeys, as well as horses and oxen, often provide draft power for the farms. The main districts for cattle are northern and north-central Portugal; most of the sheep, goats, and pigs are raised in the central and southern sections. In 2005, Portugal's meat production included an estimated 321,000 tons of pork, 242,000 tons of poultry meat, 119,500 tons of beef and veal, and 22,100 tons of mutton. Other production estimates for 2005 included 2,076,000 tons of milk, 132,450 tons of eggs, 75,600 tons of cheese, and 26,000 tons of butter.

FISHING

Three main fields of activity make up the Portuguese fishing enterprise: coastal fishing, with sardines as the most important catch; trawl fishing on the high seas; and cod fishing on the Grand Banks, off Newfoundland. In 2004, the Portuguese fishing fleet consisted of 10,089 vessels with 112,978 GRT. National fish landings totaled 210,526 tons in 2004, of which aquaculture accounted for 3.6%. Dominant species are sardines, mackerel, red fish, scabbardfish, and octopus. These species accounted for nearly half the landings. Virtually all the total catch is sold fresh, but small amounts of sardines and octopus are frozen. The total catch fell from 375,413 tons in 1973 to 247,596 tons in 1983 but increased to 325,349 tons in 1991. The average annual catch during 1990–94 was 295,007 tons, 318,600 tons during 1995–99, and 205,611 tons during 2000–04. The annual catch declined since the 1990s because Portugal was affected by internationally-set limits (Total Allowable Catches) that restrict fishing access for certain species in the international waters of the North Atlantic and by EU fishing quotas. The fishing potential has also been affected by a reduction in the national fleet in association with EU fleet reduction incentives. The Portuguese fishing fleet was reduced by 40% during 1990–2000. There was an additional 5% reduction in fleet tonnage during 2000–04.

FORESTRY

With about 40% of the total land area forested, Portugal is an important producer of forestry products. The country is the world's leading producer of cork, harvested exclusively from cork oak (Quercus suber ) found predominantly in the Mediterranean region. Portugal ordinarily supplies around 175,000 tons of cork per year (about half of world output) from some 725,000 hectares (1,791,000 acres) of cork forests. Portugal is also an important producer of resin and turpentine. Roundwood production in 2004 was 9,672,000 cu m (341.4 million cu ft), with a sawn wood output of 1,383,000 cu m (48.8 million cu ft). Other commodities produced that year included wood pulp, 1,935,000 tons; paper and paperboard, 1,536,000 tons; and particleboard and other wood-based panels, 1,215,000 cu m (42.9 million cu ft). In 2004, timber and other forest product exports amounted to $1,684 million. Wine stoppers account for 55% of cork export value. Cork demand has fallen in recent years, and production is limited by the botanical fact that a single tree can only be stripped once every nine years. Eucalyptus logs (the crux of the pulp industry) are exported as well; forestation of eucalyptus is a major national controversy, with opponents charging that it displaces traditional farmers and damages the soil and water table. Pine accounts for most lumber exports.

MINING

Portugal's mineral wealth is significant but the deposits are scattered and are not easily exploitable on a large scale. The country's most important metallic mineral resources are copper, tin and tungsten. Portugal is a leading producer of mined copper in the European Union (EU), as well as being an important producer of dimension stone and tungsten concentrates. Minerals were one of the country's dynamic industrial sectors, mainly because of the discovery and development of the Neves-Corvo copper and tin deposits. The Panasqueira mine was one of the world's largest producers of tungsten concentrates.

In 2003, the output of mined copper (metal content) was 77,581 metric tons, up slightly from 77,227 metric tons in 2002. Output of mined tungsten (metal content) was 715 metric tons, compared to 693 metric tons in 2002. Tin mine output (metal content) in 2003 totaled 354 metric tons, down from 574 metric tons in 2002. Production of iron ore and concentrates (gross weight) in 2003 totaled was estimated at 14,000 metric tons, unchanged from 2002. Portugal also produced white arsenic, manganese, silver, uranium, anhydrite, hydraulic cement, refractory clays, diatomite, feldspar, gypsum, kaolin, hydrated lime, quicklime, lepidolite (a lithium mineral), nitrogen, pyrite and pyrrhotite (including cuprous), rock salt, sand, soda ash, sodium sulfate, stone (basalt, dolomite, diorite, gabbro, granite, both crushed and ornamental, graywacke, calcite marl limestone, marble, ophite, quartz, quartzite, schist, slate, and syenite), sulfur, and talc. Marble, mainly from the Evora District, was the most valuable of the stone products. A new deposit, at the Aljustrel mine/mill complex, encompassing five massive sulfide deposits, could be brought into production relatively quickly as a low-cost zinc producer; the most significant deposit, at Feitais, had 12 million tons of proven and probable minable zinc reserves with an average grade of 5.67% zinc, 1.7% lead, and 64 grams per ton of silver, and 1.6 million tons of proven and probable copper ore reserves with an average grade of 2.2% copper, 0.97% zinc, and 14 grams per ton of silver.

The southern Iberian Peninsula, known as the Iberian Pyrite Belt (IPB), was one of the most mineralized areas of Western Europe and was geologically very complex. The IPB's internationally well-known volcanogenic massive sulfide (VMS) deposits, in the southwestern part of the peninsula, dated to the Upper Devonian and the Lower Carboniferous ages. Clusters of deposits occurred around individual volcanic centers, and the largest individual deposit located to date may have held an original reserve of 500 million tons, out of IPB's total resource of 1,725 million tons. Sulfide deposit resources in 1999 were 1,100 million tons.

The government continued its privatization program and was proceeding with legislation to privatize many public companies, part of a broader program to make the economy more market driven. The structure of the mineral industry could change in the near future because of significant mining exploration by several foreign companies, particularly for copper, gold, kaolin, lead, lithium, pyrites, and tin. The IPB was the prime area for exploration activity, and had an above-average potential for success based on an unusually high number of large VMS deposits.

ENERGY AND POWER

Portugal operates two refineries, which allows the country to meet a portion of its refined petroleum product needs. However, the country must import all of the crude oil it refines, as well as additional amounts of refined petroleum products, in addition to all of the natural gas and coal the country consumes.

In 2002, Portugal's two refineries, one at Sines and the other at Porto, had a combined output of 271,740 barrels per day. However, domestic demand for refined oil in that year averaged 343,160 barrels per day. Imports of refined and crude petroleum averaged a combined 355,580 barrels per day, although the country did reexport an average of 28,790 barrels per day.

Natural gas imports and consumption for 2002 totaled 109.83 billion cu ft and 109.26 billion cu ft, respectively. Demand for coal in 2003 was met entirely by imports. Consumption of coal that year totaled 5.9 million short tons, most of which was used to generate electricity.

Portugal's electric generating capacity in 2002 totaled 10.394 million kW, of which hydroelectric capacity accounted for 3.963 million kW, and conventional thermal capacity accounting for 6.217 million kW. Geothermal/other capacity accounted for 0.214 million kW. Total output of electric power in 2002 came to 43.439 billion kWh, of which conventional thermal sources provided 33.633 billion kWh, and hydroelectric 7.722 billion kWh. Geothermal/other provided 2.084 billion kWh. Demand for electric power totaled 42.297 billion kWh.

INDUSTRY

Industry (including construction, energy, and water) employs about one-third of the labor force, and its contribution to the national economy has grown significantly in recent decades. It accounted for 30.2% of GDP in 2004. Industrial production in 2004 had maintained a 1.1% growth rate over 2003. Portuguese industry is mainly light; the development of heavy industry has been hampered by a shortage of electric power. Textiles—especially cottons and woolens—are the oldest and most important of Portugal's manufactures. Other principal industries are automotive assembly, electronics, glass, porcelain, and pottery, footwear, cement, cellulose and paper, rubber and chemicals, cork and cork products, and food industries (mainly canned fish). Small artisan industries, such as jewelry and homespun and hand-embroidered clothing, are of local importance.

Manufactured goods in the early 2000s included cement, wood pulp, crude steel for ingots, paper and paperboard, and radios and televisions. In 2005, footwear, textiles, wood and cork, chemicals, paper, and food and beverages (wine) were the central industries. In addition, the country has increased its role in Europe's automotive sector, and has a fine mold-making industry.

Foreign competition has cut into Portugal's textile industry. Following the expiration of the World Trade Organization's longstanding system of textile quotas at the beginning of 2005, the EU signed an agreement with China in June 2005, imposing new quotas on 10 categories of textile goods, limiting growth in those categories to between 8% and 12.5% a year. The agreement runs until 2007, and was designed to give European textile manufacturers time to adjust to a world of unfettered competition. Nevertheless, barely a month after the EU-China agreement was signed, China reached its quotas for sweaters, followed soon after by blouses, bras, T-shirts, and flax yarn. Tens of millions of garments piled up in warehouses and customs checkpoints, which affected both retailers and consumers.

SCIENCE AND TECHNOLOGY

In 1996, Portugal had 18 scientific and technological learning societies, and 20 scientific and technological research institutes. The leading scientific academy is the Lisbon Academy of Sciences, founded in 1779. In 1996, Portugal had 27 universities and colleges offering courses in basic and applied sciences. Attached to the University of Lisbon is the Museum and Laboratory of Mineralogy and Geology, founded in 1837. In 1987–97, science and engineering students accounted for 36% of university enrollment. In 2000 (the latest year for which data was available) of all bachelor's degrees awarded, 17.5% were for the sciences (natural, mathematics and computers, engineering). Total government expenditures on research and development (R&D) in 2001 totaled $1.548.302 million, or 0.84% of GDP. Of that amount, 61% came from government sources, while the business sector accounted for 31.5%. In 2002, R&D spending amounted to $1,732.108 million, or 0.93% of GDP. In that same year, there were 1,842 scientists and engineers engaged in R&D per million people. High technology exports in 2002 totaled $1.628 billion, or 7% of the country's manufactured exports.

DOMESTIC TRADE

Lisbon and Porto are the two leading commercial and distribution centers. Larger retail stores, shopping malls, and supermarkets have become well-established in many areas. Franchising has also gained ground, particularly in the clothing and fast-food markets. Direct marketing through television and mail order sales has grown considerably. The most common advertising media are newspapers, outdoor billboards, radio, and television; movie theaters also carry advertisements.

The usual business hours are from 9 am to 6 pm, Monday through Friday. Banking hours are generally 8:30 am to 2:45 pm, Monday through Friday. An increasing number of shopping centers in urban areas have more flexible hours, including hours on Sundays.

FOREIGN TRADE

Portugal's foreign trade balance has regularly shown a heavy deficit, which it finances through net receipts from tourism, remittances from Portuguese workers abroad, and net transfers from the EU. In 2004, merchandise exports were an estimated $37.9 billion, and imports totaled $56.2 billion, which widened the trade deficit to $18.2 billion, up from $13.4 billion in 2003, as a result of stronger domestic demand.

In 2004, Portugal's exports consisted of capital goods (34.8% of total exports), consumer goods (32.4%), raw materials and intermediate products (30.2%), and energy products (2.6%). The major imports in 2004 consisted of capital goods (33.9% of all imports), raw materials and intermediate products (30.5%), consumer goods (24.6%), and energy products (11%). Portugal's leading markets in 2004 were Spain (24.9% of all exports), France (14%), Germany (13.5%), the United Kingdom (9.6%), the United States (6.1%), and Italy (4.3%). In all, 79.4% of all exports were traded with the 25 EU member nations. Portugal's leading suppliers in 2004 were Spain (29.3% of all imports), Germany (14.3%), France (9.3%), Italy (6.1%), the United Kingdom (4.6%), and the United States (2.4%). In total, 76.6% of all imports came from the 25 EU member nations. Portugal received 5% of its imports from OPEC nations.

BALANCE OF PAYMENTS

Despite chronic trade deficits, Portugal until 1973 managed to achieve a balance-of-payments surplus through tourist revenues and remittances from emigrant workers. With the economic dislocations of 1974, net tourist receipts fell 30%; the trade deficit almost doubled; and emigrant remittances stagnated—thus, the 1973 payments surplus of $255.7 million became a $647.7 million deficit in 1974. Emigrant remittances grew steadily between 1976 and 1980, when they peaked at $2,946 million. Because of this, Portugal's balance of payments improved and in 1979 even showed a surplus of $761 million. Subsequently, increasing trade deficits resulted in balance-of-payments deficits that reached $3.2 billion in 1982. By 1985, however, the deficit had become a surplus of $0.4 billion, which rose to $1.1 billion in 1986; the chief reason was the weakening dollar, which boosted the value of tourism earnings and remittances. The 1990 Portuguese external payments surplus stabilized at the previous year's record level of nearly $4 billion. After a few years of surplus boom, mainly due to the enormous

influx of foreign capital and transfers to Portugal following EC membership in 1986, measures were taken in July 1990 to restrict foreign credit and investment thereby helping the authorities get better control over monetary aggregates. These measures, along with the hiatus in international investment caused by the 1990–91 Persian Gulf crisis and some deterioration in the merchandise trade account contributed to halting the growth of the total nonmonetary balance.

The country's large current account deficit was 7.5% of GDP in 2002. Although foreign direct investment (FDI) in new manufacturing projects, such as the automotive and electronics sectors, increased in the 1990s, in the early 2000s FDI flowed to lower-cost manufacturing locations in central and eastern Europe, away from Portugal. In 2004, the current account deficit grew to $13.7 billion (8.1% of GDP), up from $8.4 billion in 2003. The current account deficit was expected to widen in 2005, reflecting deteriorating export competitiveness and slower external demand, but lower oil prices from the second half of 2006 were predicted to help narrow the deficit slightly in 2006–07.

BANKING AND SECURITIES

All 22 banks in Portugal, except for three foreign-owned ones (Banco do Brasil, Credit Franco-Portugais, and the Bank of London and South America), were nationalized in 1975. A 1983 law, however, permitted private enterprise to return to the banking industry. The Bank of Portugal, the central bank (founded in 1846), functions as a bank of issue, while the European Central Bank controls monetary policy.

During the late 1990s, Portugal's banking industry underwent significant restructuring due to foreign investment and consolidation. A major series of consolidations in 1996 left Banco Comercial Portugeuês (BCP), Banco Pinto and Sotto Mayor, and Banco Portugeuês de Investimento as the three largest private banks. Further consolidation came in 1999 when Spain's Banco Santander Central Hispano (BSCH) merged with Champalimaud. Fearing increased Spanish influence in the Portuguese banking industry, the Portuguese government sought to block the deal and the dispute appeared headed for the European Court. Ultimately, Portugal's finance minister, Joaquim Pina Moura, forged a compromise in which BSCH acquired two banks in the Champalimaud group.

The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $47.0 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $111.7 billion.

Portugal's two stock exchanges, located in Lisbon and Porto, were closed after the coup of April 1974. The Lisbon exchange reopened in 1976, and the Porto exchange in 1981. In January 1992 the market was split into three tiers, of which the first is the major liquid market: this included the 11 firms whose shares are traded regularly and which have a minimum market capitalization of e500 million. Trading outside the stock exchanges is still widespread. Into the late 1990s trade on the exchange continued to grow as continued privatization led to greater amounts of Initial Public Offerings (IPOs). As of 2004, there were 56 companies listed on the EURONEXT Portugal exchange, which had a market capitalization of $73.404 billion. In 2004, the PSI 20 Index rose 12.6% from the previous year to 7,600.2.

INSURANCE

Portugal's domestic insurance companies were nationalized in 1975. Foreign companies were required to accept government representatives among their directors. A new law, approved in 1983, allowed the private sector to reenter the domestic insurance industry. Almost all Portuguese companies sell life and nonlife insurance, although some specialize in reinsurance only. In the wake of the reprivatization of the insurance industry, many insurance companies have sought alliances with banks. This position, in turn, serves as an impediment to new entrants into the insurance field, particularly from foreign countries. However, the market is opening up and brokers from any European Union (EU) country can operate in Portugal. Third-party auto insurance and workers' compensation are compulsory in Portugal. Contractors, travel agents, insurance brokers and other professionals are also required to carry liability insurance. In 2003, the value of direct insurance premiums written totaled $10.810 billion, of which life insurance premiums accounted for $6.122 billion. In that same year, Portugal's top nonlife insurer was Fidelidade-Mundial, which had gross written nonlife premiums of $998.9 million. The country's leading life insurer, Occidental Vida, that year, had gross written life insurance premiums of $1,039.9 million.

PUBLIC FINANCE

Portugal's budgets (accounting for the effects of loans and transfers) have been in deficit since 1974. Major factors contributing to the deficits included spending on health and education programs, funding for major public investment projects, and large state-owned enterprise payrolls. To finance the deficit, the government issued bonds in the domestic market, which also serves the monetary policy purpose of absorbing excess liquidity. The government's objective to join the Economic and Monetary Union (EMU) was achieved in 1999. Since then, monetary policy responsibilities have been absorbed by the European Central Bank. Public debt exceeded 3% of GDP in 2001, exceeding EU limits and

opening the country up to sanctions from the rest of the EU. By 2004 it continued to hover around 3%, but was expected to top 6% in 2005. In 2005 the EU ordered the country to reduce deficits, which the government planned to do by raising the value-added tax and cutting spending.

The US Central Intelligence Agency (CIA) estimated that in 2005 Portugal's central government took in revenues of approximately $78.8 billion and had expenditures of $90.2 billion. Revenues minus expenditures totaled approximately -$11.4 billion. Public debt in 2005 amounted to 69.4% of GDP. Total external debt was $298.7 billion.

TAXATION

The national corporate tax rate in Portugal as of 2005 was 25%, although rates in Madeira were 22.5% and 17.5% in the Azores. In addition, municipalities can levy a 10% surtax on the tax liability, pushing the effective rate to 27.5%. Allowable deductions in calculating taxable corporate income include depreciation, interest payments, executives' salaries, and royalties. Capital gains are taxed at 25%. Dividends paid to parent companies by subsidiaries (owned at least 25% by the payee) are excluded from taxable income to avoid double taxation. Otherwise dividends are taxed at general income tax rates.

The progressive personal income tax schedule has six bands, not including a tax-exempt base. The schedule bands as of 2003 were 15% (up to €4,100); 14% (on the next increment of income to €6.201); 24% (on the next increment to €15,375); 34% (on the next increment to €35,363): 38% (on the next increment to €51,251); and 40% (on the increment of income above €15,375). Social security taxes amount to 23.75% of nominal income. There are also taxes municipal taxes on the value of real estate.

The main indirect tax is Portugal's value-added tax (VAT) introduced 1 January 1986 with a standard rate of 16%, which was raised to 17% as of 1 January 1995 and to 19% as of 6 May 2002. There is also a reduced rate of 5% (applied to basic foodstuffs, water supplies, books, newspapers and periodicals, social housing, some medical equipment and drugs, hotel accommodations, repair and domestic services); an intermediate "parking" rate of 12% (applied to some foodstuffs, catering, and some fuels and lubricants); and exemptions from VAT (for social services, some medical and dental services, waste collection and disposal, transportation services, gold transfers to the central bank, and cremation.). For the Azores and Madeira, the standard VAT rate is 13%, the reduced rate 4% and the parking rate 8%. Other transactions taxes include stamp duties and transfer fees.

CUSTOMS AND DUTIES

Portugal uses the Harmonized Nomenclature and Classification System (HS) to organize imports into tariff categories. Almost all tariffs are levied on an ad valorem basis according to the EU Customs Code, excepting luxury goods and petroleum, which have special higher rates. Portugal adheres to all EU trade policies, including multilateral trade agreements, and conforms to WTO regulations. It also levies a value-added tax (VAT) of up to 21% on most imports, although there is a lower rate of 5%. In Madeira and the Azores, the lower rates of 4% and 13% apply. The VAT on imports from EU countries is not collected until the product is sold.

FOREIGN INVESTMENT

The government actively promotes foreign investment as an integral part of its economic development policy, and specifically through a government agency, API (Agency for Investment in Portugal). As a member of the European Union, Portugal abides by the investment rules that govern the rest of the union. New foreign investment legislation was enacted in 1986. The Institute of Foreign Investment (ICEP) is the supervising agency. Foreign investment is permitted in all sectors except ports, water management, rail services, public service telecommunications operators, and the arms industry. Portugal restricts non-EU investment in regular air transport to 49%, and restricts non-EU investment in television operations to 15%. Even in these areas, however, deregulation is under way. The foreign investment code contains liberal profit remittance regulations and tax incentives. The rate of corporation tax was reduced from 30% to 25% in 2004 as part of that year's budget, but rates in most municipalities are higher by some three percentage points due to the effects of local surcharges.

Foreign direct investment (FDI) inflows in Portugal averaged about $2 billion per year in 1992–95, or 1.6% of GDP. Main investing countries are the United Kingdom, Spain, and France. The financial sector accounted for about 60% of all new foreign investment. In 1998, FDI inflows reached $3.1 billion, up from $2.5 billion in 1997, but fell to $1.2 billion in 1999. FDI inflows soared to $6.4 billion in 2000, and were still above $6 billion in 2001, despite the global economic slowdown.

Total FDI inflows into Portugal in 2003 were €852.2 million. Portuguese FDI abroad was in the negative numbers, at -€84.6 million. Portugal invests most heavily in Brazil and Spain, followed by Germany and other EU countries. Low labor costs, combined with unrestricted access to the EU market, have attracted foreign investment in new manufacturing projects, especially in the automotive and electronics sectors. However, FDI has slowed as low-cost manufacturing locations in central and Eastern Europe have become increasingly appealing to investors, especially since the admission of 10 new EU members in 2004. Therefore, Portugal can no longer afford to rely solely upon low wage costs to attract further investment.

ECONOMIC DEVELOPMENT

In 1975, radical economic transformations were accomplished through a series of decrees that nationalized the domestically owned parts of major sectors of the national economy. These decrees affected the leading banks, insurance companies (representing 99% of insurance companies' capital), petroleum refineries, the transportation sector, the steel industry, and eventually Portugal's leading privately owned industrial monopoly, Companhia União Fabril. At the same time, large-scale agrarian reform measures led to expropriation of many of the country's privately owned large landholdings; other holdings were seized illegally by peasants. In an attempt to stimulate agricultural production, the government decreed a 30% reduction in the price of fertilizer to farm workers and small and medium farmers. When the nationalization and agrarian reform measures met with only limited success, partly because of liquidity problems, an emergency austerity plan was approved by the Council of Ministers in October 1975. The program included wage and import controls and the reduction of subsidies on consumer goods.

