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Portugal (05/00)


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For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Portuguese Republic

Geography
Area: 92,391 sq. km., including the Azores and Madeira Islands; slightly smaller than the State of Indiana.
Cities: Lisbon (capital, pop. 1.9 million), Oporto (1.7 million), Faro.
Terrain: Mountainous in the north; rolling plains in the central south.
Climate: Maritime temperate, average annual temperature is 16�C (61�F).

People
Nationality: Noun and adjective--Portuguese (singular and plural).
Population (1999): 9.9 million.
Population density: 105 per sq. km. (272 per sq. mi.).
Annual growth rate: 0.0%.
Ethnic groups: Homogeneous Mediterranean stock with a small black African minority.
Religion: Roman Catholic, 97%.
Language: Portuguese.
Education: Years compulsory--9. Literacy--90%.
Health: Infant mortality rate--6.73/1, 000. Life expectancy--76 years.
Work force (4.7 million): Government and services--56%; industry--32%; agriculture--12%.

Government
Type: Republic.
Constitution: Effective April 25, 1976; revised October 30, 1982, June 1, 1989, November 25, 1992, and September 3, 1997.
Branches: Executive--president (head of state), Council of State (presidential advisory body), prime minister (head of government), Council of Ministers. Legislative--unicameral Assembly of the Republic (230 deputies). Judicial--Supreme Court, district courts, appeals courts, Constitutional Tribunal.
Administrative subdivisions: 18 districts, 2 autonomous regions.
Major political parties: Socialist Party (PS), Social Democratic Party (PSD), Popular Party (CDS/PP), Portuguese Communist Party (PCP).
Suffrage: Universal at age 18.

Economy
GDP (1999): $108.9 billion.
Annual growth rate: 3.1%.
Per capita GDP (1999): $10,901.
Avg. inflation rate (1999): 2.2%.
Natural resources: Fish, tungsten, iron, copper, tin, and uranium ores. Agriculture: Forestry, fisheries, cork, wine.
Industry: Textiles, clothing, footwear, wood and cork, paper, chemicals, manufacturing, food and beverages.
Services: Commerce, government, housing, banking and finance.
Trade: Exports--$25 billion; clothing, footwear, machinery, vehicles, cork and paper products, food products. Imports--$34.9 billion; machinery, vehicles, agricultural products, chemicals. Partners--European Union (81%), United States, Portuguese-speaking African countries, European Free Trade Area (EFTA), Middle East.

GOVERNMENT
Portugal's April 25, 1976 constitution reflected the country's 1974-76 move from authoritarian rule to provisional military government to a parliamentary democracy with some initial communist and left-wing influence. The military coup in 1974 was a result of the colonial wars and removed the authoritarian dictator, Marcello Caetano, from power. The threat of a communist takeover in Portugal generated considerable concern among the country's NATO allies. The revolution also led to the country abruptly abandoning its colonies overseas and to the return of an estimated 600,000 Portuguese citizens from abroad. The 1976 constitution, which defined Portugal as a "Republic...engaged in the formation of a classless society," was revised in 1982, 1989, 1992, and 1997.

The 1982 revision of the constitution placed the military under strict civilian control, trimmed the powers of the president, and abolished the Revolutionary Council (a non-elected committee with legislative veto powers). The country joined the European Union in 1986, beginning a path toward greater economic and political integration with its richer neighbors in Europe. The 1989 revision of the constitution eliminated much of the remaining Marxist rhetoric of the original document, abolished the communist-inspired "agrarian reform," and laid the groundwork for further privatization of nationalized firms and the government-owned communications media.

The current Portuguese constitution provides for progressive administrative decentralization and calls for future reorganization on a regional basis. The Azores and Madeira Islands have constitutionally mandated autonomous status. A regional autonomy statute promulgated in 1980 established the Government of the Autonomous Region of the Azores; the Government of the Autonomous Region of Madeira operates under a provisional autonomy statute in effect since 1976. Apart from the Azores and Madeira, the country is divided into 18 districts, each headed by a governor appointed by the Minister of Internal Administration. Macau, a former dependency, reverted to Chinese sovereignty in December 1999.

The four main organs of the national government are the presidency, the prime minister and Council of Ministers (the government), the Assembly of the Republic (the parliament), and the judiciary. The president, elected to a 5-year term by direct, universal suffrage, also is commander in chief of the armed forces. Presidential powers include appointing the prime minister and Council of Ministers, in which the president must be guided by the assembly election results; dismissing the prime minister; dissolving the assembly to call early elections; vetoing legislation, which may be overridden by the assembly; and declaring a state of war or siege.

The Council of State, a presidential advisory body, is composed of six senior civilian officers, any former presidents elected under the 1976 constitution, five members chosen by the assembly, and five selected by the president.

