A republic since 1910, the country was ruled from 1932 to 1968 by a single prime minister, Antonio de Oliveira Salazar. A right-wing dictator, Salazar, though at first sympathetic to Germany, kept Portugal stable and out of the Second World War. During the war, spies from both sides haunted Lisbon.
From the mid-1950s the country became more and more divided politically: the north remained strongly religious and conservative, but in the south a large land less peasantry began to express discontent.
When Salazar was incapacitated by a stroke and was succeeded by Marcello Caetano in 1968, the costs of colonial wars against nationalist movements in Angola, Portuguese Guinea (now Guinea-Bissau) and Mozambique had begun to place a heavy burden on the country, both in manpower and finance. In 1974 the Armed Forces Movement staged a bloodless coup and a national hero, the monocled General Antonio de Spinola, briefly became president. The African colonies were freed but political confusion followed.
Since 1974 there have been 16 governments, mainly left wing and Socialist alliances. In the 1985 elections, though, the Social Democrats replaced the Socialist power.
Under Salazar's nationalist policies, foreign investment was low, and political uncertainty following the 1974 coup has continued to hinder foreign investment. Subsequently, Portugal's low labour costs attracted some investment, but this fell away as real wages fell by 27 percent in the years 1983-5, giving rise to strikes and economic turmoil. However, the trading benefits expected from membership of the European Economic Community, which Portugal joined in 1986, are beginning to attract foreign investors.
Portugal's industry is focussed mainly in the districts of Lisbon and SETUBAL in the centre west, and Oporto, Aveiro and Braga in the north. Around Lisbon, metallurgy and engineering are the dominant industries, whereas in the north textiles take first place.
Industry is mainly labour, but increasing investment is leading to the modernization of some sectors, such as petrochemicals and shipbuilding. Food processing is also of importance, and no one can visit coastal towns such as Matosinhos or Peniche without noticing the all-pervading smell of fish canning.
Although about 27 percent of Portugal's work force is employed in agriculture, the country has to import nearly two-thirds of its food. There is a continuing, large balance of payments deficit.
Farms are small in the north - often less than 2 hectares (5 acres) and large in the south. After 1914 most of the large southern estates were turned into farm cooperatives, but falls ingrain production led to the government leasing land back to individual farmers. About two-fifths of the 600 cooperatives were broken up.
The only forestry and agricultural products which Portugal exports in any amount are vegetables.
The small northern farms are old-fashioned; oxen are often used rather than tractors. The farmers grow maize, beans, potatoes and a variety of vegetables, mainly for their own use. Most of the cattle are stall fed, and a common sight in the evenings is to see children taking their family's two or three cows to the collective milking parlor in the village.
An older son may be working abroad, probably in France, spending his holidays back in his home village, perhaps with his foreign car, and using much of his income to build a new house.
The women, often dressed in black, may spend the morning washing clothes at the communal tubs by the stream. After lunch, the men meet in the village cafe to drink coffee and watch the latest soap opera on television,
The whole rhythm of town life is different. Cars blare their horns in traffic jams; people in brightly coloured clothes view the latest fashions in the shops; men in dark suits go briskly about their work. And yet, in all but the largest towns, the cafes and bars remain very much the preserve of men. Traditions are changing, but the visitor will be surprised at the continuance of old customs and ways of life.
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