As a result of Portugal's entry into the EC (now EU), the highly protected, unresponsive, and inefficient economy is being transformed. State intervention is being reduced, and the physical infrastructure is being modernized. Privatization began in 1989, with the share of gross domestic product (GDP) for non-financial public enterprises reduced from 17.9% in 1985 to 10.7% in 1991. In 1992, $3.6 billion was raised as banks, insurance companies, and a 25% interest in Petrogal—the state oil company—were sold. The government estimated that privatized companies would represent half of stock market capitalization by the end of 1994.

In 1996 and 1997, a series of important investments and acquisitions were made by companies such as Sonae and Jernimo Martins, Portugal's leading retail distributors; Cimpor, a cement producer; and Portugal Telecom and Electricidade de Portugal, the last of which was privatized. The big banks were developing new overseas operations as well. The best indicator of Portugal's economic progress was Portugal's acceptance into the European Economic and Monetary Union in 1999.

During the 1990s and into the 2000s, the economy grew at rates well above EU averages; however, growth slowed in 2002–03, and fell below the euro-area average for the first time in close to a decade. In 2002, the external current account deficit remained one of the largest (in relation to GDP) among industrialized countries. The unemployment rate also increased sharply. Nonetheless, an inflow of capital funds has financed infrastructure projects.

In 2001, Portugal became the first country to breach the eurozone's Stability and Growth pact budget deficit target of 3%, with a gap equal to 4.2% of GDP. Portugal's government met the 3% target in 2002 and 2003, but despite a hiring freeze and other measures, the country had a structural budget deficit in 2004 projected at 4.9%. Public spending was expected to equal 47.9% of GDP in 2004. The 2005 budget projected a structural deficit in excess of 3%, and violated the 60% limit on public debt. Due to labor reform legislation, which took effect in early 2004, and corporate and personal tax cuts in 2004 and 2005, the government expected the economy to recover strongly in 2006.

The government is attempting to change Portugal's economic development model from one based on public consumption and public investment to one focused on exports and private investment.

SOCIAL DEVELOPMENT

A social insurance and social assistance program has been frequently updated since 1935. The program provides old-age, disability, sickness, and unemployment benefits, family allowances, and health and medical care. The system is funded by payroll contributions from employers and employees. The government subsidizes social pensions for those persons not employed. Retirement is set at age 50 for miners, age 55 for fishermen and seamen, and age 65 for other professions. Medical benefits are provided to all residents, and cash sickness and maternity benefits are provided to employees. Maternity benefits of 100% of earnings and benefits are paid for 120 days for all employed persons. Paternity and adoption benefits are also available. There is a need based family allowance, a special education allowance, and a funeral grant.

Women have full rights and protections under both the constitution and civil code. According to law, women must receive equal pay for equal work. In practice, however, a salary gap still exists between men and women. Spousal abuse and other violence against women are widespread problems and remain underreported. The judicial system is supportive when cases are brought forward. Sexual harassment in the workplace is considered a crime, but only if committed by a superior.

Immigrants from Portugal's former African colonies face social prejudice and discrimination. There were reports of right-wing groups carrying out racially motivated attacks against immigrants and other nonethnic Portuguese. Human rights are generally respected in Portugal. Prison conditions are poor, but the government is engaging in dialogue with human rights organizations on this and other issues.

HEALTH

The public health care sector is by far the largest. The country planned to construct 12 new hospital districts, 84 health centers, and 5 technical schools for nurses, and to enlarge or remodel several hospital centers, hospital districts, and maternity wards. The Santa Maria Hospital in Lisbon is the largest hospital in Portugal. The number of physicians in Portugal grew steadily throughout the 1990s. As of 2004, there were an estimated 324 physicians, 374 nurses, 44 dentists, and 84 pharmacists per 100,000 people. Total health care expenditure was estimated at 7.7% of GDP.

As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 11.5 and 10.2 per 1,000 people. Approximately 66% of married women (ages 15 to 49) were using contraception. The infant mortality rate decreased from 61 to 5.05 per 1,000 live births between 1968 and 2005. Average life expectancy in 2005 was 77.53 years.

The leading natural causes of death are circulatory disorders, cancer, and respiratory disorders. Children up to one year of age were vaccinated against diphtheria, pertussis, and tetanus, 95%, and measles, 99%. The cancer and heart disease rates in Portugal are well below the industrialized countries average.

The HIV/AIDS prevalence was 0.40 per 100 adults in 2003. As of 2004, there were approximately 22,000 people living with HIV/AIDS in the country. There were an estimated 1,000 deaths from AIDS in 2003.

HOUSING

According to the 2001 census, Portugal had about 5,054,922 dwelling units. However, about 65% of all families live in dilapidated structures and nearly 8.5% live in shacks. While the Government Social Housing Program has made some progress in rehousing families into more adequate structures, there are not enough programs to help the households rise above the poverty level. Traditional Portuguese houses are made of brick walls and tile roofs.

EDUCATION

Basic education is compulsory for nine years. This includes three cycles of four, two, and three years each. Secondary level education covers a three-year program; students choose between general secondary, professional, and specialized technical or vocational schools. The academic year runs from September to July.

In 2001, about 70% of children between the ages of three and five were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 100% of age-eligible students. The same year, secondary school enrollment was about 85% of age-eligible students. It is estimated that about 98% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 13:1 in 2003; the ratio for secondary school was about 8:1. In 2003, private schools accounted for about 10.5% of primary school enrollment and 14.7% of secondary enrollment.

Coimbra University, founded in 1290, is Portugal's oldest institution of higher learning, and the universities of Lisbon and Porto are two of the largest. There are also art schools, music schools, and a school of tropical medicine. The Portuguese Catholic University was instituted by decree of the Holy See. In 2003, about 56% of the tertiary age population were enrolled in some type of higher education program; 48% for men and 64% for women. The adult literacy rate for 2003 was estimated at about 93.3%.

As of 2003, public expenditure on education was estimated at 5.8% of GDP, or 12.7% of total government expenditures.

LIBRARIES AND MUSEUMS

The leading libraries of Portugal are the National Library, founded in 1796 (about 2.3 million volumes) and the Library of the Academy of Sciences (400,000) in Lisbon, the University Library in Coimbra (one million), and the Municipal Library in Porto (1.27 million). The Public Libraries Programme in Portugal was launched in 1987 with a goal of providing public library services in each of the country's 275 municipalities. By 1999, about 166 libraries had been established.

There are some 300 museums in Portugal. Most feature exhibits relating to Portuguese history. Lisbon has the National Museum of Ancient Art, the Museum of Decorative Arts, the Calouste Gulbenkian Museum, and the Center for Modern Art, as well as the National Museum of Natural History. The Abbey of the Friars of St. Jerome in Belém and the Battle Abbey in Batalha contain some of the finest examples of Portuguese art. There are dozens of municipal ethnographic and historic museums, as well as many finely restored castles and manors.

MEDIA

Direct radiotelephone service connects Portugal with its former and current overseas provinces in Africa and Asia. In 2003, there were an estimated 411 mainline telephones for every 1,000 people. The same year, there were approximately 898 mobile phones in use for every 1,000 people.

The government broadcasting network, Radiodifusão Portuguesa, and Radio Renascenca, a religious network, operate AM and FM stations. The state-owned television network, Radiotelevisão Portuguesa, offers color broadcasts on two channels. In 2005, there were an additional 300 local and regional commercial radio stations and at least two other commercial television stations. In 2003, there were an estimated 299 radios and 413 television sets for every 1,000 people. About 128.2 of every 1,000 people were cable subscribers. Also in 2003, there were 134.4 personal computers for every 1,000 people and 194 of every 1,000 people had access to the Internet. There were 458 secure Internet servers in the country in 2004.

The constitution of 1976 guaranteed freedom of the press. The principal daily newspapers (with their affiliation estimated 2002 circulations) include: Correo da Manha (independent, 85,000), Diario de Noticias (Communist, 75,560), Publico (75,000), Diario Popular (leftist, 62,000), A Capital (leftist, 40,000), Jornal de Noticias (leftist, 90,000), Comercio do Porto (moderate, 30,300), and Oprimeiro de Janeiro (conservative, 20,200). The weekly paper Expresso has a circulation of 160,000.

ORGANIZATIONS

The principal current organizations are syndicates, the majority of which are linked to the national trade union confederation; residents' commissions; workers' commissions; and popular assemblies. Many of these associations, particularly in rural areas, are involved in local community improvement projects as well as political and cultural activities. There are four chambers of commerce and three main industrial organizations, the oldest of which, the Industrial Association of Porto, dates from 1849.

The Academy of Sciences Lisbon is primarily a scholarly and research organization. Several professional associations also promote research and public education in a variety of fields, particularly in medicine and healthcare. There are organizations for hobbyists, including the multinational Federation of European Philatelic Associations.

National youth organizations include Association of Young Farmers of Portugal, Communist Youth of Portugal, International Friendship League of Portugal, Monarchist Youth of Portugal, the Scout Federation of Portugal, and YMCA/YWCA. There are several sports associations in the country, representing a variety of pastimes such as tae kwon do, badminton, tennis, and track and field. There is a national chapter of the Special Olympics.

The Kiwanis and Lion's Clubs also have active programs. Amnesty International, Habitat for Humanity, and the Red Cross have national chapters.

TOURISM, TRAVEL, AND RECREATION

Portugal's historic cities—Lisbon, Porto, Coimbra, and others—offer numerous museums, old churches, and castles. Most villages still celebrate market days with dances and other festivities. There are more than 800 km (500 mi) of beaches. The Portuguese bullfight (differing from the Spanish variety in that the bulls are not killed) is a popular spectator sport; the season lasts from Easter Sunday to October. Football (soccer) is popular as both a participant and a spectator sport. A valid passport is required; visas are needed for stays of more than 90 days.

Tourism has become a major contributor of foreign exchange earnings and a stimulus to employment and investment in the hotel industry and related services. The number of tourists was 11,644,231 in 2002. Hotel rooms numbered 105,986 in 2003 with 238,759 beds and an occupancy rate of 38%.

The daily cost of staying in Lisbon, according to 2005 US Department of State estimates, was $232. Other areas were between $159 and $255, with some rates varying by season.

FAMOUS PORTUGUESE

During Portugal's golden age, the 15th and 16th centuries, the small Portuguese nation built an overseas empire that stretched halfway around the globe. Prince Henry the Navigator (Henrique Navegador, 1394–1460) laid the foundations of the empire. Among the leaders in overseas exploration were Bartholomeu Dias (1450?–1500), the first European to round the Cape of Good Hope; Vasco da Gama (1469–1524), who reached India and founded Portuguese India in 1498; and Pedro Alvares Cabral (1460?–1526), who took possession of Brazil for Portugal in 1500. Ferdinand Magellan (Fernão de Magalhães, 1480?–1521) led a Spanish expedition, the survivors of which were the first to sail around the world, although Magellan himself was killed after reaching the Philippines. Afonso de Albuquerque (1453–1515) was foremost among the builders of Portugal's Far Eastern empire.

Famous literary figures of the golden age include the historians Diogo do Couto (1542–1616) and João de Barros (1496–1570); Portugal's greatest writer, Luis Vas de Camões (1524?–80), the author of Os Lusiadas, the Portuguese national epic, and of lyric and dramatic poetry; the dramatists Gil Vicente (1465?–1537?) and Francisco de Sá de Miranda (1482–1558); the poets Bernardim Ribeiro (1482?–1552) and Diogo Bernardes (1532?–96?); and the travel writer Fernão Mendes Pinto (1509–83). Portugal's leading painter was Nuno Gonçalves (fl.1450–80).

Among the noted Portuguese of more recent times are Sebastião José de Carvalho e Mello, marquis de Pombal (1699–1782), the celebrated prime minister of King Joseph Emanuel (José Manuel, 1715–77); the novelists Camilo Castelo Branco, viscount of Correia-Botelho (1825–90), and José Maria Eça de Queiróz (1843–1900); the poets João Baptista da Silva Leitão, viscount of Almeida-Garrett (1799–1854), Antero Tarquinio de Quental (1842–91), João de Deus Nogueira Ramos (1830–96), Teófilo Braga (1843–1924), and Abilio Manuel Guerra Junqueiro (1850–1923); the satirist José Duarte Ramalho Ortigão (1836–1915); and the painter Domingos António de Sequeira (1768–1837). António Caetano de Abreu Freire Egas Moniz (1874–1955) won the Nobel Prize in physiology in 1949.

António de Oliveira Salazar (1889–1970), prime minister for more than 30 years, was Portugal's best-known modern leader. Gen. (later Marshal) António Sebastião Ribeiro de Spínola (1910–96) played a key role in the revolution of April 1974. Gen. António dos Santos Ramalho Eanes (b.1935) became president in 1976 and was reelected in 1980. Other political leaders include: Mário Alberto Nobre Lopes Soares (b.1924), Francisco Sá Carneiro (1934–80), Jorge Fernando Branco de Sampaio (b.1939), Aníbal António Cavaco Silva (b.1939), António Manuel de Oliveira Guterres (b.1949)—a former prime minister who became the United Nations High Commissioner for Refugees, and José Manuel Durão Barroso (b.1956)—a former prime minister who became president of the European Commission.

DEPENDENCIES

Between 1974 and 1976, all of Portugal's overseas possessions in Africa—including Angola, the Cape Verde Islands, Portuguese Guinea (now Guinea-Bissau), Mozambique, and São Tomé and Príncipe—became independent countries in accordance with the Armed Forces Movement's decolonization policy. After the Portuguese withdrew from East Timor, in the Indonesian archipelago, the former colony was invaded by Indonesian forces in 1975 and became a province of Indonesia in 1976; East Timor became an independent nation in 2002. Macau, on the south coast of China, was a "Chinese territory under Portuguese administration" from 1975–99.

BIBLIOGRAPHY

Anderson, James M. The History of Portugal. Westport, Conn.: Greenwood Press, 2000.

Annesley, Claire (ed.). A Political and Economic Dictionary of Western Europe. Philadelphia: Routledge/Taylor and Francis, 2005.

Birmingham, David. A Concise History of Portugal. Cambridge: Cambridge University Press, 1993.

Graham, Lawrence F., and Harry M. Makler (eds.) The Portuguese Military and the State: Rethinking Transitions in Europe and Latin America. Boulder, Colo.: Westview Press, 1993.

Hilton, Ronald. A Bibliography of Spain and Portugal. Lanham, Md.: Scarecrow Press, 1999.

International Smoking Statistics: A Collection of Historical Data from 30 Economically Developed Countries. New York: Oxford University Press, 2002.

Magone, José M. European Portugal: The Difficult Road to Sustainable Democracy. Houndmills, U.K.: Macmillan, 1997.

Manuel, Paul Christopher. The Challenges of Democratic Consolidation in Portugal. Westport, Conn.: Praeger, 1996.

Nataf, Daniel. Democratization and Social Settlements: The Politics of Change in Contemporary Portugal. Albany: State University of New York Press, 1995.

Ortiz Griffin, Julia. Spain and Portugal. New York: Facts On File, 2006.

Wessels, Wolfgang, Andreas Maurer, and Jürgan Mittag (eds.). Fifteen into One?: the European Union and Its Member States. New York: Palgrave, 2003.

Wheeler, Douglas L. Historical Dictionary of Portugal. Lanham, Md.: Scarecrow Press, 2002.

Wiarda, Howard J. Politics in Iberia: The Political Systems of Spain and Portugal. New York: HarperCollins, 1993.

Portugal

History & Background

The beginning of Portugal's history can be traced back to the twelfth century. The Iberian Peninsula was once a unified region. At the end of the eleventh century, Afonso VI, King of Leon, married his daughter Urraca to Count Raymond of Burgundy. His other daughter, Tareja, who was illegitimate, was married to Henry of Burgundy. As a wedding gift, Count Raymond of Burgundy received the region of Galicia, the second area between the Minho and the Tagus, called Condado Portucalense. When Afonso VI died, military and political struggles took place in the Christian kingdoms. Afonso Henriques, son of Tareja, had the necessary military forces to achieve independence. Portugal became an autonomous country in 1143 and Afonso Henriques received the title of king in 1179.

Public instruction took place in the cathedrals, Episcopal churches, convents and monasteries. Reading, writing, and grammar were taught in Latin, but it was spoken only by a few religious people and ambassadors from the twelfth to the fifteenth century. It was necessary to have vocabularies in both Latin and Portuguese. During the reign of King Dinis (1279-1325), Portuguese was declared the official language. The first written texts in Portuguese, mainly translations from Latin texts, appeared in the beginning of the thirteenth century. People were taught through oral transmission: cantigas (songs composed by troubadours), chivalry novels, sermons and proverbs. D. Dinis founded the first Portuguese university in Lisbon in 1290, moving it to the city of Coimbra in 1308.

In 1385, with the Master of Avis, King John I, the epoch of world exploration starts. The focus of the feudal system changed to commerce. This social transformation brought a new conscience, best described as "man has a creative power that enables him to dominate the universe." In order to achieve this transformation a person needed knowledge. In addition to reading and writing, the merchants living in Oporto and Lisbon acquired the ability to count.

The sixteenth century was the golden age of world exploration. In the kingdom of John III (1521-57) the university, which had been moved back to Lisbon, once more returned to Coimbra (1537) and the Colégio das Artes (School of Arts) was created. Teachers and masters were recruited from France. Latin, Greek, Hebrew, mathematics, logic, and philosophy were taught. The philosophy of Aristotelic rationalism replaced the previous medieval theology. With the death of André de Gouveia, head of the school, a crisis began, and in 1555 the management of the school was handed over to the Companhia de Jesus (Company of Jesus), and became a center of theological studies. Primary and secondary schools were established and mainly maintained by religious congregations.

An organized censorship was introduced by the Spanish Inquisition in 1540. Inquisition, censorship, and the Jesuit education intervened in the cultural development of the country. Writings of well-known authors such as Gil Vicente, Luis de Camo~es, and Bernardim Ribeiro were considered against the faith and good customs. The Portuguese language became more grammatically established when João de Barros wrote the Gramática da Língua Portuguesa in 1540.

With Portuguese exploration, there was an overseas expansion to Africa, Asia, and South America. The chief discovery was Brazil in 1500. Primary schooling was started there, primarily to convert the natives. Father Antonio Vieira, the most famous author of Baroque prose, was sent to Brazil principally for this purpose.

A change of mentality occurred in the eighteenth century, with the theories of the Enlightenment. This intellectual movement of renovation started in England and reached its high point with the French revolution. The ideas and philosophy of Diderot, D'Alembert, Voltaire, and Jean-Jacques Rousseau had great influence. Spanish influence was replaced by French, Italian, English, and German thinking.

Beginning in 1755, King Joseph (1750-77) with the help of his prime minister, the Marquis of Pombal, adopted foreign theories based on "reason." There was a direct intervention by the state on the teaching and cultural systems. Jesuits were forbidden to teach and were expelled from the country in 1759, and religious censorship was replaced by the Real Mesa Censória in 1768. Even religious charity institutions involved in teaching were replaced by a systematized education. The Marquis of Pombal was able to perform a complete renewal of the whole political and educational structure in 1755 due to an earthquake that destroyed the city of Lisbon. A new city was created in its place, and a renewal of the educational system was introduced. Luís Antonio Verney (1731-92) wrote O Verdadeiro Método de Estudar (1746), with the intention of ensuring that the following subjects would be taken into account in education: writing, languages, rhetoric, arithmetic, humanities, sciences, and dance. In 1768 the Escola de Comércio (Commercial School) started providing education for the bourgeois class. Females had access to school for the first time beginning in the eighteenth century, under the reign of Queen Mary I (1777-1816), who also founded the Academia Real das Ciências (Royal Academy of Sciences) and the Biblioteca Nacional (National Library). Educational progress was slow during the nineteenth century. With the introduction of journalism as a means of communication, reading became more important, although until 1900 the rate of illiteracy was about 80 percent. New schools continued to be opened, with institutions specializing in agriculture, medicine, and humanities (Faculdades de Letras ). Free primary schooling was guaranteed by the constitutions of 1822 and 1926. Wellknown writers were engaged in improving education, and many composed books and essays with this purpose. Antonio Feliciano de Castilho contributed with Método Português Castilho (1850) and Felicidade pela Instrução (1854). João de Deus fought illiteracy with his Cartilha Maternal (1876). In the twentieth century major changes occurred. Elementary school was reformed in 1901. Instruction was divided into ensino infantil (preschooling) from the ages of 4 to 6; primeiro grau (elementary school), which was obligatory and free for both genders between the age of 6 and 12; and segundo grau (middle school), which was not obligatory but was paid. The republic was proclaimed in 1910, and a new Decreto (law) remodeled the educational system. Ensino primário (elementary school) was divided into elementary, which lasted for three years for children with a minimum age of seven; complementary, with a duration of two years for children beginning at age 10; and superior, three years for students beginning at age 12. When they graduated they could go to Escolas normais primárias (teaching schools for elementary education), or to regular courses in industrial, agricultural, commercial, or technical schools. Escolas móveis (mobile schools) were created where it was not possible to have permanent schools. The 1910 Decreto was replaced in 1919, at which time obligatory schooling was extended from three to five years, and elementary and complementary school were transformed into one course called ensino primário (elementary school) with obligatory attendance.

The Ministry of Public Instruction that had been created in 1913 was eliminated with in 1926 when the fascist regime Estado Novo (new state) of Antonio Oliveira Salazar took over the country. This regime ruled until 25 April 1974. In 1936 the livro único (sole book) was institutionalized for elementary education. Salazar closed the escolas móveis that had been important for adult literacy. He replaced the escolas normais superiores (higher normal schools) with cursos de ciências pedagógicas (pedagogical science programs) and the escolas normais primárias with the escolas de magistério primárias. The former schools were for women, the latter for both genders. In 1930 the Universidade Técnica de Lisboa was founded, uniting several colleges.

The Republic had given initial autonomy to women as to career and employment. Divorce was legalized, and in 1914 the Conselho das Mulheres Portuguesas (Council of Portuguese Women) was created to defend women's rights. Salazar's regime was a setback. Women who stayed at home were cherished, and in 1939 a law was introduced allowing men to make their wives return home in case they left them. From 1950 to 1960, Salazar introduced a law that prevented women from obtaining a passport or leaving the country without her husband's authorization.

Major changes took place with a 1974 coup (Revolução dos Cravos ). The Portuguese speaking countries in Africa (Angola, Mozambique, Cape Verde, Guinea Bissau, and the Islands of São Tomé and Príncipe) gained independence from Portugal. In 1975, one year of compulsory serviço cívico (civic service) became obligatory before entering the university. The Constitution of 1976 gave equal rights to both men and women without discrimination. In this same year coeducation became obligatory.

Marcelo Caetano, Salazar's successor, created the Ministry of Education, proposed the reform of the secondary school, and encouraged student repression. Teachers of elementary schools, in addition to their normal duties, had to perform other tasks such as teaching illiterate adults and functioning as agents of community development.

The government elected in 1991 began to emphasize modernization and decentralization. Some of its goals continued into the late twentieth and early twenty-first century. Portugal joined the European Common Market and sought to promote the Portuguese language and culture at home and abroad, to modernize public administration, and to give more local power to educational institutions by decentralization.

Constitutional & Legal Foundations

National education policies, curricula, and specific programs are administered by the Ministry of Education. Principles and rules are established by decretos-leis (legal decrees). The basic educational law, Lei 46/86, dates from 14 October 1986. It has 64 articles (artigos ) divided into nine chapters (capítulos ). Chapters I and II define general and organizational principles; chapter III determines the support and educational complements for successful learning; chapter IV establishes the careers and the requirements for educators to teach; chapter V determines the organization of material resources; chapter VI establishes the principles and forms of educational administration; chapter VII determines the forms of development and evaluation of the system; chapter VIII defines the role of private and cooperative teaching; and chapter IX deals with the transition, implementation, and application of the law. Another law, Decreto-Lei 43/89, of 3 February 1989, is an additional document that establishes the juridical regime of school's autonomy in basic and secondary education.

Besides establishing a basic educational policy, the law 46/86 (Lei de Bases do Sistema Educativo ) declares that education is universal, compulsory, and free of charge for all children until the age of nine years. Education is compulsory from the age of 6 to 15. This is still the key law.

Other laws of significance are the law that established the teaching career, Decreto-Lei 139-A/90, and the law that modifies the teaching career for elementary and secondary, Decreto-Lei 1/98.

Portugal has advanced immensely in the last few decades. From the coup in 1974 to the twenty-first century, freedom and autonomy have been granted to educational institutions and contemporary social concerns have been addressed, such as special education for disabled children, access for immigrant children to Portuguese language and culture, promotion of the Portuguese language abroad, and the use of democratic rights by teachers, students, and parents in the form of associations.

Beginning in the year 2000, the third part of PRODEP III, or Programa de Desenvolvimento Educativo para Portugal (Educational Development Program for Portugal) was put into action. This program was established with the European Commission and is designed to be in effect until 2006. The first two parts of the program, PRODEP I and II, contributed heavily to the development of the country's educational system throughout the decade of the 1990s.

The financial resources made available by PRODEP III are directed towards the various levels of instruction, such as basic, secondary, and higher education, and also to professional schools. More importantly, PRODEP III allocates funds for professional development of those individuals directly involved in the teaching process. This effort helps keep teaching professionals up-to-date with the latest technological advances.

Educational System—Overview

The educational system as it was established by the Law 46/86 has a number of divisions:

1. preschool education;
2. basic education with three cycles; the first cycle is four years, the second cycle is two years, and the third cycle is three years, with the first six years of basic education being compulsory and free;
3. Secondary education lasts three years, with a choice among general courses, technological courses, vocational courses, and courses of specialized artistic education;
4. higher education is divided into university education and polytechnic education, and the student can graduate with a bacharelato (bachelor's degree) or licenciatura (license to teach);
5. Mestrado (master's degree), and
6. Doutorado (doctorate degree).

The school year runs from October through July. Schools have double and even triple shifts in some cases (morning, afternoon, and evening). The curricula are formulated by the Ministry of Education. In addition to public schools, there are also private ones, mainly Roman Catholic. There is also indirect education in remote and peripheral zones with the use of television, although the government is trying to make the whole system direct. The school year is divided into two semesters of 15 to 16 weeks each. There is an effort to have classes no larger than 25 pupils. Each teacher is responsible for one subject.

Preprimary & Primary Education

Preprimary Education: The family is in charge of the child's education at an early stage. The role of the family is complemented or supplemented with educação préescolar (preschool education). Preschool education is part of the Departamento de Educação Básica (Department of Basic Education), and is organized into public and private nursery schools. Since 1977, there is a legal provision for one year of preprimary education, but because the government recognizes the importance of the family in the child's learning process from the age of three to six, attendance is optional.

The purpose of preschool is to stimulate the child's skills, introduce him or her to a system, encourage the development of a number of potential abilities, help acquire a sense of order and responsibility, and promote social integration at an early stage. Awareness is a keyword in this process.

Basic Education: Educação básica (basic education) starts at the age of six and lasts for nine years. As the name implies, it is a basic and general education that allows the student to pursue higher levels of education.

Basic education is universal, compulsory, and free of charge. It is divided into three cycles of different duration. The first cycle lasts four years. It includes the development of speech, reading, and writing, and basic skills in the subjects of arithmetic, artistic expression, drama, music, and sports.

The second cycle lasts two years. Education is centered on the previous humanistic, artistic, and physical studies, along with scientific, technological, sociological, and economical studies. Emphasis is given to developing creative and critical thinking, and methodology is introduced in several of the fields taught. Moral and civic education is also introduced at this stage.

The third cycle lasts three years. There is a continuation of the previous teaching, but is focused on the student's future either in continuing studies or in joining the work force. Vocational guidance is given to help prepare the student for the future. The twelfth year is the ano propedêutico (a year of preparation for higher level studies).

Adult Education: Part of the Department of Basic Education is the Ensino Básico Recorrente (Basic Education for Adults). It provides an opportunity for adults who did not have a previous chance to study, or who failed or dropped out of school, to integrate into the societal system. It also allows adult professional improvement. At the end of the third cycle of this learning process, adults receive a diploma or certificate similar to regular education. There is a curricular program with evaluation, but learning is focused on an interdisciplinary approach to round out the adult's personality. The goal of adult education is to help eliminate illiteracy. In 1990 the rate of illiteracy was 13 percent, mainly in rural areas and among women.

Special Education: There are special schools for handicapped children, although they are often included in normal classes. The Instituto Antonio Coelho and the Instituto Condessa de Rilvas are responsible for mentally retarded children. The Instituto de Assistência aos Menores takes care of the visually and hearing impaired youngsters. The Centro Infantil Helen Keller is also in charge of the visually impaired. In 1973 the Ministry of Education set up a department of special education to help out the basic and secondary levels. Teachers are prepared at the Centro de Preparação de Pessoal da Direccção Geral de Assistência.

Secondary Education

Secondary education in Portugal is administered by the Department of Secondary Education. Depending on the student's aims, he/she can pursue Cursos Gerais(general courses) if he/she wants to continue to higher education, or Cursos Tecnológicos (technological courses) to prepare for the job market. Each of these courses lasts three years and corresponds to the tenth, eleventh, and twelfth school year. At the end of the twelfth year of the general courses, a diploma is awarded that specifies the course completed and the final grade, allowing the student to apply for higher education. A Vocational Qualification Certificate is awarded at the end of the technological course that allows students to access the job market.

According to the Constitution and to the secondary curricular structure, the main objectives of secondary education are to create conditions for personal and social fulfillment; to consolidate the student's culture through knowledge, instruments, and methodologies; to help define individual interests and vocational options; and to prepare the student intellectually and emotionally for a role in society.

Additionally, there is secondary education for adults, similar to the normal secondary education, divided into general courses and technological courses. There are also visual art courses for adults, part of the special artistic education, divided into Curso geral and Curso tecnológico do ensino artístico, both leading to a twelfth year diploma.

Vocational Education: If the student is not going to pursue a university career, he/she can get technical training for three years following the ninth year of schooling organized in modules or autonomous learning units. These units allow the student to learn at his/her own pace. There is flexibility in training according to individual needs and potentials. If the student completes the studies successfully, he/she will receive a diploma, which allows acceptance at the university in the future. The student also receives another diploma, a vocational certificate, enabling him/her for the job market. Vocational education is a response to shortcomings in local and regional markets.

Artistic Education: Visual arts, dance, and music are specific courses designed for those with potential ability and interest in one of these artistic expressions. Plastic arts and musical expression are taught beginning in preschool. Visual education, such as art and design, is part of the secondary education. Artistic education provides training for professional preparation in these fields. It encourages individual and group practices and stimulates creativity. The Calouste Gulbenkian Foundation has a school that teaches music students at the primary and secondary levels. Lisbon and Oporto have schools of fine arts on a higher level. Lisbon also has a National Conservatory and a Gregorian Institute. Other cities have musical conservatories and visual arts institutions as well.

Higher Education

Higher education consists of university education and polytechnic education. Both are supervised by the Direcção Geral do Ensino Superior (General Office for Higher Education). Each university has a general assembly, a faculty council, and a pedagogical and scientific council. The head of each university is the reitor (rector), and all rectors are members of the National Board of Education.

The aim of higher education is to provide students scientific, cultural, and technical preparation for their professional career. The Licenciatura ranges from four to six years. Further specialization can be pursued with a mestrado (master's degree) and doutorado (doctorate degree).

Higher education is also undertaken in polytechnic institutes with the purpose of developing specific skills and knowledge in professional activities. These institutes offer a Bacharelato (bachelor's degree) after six semesters or a Licenciatura following eight semesters of pedagogical training.

The most traditional universities are in Lisbon, Coimbra, and Oporto. The University of Coimbra is the nation's oldest university. Like other universities, it has several colleges and institutes.

There is an entrance examination for the university that can be waived if the secondary school degrees are very high. In 1975 the Revolutionary Council approved a law obliging students to perform one year of public service before entering the university.

Faculty is organized in four ranks: lecturer, assistant professor, associate professor, and full professor. Universities recruit their faculty through competitive examination and appropriate credentials.

Administration, Finance, & Educational Research

Administration: The Ministry of Education centralizes the educational system in Portugal, although autonomy has been given to the islands of Azores and Madeira. The Ministry has several departments and institutes, including departments for basic education, secondary education, and higher education. There are other departments or directorates for special education; adult education; technological, artistic, and vocational education; distance education; and educational technology. Councils and consulting bodies complement this structure. The advisory bodies are the National Education Committee, the Private and Cooperative Education Coordinating Committee, the Committee of Higher Education, and the National School Sports Committee. The technical and planning bodies are formed by the General Secretariat, the Planning and Research Bureau, and the Financial Management Bureau. The Institute for Educational Research is responsible for research and educational development. The Ministry of Education also works in conjunction with other ministries such as health, labor, and social welfare; culture; and public works.

Since decentralization and regionalization was established in 1976 and effectively implemented in the 1990s, Portugal has been divided into central and regional bodies, each with its own directorate. There is one directorate for each of the five regions of Portugal (Direcção Regional de Educação do Norte, Direcção Regional de Educação do Centro, Direcção Regional de Educação de Lisboa, Direcção Regional de Educação do Alentejo, and Direcção Regional de Educação do Algarve ). The Ministry of Education is responsible for educational guidelines, administrative and planning support, coordination of developmental research, and social policy.

Finance: The GEF, or Gabinete de Gestão Financeira (Financial Management Bureau), is an autonomous branch of the Ministry of Education in charge of financial programming and management of projects cofinanced by the European Union. The budget of the Ministry of Education in the year 2001 was about US$6.8 million, which represents an increase of 9.8 percent in comparison to the previous year.

The Ministry of Education pays the salary of teaching staff and faculty for public schools and universities. Municipalities are in charge of elementary schools for administration and construction. The Ministry of Public Works is responsible for other construction. Tuition is free for students, but they must pay for books and school materials. Grants for needy students are available from social services.

Nonformal Education

The Ministry of Education created the GAERI, or Gabinete de Assuntos Europeus e Relaço~es Internacionais (Office for European and International Relations) through the Decree-Law 59/96 to take care of assuntos comunitários (community issues), assuntos bilaterais e multilaterais (bilateral and multilateral issues), and cooperação para o desenvolvimento (developmental cooperation). The objective of GAERI is to fulfill the needs of the European Common Market. Several projects are being developed by the Instituto de Inovação Educacional (Institute of Educational Innovations) in this direction. There are over 110 projects available, elaborated by a team of professors from several countries. This is part of the distance learning process. Some of the main projects developed by Portugal in conjunction with other countries are: "The image of the other," "Women all over the world," "Islands projects," "Art gallery," "Life in my part of the world," "Global water sampling project," and "Radiodata." The last two projects highlight a main concern of the Institute of Educational Innovations with environmental issues involving the decline of life quality. The institute tries to identify the evolution of national measures for environmental protection and to disseminate these notions through nonformal education in the media and schools in order to bring awareness to the youngsters who can make a difference in the future of the world.

The European Schools Project is a European initiative to promote telecommunications in basic and secondary schools throughout the world. It was started in 1988 at the University of Amsterdam and has the participation of more than 300 schools in 26 countries. The use of the Internet to promote better learning is one of its main purposes.

Other projects involve the teaching of the Portuguese language and the development of knowledge of Portuguese culture through books and television programs to Portuguese speaking countries, the PALOP, or Países de Língua Oficial Portuguesa (countries of official Portuguese language). In the African Portuguese speaking countries, Portuguese is only one of many languages and generally the official one for schooling and business communication.

Teaching Profession

Teachers for nursery schools are educated for three years in escolas de educadores de infância. Basic education teachers are trained in escolas do magistério primário. There is an entrance exam, and the course lasts three years. For all other levels, the training is done in escolas superiores de educação. If the teachers have a bacharelato or licenciatura, they take a two-year theoretical and practical training course; otherwise they have to pursue a four- or five-year course at a higher level. Secondary school teachers take courses that last four years, or five if they continue pedagogical or professional training. Special education is taught at the Instituto Antonio Aurélio da Costa Ferreira in Lisbon, and hearing impaired training is also taught at the Instituto Jacob Rodrigues Pereira.

Summary

The Iberian Peninsula, which includes Portugal and Spain, has always been considered separate from the rest of Europe. Innovations from the rest of Europe were introduced up to a century after they had been instituted in other countries. Two major changes occurred in the twentieth century that helped Portugal catch up with the rest of Europe. The first was the Revolution of 1975, which introduced democratic reform. The second was Portugal's admission to the European Common Market. Financial aid, technological cooperation, and a renewed educational system helped diminish the educational gap and allowed Portugal to compete with other countries in the twenty-first century.

The Ministry of Education office in Portugal has faced continual challenges throughout its existence, especially with demands for a standardized education throughout Europe. Major reforms took place in Portugal in the 1980s and 1990s: development of polytechnic higher education as an alternative to university higher education, implementation of school management with the participation of the community (parents, local authorities, etc.), reform of school curricula by integrating subject contents of different fields of knowledge, and collaboration of state support in private vocational schools.

In the 1990s, the demand for a completely free education became a proverbial battle between the Ministry of Education and students from public universities across the country. Prior to the 1990s, private higher education institutions were nonexistent, and the small number of enrollments available in public universities was responsible for a huge gap between the number of applicants and the number of admissions. To complicate matters, access to universities was dependent on different factors dictated by different governments. Admissions criteria varied from a student's twelfth year of schooling as the determining factor in admission to a student's placement on nationwide standardized exams. Admissions criteria then became based on a student's placement on the controversial PGA, or Prova Geral de Acesso (general access exam), in conjunction with his/her grades from the tenth through the twelfth years of school. The PGA was later replaced by the Provas Específicas (specific exams), which tested candidates to the university according to their fields of expertise.

In any case, access to a university was a competitive process that left thousands of students each year waiting for another opportunity the next year. Among those who made it, there existed a gap between those receiving a nearly free education at public universities and those dealing with the high cost of studying at a private university. After graduating from a program, the Portuguese students had another challenge, finding a job that corresponded to their education, training, and aspirations.

As of the early 2000s, the way universities offer their cursos (courses) differs from the United States. Courses in Portugal consist of a predefined program for the duration of the student's education. Rather than random classes, students pick from programs in specific fields. As most universities tend to specialize in a limited number of subject areas, students have a limited choice of schools that offer the courses pertinent to their vocation.

Students in secondary education voiced their concerns in an active way. In the early twenty-first century, it is a common occurrence in Portugal for students to boycott classes and organize manifestations in front of the headquarters of the Ministry of Education or one of its regional branches. One concern of students was sex education classes, which students claimed were promised to be in the curriculum many years prior but had never been included. High school students have also been known to voice their disagreement, as when the Ministry of Education proposed to increase the length of the class period from 50 to 90 minutes.

The twenty-first century offers the challenge of broadening access to higher education for more students, the training and development of teachers to face the increasing number of students, and increased vocational education for a more demanding and specialized job market. Education in Portugal is developing at an accelerated rate in all aspects. Illiteracy rates have fallen consistently in the last years. There have never been so many students in higher education, and so many pursuing graduate studies. The country is developing rapidly, and education is accompanying this strong evolution.

Bibliography

Azevedo, Joaquim. Avenidas da liberdade, reflexo~es sobre política educativa. Oporto: Asa, 1994.

Bagão, Germano. Educational Laws. 9 February 2001. Available from http://www.malhatlantica.pt/.

Carvalho, Rómulo de. História do ensino em Portugal. Lisboa: Fundação Calouste Gulbenkian, 1985.

Cortesão, Luiza. Escola, sociedade, que relação?. Biblioteca das Ciências do Homem. 2nd ed. Oporto: Afrontamento, 1988.

ESTIA. Basic Education. 9 February 2001. Available from http://www.des.min-edu.pt/.

——. Diagrammatic Overview. 9 February 2001. Available from http://www.des.min-edu.pt/.

——. Educational System. 9 February 2001. Avaialable from http://www.des.min-edu.pt/.

——. Preschool Education. 9 February 2001. Available from http://www.des.min-edu.pt/.

Fernandes, A. Mendes. A educação em Portugal. Guarda: Of. S. José, 1958.

GAERI. Office of European and International Relations. 9 February 2001. Available from http://www.gaeri.minedu.pt/.

Galvão, Maria Emília. Secondary Education in Portugal. Strasbourg: Council of Europe Press, 1998.

Guia da Reforma Curricular. 3rd ed. Lisboa: Texto Editora, 1994.

Institute of Educational Innovation. 9 February 2001. Available from http://www.iie.min-edu.pt/.

Mónica, Maria Filomena. Educação e Sociedade no Portugal de Salazar. Lisboa: Presença, 1978.

Ministry of Education. Departamento da Educaçã a Básica. 9 February 2001. Available from http://www.deb.min-edu.pt/.

Pires, Eurico Lemos et al. O ensino básico em Portugal. Oporto: Asa, 1989.

Proença, Maria Cândida. O sistema de ensino em Portugal: séculos XIX-XX. Lisboa: Colibri, 1998.

Silva, Agostinho da. Educação de Portugal. 4th ed. Lisboa: Ulmeiro, 1996.

Terminology of Education. 9 February 2001. Available from http://www.barril.dapp.min-edu.pt/.

—Monica Rector and Pedro Lopes

PORTUGAL

Portuguese Republic

República Portuguesa

COUNTRY OVERVIEW

LOCATION AND SIZE.

Located in southwestern Europe in the western part of the Iberian Peninsula, Portugal borders Spain to the north and east and the Atlantic Ocean to the south and west. The total area of the country—including the overseas territories of Azores (2,247 square kilometers/868 square miles) and the Madeira Islands (794 square kilometers/307 square miles), both autonomous regions of Portugal—is 92,345 square kilometers (35,655 square miles). The area of Portugal is thus slightly smaller than the U.S. state of Indiana. The capital and largest city is Lisbon, a major seaport situated in the west-central part of Portugal at the mouth of the Tejo (Tajo) River. Other major cities include Oporto (Porto) situated in the northwest at the mouth of the Douro (Duero) River; Coimbra, an industrial and university city on the Mondego River in central Portugal; and Faro, located in the renowned Algarve beach resort area in the south.

POPULATION.

The population of Portugal numbered 10,048,232 in July 2000. The population growth rate was estimated at a rather low 0.18 percent in 2000, and the net migration rate was 0.5 immigrants per 1,000 population in the same year. The Portuguese population declined slightly in the late 1980s due to a rapid reduction of the birth rate and steady emigration . The figures somewhat stabilized during the 1990s, and in 1999 the population was 1 percent higher than it was in 1991. Portugal still has one of the lowest fertility rates in Western Europe with approximately 1.4 children born per woman. In 1999, the number of births rose by 2.3 percent, but this increase was still insufficient to ensure long-term population growth. According to Portuguese demographic projections (assuming a recovery in the fertility rate to 1.66 per woman in 2020), the Portuguese population is expected to peak in 2015 at 10.18 million and then again begin to decline. As in many other European countries, Portugal has an aging population with 15.2 percent over 65 years of age in 1998 (up from 13.8 percent in 1991) and only 16.8 percent aged 14 years or younger (compared with 19.4 percent in 1991). Life expectancy was 72.24 years for men and 79.49 years for women in 2000. Aging will inevitably increase the strain on Portugal's already over-stretched health-care and social security systems.

The Portuguese population has been strongly influenced by migration processes. Many nationals emigrated in the 1960s, 1970s, and to a lesser extent in the 1980s in search of higher living standards in the more affluent economies of Western Europe and elsewhere. About 4.5 million Portuguese now live abroad, or almost one-half of the domestic population, but better domestic economic conditions in recent years—particularly since the country joined the European Union (EU) in 1986—have changed this. By 2000, Portugal experienced a net immigration of 0.5 people per 1,000 population. In 1998, there were fewer than 178,000 immigrants legally residing in Portugal. These immigrants originated mainly from the country's former African and South American colonies and from EU countries.

The Portuguese are primarily of Mediterranean descent, as their ancestry can be traced to ancient Iberians, Romans, Visigoths, and Moors (Arabs). Black African citizens who immigrated to the mainland during the de-colonization in the 1970s are fewer than 100,000 in number. Portuguese is the official language. Roman Catholicism is the religion of about 94 percent of the population, although a number of Protestants and followers of other denominations also live in the country. The main urban centers are concentrated around the Lisbon and Tejo Valley area on the Atlantic coast and in the vicinity of the city of Oporto. These 2 conurbations (zones) are home to nearly 69 percent of the population. The shift from inland rural areas to the cities was fueled by the agricultural crisis and the post-World War II industrial boom, which again gained momentum in the 1970s. The nation is still experiencing heavy migration to urban centers, along with the gradual depopulation of villages in Portugal's rural provinces.

OVERVIEW OF ECONOMY

In 2000, Portugal's economy was to a large degree modern and market-oriented, enjoying steady, although not spectacular, economic growth, decreased interest rates, comparatively low unemployment, and improved living standards. Nevertheless, it remained Western Europe's least developed country with a per capita gross domestic product (GDP) of US$15,975, or approximately two-thirds that of the large Western European economies. Portugal's GDP was the second lowest in the EU after that of Greece, which was estimated to have the lowest production on the basis of market exchange rates in late 2000. Portugal also continued to have a large trade and balance of payments deficit.

Following its past glory as an influential world power and the leading maritime and colonial nation in the 15th and 16th centuries, Portugal experienced economic decline, particularly after the loss of its Brazilian colony in 1822. After more than 6 decades of oppressive dictatorship, economic stagnation, and international isolation during the 20th century, Portugal was considered by many to be the laggard of Western Europe by the early 1970s. Following the country's return to democratic rule in 1974, the economy grew by an average of 5.3 percent annually during the period from 1975 to 1980.

Portugal joined the EU in 1985, and its GDP growth slowed down to less than 1 percent annually during the period of EU adjustment. After 1990, it achieved a satisfactory annual growth average of 2.1 percent, reaching 2.7 percent in 2000. In 1998, Portugal successfully qualified for the European Monetary Union (EMU) and joined with 10 other European countries in launching the European currency, the euro, on January 1, 1999. The euro will fully replace Portugal's currency unit, the escudo, in February 2002. EU and EMU membership should be considered a major success, given the condition of the Portuguese economy in the early 1970s.

EU membership has been particularly beneficial for Portugal, allowing the country access to development funds and creating favorable conditions for its economy to compete, integrate, learn from, and get closer to the advanced economies of Western Europe. The government is working to modernize the country's economic capacity and increase its competitiveness in the increasingly integrated European and world markets. Improvement in the education sector is critical to this process.

These successes notwithstanding, industrial development and restructuring in Portugal generally has been slower than in other EU countries. Its industrial base is still quite limited, often facing hardship from having to compete in the single European market. But driven by the pressing competition of lower-cost East and South Asian imports, some traditional Portuguese exporting industries, such as footwear, clothing, and textiles, have rapidly modernized since the 1990s. Growth has been also strong in services, especially in the financial and retail sectors, and in construction. Tourism has also been historically important, with its focus in the late 1990s moving from traditional mass-market beach holidays to high-end, quality, cultural tourism.

Portugal, like its EU neighbors, has developed a service-based economy, while agriculture and fishing— once major sectors—have become much less important. Although the agricultural sector represented just 3.3 percent of GDP in 1998, it still accounted for 13.5 percent of total employment, much higher than the average for EU countries. The slowness of farmers to adopt more productive agricultural technology has led to a loss of market share to the more efficient producers of Spain and France.

An important factor setting Portugal apart from the leading EU economies is its lower labor costs, with an average annual cost of US$13,084 per worker, compared, for example, with US$33,196 per worker in Germany. Cheap labor has attracted substantial foreign investment in several new industry projects, particularly in the automotive and electronics manufacturing sectors. A new technology park outside of Lisbon has attracted several high-profile computer software and hardware companies. However, alternative low-cost manufacturing locations are also growing across Central and Eastern Europe, at locations often better suited geographically to supply the main European markets. They too are becoming increasingly attractive for investors, and Portugal is aware that it can no longer rely on low wages alone to attract new investment. Preparations for EU enlargement in 2001-02 and beyond will be of crucial significance to Portugal. The country will have to strive to protect its interests in accessing the EU's development funds and protecting its market shares in competition with the new, poorer, and sometimes smaller EU members.

POLITICS, GOVERNMENT, AND TAXATION

For much of the 20th century, Portugal has been ruled by an oppressive right-wing dictatorial regime and has maintained, often by force, control of its large colonial empire. In 1974, Portuguese revolutionaries initiated broad democratic constitutional reforms. In 1975, the country granted independence to its African colonies— Angola, Mozambique, Guinea-Bissau, Cape Verde, and São Tomé and Príncipe. Its constitution was further amended several times, most notably in 1992 when the treaty that created the EU, known as the Maastricht Treaty, was ratified, reflecting the new political and economic conditions of a united Europe.

The political system that emerged from the democratic reforms in the 1970s is parliamentary, with the role of the president being largely ceremonial, although certain reserve powers are also vested in this institution. The president is directly elected for a term of 5 years by popular vote and a person can hold the office for a maximum of 2 consecutive terms. In the Portuguese executive branch, the leadership role of the prime minister is much more important. The prime minister is the head of government and is elected by parliament on a motion by the largest parliamentary party or coalition.

Legislative power is vested in the unicameral (one house), 250-member Assembleia da Republica (parliament). Members are elected for terms of 4 years by proportional representation , but elections can also be called by the president at an earlier date (the next parliamentary election is due in October of 2003). There are 20 constituencies (electoral districts) in Portugal and the electorate chooses between numerous competing party lists.

The most influential Portuguese political parties include the center-left Socialist Party (PS), the center-right Social Democratic Party (PSD), the Communist Party (PCP), and the conservative Popular Party (PP). The PS returned to power in October 1995 after 10 years in opposition and was reelected in October 1999 with 115 parliamentary seats—not a majority, but significantly more than any other party. Its major dissent on economic policy with the PSD (81 seats), the main opposition party of the PS, is the greater stress that the PS places on social welfare spending. Both parties support a market economy, privatization , and European integration. The PCP (17 seats, in coalition with the smaller Green Party), which used to be the most effective party in clandestine (secret) opposition to the dictatorship before 1974, is one of the few remaining hard-line leftist parties in Europe. The PCP still advocates an extensive role of the state in the economy. Its once strong base in the industrial suburbs of large cities and the rural south was weakened during the 1980s and 1990s as the economy improved and poverty diminished radically. The PP (15 seats), previously known as the Center Democrats (CDS), underwent a number of transformations in the 1990s. These were accompanied by acute internal crises, and the party finally emerged in the late 1990s as the voice of the new right, holding a populist and anti-European stance.

In January 2001, the socialist president, Jorge Sampaio, was reelected with 55.8 percent of the popular vote, but roughly a year into its second term, the PS government, led by socialist Prime Minister Antonio Guterres, came under controversy. The economic climate was deteriorating, GDP growth was expected to slow from 2.7 percent in 2000 to 2.3 percent in 2001, and acute budgetary disputes and depressing corruption charges plagued the government. Another major confusion was caused by the findings of the of the long-running "Camarate Affair" investigation into a 1980 plane crash that killed the then Prime Minister Francisco Sa Carneiro of the PSD, as it is now widely believed that Sa Carneiro was in fact deliberately murdered.

The government's role in the economy became very significant in the decade following the 1974 revolution. One of the chief results of the upheaval was the takeover of many important industries by the state. Following its joining of the EU in 1985, however, Portugal adopted, partly as an adjustment measure, an active privatization program aimed at making the public sector more limited and more profitable. As a result, the Portuguese public sector accounted for 19.7 percent of GDP and for 5.5 percent of the country's total employment in 1988, and by late 1997, the numbers had been further reduced to 8 percent and 2.6 percent, respectively.

The privatization of state companies has been generally very beneficial for the country. The approaches towards accomplishing privatization have been quite varied, including selling shares in selected companies through a public stock offering in the capital markets, private sale, or often by using both methods combined. On a number of occasions, however, the government has kept a controlling share for itself that gives it the right to overrule strategic corporate decisions in the privatized companies. From 1989 to 1998, approximately 150 sales involving the shares of nearly 100 companies generated proceeds of more than US$21 billion, and 52 percent of the revenue was used for the repayment of existing public debt.

In 1998, 58 percent of the total market capitalization in the Lisbon Stock Exchange (BVL) was accounted for by the market capitalization of these privatized firms. In addition to some further expected sales of the stock of state-owned companies such as the telecommunications firm, Portuguese Telecom (PT), and the electricity company, Electricidade de Portugal (EDP), there are other major state firms still in the initial stages of privatization. These include the state airline, TAP, and a new energy holding company that combines the government's interest in petroleum refining and natural gas transmission.

In taxation, the government is trying to bring the Portuguese system closer to those established in other EU countries. A major reform of direct taxation took place in 1989 to that effect, but it was widely believed that occasional gaps remained between the law and its actual enforcement practices. The 1989 tax code defined taxable income as the profits of firms involved in commerce, industry, or agriculture. All income gained by local companies abroad is taxable, but tax liability may be cancelled or decreased by various tax treaties. The income of resident corporations and branches of foreign (non-resident) companies is taxable at a rate of 32 percent. The actual tax rate in many regions of Portugal is in fact 35.2 percent because some local surcharges exist, usually at a rate of 10 percent of the base tax.

The government intends, however, to cut corporate taxes by nearly one-eighth before 2003, and companies with revenues of less than Esc100 million would be granted even more preferential treatment. The introduction of the value-added tax (VAT) in 1986 helped the tax authorities detect and prevent widespread tax evasion by individuals and companies who were still plaguing the economy at that time. Tax evasion has been further reduced since the government was forced to dramatically improve its tax collection efficiency and to reduce its budget deficit without introducing new taxes. The government was forced to do this in order to qualify for the requirements of the EMU in 1998. A 20 percent advance tax is applied to all payments by businesses to independent contractors and all self-employed individuals with an annual income of Esc2 million or higher.

Portugal has an external debt estimated at US$13.1 billion in 1997. The debt is not considered disproportionate or burdening for the economy, and Portugal handles its financial obligations properly.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

Portugal's membership in the EU was beneficial for the country's infrastructure . This was so not only because of the economic improvement due to European integration, but also because the country received support in financing its infrastructure projects from the union's funds. The greatest portions of these funds were raised through the European Regional Development Fund. Between 1987 and 1998, Portugal received approximately US$24 billion in development funds from the EU. Economic growth over the 1990s has been accompanied by some ambitious infrastructure improvements, most notably by the completion of an extensive system of modern highways.

Additional infrastructure projects are expected to be launched between 2001 and 2005, including additional roads, dams and ports, a new international airport (to be built at Ota, north of Lisbon), a new metro (subway) system at Oporto, modernization of the country's railroad system, and an upgrade of the natural gas pipeline system. As a result, the country has a well-developed transportation network with 59,110 kilometers (37,000 miles) of paved roads, including 797 kilometers (498 miles) of expressways, 2,850 kilometers (1,780 miles) of railroads, and some 820 kilometers (513 miles) of navigable inland waterways (of relatively little importance to the national economy). Once a great maritime nation, Portugal has many ports and harbors in Aveiro, Funchal (the Madeira Islands), Horta (the Azores), Leixoes, Lisbon, Porto, Ponta Delgada (Azores), Praia da Vitoria (Azores), Setubal, and Viana do Castelo. The country also runs a sizable merchant fleet of 151 ships totaling 1,061,267 dead-weight tons (DWT). Portugal is served by nearly 40 airports and by its major national airline, TAP.

The energy industry is largely state-controlled, but energy output in Portugal is still quite low. Its dependence on foreign energy sources is thus correspondingly high. No oil or natural gas has been exploited in the country, known reserves of coal are limited (only about 30 million tons), and there are no nuclear power facilities. With financing from the EU, Portugal allocated Esc470 billion to the construction of a natural gas network to connect with the pipeline from Algeria to Europe, which opened in November 1996. The country expects the connection to the pipeline to support one-tenth of its energy

needs. In 1998, electricity was generated mostly by thermal plants, using fossil fuel (63.14 percent), hydropower (33.46 percent), and other (not nuclear) sources (3.4 percent). The country is a major net importer of energy.

The Portuguese energy market in the 1990s was served by 4 government-controlled companies: the partly privatized oil company Petrogal, the partly privatized electricity utility Electricidade de Portugal (EDP), and the 2 gas companies, Transgas (operating the new natural gas pipeline) and Gas de Portugal (GdP). In 1999, the government created a new state-controlled holding company, Gas e Petroleos de Portugal (Galp) by merging Petrogal with the 2 gas companies. This process was aimed at developing an energy group that would be able to compete effectively with larger Western European utility companies in the increasingly liberalized market.

In telecommunications, Portugal is a small market lacking a culture that is particularly technology-oriented. Furthermore, Portugal has a relatively low saturation in terms of consumer telecom services compared with other, more developed EU countries. In 1996, 3.72 million fixed telephone lines were in use, and there were 887,216 mobile phone subscribers in 1999. For comparison, these statistics are quite lower than in Scandinavia, but still higher than in Germany. Portugal joined Finland and Venezuela as one of the only countries where, for various reasons, mobile phone penetration has overgrown the fixed phone market. About 23 percent of Portuguese homes had cable TV in 2000. Although 20 Internet service providers operated in 1999, the Portuguese still lagged well behind most other Europeans in using the Internet. Business and consumer broadband and data faster-access Internet services, popular elsewhere in Europe, are still almost non-existent.

The legacy of the decades-long Portuguese dictatorship with its nationalistic, isolationist economic policies, combined with its comparatively late entry into the EU, has resulted in Portugal's reputation as the EU's telecommunications laggard. The country started implementing the EU services directives to harmonize its telecommunications industry with the markets of its larger, more developed neighbors for the first time in the early 1990s. Portugal liberalized its basic telecommunications services in January 2000, becoming the second-to-last EU member to open its market to foreign competition, and its regulatory regime was set to manage the transition period to free competition. By early 2001, the state-run Portugal Telecom (PT) had kept its monopoly control on traditional segments such as fixed telephony, leased lines, and multi-channel television. The cable television market is still dominated by the PT's cable division (under the brand names of PT, Multimedia, and TV Cabo), which operates a nationwide fiber optic cable network covering nearly 95 percent of the consumer base.

However, PT faces robust competition in newer telecom services in the liberalized market environment. While PT's basic fixed line telephone market is considered rather dysfunctional, under-developed, and shrinking, its strongest competitive advantage is TMN, its mobile service operator and only serious business presence in non-traditional markets. Competition in new service segments started gaining ground when the second mobile phone operator, using the European GSM system, was launched in 1992. The liberalization of the data services market in 1994 led to several new data service entrants. Competition in non-traditional services has forced PT to reinvigorate its efforts to secure its thinning margin of leadership in market share in these segments. In January 2000, with the entry of 8 new basic services operators, competition entered the traditional market.

In 2000, the government filed for EU approval to privatize a 34 percent stake in the TAP airline, demonstrating its intention to sell it to Swissair. Other deals in the government's ambitious infrastructure privatization program include a 20 percent share in the state electricity giant EDP and the last 10 percent of state-owned stake in national telecommunications company PT, which was sold to foreign investors in 2000. In 2001, the privatization of the state's remaining 15 percent stake in the expressway operator holding, Brisa, is expected, as well as the partial privatization of the energy holding company Galp, one-third of which has already been bought by the Italian energy group ENI. However, the government's handling of the TAP, EDP, and Galp privatizations has turned highly controversial, and political and legal inquiries into the matter could delay further privatization steps.

ECONOMIC SECTORS

In 1998, the largest contributor to the Portuguese economy, as elsewhere in Western Europe, was the services industries. This sector is responsible for nearly two-thirds of the GDP, while industry, utilities, and construction together contributed more than one-third, and agriculture, forestry, and fishing contributed about 3.3 percent. By European standards, however, a disproportionately high percentage of the labor force was employed in agriculture. The 13.5 percent of the population that works in this industry apparently still lag behind their counterparts in other EU nations in using modern technologies and enhancing effectiveness.

AGRICULTURE

Although its contribution to GDP is very small, agriculture still employs a considerable number of Portuguese. Chief crops and production figures for 1998 include vegetables (including tomatoes, 2.2 million metric tons), fruit (including grapes and olives, 1.7 million tons), root crops (including potatoes, 1.1 million tons), and cereal grains (including corn and wheat, 1.3 million tons). Portugal is traditionally one of the world's leading producers of wine (including the world-renowned Porto and Madeira wines) and olive oil. Livestock in 1998 numbered 1.3 million cattle, 6.3 million sheep, 2.2 million pigs, and 33 million poultry. Fishing is also a major industry. Portuguese farmers and fishers—like their colleagues elsewhere in Europe—rely heavily on EU subsidies , but their slowness to adopt more productive technology has resulted in a loss of EU market share to competitors from Spain, France, and Italy.

INDUSTRY

Although the country's economy is progressively shifting its weight to the services sector, manufacturing retains significant importance in Portugal, employing (with construction and mining) more than one-third of the labor force. Major traditional manufactures include processed food, textiles, metals, machinery and ship repair, chemicals, wood (particularly cork), glass and pottery items, refined petroleum, and building materials. Annual production in the late 1980s included about 27,400 metric tons of processed sardines, 285,900 metric tons of refined sugar, 1.3 million metric tons of chemical fertilizers, and 386,900 metric tons of steel products. The products of Portuguese cottage industries, such as lace, pottery, and tiles, are world famous, and the shoe industry also performs particularly well. Some new sectors, such as automobiles and automobile components, electronics, and plastics, have also become increasingly important over the 1990s. The prosperity of the manufacturing sector generally improved during the 1990s, with output expanding by a yearly average of 3.1 percent. This was due in part to the presence of a new generation of Portuguese entrepreneurs and the appearance of major foreign investors. Industrial policy in the 1990s focused on attracting foreign capital, mostly by way of privatization, but also by offering state and EU subsidies and assistance to investors. The government intends to further privatize several manufacturing facilities, notably in power generation, chemicals, and construction materials (cement). Not all foreign investments have been successful, however, and the government has been criticized for not properly securing guarantees for the future performance of many of them. Between 1995 and 2000, for example, 2 automobile manufacturers, Ford and the French company Renault, have terminated production in Portugal.

A considerable number of Portugal's more traditional manufacturing businesses are still run by the most powerful families. Nonetheless, a new generation of family management has been successful in meeting the challenges of the European single market through technological innovations, developing export markets, and making use of the country's low wage structure. However, many of these industries face increasingly tough competition from the Asian economies, where wage levels are even lower and where currency devaluations in the 1990s have increased their competitive edge. Many firms have been unable to adapt to these new market realities, resulting in a decline in the production of textiles, clothing, and footwear between 1995 and 2000. Difficult economic conditions are expected to continue until 2005, as companies shift their output to more value-added products. Raising productivity is an important priority for Portuguese manufacturing, but its record in research and development is weak. In 1997, it spent only 0.63 percent of its GDP on research and development, less than one-third of the average amount of EU nations.

Nevertheless, the 1990s saw positive developments in the newer manufacturing sectors as well. A joint venture with Ford and Germany's Volkswagen (VW), Auto-Europa, was launched in April 1995 with the purpose of building multi-purpose passenger cars for export. At the time, it was Portugal's largest manufacturing operation. This US$2.6 billion investment package received the highest level ever of union subsidies in the EU at nearly US$1 billion. From the beginning, however, company executives admitted that production and employment would not meet forecasts because of weaker than expected European demand for the vehicle being produced. Ford gradually pulled out and VW acquired full ownership of the venture. Despite these setbacks, this modern plant has had a very positive impact on the economy, producing nearly 130,000 cars per year. They are almost all produced for export, generating sales of US$2.3 billion and accounting for some 12 percent of the total worth of Portuguese exports (1997 est.). The plant employs 3,000 workers and has helped to create more than 5,000 other jobs. At its full capacity, it could add as much as 15 percent to the value of Portugal's total exports and 6 to 7 percent to its import bill. The AutoEuropa plant is situated in a new industrial park outside of Lisbon in Palmela, where many of its main suppliers are located as well. Taguspark, also located outside of Lisbon in the city of Oeiras, is a science and technology park built in 1992 that housed about 100 new technology companies in 2000.

SERVICES

FINANCE.

As Portugal's economy moved towards a focus on services, particularly on banking and finance, this sector gained importance in the 1990s. Following the gradual but thorough privatization of state banks begun in the late 1980s, the Caixa Geral de Depositos (CGD) remained the only state-controlled financial services firm in 2000 (the government has ruled out its privatization for the time being).

The privatization of the sector has been followed by a wave of bank mergers and acquisitions. Coping with a relatively small but increasingly crowded market as a result of the European banking liberalization policies, Portuguese banks took the opportunity to form larger and more efficient groups. In 1995, Banco Comercial Portugues (BCP) and the insurer Imperio jointly bought the country's largest private bank, Banco Portugues do Atlantico (BPA). Industrialist Antonio Champalimaud acquired half of the second largest bank, Banco Totta e Acores, and added it to his Banco Pinto e Sotto Mayor (BPSM). In 1999-2000, the banking sector underwent further consolidation when the major Spanish bank, Banco Santander Central Hispano (BSCH) tried to acquire a controlling stake in the Champalimaud group. Because it was in violation of EU legislation, the deal was banned by the government, but a compromise led to the split of the Champalimaud group and a new reorganization of the sector. BSCH acquired 2 of the splinter Champalimaud banks, Banco Totta e Acores and Credito Pre-dial Portugues; CGD acquired the group's most valued assets, BPSM and the insurance group Mundial Confianca. This reorganization concentrated 70 percent of the country's retail banking market in 4 institutions: CGD, BCP, Banco Portuguese do Investimento (BPI), and Banco Espirito Santo (BES). BSCH of Spain controls 11 percent of the market share. Insurance firms are strongly connected to the banking groups, and 3 of them dominate the market: Mundial Confianca, acquired by CGD; Imperio, controlled by BCP; and Tranquilidade, in which BES has a major stake.

By 2000, banking services in Portugal were modern and mature. Yet as the competition from foreign banks increased with the implementation of the EU banking liberalization policies, profit margins of Portuguese banks began to shrink. Even though the Internet offered the possibilities of cost advantages such as online banking, no Portuguese bank was in a position by 2000 to use fully the Internet for significant cost savings. None had close enough ties to a major foreign bank that would have been able to provide adequate support. Decreasing lending margins in the late 1990s, on the other hand, have prompted most Portuguese retail banks to raise their commissions on customer transactions in order to stay profitable. For example, debit cards in Portugal have an annual charge of US$9.25 a year and credit cards have an even higher annual charge. As a result, commissions vary radically from bank to bank, and it is often the poorer customers who are actually bearing the burden of such dubious banking policies.

Shrinking bank profit margins, increasing bank commissions, and allegations that banks frequently gave misleading information on their charges or applied the charges after the accounts had been opened prompted the government to introduce new voluntary regulations on banking services. These regulations allowed for even the poorest citizen to have a bank account without depositing a minimum amount and to pay only low predictable charges. Only the state-owned CGD, the country's largest financial group, had previously provided a full table of its prices for any visitor to its web page to see. Several major banks adopted the new rules in 2000, but others declined for reasons of commercial secrecy.

Although Internet banking hardly exists in Portugal, its national system of automated teller machines (ATMs), Multibanco, is a leader in Europe. The new Netpin electronic technology, compatible with the system, offers unprecedented security against fraud. Netpin's developer, the Portuguese technology-based company Grupo de Apoio a Industria Nacional (GAIN), manufactures most of the terminals distributed across the SIBS (Sociedade Interbancaria de Servitos) system, parallel to Multibanco. The Netpin system offers the services available at a regular ATM (withdrawals; balance inquiries; payment of tax, water, and energy bills; recharging of electronic "purse cards") and could serve as the basis for development of electronic commerce in Portugal. The company is considering marketing the product in foreign markets, concentrating on those where the Multibanco system already has a foothold, such as Brazil, Colombia, Spain, and Costa Rica.

Between 1994 and 1998, due to very easy and active mortgage financing, household debt (in home mortgages) rose from 28.6 percent to 60.8 percent of the disposable income in the country and from 21.1 percent to 44.1 percent of GDP. While the Portuguese government believes that such levels are not dangerous, the rapid growth of the debt is hardly sustainable. If household income suddenly drops, a banking crisis could be triggered by households unable to make payments. There are thus some worries that these high debt levels could worsen any future recession . Furthermore, household disposable income can be rapidly affected even if no recession occurs, simply due to changes in interest rates by the European Central Bank. Finally, the easy availability of home mortgage loans has contributed to an exaggerated and burdensome increase in real estate prices.

TOURISM.

Tourism is one of the most important sectors of the Portuguese economy, with foreign currency earnings accounting for an estimated 4.8 percent of GDP in 1999 and employing 6 percent of the active population. Foreign exchange revenue from tourism amounted to US$2.4 billion in 1997. Nearly 25 million foreigners visit Portugal every year, and about half of them are tourists. Most of the visitors are Central and Northern Europeans attracted by the sun and beaches of the southern Algarve region and Madeira. In the mid-1990s, as mass beach tourism declined worldwide, the sector went through a sluggish period, in contrast to the tourist boom in neighboring Spain. The authorities launched a program to diversify attractions by promoting sports, culture, and conference facilities, and public investment in the late 1990s was directed into providing facilities in undeveloped areas to encourage investment by the private sector . The government is restoring historical and cultural assets such as castles and monasteries, with the EU meeting one-third of the costs. A renewed tourism promotional campaign helped increase revenue in 1997 and 1998. The favorable exchange rate for visitors from Britain (Portugal's most important tourist market) and the celebration of the World Fair Expo '98 in Lisbon brought in additional visitors as well. The World Fair alone contributed a 20 percent increase in foreign visitors in 1998 and a 17 percent increase in tourist revenue.

RETAIL.

Portugal is slowly following general European retail trends, with a proliferation of hypermarkets and shopping malls gradually replacing small traditional retailers. These new forms of retailing thrived during the consumer boom of the late 1990s. Both foreign and domestic investors have participated in the retailing revolution, with principal domestic investors being the Oporto-based group Sonae Investimentos and Lisbon's Jeronimo Martins.

Portugal's franchise retail market, after the boom period of the 1990s, entered a phase of consolidation in 1999. At that time, 357 franchisers were already operating in the market. Of the total number of brands, 35 percent were Portuguese and 42 percent were Spanish. Banks specializing in small and medium-sized businesses, like the state-owned Banco Nacional Ultramarino, help franchises get started. Famous franchise names include Printemps and Carrefour (French supermarket chains); McDonald's, Pizza Hut and Baskin-Robbins (U.S. fast-food chains); Goody's, a Greek fast-food chain claiming to be the third largest in Europe; and Italian and French apparel stores like Massimo Dutti and Faconnable. Ready-to-wear clothes account for more than one-third of all franchised outlets. A series of new retail centers, such as the large Colombo Center in Lisbon that opened in 1997, have provided excellent opportunities for retail licensing and franchising. The company Sonae Imobiliaria, a unit of Sonae Investimentos, accounts for more than half the market for new retail centers. The next phase of retail development will most likely be the emergence of retail parks or factory outlets, and Sonae Imobiliaria, as well as its rival Mundicenter, are preparing to develop this market.

Since the late 1980s, mail order and TV sales have become popular direct marketing methods. Between 1996 and 1997, sales growth was calculated at 15 percent, and there are presently around 50 direct marketing firms. The most popular sectors are cultural, instruction and training, and amusement materials (33 percent of sales) and apparel and clothing (17 percent of sales). Other strong areas are housewares, perfumes, cosmetics, art, and collectibles. The success of direct marketing is more impressive given that Portuguese mailing expenses are considered high.

E-commerce is still lagging behind most of Europe, but several companies have emerged in the late 1990s that offer online shopping for office supplies, computer accessories, and groceries. Consumer protection regulations and laws in Portugal are considered generally adequate for online shopping, although inspections often are ineffective.

INTERNATIONAL TRADE

In 1996, Portuguese imports totaled US$34.1 billion and exports US$23.8 billion. Principal imports typically were mineral fuels, machinery and transportation equipment, and food and livestock. Principal exports included clothing, textile yarns and fabrics, and wood and paper products. Leading purchasers of exports were Germany, Spain, France, the United Kingdom, the Netherlands, the United States, Italy, Belgium, and Sweden; chief sources for imports were Spain, Germany, France, Italy, the United Kingdom, and the Netherlands. Foreign exchange revenue from tourism, amounting to US$2.4 billion in 1997, helped to compensate for the nation's chronic trade deficit . The World Fair Expo '98 in Lisbon considerably enhanced the country's profile in this respect.

MONEY

Portugal and 10 other members of the EU have started changing over from their national currencies to the single European currency, the euro, for all transactions as part of their participation in the EMU. Use of the euro began in January 1999, although only for electronic bank transfers and for accounting purposes. Euro coins and bills will be issued in 2002, at which time the Portuguese escudo will cease to be legal currency. The EU members have established the European Central Bank (ECB) in Frankfurt,

Germany, responsible for all EU monetary policies . Since 1999, the control over Portuguese monetary issues, including interest rates and the money supply regulation, has been also transferred to the ECB.

Although Portugal qualified for the initial stage of the EMU in 1998, its public finances are still considered quite unstable. In 2000, the ECB decision to hold interest rates steady was welcomed in Portugal, but financial policy challenges were still very serious. The late 1990s, years of rapid economic growth and increasing tax revenues, allowed the government to boost public spending growth in 1998 and 1999 and still meet its deficit reduction targets. But revenue growth slowed dramatically in 2000 due to the domestic economic slowdown and the government's highly controversial energy policy.

By allowing the rate of the petrol tax to fluctuate disproportionately to oil prices, the government hoped to prevent a dramatic rise in oil prices that might fuel consumer price inflation . That policy, however, turned into a massive drain of the public finances while budgeted revenue targets were missed by about 0.7 percent of GDP. The government, quite luckily, met its budget deficit target of 1.5 percent of GDP in 2000, as required by the EU standards, but that was only thanks to the boost of US$360 million from the sale of 4 operating licenses for third generation mobile phone operators. It was otherwise estimated that the deficit would have been almost 2 percent of GDP.

The weaknesses of Portugal's public finances were analyzed in 2000 in reports by the European Commission (the EU executive body), the International Monetary Fund (IMF), and the Organization for Economic Cooperation and Development (OECD), all of which offered a gloomy account of the situation. The government admits that, with the economy entering a period of slower growth, it has few options but to implement structural spending reforms (public spending cuts) if it is to meet future deficit reduction targets. A new public finance committee was scheduled to present proposals on spending cuts in the first half of 2001.

Financial markets in Portugal are doing considerably well by most accounts, although important pieces of legislation regarding their development are still pending in parliament. The Lisbon Stock Exchange's (Bolsa de Valores de Lisboa, or BVL) capitalization and turnover have grown rapidly in the late 1990s, fueled by the govern-ment's massive privatization program and by the Portuguese people's growing enthusiasm for share ownership. The privatization of a 30 percent stake in the electricity utility EDP in June of 1997 substantially increased the exchange capitalization and liquidity , and the number of shareholders increased from 1 percent to 6 percent of the Portuguese population. This considerable growth in activity, value, and capitalization transformed the exchange from an emerging market into a developed one. The launching of a new market in Oporto in 1996, which merged with the Lisbon one in 1999, gave an additional impetus to stock market trading.

After dropping slightly in 1995, the BVL price index (the Portuguese counterpart for the United States' Dow Jones) increased by 32 percent in 1996, by 65 percent in 1997, by 26 percent in 1998, and by 10.2 percent in 1999. It reached its record high of 6,511 on March 3, 2000. The increase was driven by the soaring prices of a limited number of telecom, media, and Internet stocks, although concerns in Europe and the United States about overvaluation of Internet-related stock has since led to a dramatic cooling of market enthusiasm for the "new economy" stocks. The stock market also experienced a still rising tide of public offerings in this sector in 2000, including PT Multimedia and PT.com(the media and Internet subsidiaries of PT), Sonae.com(the Internet division of the other major domestic telecom operator, Sonae), and Impresa (a major media group). Nonetheless, the Portuguese stock market suffers from a lack of liquidity similar to that of other European exchanges, reflecting its disproportionate dependence on a small number of blue-chip (large and profitable company) stocks, the most influential of which, PT and EDP, are still largely controlled by the government.

The long expected New Market (Novo Mercado) for small, high-growth companies, a replica of the American Nasdaq market, failed to launch by its planned deadline of December 2000. The disappointment in Portugal was considerable as this failure was largely regarded as a sign that the BVL was lagging behind at a time of rapid transformation of European securities markets. BVL executives decided that an alliance with other exchanges would keep it from being left out of this period of European expansion. Negotiations were started for an association with the Euronext exchange group, which serves to unite stock exchanges in Amsterdam, Brussels and Paris, although there were no guarantees that the larger markets would agree to accept Portugal's much smaller exchange as an equal. In late 2000, the BVL also struck an agreement with the Spanish derivatives market, MEFF, to launch trading in financial products listed in each other's markets. The Portuguese stock market commission declared that in January 2001 the exchange would adopt several new indicators, with the current index, the BVL 30, being replaced by the Portuguese Stock Index 30. It would also be joined by other existing indexes. The indexes planned to be included in the deal are PSI 20, PSI General, PSI TMT (technology, media, and telecommunications), PSI NM (New Market, as soon as it becomes operational), and another new index for medium-sized service and industrial companies. This change has been seen largely as a cosmetic measure, however. There have been many discussions of fundamental change at the BVL, but little has been decided upon, and the market continues to suffer from large gaps between the intentions of its executives, the needed but still pending legislation, and actual achievements.

POVERTY AND WEALTH

After long decades of relative poverty for the rural and urban masses during the dictatorship, Portugal's living standards have been on the rise since the mid-1970s. Conditions particularly improved after the country joined the EU and aligned its social policies with the Union's regulations. Poverty and social exclusion, characteristic of the country earlier in the 20th century, are presently almost non-existent. Many remote, depopulated rural areas benefit vastly from EU programs on regional development. After the democratic revolution in 1974, the government implemented, under socialist and communist influence, a number of measures for more equitable distribution of income and land ownership.

One measure of economic inequality, the Gini index , gives Portugal a ranking of 35.6, lower than that of the United States (40.8) or the UK (36.1), though it is still much higher than those of Nordic EU members such as Denmark, Sweden or Finland. Yet Portugal's per capita GDP is still comparatively low by European standards, and the bank indebtedness of ordinary households is remarkably high.

Portugal's rate of inflation rose through much of 2000, exceeding the ECB price stability limit of 2 percent and the Portuguese government's original inflation target of 2 percent for the year (later revised to 2.7 percent). The actual inflation rate for 2000 was double the euro-zone average. The inflation rise reflected rising food prices, the effect of the euro's weakness against the U.S. dollar on 2000 import prices, and the impact of higher energy bills. Despite the government's decision to freeze the prices of retail oil products in April 2000, both producer and consumer prices continued to increase. The extremely tight labor market and rising inflation notwithstanding, average wage growth (based on collective pay agreements for non-public-sector workers) showed very

little increase in 2000. Real wages were likely to decline by the end of 2000. As a result of this, ordinary Portuguese felt rather pessimistic about their current economic prospects.

WORKING CONDITIONS

By 1997, the total labor force in Portugal was approximately 5 million. Although unemployment still averaged about 4 percent (one of the lowest in the EU), many considered Portugal to have almost achieved full employment and that there was little opportunity left for redirecting underemployed workers from agriculture to more productive sectors. The proportion of working women was already higher than in most other EU countries. Since the late 1980s, powerful syndicates (labor unions) controlled more than 55 percent of the labor force. The labor market is accordingly tight and many industries are suffering from a labor shortage.

According to the available data from the third quarter of 2000, 30,000 new jobs were created in Portugal during that period, and the rate of employment growth accelerated to 1.8 percent. New job creation was boosted mainly through the traditionally unstable construction sector, where employment rose by 11.5 percent, while service sector jobs increased by only 2.1 percent, and industrial employment fell by 3.3 percent. Growth in the number of employees reached 2.6 percent, of which fixed-term contract employees were responsible for 1 percent and permanent contracts for 0.7 percent. The tightness of the labor market was somewhat lessened by a rise in the number of persons who applied for a job for the first time. Nevertheless, the economy continued to operate in conditions of near full employment. Portugal's participation rate still remains well below the EU average, increasing the heavy strain on overburdened social security and health-care systems.

Although Portugal is ruled by a socialist government and enjoys friendly relations between the government and the unions, labor disputes are often quite passionate. In May 2000, after a series of nationwide railroad strikes, the government ordered 1,700 state-employed train operators back to work, claiming their actions were harming the economy and the people's lives. Legislation provides grounds for such an order as a rarely used emergency measure if key public services are at risk. The loss-making national railroad company, Caminhos de Ferro Portugueses, is Portugal's only train service provider. Once the period covered by the order expired, however, train operators decided to resume their action.

Earlier in 2000, the socialist government was shaken by the worst wave of public sector protests since it took office in 1995, when a general strike by civil service and transport unions hit services in Portugal. Schools, health centers, buses, and the Lisbon Metro were affected by the stoppages. The main communist and socialist-led union federations called upon labor opposition to push for higher wages. The strike was the latest in a series of events that had been gathering momentum since annual wage talks were aborted in March 2000, and the government fixed a 2.5 percent wage increase for public administration workers. When the government later announced an average increase of more than 11 percent in fuel prices, unions feared that real wage increases would erode. Antonio Guterres, the prime minister, warned that public sector wage increases had to be kept moderate to prevent higher inflation that could threaten Portugal's compliance with the EMU stability pact.

The dire economic forecasts in early 2001 suggest that hidden wage pressure may be still growing. Public-sector unions have demanded wage increases between 4.5 percent and 6 percent in 2001, expressing their serious concern about the fact that the government may miss the inflation target (on which wage negotiations are based) for the third consecutive year. The government, which has resisted these pressures, is still expected to agree upon an average pay raise in the public sector of about 3.7 percent for 2001 (up from 2.5 percent in 2000), which, on the other hand, may over-stretch the already very fragile public finances and fuel higher inflation.

Furthermore, with labor market conditions remaining very tight, there is a risk of even greater pressure for wage increases on the private-sector, raising the threat that even higher inflation could become inevitable. The traditional loyalty between the government and the trade union federation could, in the event that this happens, come under additional strain. Good labor relations, nonetheless, will most likely continue to be the norm. On the other hand, improvements in the quality of the work-force through education and training, which have been generously funded through EU programs, will be conducive to wage growth.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

2ND CENTURY B.C. Present-day Portugal territory becomes a part of the Roman province of Lusitania.

5TH CENTURY A.D. The area is conquered by the Visigoths.

8TH CENTURY. The region is conquered by Muslim Moors.

997. The land between the Douro and Minho rivers is taken over by Bermudo II, the Spanish Christian king of Leon.

1064. The lands to the south of the Douro and Minho rivers, including Coimbra and including several Spanish fiefs, are united into a feudal entity by Ferdinand I, Spanish king of Castile and Leon. The northernmost of the fiefs, the Comitatus Portaculensis, situated around the old Roman seaport of Portus Cale (Oporto), later gives its name to Portugal. A feudal, agriculture-based economy develops.

1093. Henry (Henrique) of Burgundy becomes Count of Portugal.

1139. Alfonso Henriques, son of Henry of Burgundy, declares Portugal independent from the kingdom of Castile and Leon and becomes king. Aided by the Templars and other knights' orders, he extends the kingdom southward to the Tejo River.

1185. Portuguese settle in the reconquered area in self-governing municipalities. The Cistercian monks promote more efficient agricultural methods.

1248-79. The Moors are driven out of the southern province of Algarve, and the capital of Portugal is moved from Coimbra to Lisbon. The king starts governing with the help of a Cortes (a representative assembly of the nobility, clergy, and citizens).

LATE 13TH CENTURY. Diniz, "the Farmer King," encourages agriculture, founds the first university at Coimbra, develops the Portuguese navy into the strongest in all of Europe, and negotiates a commercial treaty with England.

LATE 14TH CENTURY. Under the lead of Prince Henry the Navigator, son of King John I, a century of exploration and conquest begins with exploring the African coast for a route to the Indies. Portugal later becomes a great colonial power as its navigators explore Madeira, discover the Azores Islands, and take a foothold in Africa.

MID-15TH CENTURY. Using the caravel, a tall ship adapted for Atlantic voyages, Portuguese sailors reach present-day Cape Verde, Sierra Leone, Ghana, and Angola.

1488. Bartholomeu Dias becomes the first European to sail around the southern tip of Africa, opening the sea route to the East Indies.

1494. After Christopher Columbus's voyage to America, Portugal and Spain sign the Treaty of Tordesillas, which allocates to Portugal all undiscovered lands east of a line 370 leagues west of the Cape Verde Islands.

1497-99. Vasco da Gama reaches India by the Dias route and starts a lucrative trade in spices and other luxuries. The Portuguese later conquer Goa (in present-day India), Malacca (in present-day Malaysia), the Moluccas Islands (in present-day Indonesia), and Hormuz Island in the Persian Gulf. Under pressure from Spain, Portugal expels all Jews and Muslims, depriving Portugal of much of its enterprising middle class. Trade is begun with China, and Portugal later acquires the trade colony of Macao from China.

16TH CENTURY. Portugal settles Brazil and introduces the Inquisition at home to enforce Roman Catholic loyalty. Political decline follows internal struggles for the throne, and Portugal is subdued by the Spanish Habsburgs and gradually loses its positions in the East Indies to the Dutch and the English.

1640. With help from France, Portugal restores its independence, and John IV of Braganza takes over the throne and renews ties with England. British merchants gradually come to dominate Portuguese trade, monarchy becomes more despotic, and the Cortes lose their significance.

1750-77. Chief Minister Sebastiao Jose de Carvalho e Mello encourages industry and education and ends the foreign monopoly of trade.

1807. The armies of French Emperor Napoleon threaten Portugal, and the royal family withdraws to Brazil, making Rio de Janeiro the seat of government. In 1811, Portugal is free of French influence, but the royal family remains in Brazil and makes it a separate kingdom in 1815. Brazil proclaims its independence in 1822.

1826. Pedro IV (former Pedro I of Brazil) takes over the throne in Lisbon and introduces a parliamentary regime subordinated to the monarchy. Acute internal political strife more than once requires the intervention of other European powers and popular dissatisfaction with the monarchy grows.

1910. The army and navy lead a revolution establishing a republic. A liberal constitution is then adopted, and Manuel Jose de Arriaga is elected president. Portugal is shaken by political turmoil and in 1916 begins participation in World War I fighting for the Entente.

1926. An army coup deposes the 40th successive cabinet since the founding of the republic. Antonio de Oliveira Salazar, professor of economics, is appointed minister of finance.

1932. Salazar becomes prime minister and dictator, and Portugal becomes a incorporated state with a planned economy, called the Estado Novo (New State).

1943. Portugal remains neutral in World War II but allows the Allies to use the Azores as a naval and air base. The planned economy collapses as the fishing industry declines, refugees fill the country, and the East Indies colonies are threatened by Japan.

1945. Unemployment and poverty are rampant after the war, but opposition to the Salazar regime is suppressed.

1960s. India annexes Portuguese Goa in 1961. Uprisings start in Angola, Guinea, and Mozambique and fighting continues into the 1970s. The United Nations (UN) blames Portugal for waging colonial wars. Loans help finance domestic irrigation and construction projects and some economic growth occurs.

1974. Led by Antonio de Spinola, a 7-man junta takes power and promises democracy at home and peace in Africa.

1974-75. Guinea-Bissau, Mozambique, the Cape Verde Islands, São Tomé and Príncipe, and Angola become independent.

1975. The Movement of the Armed Forces (Movimento das Forcas Armadas, MFA) assumes a formal role in the government by establishing a single trade union confederation and starting to reform economic and social life. Heavy industry and banking are nationalized and large agricultural holdings are expropriated and redistributed. The Socialists win elections for a constituent assembly, but after a series of clashes between Socialists and Communists, the MFA assumes control. In the same year, Portuguese Timor is occupied by Indonesia.

1976. New parliamentary elections bring the Socialists into office and Mario Soares becomes prime minister.

1979. The Conservative Democratic Alliance wins elections and its leader, Francisco Sa Carneiro, takes office as premier but is killed in a plane crash a year later. The military Council of the Revolution is dismissed by a constitutional amendment.

1983. Socialist Soares comes back into power as prime minister. He introduces an austerity program and conducts negotiations for joining the European Community (now the EU) that are finalized in 1986.

1992. Mass student demonstrations are followed by strikes involving public employees demanding wage increases and doctors protesting plans to privatize some health services.

1996. Portugal and its former colonies of Angola, Brazil, Cape Verde, Guinea-Bissau, Mozambique, and São Tomé and Príncipe form the Commonwealth of Portuguese-Speaking Countries (CPLP), an organization seeking to preserve the language, coordinate diplomatic efforts, and improve cooperation between the countries.

FUTURE TRENDS

The Portuguese economy is very closely dependent on the overall developmental trends of the EU and its efforts to match the requirements of the single European economic space. Over the first decade of the 21st century, it will continue to progress towards more private enterprise and competition. Privatization will continue to be an important issue in telecommunications, manufacture, and the other utilities, although the government is likely to retain special rights in key companies. It will also seek international strategic partners for those companies. Incentives to attract foreign direct investment will receive more attention, and Portugal may attract some new additional investment from its close links with Spain and Latin America. Gradual discarding of EU quotas on imports of textiles and clothing will create conditions for increase in Portugal's exports to the union members. The possibility of further negotiations on multilateral trade liberalization within the World Trade Organization (WTO) may also contribute to the future reinvigoration of the Portuguese export sector.

Trade with non-EU countries, including its former African, Asian and Latin American colonies, should continue to increase. A major simplification of corporate taxation is expected before 2003, and the corporate tax rate might be reduced to 30 percent (although indirect taxes may rise). Improved investment incentives may come under further EU scrutiny while stock market liquidity and capitalization will increase, boosted by further privatization. Due to the limited size of the domestic capital markets, more medium-sized businesses will increasingly seek funding in the international markets. A further consolidation in the financial sector and the emergence of more powerful banks, able to better realize economies of scale, compete in the single European market space, and make use of the Internet revolution, is also expected.

Work on the government's ambitious road building program and the new urban rail networks in Oporto and Lisbon will continue. The main seaports will be upgraded, and Lisbon is expected to receive a new international airport.

Portugal will experience more serious problems as new Central and Eastern European members of the EU with more pressing needs start competing for development funds. Agriculture and fishing may face a corresponding decrease in subsidies. It is logical to expect that Portugal, along with Greece, would not be overzealous in the process of the new members' accession to the EU. No major dangers for the economy have been envisaged (projected) and growth is forecast to decrease only slightly below the EU average in 2001 and 2002. Yet the current high levels of household indebtedness and the recent rise in house prices suggest there could be a risk of a severe decrease in consumer spending, particularly if interest rates go higher than expected. Such developments may significantly harm retail and domestic consumer goods manufacturers.

DEPENDENCIES

Portugal has no territories or colonies.

BIBLIOGRAPHY

Economist Intelligence Unit. Country Profile: Portugal. London: EIU, 2001.

Solsten, Eric. Portugal: A Country Study. Washington, DC: Library of Congress, 1993.

U.S. Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed August 2001.

U.S. Department of State. FY 2000 Country Commercial Guide: Portugal. <http://www.state.gov/www/about_state/business/com_guides/index.html>. Accessed January 2001.

—Valentin Hadjiyski

CAPITAL:

Lisbon (Lisboa).

MONETARY UNIT:

Escudo (Esc). One Portuguese escudo equals 100 centavos. There are banknotes in denominations of 10,000, 5,000, 2,000, 1,000, and 500 escudos. Coins come in denominations of 200, 100, 50, 20, 10 and 5 escudos. The escudo will remain in circulation until February 28, 2002, when it will be completely be replaced by the new European currency, the euro.

CHIEF EXPORTS:

Clothing and footwear, machinery, chemicals, cork and paper products, food and beverages, and hides.

CHIEF IMPORTS:

Machinery and transport equipment, chemicals, petroleum, textiles, and agricultural products.

GROSS DOMESTIC PRODUCT:

US$151.4 billion (1999 est.).

BALANCE OF TRADE:

Exports: US$25 billion (1998 est.). Imports: US$34.9 billion (1998 est.).

PORTUGAL

Portuguese Republic

Major Cities:
Lisbon, Ponta Delgada, Azores, Oporto, Coimbra

Other Cities:
Aveiro, Braga, Covilhã, Funchal, Matosinhos, Montijo, Setúbal, Vila Nova de Gaia

EDITOR'S NOTE

This chapter was adapted from the Department of State Post Report dated January 1996. Supplemental material has been added to increase coverage of minor cities, facts have been updated, and some material has been condensed. Readers are encouraged to visit the Department of State's web site at http://travel.state.gov/ for the most recent information available on travel to this country.

INTRODUCTION

Known is antiquity as Lusitania, PORTUGAL is one of Europe's oldest independent countries. It has been a sovereign state since the 12th century, when it vanquished the Castilians and the Moors who had long held the peninsula. Before that time, the area had been overrun or occupied by Celts, Romans, and Visigoths. While briefly ruled by Spain in 1580-1640, in the 15th and 16th centuries, the young Portuguese nation opened the sea lanes of the world, leading the way in explorations and discoveries, and founding an empire in America, Africa, and Asia.

Portugal became a dependent ally of Great Britain in the latter years of the 17th century. It was occupied by France from 1807 to 1814 and, after a revolt in 1820, entered a troubled period during which it lost its long-established claim to Brazil. A republic was established a decade after the turn of the 20th century and, although Portugal sided against Germany in the first World War, it remained officially neutral (but friendly to the Allies) in World War II.

In 1961, India seized control of Portugal's provinces of Goa, Damão, and Diu. Revolts and independence movements began in several of the remaining colonies in the early 1960s. During the unsettled period after the April 1974 revolution, most of Portugal's African and Asian colonies were given or took their independence. Indonesia annexed Portugal's Timor possessions in 1976, over protest. Portugal's only remaining Asian colony is Macau, which is scheduled to return to Chinese control in 1999.

The nation has seen centuries of monarchy and, in recent times, years of dictatorship. After the "April 25" revolution in 1974, a series of six provisional governments were formed in the space of two years. By the late 1970s, the situation was much less volatile, though no party was able to draw a majority. In 1987, the Social Democrats became the first party in 13 years to win an absolute majority of legislative seats; they maintained the majority in the 1991 election.

MAJOR CITIES

Lisbon

Lisbon stretches over several hills on the north side of the Tagus River. The city faces south across one of Europe's finest bays toward the Arrabida mountain range about 25 miles away. The bay's entrance is spanned by Europe's longest suspension bridge—the April 25 Bridge—with a main span of 1,108 yards.

Lisbon presents a contrasting picture of old, narrow alleyways and tiled buildings that reveal its Moorish heritage next to broad, modern boulevards, new apartment buildings, and parks. There is an abundance of trees (including palms, evergreens, and numerous deciduous varieties), and a month without flowers is a rare one indeed.

Lisbon is the cultural, commercial and administrative center of the nation. The population of Lisbon proper is approximately 663,000; greater Lisbon's population is approximately 2,561,000. Although less populous than many other major capitals, Lisbon is nonetheless quite congested from 8:00 am to 8:00 pm, a situation which is exacerbated by the narrow, winding streets, many of them one-way. Traffic is generally disorderly in town, and it is always hazardous along the main coastal road.

Food

Food is available in ample variety and quantity. Seasonal fresh fruits and vegetables are of good quality. The variety and quality of frozen goods has improved greatly with Portugal's accession into the Common Market. A large assortment of local and imported canned goods is available. Pork, lamb, and a wide variety of fish are excellent, although the shellfish is quite expensive; beef is not aged and may not appeal to American tastes; veal is periodically available. Local hams, bacon and other lunch meats are excellent.

Pasteurized fresh milk (whole, part-skim and skim) is readily available. On the coast, many people have milk delivered to their homes. Portuguese butter and cheese are excellent, and there is a large assortment of European cheeses in some markets. Sour cream and cottage cheese are not available, but there are close substitutes which are imported from France.

Freshly baked Portuguese bread is very popular with Americans. A variety of whole-grain breads is available as well as traditional types. Home bread deliveries are possible.

Clothing

Clothing requirements are much the same as for the Mid-Atlantic, except that heavy snow wear is not required. A good raincoat with a zipout wool lining is an excellent investment. Summers can be hot, and winters can be chilly and damp. Dress tends to be formal and conservative among the older generation, but less so among the younger. A good supply of sweaters and woolens are needed in winter, as most houses are poorly heated and stay cold and damp. Warm sleepwear and slippers are essential. Umbrellas and rainwear are necessary. The cobbled streets and sidewalks are hard on shoes, and it is difficult to find good walking shoes here. Running and tennis shoes are available, but there is not a great variety and they tend to be more expensive than in the states. There is a good assortment of swimwear available locally, ranging from the reasonably priced to very expensive designer models.

Clothing tends to be pricey in Portugal. Bargains can be found during sales or at the local markets.

Formal attire for men can be rented or tailored here at a price comparable to the Mid-Atlantic area. Formal attire for women is expensive and difficult to find off the rack.

Men: Clothing suitable for the Mid-Atlantic is suitable for Lisbon. Good quality ready-to-wear clothing can be expensive. Less expensive clothing is available, particularly in the open-air markets; however sizes tend to be smaller than in the U.S., a Portuguese large being equivalent to medium in the states. Excellent tailor-made suits, slacks, and jackets are available at higher prices than good ready-to-wear items in the U.S. Portuguese sweaters and woolens in general are a good buy.

While Portuguese shoes are attractive, many believe they do not last as long or fit as comfortably as American shoes. Large sizes can be difficult to find.

Women: Ready-made clothing is available here but tends to be short-waisted for some American figures. Designer fashions at high prices are available. Shoes are very attractive, although prices now are equal to or higher than those in the U.S. Shoes larger than a size 8 are difficult to find. Good stockings/hose are difficult to find, not usually of high quality and very expensive. Boots are reasonably priced. Lingerie, both Portuguese and from other European countries, is expensive.

Good dressmakers are available, but can be just as expensive as buying ready made clothing. Imported fabrics tend to be expensive, but Portuguese wool is attractive and reasonably priced.

It is difficult to find ready-to-wear evening clothes. Women are advised either to bring their formal attire or to bring the fabric and have it made here. Evening shoes are also difficult to find. Jewelry (both genuine and costume) is lovely and is a good buy when compared to the rest of Europe.

Children: Good quality readymade clothing is available for children. Prices are generally much higher than in the U.S., the assortment is not nearly so wide, and is often not to American children's taste (except for very expensive clothing). Children's tennis shoes, in familiar brands, are available locally, although they are almost double in price.

Supplies and Services

Supplies: A broad selection of toiletries, cosmetics and home remedies is available in Lisbon. Since Portugal has joined the Common Market, there is an increase in the variety of European cosmetics and toiletries available for a higher price than in the U.S.

Basic Services: Dry cleaning services are adequate but expensive. Several self-service laundromats, which include dry cleaning machines, now operate in Lisbon and the suburbs. Shoe repair shops provide fine work at reasonable prices.

Religious Activities

Irish Dominican priests hold English-language Roman Catholic services in Lisbon, S. Pedro do Estoril, and Cascais. An interdenominational American Protestant church holds English-language services each Sunday in Cascais. An Anglican church in Lisbon, and its sister church in Estoril, hold weekly services in English. The Mormon Church has an active congregation in both Lisbon and the western suburbs. There is a small synagogue in Lisbon. There are Baptist and Evangelical missionary groups headquartered in Lisbon with American missionaries and Portuguese orientation. There is religious education available for Catholic children (to which they are transported by school bus after school if they attend the American International School). Other churches offer prayer and study groups.

Education

There are a few schools to which American travelers send their children. In general, families have been pleased with the schools their children attend.

The American International School offers grades PK-12. A portion of the student body is American, with the remainder either Portuguese or third-country nationals. Students attend one of three campuses: grades 5-12 are located on the larger campus in Carnaxide (about midway between Lisbon and Estoril), grades PK-1 are located in a converted house in Sao Joao do Estoril, and grades 2-4 are located in a converted house in Monte Estoril. Bus service is provided. Teaching methods and materials are American. AP courses are offered, as is ESL, but essentially no other special education is offered. Contact the school if you have needs in this area. Most teachers are hired in the United States.

St. Dominic's School is an Irish Dominican Roman Catholic school. The school has modern facilities and is located near Carcavelos (between Lisbon and Estoril). It accepts pupils from kindergarten through grade 12 regardless of religious affiliation. The student body includes many American children as well as other nationalities. Texts and classroom methods are British and the International Baccalaureate diploma is now offered. Bus service is available. Uniforms are required.

St. Julian's School is the British school. It is located in Carcavelos, in splendid grounds. It is based on the British system. Kindergarten through grade 13 (and the International Baccalaureate diploma) are offered. The school has both an English and a Portuguese section. Americans wishing to enroll their children in St. Julian's should apply as far in advance as possible, and even then there is no assurance that there will be space. The school has a waiting list for admission, and British children are given first preference. The school year begins in mid-September and ends in July. Uniforms are required. Bus service is not available.

The International Preparatory School is a small school which has classes from nursery school through grade 5. It is located in Carcavelos and has been used successfully in the past few years by several American families. It offers a mixed British/American curriculum.

The American Christian International Academy was founded in 1981 to provide an American education from a Christian perspective. Many families of diplomats, U.S. military, business personnel and missionaries have taken advantage of the academic emphasis at ACIA. It offers an American curriculum for grades K-8.

Special Educational Opportunities

The Universities of Aveiro, Coimbra, and Lisbon provide courses for foreigners in Portuguese literature, history and philosophy. Credits earned here cannot be transferred to an American university and vice versa.

University of Maryland Overseas offers classes irregularly.

Sports

Portugal offers a variety of sports, including soccer, tennis, golf, squash, horseback riding, polo, swimming, sailing, fishing, hunting, hiking, and softball, among others. Wind surfing, water skiing, surf-boarding, and scuba diving are popular. Soccer and bull fighting are the major spectator sports, although there is some auto racing (including a Portuguese Grand Prix) and bicycle racing.

Touring and Outdoor Activities

As would be imagined, sight-seeing trips are easily arranged. Costs are moderate in comparison to other European countries. Portugal operates state inns called "pousadas," which offer fine lodgings, often in remote areas. In the past, these were a bargain. A system of bedand-breakfast lodgings (often in stately homes) under the auspices of the national tourist bureau has been instituted, and guests have brought back rave reviews from their stays in these homes (known as "turismo de habitaçao"). The Algarve offers a wide range of accommodations, ranging from campgrounds to luxury resort complexes. Most towns have at least one hotel and a couple of pensions. There are numerous campgrounds, particularly in the north of the country.

Lisbon has lovely tree-lined and flower-filled parks, numerous children's playgrounds, a fine small zoo, botanical gardens, an aquarium, museums, galleries, cathedrals, palaces, and castles. The Royal Coach Museum is reputed to have the finest collection of royal and state coaches in the world. Day trips to Evora, Fatima, Batalha, the walled villages of Obidos, Marvao, Monsaraz and Estremoz and other sites of interest are possible. Madrid is approximately 8 hours by car, Seville is about 5 or 6, Merida (with glorious Roman ruins) about 4 hours.

Atlantic Ocean temperatures north of Lisbon seldom rise above 60°F because the Gulf Stream does not flow near enough to temper the cold waters. The Algarve's water temperatures are warmer, although still cold by American standards. Carcavelos, Estoril, and Cascais (near Lisbon) have beautiful protected beaches, but they are currently considered to be unsafe for swimming because of nearby sewage disposal. (Nonetheless, they are filled with bathers.) There is presently a massive sewage cleanup program in operation, and there are promises of clean sea water within the next couple of years. Farther west and north of Lisbon are Guincho, Praia Grande, and Praia das Maças. Five miles southwest across the Tagus River on the Costa da Caparica one can find safe bathing beaches. There are many more fine beaches further from Lisbon. Most provide chair and/or cabana rental by the hour, day, or even longer.

Several hotels on the Costa do Sol near Lisbon have large fresh or treated saltwater swimming pools which non-guests may use for a fee. The Quinta da Marinha (a golf and country club), and the Cascais Country Club, to name just two, have membership fees, comparable to club fees in the U.S.

In the suburbs, there are a number of tennis clubs (and tennis lessons), golf courses (and golf lessons), riding stables (and riding lessons), and swimming pools. Golfers should bring their own golf equipment and attire with them. Golf shops have a good selection, but their prices are very high.

Numerous health clubs have opened in the area in recent years, and with them opportunities for aerobic and other exercise classes.

Skiing is sometimes possible in midwinter in the Serra da Estrela, about 250 kilometers northeast of Lisbon. Boots, skis, and poles can be rented. Better skiing is in the Sierra Nevada mountains near Granada, Spain.

Entertainment

Movies are a popular form of entertainment, with films being shown in their original language with Portuguese subtitles. American films usually reach Portugal about 6 months after their debut in the U.S. Current and older films from other countries are also shown, but British and American are by far the most popular.

The rich ballet, opera, and concert seasons are enjoyed by all. The quality of performances is good, and the tickets are reasonably priced. Many employees buy season concert tickets for the Gulbenkian orchestra.

Theater performances, usually original works by Portuguese playwrights, also abound. An international amateur dramatic group, the Lisbon Players, offers several English-language dramatic productions each year.

The bullfight season runs from Easter to early October. Unlike in Spanish bullfights, the bull is not killed in Portugal, and the fight is carried on mostly on horseback. There is one major bullring in Lisbon and one in Cascais. Many people attend out-of-town fights as well.

Dining out is a popular form of entertainment in Lisbon. On the Estoril coast and throughout Portugal there are countless restaurants ranging from luxurious to humble. Prices in all categories are now similar to those in the U.S., but prices are climbing. Lunch is usually served from about 1 to 3 pm, dinner from about 7:00 to 10:00 pm. There are McDonald's and Pizza Hut chains in Lisbon, with prices slightly higher than the U.S.

"Fado" is sung in many small restaurants in the Alfama and Bairro Alto, the older sections of Lisbon, as well as in a couple of night spots on the Estoril coast. Haunting in tone, tragic in theme, the fado is well beloved by the Portuguese and is to them what the blues are to Americans. The fado performances generally begin about 10 pm, with the best sets performed well after midnight.

Nightclubs of varying quality, discotheques and the Estoril Casino provide further night life. Cascais has many small bars which are close replicas of English pubs.

Social Activities

Among Americans: The American Women of Lisbon and the American Club of Lisbon, are two active organized women's clubs. The latter includes most of the American business community and other nationals. The annually elected Board of Directors of the former is composed of American women, but its membership is comprised of many nationalities. British and Scandinavian women are very active. Both clubs regularly schedule luncheons with featured speakers, as well as other activities.

A newly formed club, International Women in Portugal, (IWP) offers many activities and a monthly luncheon at different locales. Although international in flavor, the main language is English.

Ponta Delgada, Azores

The Azores archipelago, an autonomous region of the Republic of Portugal, is located in the North Atlantic about 800 miles west of Lisbon and 2,300 miles east of New York City. The Ponta Delgada district includes the nine-island archipelago composed of Sao Miguel, Terceira, Santa Maria, Graciosa, Sao Jorge, Pico, Faial, Flores, and Corvo. Total land area is 890 square miles; the estimated population is 244,000.

People from Portugal, the Low Countries, France and Spain were among the first settlers; present-day inhabitants reflect their physical, cultural and linguistic characteristics. The islands are of volcanic origin characterized by steep coastlines with occasional black sand beaches. Inland, the terrain is marked by extinct volcanic craters, some with lakes and picturesque hills rising to 3,000 feet. Lush vegetation and, in season, beautiful flowers cover the countryside. The climate is temperate and the Gulf Stream wards off extremes of heat and cold. Temperatures never reach freezing and rarely go above 80°F; however, humidity often exceeds 80 percent. June through September is usually good beach weather. Winter days are chilly with high winds reaching gale force. The annual rainfall is 34 inches.

In the past, the Azores were an important port of call for ships returning from the New World and those returning from India. Now, except for the cargo ships which link the archipelago with continental Portugal and the rest of the world, ships stop only for bunkering and emergency repairs. In summer, foreign cruise ships occasionally call for a day at Ponta Delgada.

The principal economic activity is agriculture. About two-thirds of the land is devoted to pasture. Dairy products, including excellent cheeses, account for a large percentage of local income as does cattle breeding. Next in importance are canned fish, milling and feed, bakery products, sugar, tobacco, and wood. Azorean wines from Graciosa and Pico are excellent, but insufficient quantities are produced for export. Other than food processing and handicrafts (mainly embroidery, ceramics, wicker and woodworking), the Azores have little industry.

According to the Autonomy Statute approved in 1976, the Azores form an autonomous region of Portugal with an elected Regional Assembly and a Regional Government responsible to the Assembly. Portuguese sovereignty is represented by the President of Portugal. The regional Government consists of a President and ten Regional Secretaries. Since the Azores have no capital, government functions are divided among the three major cities—Ponta Delgada (Sao Miguel), Angra do Hero-ismo (Terceira), and Horta (Faial). The Azores are represented in the national Assembly of the Republic by five deputies.

The Commander-in-Chief of the Armed Forces in the Azores, with headquarters in Ponta Delgada, oversees military operations throughout the Azores and also is the NATO representative in the archipelago. Under the Commander-in-Chief, a Rear Admiral of the Portuguese Navy, supervises the small naval detachment stationed in the islands, and an Army Brigadier (equivalent to a U.S. Major General) commands infantry and artillery units. An Air Force Brigadier commands the Air Zone which includes Lajes Field (which is formally designated Portuguese Air Base 4) on Terceira.

The U.S. military presence in the Azores began during World War I, when a squadron of destroyers was based at Ponta Delgada. In 1944, United States forces returned to the Azores, where they subsequently have maintained a continuous presence within the framework of a bilateral defense agreement signed in 1951. As at most bases, limited medical, educational, shopping, and social facilities are available. As with many other U.S. military installations worldwide, the U.S. presence in the Azores will be affected in coming years by planned reductions in Defense Department budget and staff.

Food

In winter, the local vegetable market is restricted largely to onions, potatoes, carrots, turnips, cabbage, brussels sprouts, lettuce, and collard greens. Available fruits, usually imported from Lisbon, include apples, pears, tangerines, oranges, and lemons. Bananas and delicious hothouse pineapples are grown locally. Generally there is a fair variety of fruits and vegetables found in the supermarkets and public markets. The quality varies and can differ noticeably from U.S. standards. Seasonal shortages of fruits and vegetables on local markets do occur.

Fresh fish is available year round except during bad weather and heavy seas. Although lobster is expensive, a few other indigenous shellfish are reasonably priced. Meat cuts offered by local butchers differ from U.S. cuts. Fresh beef, pork, liver, lamb, and kidneys are available. Portuguese hams and turkeys are expensive.

Sterilized (UHT) milk and good bread and pastries are readily available. Azorean cheeses are outstanding, and several excellent varieties are made in Sao Miguel.

Excellent wines from mainland Portugal (inexpensive by U.S. standards) are readily available in local stores. Local vineyards provide vinho de cheiro, a wine of unusual flavor and aroma which goes well with the regional cuisine. Tea grown on the island of Sao Miguel is excellent.

Clothing

Temperate clothing is suitable most of the year. Lightweight tropical garments can be worn only a short time in summer. A topcoat, a zip-lined raincoat, boots, and an umbrella are useful for the rainy, cold winters. Sweaters, flannel pajamas, and wool robes are necessities for winter. Light weight winter clothing, appropriate for centrally heated U.S. buildings, is not adequate for the drafty and unheated buildings in the Azores. Dress is conservative but becoming more informal.

Women's dress tends toward the conservative. Pants are worn for only the most informal occasions. Dressy suits or simple, well-cut afternoon dresses are the rule for cocktails and informal dinners on Sao Miguel. An evening wrap is necessary. Local women wear fur stoles for winter evening affairs. Imported clothing is locally available, but expensive. Dressmakers are reasonably priced but difficult to find.

Supplies and Services

Basic Services: Shoe repairs are reasonably priced. Local dry cleaning is expensive and adequate, if slow.

Local hairdressers are satisfactory and reasonably priced. Men's haircuts are satisfactory and inexpensive.

Religious Activities

Many Roman Catholic churches dot the island. The one synagogue is not open at present. Other denominations include both Southern and Nazarene Baptists, Seventh Day Adventists, and Mormons. All services are in Portuguese.

The most important religious event on Sao Miguel is the Santo Cristo Festival. Held in Ponta Delgada every year, it peaks on the fifth Sunday after Easter. The festival attracts many people from the other islands, as well as from the United States, Canada and continental Portugal.

"Romeiros" (pilgrimages) during Lent, "Danças dos Cadarcos" at Carnival time, the Holy Ghost celebrations in May and June, and "Carvalhadas" on June 29 are some of the most interesting festivals and pageants. On Sundays during the summer, many small processions can be seen in the villages throughout the islands.

Education

No schools offer instruction in English.

Special Educational Opportunities

The University of the Azores has no special facilities for foreign students. Music lessons by private tutors are given at the Regional Conservatory. Ballet lessons, exercise classes, and craft classes are available, as well as other private lessons

Sports

A beautiful golf course is located in the hills 28 miles from Ponta Delgada. The weather is usually cloudy, chilly, and windy, so bring a golfer's raincoat. Lajes also has an excellent golf course and a golf shop with American goods.

Private tennis courts and public courts are located near Ponta Delgada. Lajes also has tennis courts.

Sao Miguel has some fishing. Salt-water fish include bluefish, amber-jack, marlin, tuna, and shark. Several world records have been broken by local anglers. Freshwater fishing is possible in the lakes and streams of Sao Miguel. Licenses are required.

Other popular sports include soccer, basketball, volleyball, field and roller hockey, horseback riding, and ocean swimming.

Lajes field has bowling alleys, ice skating and other sports facilities.

Portuguese authorities limit the size of sporting rifles to .22 caliber and pistols to .32 caliber. It is possible to hunt for quail, ring doves, pigeons, and rabbits on Sundays for about 9 months of the year. A trap shooting club, located about an hour's drive from Ponta Delgada, meets on weekends.

Touring and Outdoor Activities

A visit to the other islands of the archipelago is highly recommended, as each has a distinct personality and different customs, food, and even accent. Incredibly beautiful spots for picnics and camping exist everywhere, usually without the expected infrastructure, however. The islands are a photographer's and a hiker's paradise. Sao Miguel has beautiful lakes at the bottom of ancient craters at Sete Cidades, Lagoa do Fogo, and Furnas. The botanical garden and the famous hot springs of Furnas are picturesque.

Because of the distance and lack of relatively inexpensive transportation, travel to the Continent is limited. The interisland airline SATAAir Azores calls at eight of the islands and is the usual mode of travel. Pico, Faial, Terceira, and Sao Miguel all have at least one excellent hotel. Flores, Sao Jorge, Graciosa and Corvo have good hotels. The other islands have only small pensions, usually without private baths.

For a nominal fee, you may join the local yacht club, which has swimming meets, and sailboats and wind surf boards for member use. Limited facilities are available for lessons in sailing and horseback riding.

Organized activities for young children depend on the parents' initiative. Despite a shortage of leaders, Ponta Delgada has Scout troops for boys and girls.

Entertainment

Ponta Delgada has a few regular motion picture theaters. The films are predominantly American, English, French, Italian, Spanish, and German, with Portuguese subtitles.

An interesting museum displays paintings, sculptures, and artisans' crafts. The University of the Azores at Ponta Delgada sponsors some concerts and conferences with foreign guests during winter. The Regional Directorate of Culture occasionally sponsors guest artist that are worth seeing.

Discos are located in and around Ponta Delgada, and a few good restaurants and hotels serve continental food. Most restaurants stay open until after 11 pm. There is also a well known tavern in Ponta Delgada where the traditional Portuguese "Fado" is sung.

Social Activities

Among Americans: Most American residents of the Azores are former Azoreans who have returned to the Azores as retirees or farmers. They are totally integrated into the local society and there is no American colony as such. There is a small group of Americans in Sao Miguel, mainly retirees, who are not Luso-Americans.

Most entertaining is done in the home. Bridge and poker are popular.

International Contacts: No large colonies of foreigners live in the Azores, except for those on Flores as well as a few British, Canadian and South African retirees. During the summer months an influx of Europeans and Americans allows an opportunity for interesting social exchange.

Social and professional contacts are friendly, and the ability to speak Portuguese is essential to conduct both social and business activities.

Oporto

Oporto (in Portuguese, Pôrto), situated at the mouth of the Douro River some 213 miles north of Lisbon, is Portugal's second largest city and the seat of an important administrative district. It is a chief Atlantic port, with its outer harbor at Leixões. According to the latest census (2001), Oporto proper has a population of 302,000, and Greater Oporto, almost 1.2 million.

The surrounding area has a high concentration of Portuguese commerce, industry, agriculture, educational facilities, and centers of religious thought. There are many famous historical sites and cities, artistic monuments, attractive towns and villages, and varied scenery. Among the famous landmarks are the Torre dos Clérigos, an 18th-century tower; a beautiful Gothic cathedral called Sé; and the two-storied Dom Luis Bridge which spans the Douro.

The city began as a pre-Roman town, first as Cale and then as Portus Cale, and later was held by Visigoths and Moors. It was the capital of northern Portugal until 1174. Oporto gave its name to port wine when export trade of that product was established here in 1678.

The temperature of Oporto's coastal area varies moderately between a mean maximum of 74.5°F and a minimum of 58°F. In summer the temperature seldom reaches 80°F, and in winter seldom drops below freezing. Frosts are fairly frequent from December to March.

Oporto winters, although comparatively mild, call for heating and warm clothing. The dampness is penetrating, as are the north and east winds. Private homes, schools, and public buildings often lack central heating and can be uncomfortably cold.

Schools for Foreigners

The British community operates a school which accepts American children; its main purpose is to prepare British children for English public schools. Children from kindergarten through grade 12 are taught in small classes, with emphasis on individual attention. The French school takes children from kindergarten through grade four. The German school teaches in German through the abitur (secondary school graduation). A new international school opened in October 1986. This school teaches both a Portuguese and English curriculum aimed at preparing students for the international baccalaureate.

Portuguese public schools offer free education through grade six. Public and private schools charge moderate (by American standards) fees for education in the higher grades. There is a range of good private schools in the Oporto area, most of them operated by Roman Catholic orders. Two separate organizations in Oporto are dedicated to the education of handicapped and gifted children. There are several excellent nursery schools for very young children.

The British, German, Spanish, and Italian governments support or operate cultural institutes in Oporto, with special emphasis on the study of languages. The Instituto Luso-Britânico prepares students for British university examinations, and conducts classes in English. The German Cultural Institute, affiliated with the University of Oporto, offers language and literature classes. Courses in French language and literature are offered at the Institut Français. All sponsor frequent lectures, art exhibits, and concerts, and all have libraries. The British Association's library has a variety of current English books and reference works.

The University of Oporto, with faculties of medicine, pharmacy, engineering, liberal arts, and economics, has no special facilities for foreign students. Americans with a university background and knowledge of Portuguese have been accepted as special students, but not as degree candidates. The transfer of credits from Portuguese to American universities is difficult, if not impossible.

Oporto has a Conservatory of Music and a School of Fine Arts, both of which accept foreign students. Private art and music teachers are also available, as are several ballet schools.

Recreation and Entertainment

Touring, hiking, and picnicking in northern Portugal are delightful. Roman and pre-Roman ruins and interesting buildings, museums, and fine scenery abound. Neighboring Spanish Galicia also offers rewarding tourist possibilities, though the narrow, winding roads often make for slow car travel. Government-built pousadas and estalagens (hostels) provide the best guest accommodations at moderate prices. Restaurants in pousadas and the better hotels generally serve international cuisine and are reliable. There are an increasing number of "bed-and-breakfast" establishments, many in stately homes.

Spectator and participant sports within easy reach of Oporto include soccer, basketball, roller skating, roller hockey, tennis, golf, squash, hiking, swimming, riding, boating, fishing, and hunting. Beaches are more popular for sunbathing than for swimming because of the low water temperatures; some hotels and private clubs, however, have large pools. There is boating all along the coast.

Trout are found in some streams. Snipe and quail shooting are fall and winter pastimes. Skeet and trap shooting are also available.

Some bullfights (touradas ) are held in northern Portugal. The tourada during the August Festa da Agonia in Viana do Castelo always draws large crowds. So do the occasional Sunday and holiday bullfights in Póvoa do Varzim, a beach resort just north of Oporto.

There is skiing high in the mountains, chiefly in the Serra da Estrela. Better facilities exist in the mountains north of Madrid. Riding is popular and horses are readily available. The Tennis Club da Foz and the Oporto Cricket and Lawn Tennis Club offer courts, restaurant, and other facilities to members. Membership possibilities vary, but all involve substantial nonrefundable entrance fees. Two golf courses are near Oporto. While tennis, golf, and other sports apparel and equipment are available locally, they are expensive.

Home entertainment centering around close family life remains traditional in northern Portugal. First-rate restaurants and nightclubs are few. Movies are a favorite evening entertainment, and many American films are screened. The best films of most countries get to Oporto eventually, normally with original soundtrack and Portuguese subtitles.

The music season has been revived after a slowdown some years ago. The Gulbenkian orchestra and ballet from Lisbon offer occasional performances, and some foreign cultural institutes (British, German, French) and the Ateneu Comercial stage a few musical and theatrical events.

Most Americans in the district speak Portuguese and are U.S. citizens who have returned to the land of their birth. The native-born American community is small, consisting mostly of business representatives. There is a substantial British community, largely connected with the Port wine exporting "factors" (merchants). Organizations open to membership include a Red Cross chapter, and the Ladies' Guild of the Anglican Church of St. James, as well as many other charitable institutions. Those who know some Portuguese will find volunteer organizations enthusiastic about proffered help. Clubs and sports facilities are also sources of contact with Portuguese and British nationals.

Coimbra

Coimbra, which flourished under the Romans and the Moors, and later as the capital of Portugal (from about 1139 to 1260), is a market center and a city of small industries, 180 miles northeast of Lisbon. It is the old capital of the former Beira province, and once bore the name Conimbriga. It also is the home of the esteemed University of Coimbra, one of the oldest universities in Europe, founded in Lisbon in 1290 and moved to its present site in 1537. The University offers courses for foreigners; its faculties of law and letters attract many expatriates. Among the university's distinguished students were Portugal's great epic and lyric poet, Camões (Luis Vaz de Camoëns, 1524-1580), and the 19th-century writer, José Maria Eça de Queiros.

This city of 78,000 residents has many interesting buildings, among them a fine 12th-century cathedral, Sé Velha, and the cloistered church of Santa Cruz. The city, famous for its fado music and its beautiful park, overlooks the Mondego River.

It was at Coimbra in 1355 that the romantic heroine Inés de Castro was murdered; Portuguese writers over the ensuing centuries have immortalized her tragic love affair with Peter I (Dom Pedro).

OTHER CITIES

Known as the Venice of Portugal, AVEIRO is dominated by the Central Canal, which connects the city to the Atlantic Ocean. It is located on the Costa de Prata (Silver Coast) northeast of Lisbon, and is surrounded by salt flats, beaches, and lagoons. It is the capital of Aveiro district, and is said to be the ancient Roman city of Talabriga. Mercury mines are located in the area, and other important industries include sardine fisheries and the production of sea salt. The museum here is a converted convent, and has a fine collection of religious art. The population of Aveiro is over 63,000.

BRAGA , 30 miles north-northeast of Oporto, is a summer resort, but is also a noted religious center. Thought to have been founded by Carthaginians, it was also a Roman city (its ancient name was Bracara Augusta), and ruins from that period are still in evidence. Braga was the residence of the Portuguese court from 1093 to 1147, and an archiepiscopal see and primacy. In its 12th-century cathedral is the tomb of Henry of Burgundy, count of Portugal and father of Alfonso I. Braga was capital of the old province of Entre-Douro-e-Minho, and the ancient capital of Lusitania. Today, the city is home to over 65,000 residents.

COVILHÃ is a prominent textile hub, located 130 miles northeast of Lisbon, in east-central Portugal. Wool and cotton cloth are the city's main products; it is also a marketing area for the Cova de Beira Basin. Covilhã is in one of Portugal's only winter sports regions; the nearby Serra da Estrela ("Range of the Stars") mountains offer skiing resorts with panoramic views. The area is known for its cheeses, especially the ewe's milk cheese, "Queijo da Serra." Covilhã's population is over 22,000.

FUNCHAL lies on the southern coast of Madeira Island in the North Atlantic, about 440 miles northwest of Morocco. The capital of the island, Funchal is also a major tourist spot. Landmarks include the Quinta da Boavista orchid house, and the Museum of Sacred Art, The Funchal Festival of St. Sylvester celebrates the year's end each December with singing, dancing, and fireworks. The city was founded in 1421 by the Portuguese navigator Joãco Gonçalves Zarco, and has had periods of Spanish and British control. Funchal has a current population of approximately 115,000.

MATOSINHOS is a northwestern suburb of Oporto, situated 170 miles north of Lisbon on the Atlantic coast. The artificial harbor here is the main port for northern Portugal's wine exports. It is heavily used by local canneries. The Church of Bom Jesus de Bouças contains a crucifix supposedly carved by the biblical Nicodemus who helped to bury Jesus. Matosinhos was originally called Matusiny (1258); it became a town in 1853. The population is over 26,000.

MONTIJO lies due east of Lisbon across the Tagus River. Its roughly 23,000 residents are employed in industries such as cork processing, and fertilizer and hardware manufacture. Oyster fisheries are also important. Empress Eugénie, a consort of Napoleon III, was the countess of Montijo.

SETÚBA L, 19 miles southeast of Lisbon, was once known as Saint Yves (or Saint Ubes). It is an important port on the Bay of Setúbal, and is known for its muscatel wine, corks, and oranges, and for its shipbuilding and sardine-canning industries. It served as a royal residence in the 15th century. Setúbal's current population is close to 104,000.

VILA NOVA DE GAIA is located on the Rio Douro, immediately south of Oporto, in the northwest. It is a wine-producing city of over 63,000 residents. Port is matured and blended in its many armazéns, or wine lodges. Pottery, footwear, and textiles are also made here.

COUNTRY PROFILE

Geography and Climate

Portugal, in Europe's southwest corner, is part of the Iberian Peninsula. With an area of 36,390 sq. miles, it is approximately the size of Indiana. The country is made up of the mainland and the Azores and Madeira Islands. On the north and east, Portugal is bordered by Spain; on the south and west by the Atlantic Ocean.

The Tagus River, flowing west into the Atlantic at Lisbon, divides mainland Portugal into two distinct topographical and climatic regions. The northern part of the country is mountainous. Its climate is relatively cool and rainy. In the south there are low, rolling plains. The climate is drier and warmer, particularly in the interior.

Lying about 800 miles west of Lisbon in the Atlantic Ocean, the Azores are a chain of nine mountainous islands of volcanic origin. Their climate tends to be moist and moderate throughout the year. The total land area of the nine islands is 888 sq. miles.

The two main islands and the numerous smaller, uninhabited islands that make up the Madeira chain are located in the Atlantic Ocean about 350 miles west of Morocco. The islands are mountainous and rugged, with a mild year-round climate. Total land area is slightly over 300 sq. miles.

Mainland Portugal experiences two distinct seasons. From late October to mid-May rain is frequent and sometimes heavy. Temperatures may drop into the low 30's at night during the coldest months, with daytime highs in the 50's and 60's. Annual variations in rainfall can be considerable, with years of flooding followed by years of drought. The remainder of the year is normally sunny with minimal rainfall. Days are pleasant, with temperatures seldom exceeding 95°F, except in the southern interior of the country. Afternoons and evenings are breezy, with nighttime temperatures in the 60's and low 70's. Spells of intense heat are infrequent and last only a few days.

Population

The Portuguese, who numbered about 10.2 million in 2001, are a homogeneous people of Mediterranean stock. The original Ibero-Celtic peoples have, over the last 2,000 years, mixed with Germanic, Celtic, Roman, Arabic, and African peoples to form the population of today. The Portuguese are predominantly Roman Catholic, have a literacy rate more than 85 percent, and have a life expectancy of 76 years. "Saudade," a feeling of nostalgia mixed with a melancholy acceptance of fate, is a concept often applied by the Portuguese to themselves.

More than 600,000 residents of Portugal's former overseas colonies returned to the motherland in the 1970s. Portuguese citizens of African descent make up the country's only significant minority.

Thousands of American residents live in Portugal, the vast majority of whom are returned Portuguese-born immigrants. Most Americans live in the Lisbon area, the Oporto district in the north, the Algarve province in the south, and in the Azores and Madeira. The British and the Dutch form other large expatriate communities in Portugal.

Tourism is a major industry. More than 13 million people visit Portugal yearly. Spaniards make up the largest group of tourists, followed by the British and other northern Europeans. Over 200,000 Americans visit each year.

English and French are the most widely spoken foreign languages. Although Spanish and Portuguese are quite similar in structure and vocabulary, they differ significantly in pronunciation. While the Portuguese are very gracious when foreigners attempt to speak Portuguese, they are often offended when non-Spaniards speak Spanish with them. It is prudent for Americans to speak English with the Portuguese when they are unable to converse in Portuguese.

Public Institutions

Portugal is one of Europe's oldest independent nations, tracing its history to the 12th century when it became a kingdom following victories over the Leonese and the Moors. In the 15th and 16th centuries Portuguese navigators led the way in overseas exploration, establishing an empire in Latin America, Africa, and Asia. The Portuguese monarchy lasted until 1910, when it was overthrown and Portugal was proclaimed a republic. Sixteen years later a military coup led to the dictatorship of Dr. Antonio de Oliveira Salazar, a law professor who served as Finance Minister and later Prime Minister. Marcello Caetano followed Dr. Salazar as Prime Minister from 1968 to 1974.

On April 25, 1974, the Armed Forces Movement, formed by young military officers, overthrew the Caetano regime. Although the period that followed was marked by considerable instability, free elections were held for a Constituent Assembly in April 1975, and for the Legislative Assembly in April 1976.

A new constitution was adopted in April 1976, and revised in 1982 and 1989, which defines Portugal as "a Democratic State based on the rule of law." The constitution provides strong safeguards for individual civil liberties. It also establishes the four main branches of the national government: the Presidency; the Prime Minister and the Council of Ministers; the Assembly of the Republic; and the courts.

The most recent presidential elections held in January 2001, at which time Jorge Fernando de Sampaio, a member of the Socialist Party, was reelected. The most recent general election, in March 2002, provided the Social Democratic Party (PSP) with a majority in the Assembly; the Social Democrats have held such a majority since 1987. José Manuel Durão Baroso of the PSP became Prime Minister in 2002.

Internally, Portugal is divided into 18 districts and two autonomous regions. Municipalities within each hold elections for the selection of local officials.

Internationally, Portugal is a member of the United Nations, the Council of Europe, the North Atlantic Treaty Organization, the Western European Security Union, the Conference on Security and Cooperation in Europe, and several international development organizations. In January 1986, Portugal was granted admission to the European Community (the Common Market). Portugal held the EC's rotating Presidency for the first time during the initial half of 1992.

Arts, Science, and Education

Portugal's culture reflects its rich historical heritage—a blend of Western European, Mediterranean, and North African values. Portuguese art has found expression in architecture, especially during the Manueline period (the 1495-1521 A.D. reign of King Manuel), and in epic and lyric poetry.

By law, all Portuguese children must attend 9 years of primary school. The number of public schools is increasing to meet demands in rural areas and demands for secondary and higher education. Students who qualify academically and financially may seek admission to state or private secondary and vocational schools. Diplomas from such schools are necessary for admission to one of the many state-run universities or technical institutes.

Commerce and Industry

Portugal's accession into the European Economic Community (EC) in 1986 coincided with renewed economic activity and growth, characterized in part by increased international investment in Portugal. Money from the EC is rapidly modernizing Portugal's outdated infrastructure but making the fight against inflation even more difficult.

The Portuguese agricultural sector employs 10 percent of the work force but produces only about 4 percent of the Gross Domestic Product (GDP). Thousands of vineyards produce Portugal's world-famous Port, Madeira and other wines. Other important crops include grains, tomatoes, potatoes, olives, citrus fruits, figs, and almonds. Forests cover an additional 35 percent of the country's land area and include extensive ranges of cork oak, maritime pine, and eucalyptus.

Fishing fleets that once engaged in deep-water fishing now consist largely of small craft which harvest anchovies, sardines, and tuna along Portugal's 500-mile Atlantic coast. Much of the catch is canned for export.

Industry and commerce employ approximately 30 percent of the work force and account for about 36 percent of the GDP. Major industrial sectors include textiles, foot-wear, leather goods, wood and pulp, paper, metal working, mining, chemicals, and automobile assembly.

About 60 percent of Portugal's work force are employed in the government and service sectors.

Transportation

Local

The Lisbon area offers public transportation services. Buses connect all parts of the city and its suburbs with frequent, regularly scheduled service. Fares are on a zone basis. One U-shaped subway line operates within the city itself, connecting the downtown area with eastern areas of the city. Passes which are valid on both the buses and the subway may be purchased. Both buses and subway trains are crowded during rush hours, from 7:30 am to 9:30 am and from 4:30 pm to 7:00 pm.

Taxis are plentiful in the Lisbon area, and many are radio dispatched. Taxis operate on meters. Drivers are uniformly courteous and honest.

Commuter train service is available from downtown Lisbon along the coast to the western suburbs and Cascais. A trip from downtown to Cascais takes approximately 35 minutes. A commuter train also runs from Lisbon to Sintra.

Ponta Delgada has inexpensive bus service available to most towns on the island of Sao Miguel, although buses do not run frequently. Taxis are readily available and are not expensive. Some taxi drivers speak English and are willing to hire their taxis for half-day and full-day trips.

Driving in Portugal is dangerous. Roads are congested, speeds high, and many drivers careless. In particular, the coast road from Lisbon to Cascais is considered the most dangerous stretch of highway in Europe based on accident reports. One must always drive defensively while behind the wheel in Portugal.

Regional

Many international airlines serve Lisbon, connecting Portugal via daily flights to most of Western Europe, North and South America, and less frequently with Africa and Asia. Delta Airlines initiated service between New York and Lisbon in 1992. Direct railroad connections exist between Lisbon and Madrid in Spain, where it is possible to connect with trains to the rest of Europe. Road systems connect Portugal with Spain and the rest of Europe. Lisbon is also a major port, with maritime traffic arriving from and departing to ports throughout the world.

International airlines also connect Oporto, the Azores, and Madeira with foreign countries.

Domestic airline service is available between Lisbon and Oporto, the Algarve, the Azores and Madeira. Flight delays may be encountered during the rainy season.

Regular train service connects Lisbon with Oporto in the north, and with the Algarve in the south. Autotrain services are available to Oporto at an additional cost. Train service to the eastern part of Portugal is available on the Lisbon-Madrid line, which also offers auto-train services. Other locations throughout the country are serviced by local trains which are less comfortable than those serving the main lines.

Portugal's highway system ranges from excellent to poor. Major expressways are found in and around Lisbon, stretching both north to Oporto and south to Setubal. Short stretches of expressway are found in and near several other urban centers. Most parts of the country are connected by two-lane paved highways which are passable in all weather. Many roads are narrow and winding and are heavily travelled by automobiles, trucks, and buses. Road maintenance, particularly in the northeastern and eastern parts of the country, may be spotty at times. Drivers are urged to develop and employ good defensive driving habits wherever they may be driving in Portugal.

Both American and Portuguese car rental agencies operate throughout the country. Rental prices are comparable to the rest of Europe, but may seem expensive compared to rentals in the United States.

Communications

Telephone and Telegraph

Telephone and telegraphic circuits are available to Europe and almost all points of the world. Calls to most places can now be dialed direct. USA direct services are offered by AT&T and US Sprint.

Direct dial telephone service is available to most parts of the world from Ponta Delgada, although it is not available from some of the smaller islands.

Radio and TV

Lisbon: Shortwave radio reception is fair to good depending on location and set. U.S. radios can be used with a transformer. BBC and VOA English, as well as several other European shortwave broadcasts, can be heard in Lisbon. Local AM and FM stations offer a full range of American and Portuguese music as well as extensive newscasts in Portuguese. An AFRTS station with English-language news, sports and music broadcasts in FM from the NATO facility (IBERLANT) located outside of Lisbon. Reception varies significantly from different locations in and near Lisbon. Another FM station, "Radio Paris-Lisbonne" offers music and news in French.

Portuguese National Television (RTP) has channels that regularly feature American shows and movies in English with Portuguese subtitles. Portuguese TV uses the PAL 625 system. American color TV sets cannot be used for local viewing, although they can be used with American VCR's to watch the NTSC-system videos that are available for rent. Multi-system TV's and VCR's are available. Quality European-standard electronic equipment is available locally, but at considerably higher prices than the equivalent in the U.S.

Small satellite dishes can receive European stations like Sky News, TVE, TV5, RTL and Eurosport. CNN international is also available. There is no commercial cable TV service, but many larger apartment buildings have satellite dishes that feed channels to each apartment.

Ponta Delgada: RTP Azores operates in Sao Miguel. About 50 percent of the programs are in Portuguese, and the rest are in English, Spanish, German, and French, all with Portuguese subtitles. The American station (AFRTS) at Lajes does not produce a signal strong enough for reception in Sao Miguel.

Newspapers, Magazines, and Technical Journals

Lisbon: The International Herald Tribune is available within one day of publication at many newsstands, which also carry American and British news magazines and newspapers at prices higher than domestic rates. A small English weekly, The Anglo-Portuguese News, is aimed primarily at the large British community in Portugal. Eight Portuguese dailies and five major weeklies carry domestic and international news. The USIS library, located downtown, carries a wide selection of American books and magazines. Several local bookstores stock books in English, but at higher prices than in the U.S.

Ponta Delgada: The Consulate receives various periodicals. The International Herald Tribune arrives 5-15 days late. Lajes AFB carries a selection of magazines and newspapers in the base exchange. Three Portuguese dailies and two weekly newspapers are published in Ponta Delgada, but coverage of international news is limited.

Health and Medicine

Medical Facilities

Lisbon: The quality of physicians is good. Government hospitals and clinics, however, are sometimes underequipped, outdated, and poorly managed. Overcrowding can be a problem. Charges for medical services vary widely but are comparable to what one would pay in the United States. Nursing care, with the exception of acute care areas, is below that found in American hospitals.

In spite of these problems, some private Portuguese hospitals are satisfactory for medical and surgical procedures. Emergency room services have been used with satisfactory results, as have obstetrical care services.

Dental care is satisfactory. There are a number of excellent dentists who have been used with good results (including periodontics, orthodontics, and pediatric dentistry).

Ponta Delgada: Ponta Delgada offers good medical care and facilities. English-speaking physicians include such specialists as pediatricians, obstetricians and gynecologists. A local hospital and two clinics provide adequate care and can handle acute medical emergencies. Emergency room and intensive care services are available. Problems may exist in obtaining some medications from local pharmacies, and eyeglasses are not readily available.

Community Health

Portugal is generally considered to have a healthy environment with minor health risks for those assigned here. Despite brief bouts of upset stomach and diarrhea until one adapts to the new food, no major health problems present themselves. However, certain precautions are suggested.

Damp chilly weather is common throughout Portugal during the winter months. This aggravates rheumatism, sinusitis, and bronchial and other respiratory conditions. Common colds and various strains of the flu are frequent. Other commonly encountered diseases include hepatitis A, dysentery, measles, mumps, chicken pox, and whooping cough. Tuberculosis is also more common than in most European countries.

Preventive Measures

While not required, the following immunizations are recommended: gamma globulin, tetanus, diphtheria, pertussis, typhoid, oral polio, and hepatitis B.

Some medications are available locally. However, it is recommended that those on prescription medications bring a good supply with them and that arrangements be made for the refill of prescriptions by mail from the United States if they are not available through local pharmacies.

Although water supplied to Lisbon and the rest of Portugal is adequately treated, the distribution system is old in parts and in varying states of repair. Following any disruption of water service in the Lisbon area, and at all times outside the Lisbon metropolitan area, tap water should not be considered safe to drink unless it is first boiled for five minutes. Good bottled water, both carbonated and uncarbonated, is readily available at reasonable prices throughout the country.

Local meats, fish, fruits, and vegetables are safe for consumption. While meat and fish markets do not come under strict sanitary controls, nearly all stores have refrigeration equipment for meats, fish, and dairy products. Shellfish can be a source of hepatitis A, especially during the dry months. Caution is advised. Milk, butter, and cheese are generally safe and of excellent quality. Pasteurization of dairy products is now common, with the exception of what is called "fresh cheese" that is similar to "farmers cheese". Unpasteurized dairy products should be avoided as they may cause bovine tuberculosis.

NOTES FOR TRAVELERS

Request a visa from the appropriate issuing authority. Some Portuguese embassies will issue a visa, others (including the Embassy in Washington) may indicate it is not necessary. If you do not have a visa, you will have a 90-day visitor's permit stamped in your passport on arrival.

No vaccinations are required for entry into Portugal.

Pets are not subject to quarantine. Dogs must have vaccination certificates against rabies, and both dogs and cats need a certificate of good health. All certificates must be visaed by a Portuguese consular official before the pet arrives in Portugal.

Pets will be inspected by a veterinarian on arrival. In addition, the owner will have to pay clearances, customs broker fees, and other minor charges.

No limitations are placed on dollars or travelers checks brought to Portugal; however, declaration at the point of entry is necessary to reexport foreign currency.

The monetary unit is the euro.

Banks, hotels, and shops accept travelers checks. All major credit cards, U.S. and European, are widely accepted on the Portuguese economy.

Portugal uses the metric system of weights and measures.

LOCAL HOLIDAYS

Jan. 1 …New Year's Day

Feb/Mar.…Carnival^*

Mar/Apr.…Good Friday^*

Mar/Apr.…Easter^*

Apr 25 …Freedom Day

May 1…May Day

May/June…Corpus Christi Day^*

June 10 …Portugal Day

June 13 …St. Anthony's Day

Aug. 15…Assumption Day

Oct. 5 …Proclamation of the Portuguese Republic

Nov. 1 …All Saints' Day

Dec. 1 …Restoration of Portuguese Independence

Dec. 8 …Immaculate Conception

Dec. 25 …Christmas Day

^*variable

RECOMMENDED READING

These titles are provided as a general indication of the material published on this country. The Department of State does not endorse unofficial publications.

American University. Area Handbook for Portugal. U.S. Government Printing Office: Washington, 1977.

Antunes, Jose Freire. Kennedy e Salazar. Lisbon 1991. Difus·o Cultural.

Antunes, Jose Freire. Nixon e Caetano, Promessas e Abandono. Lisbon, 1992.

Antunes, Jose Freire. Os Americanos e Portugal, Vol. 1, Os Anos de

Richard Nixon 1969-1974. Pubs. Dom Ouixote: Lisbon, 1979

Binnendijk, Hans, editor. Authoritarian Regimes in Transition, Chapter Four, "Democracy Comes to the Iberian Peninsula." U.S. Government Printing Office: Washington, 1987.

Ferreira, Hugo G., and Michael W. Marshall. Portugal's Revolution: Ten Years On. New York: Cambridge University Press, 1986.

Frommer's Portugal, Madeira, & the Azores. New York: Prentice Hall, 1990.

Graham, Lawrence S., and DouglasL. Wheeler, eds. In Search of Modern Portugal: The Revolution and Its Consequences. Madison, WI: University of Wisconsin Press, 1983.

Kayman, Martin. Revolution and Counter-Revolution in Portugal. Wolfboro, NH: Longwood Publishing Group, 1987.

Kubiak, T. Portugal. New York:Hippocrene Books, 1989.

Marques, Antonio Henrique. History of Portugal. Palas: Lisbon, 1974.

Maxwell, Kenneth. (ed.). Portuguese Defense and Foreign Policy since Democratization. New York: Camoes Center, Columbia University, 1991.

Maxwell, Kenneth & Haltzel, Michael (eds.). Portugal: Ancient Country, Young Democracy. The Wilson Center Press. Washington, D.C., 1990.

Opello, Walter C. Portugal: From Monarchy to Pluralist Democracy. Boulder: Westnow Press, 1991. dos Passos, John. The Portugal Story: Three Centuries of Exploration and Discovery. Doubleday: New York, 1969.

Rodriguez, Avelino: Borge, Cesario;Cardosa, Mario. Abril Nos Quarteis de Novembro. Libraria Bertrand: Lisbon, 1979.

Szulc, Tad. "Behind Portugal's Revolution," Foreign Policy, No. 21, Winter 1975-76.

Many excellent travel books on Portugal are available in bookstores in the United States. Publications are also available from the Portuguese National Tourist Office both in the United States and in Portugal.

PORTUGAL

PORTUGAL. In 1385 a new dynasty came to power in Portugal under John I (João of Avis; 1357–1433; ruled 1385–1433). With the capture of the last Muslim stronghold in 1249, Portugal, located on the southwest corner of Europe and bordered by Castile to the east, had achieved roughly its modern boundaries. Though hit hard by the Black Death in 1348–1349, its population a century later had recovered to about one million inhabitants.

But the year 1450 marked a critical time in Portuguese history. Eighteen-year-old Afonso V (ruled 1438–1481), grandson of the founder of the Avis dynasty, was on the throne. The previous year (1449) his uncle, father-in-law, and former regent, Prince Pedro (1392–1449), had been killed at the battle of Alfarrobeira, the victims of civil war. Afonso V's reign might be described as the last hurrah for Portuguese royal chivalry. It clearly was the high-water mark for Portugal's upper nobility and higher clergy, who were lavishly rewarded by the monarch. Afonso V was greatly interested in campaigning in North Africa, personally leading Portuguese forces there in 1458, 1463–1464, and 1471. With the death of Henry (Enrique) IV of Castile in 1474, Afonso V took his kingdom down a dangerous path as he tried to take advantage of Castile's many civil wars. He attempted to marry his niece and Henry IV's young daughter and heiress Joan (Juana) and eventually join the thrones of Castile and Portugal. The plan had both immediate and long-term disastrous results, leading to a destructive Portuguese-Castilian war in the first place and in the second a series of Castilian-Portuguese marriages that eventually resulted in Philip II of Spain becoming king of Portugal.

In the aftermath of his father's lax reign, John (João) II (ruled 1481–1495) asserted strong royal authority. In this he was backed by the Cortes (meeting of the Three Estates) in Evora in 1481–1482. He cowed the titled nobility by having Dom Fernando, third duke of Bragança and head of Portugal's most powerful noble family (1430–1484), executed for treason in 1483 and by personally stabbing to death his own first cousin and brother-in-law, Dom Diogo, duke of Viseu and master of the Order of Christ (1462/63–1484), the following year. John II strongly promoted Portuguese expansion and discovery down the west coast of Africa. During the last years of his reign, tens of thousands of Jews expelled from Spain in 1492 sought refuge in Portugal, doubling the number already there. In the meantime, beginning in the 1440s, increasing numbers of black slaves were brought to Portugal from sub-Saharan Africa. Though a large number of the slaves were sold to Castile and other European kingdoms, many remained in the southern part of Portugal. It is estimated that by 1550 African slaves made up 10 percent of Lisbon's population.

John II was succeeded by Manuel I (ruled 1495–1521), the duke of Viseu's younger brother. Manuel brought the Bragança family back into favor. To appease his future wife Isabella and his Spanish in-laws Ferdinand of Aragón and Isabella of Castile, Manuel in late 1496 and 1497 forced Jews in Portugal to convert to Christianity. When Isabella died after childbirth in 1498, Manuel married her younger sister Maria that year. Two of their sons, John (João) (1502–1557) and Henry (Henrique) (1512–1580), later succeeded to the throne. Toward the end of his life, Manuel in 1518 married Leonor, sister of Emperor Charles V (ruled 1519–1558). Manuel usually receives high marks for administration, and he seems to have healed some of the wounds opened by his predecessor. He undertook major legal reforms, issuing new town charters (forais) and updating the earlier crown legislation of the Ordenações Afonsinas with the Ordenações Manuelinas (Manueline Ordinances). Manuel presided over a Portugal making important and often prosperous overseas contacts in East Africa, India, Southeast Asia, and Brazil.

John III's lengthy reign of thirty-six years (1521–1557) has long been the subject of controversy. Son of Manuel, he has been strongly criticized for establishing the Inquisition in Portugal beginning in 1536 and for inviting the newly founded Jesuits to Portugal in 1540. On the other hand, humanism reached its apogee in Portugal during his reign. The University of Coimbra was reformed, and the College of Arts was founded. However, John III was faced with a number of serious problems left behind by his father. Portugal, with a population of between 1 and 1.5 million inhabitants, was overextended and in serious financial difficulties, many caused by its rapid and widespread overseas expansion. The effects of the Council of Trent, 1545–1563, were also beginning to be felt.

John III was succeeded by his three-year-old grandson Sebastian (ruled 1557–1578), who required a double regency, that of his grandmother Catherine from 1557 to 1562 followed by that of his great-uncle Cardinal Henry (Henrique) from 1562 to 1568. Sebastian invaded Morocco twice, in 1574 and 1578. In August of the latter year he and more than seven thousand Portuguese nobility and soldiers died in battle. The childless Sebastian was succeeded by the aging Cardinal Henry, who died in January 1580. Though Dom António (1531–1595), prior of Crato, illegitimate son of Henry's brother Dom Luís (1506–1555), was acclaimed king of Portugal, the troops of Philip II of Spain (ruled 1556–1598) invaded Portugal, and the kingdom was acquired by conquest, inheritance, and bribery. Between 1580 and 1640 Portugal was under Spanish Habsburg rule, part of a dual monarchy. In 1581 at Tomar, Philip II swore to respect Portuguese sovereignty. Philip II spent less than two years in Portugal, and his son Philip III (ruled 1598–1621) visited briefly in 1619. Though most Portuguese seemed to accept Habsburg rule during its first few decades, economic crises and efforts at centralization by Gaspar de Guzmán y Pimental, count-duke of Olivares and chief minister of Philip IV (ruled 1621–1665), set the stage for Portuguese rebellion.

On 1 December 1640 John (João) (1604–1656), eighth duke of Bragança, was proclaimed King John IV (ruled 1640–1656). He married Luisa de Gusmão, daughter of Spain's eighth duke of Medina Sidonia. Generally well received as monarch, John IV encountered difficult times for Portugal and its overseas empire, but he managed to thwart Spanish efforts to restore Portugal to Habsburg rule. There was a period of twenty-eight years of warfare before peace was signed in 1668. When John IV died in 1656, he left behind a sickly and disturbed heir, Afonso VI (ruled 1656–1683). Queen Luisa held the regency until 1662, when a palace coup headed by Luis de Vasconcelos e Sousa (1636–1720), third count of Castelo Melhor, brought the eighteen-year-old Afonso to the throne. Vasconcelos e Sousa became Afonso's key adviser and the dominant figure in Portugal. Afonso VI married the French Marie-Françoise of Nemours in 1666.

A second palace coup ousted Afonso VI in November of 1667 and replaced him with his younger brother Peter (Pedro) (1648–1706), who, in turn, married his sister-in-law (after she had received an annulment) the following year. Peter held the title of regent until his imprisoned brother's death in 1683, after which he became known as Peter (Pedro) II until his own death in 1706. The unorthodox removal of his brother from power placed Peter in a difficult position for his almost thirty-nine years of rule, forcing him into playing the "politics of the possible" and sharing power with the titled nobility. After the death of Maria-Francisca in 1683, Pedro in 1687 married Maria Sophia of Neuburg, daughter of the elector palatine. In this marriage was born John (João) V (ruled 1706–1750), who married Maria Anna of Austria, daughter of the Holy Roman Emperor Leopold I (ruled 1658–1705).

Though Portugal managed to stay out of the international conflicts of the late seventeenth century, the kingdom did become involved in the War of the Spanish Succession (1701–1714). Initially allied with Bourbon France and Spain, Portugal soon sided with England and the Grand Alliance and backed the cause of Archduke Charles of Austria (future Holy Roman emperor Charles VI, ruled 1711–1740). Though Portuguese troops briefly captured Madrid, parts of Portugal were devastated by the war. The war's end ushered in more than half a century of relative peace for Portugal, though the Portuguese, in league with the papacy and Venice, were credited with the victorious sea battle against the Turks off Cape Matapan along the Greek coast in 1717. John V's reign saw a flood of wealth from the Brazilian gold rush, and with this newfound wealth he attempted to imitate Louis XIV (ruled 1643–1715) and the French court. There was an important building and artistic boom, and Portugal's prestige rose at the courts of Europe, especially Rome, Paris, and Vienna. John V created a patriarchate in Lisbon and was granted the title of "Most Faithful" Majesty by Pope Benedict XIV (reigned 1740–1758). Voltaire remarked that when John wanted a building, he built a monastery, and when he wanted a mistress, he took a nun. John's son, Joseph (José) I (ruled 1750–1777), married Mariana Victoria, daughter of Philip V (ruled 1700–1724, 1724–1746) of Spain. Joseph's reign saw significant reforms, especially through the efforts of his chief minister, Sebastião José de Carvalho e Melo (1699–1782), better known as the marquês of Pombal. In the aftermath of the catastrophic earthquake that hit Lisbon on 1 November 1755 and killed between five thousand and ten thousand people, Pombal consolidated his power. The controversial statesman is best understood as an economic nationalist who was also determined to subordinate the titled nobility and the higher clergy to crown control. He greatly reduced the power of the Inquisition, making it little more than a state tribunal. In 1759 he expelled the Jesuits from Portugal and the entire Portuguese world.

Joseph I was succeeded by his daughter Maria I (ruled 1777–1816). Her royal consort was her husband and uncle Pedro, known as Peter (Pedro) III (ruled 1777–1786), who died in 1786. Shortly after the French Revolution, Maria showed evidence of mental instability. In 1792 her son Prince John (João) (1767–1826) was named regent. After her death in 1816, he became John (João) VI of Portugal.

See also Lisbon ; Olivares, Gaspar de Guzmán y Pimentel, Count of ; Philip II (Spain) ; Portuguese Colonies ; Portuguese Literature and Language .

BIBLIOGRAPHY

Boxer, C. R. Salvador de Sá and the Struggle for Brazil and Angola, 1602–1686. London, 1952.

Hanson, Carl A. Economy and Society in Baroque Portugal, 1668–1703. Minneapolis, 1981.

Livermore, H. V. A History of Portugal. Cambridge, U.K., 1947.

Maxwell, Kenneth. Pombal: Paradox of the Enlightenment. Cambridge, U.K., 1995.

Oliveira Marques, A. H. de. History of Portugal. 2nd ed. New York, 1976.

Saunders, A. C. de C. M. A Social History of Black Slaves and Freedmen in Portugal, 1441–1555. Cambridge, U.K., 1982.

Francis A. Dutra