The government is headed by the presidentially appointed prime minister, who names the Council of Ministers. A new government is required to define the broad outline of its policy in a program and present it to the assembly for a mandatory period of debate. Failure of the assembly to reject the program by a majority of deputies confirms the government in office.

The Assembly of the Republic is a unicameral body composed of up to 235 deputies. Elected by universal suffrage according to a system of proportional representation, deputies serve terms of office of 4 years, unless the president dissolves the assembly and calls for new elections.

The national Supreme Court is the court of last appeal. Military, administrative, and fiscal courts are designated as separate court categories. A nine-member Constitutional Tribunal reviews the constitutionality of legislation.

Current Administration
The Socialist Party, under the leadership of Antonio Guterres, came to power with a coalition government following the October 1995 parliamentary elections. The Socialists won a new mandate by winning exactly half the parliamentary seats in the latest election in October 1999. Socialist Jorge Sampaio won the February 1996 presidential elections with nearly 54% of the vote. Sampaio's election marked the first time since the 1974 revolution that a single party held the prime ministership, the presidency, and a plurality of the municipalities. Local elections were held in December 1997.

Prime Minister Guterres has continued the privatization and modernization policies begun by his predecessor. Guterres has been a vigorous proponent of the effort to include Portugal in the first round of countries to collaborate and put into effect the "euro" in 1999. In international relations, Guterres has pursued strong ties with the United States and greater Portuguese integration with the European Union while continuing to raise Portugal's profile through an activist foreign policy. One of his first decisions as Prime Minister was to send 900 troops to participate in the IFOR peacekeeping mission in Bosnia. Portugal later contributed 320 troops to SFOR, the follow-up Bosnia operation. Portugal also contributed aircraft and personnel to NATO's Operation Allied Force in Kosovo.

Principal Government Officials
President of the Portuguese Republic--Dr. Jorge Sampaio
Prime Minister--Antonio Guterres
Minister of Foreign Affairs--Jaime Gama
Ambassador to the United States--Joao Alberto Bacelar da Rocha Paris
Ambassador to the United Nations--Antonio Monteiro

Portugal maintains an embassy in the United States at 2125 Kalorama Road, NW, Washington, DC 20008 (tel. 202-328-8610); consulates general in New York City, Boston, San Francisco, and Newark, NJ; consulates in Providence, RI and New Bedford, MA; and honorary consulates in Honolulu, Los Angeles, Houston, New Orleans, Chicago, Philadelphia, Miami, San Juan, and Waterbury. The Portuguese National Tourist Office in the United States is located at 590 Fifth Avenue, New York, NY 10036 (tel: 212-354-4403).

ECONOMY
Membership in the European Union (EU) has brought robust economic growth, largely through increased trade ties and an inflow of structural adjustment funds to improve the country's infrastructure. Since the last recession in 1993, the economy has grown at an average annual rate of 3.3%, well above EU averages. Much of the recent growth has occurred as a result of the European Monetary Union (EMU). In order to qualify, Portugal agreed to cut its fiscal deficit and undertake structural reforms. As a result of EMU, however, the country witnessed exchange rate stability, falling inflation, and falling interest rates. Falling interest rates, in turn, lowered the cost of public debt and made it relatively easy for the country to achieve its fiscal targets. Another result of falling interest rates has been the rapid expansion of household debt and the overheating economy. The European Commission, OECD, and others have advised the Portuguese Government to exercise more fiscal restraint to bring the situation under control.

Portugal's economy is based on traditional industries such as textiles, clothing, footwear, cork and wood products, beverages (wine), porcelain and earthenware, and glass and glassware. In addition, the country has increased its role in Europe's automotive sector. Services, particularly tourism, are playing an increasingly important role in the economy.

Portugal's privatization program has reduced the weight of the state-owned sector in the economy from 20% in 1989 to 10% in 1998 and yielded $21.5 billion in total proceeds to the government.

Portugal has made significant progress in raising its standard of living closer to that of its EU partners. GDP per capita on a purchasing power parity basis rose from 53% of the EC average in 1985 to 70% of the EU average in 1998.

Unemployment stood at 4.1% at the end of 1999, which is low compared to the EU average. Real wages are flexible, but high social costs and severance packages raise fixed labor costs and make new job creation difficult.

U.S.-PORTUGUESE RELATIONS
The United States encourages a stable and democratic Portugal that is closely associated with the industrial democracies of western Europe and NATO; it has supported Portugal's successful entry into the West European economic and defense mainstream. Although it was a neutral country during World War II, Portugal was a founding member of NATO and has been a strong supporter of transatlantic ties. Portugal's commitment to democratic values is demonstrated by the country's successful transition from authoritarian rule to constitutional democracy and its excellent human rights record.

Bilateral ties date from the earliest years of the United States. Following the Revolutionary War, Portugal was the first neutral country to recognize the United States. On February 21, 1791, President George Washington opened formal diplomatic relations, naming Col. David Humphreys as U.S. minister. A shared perspective promotes close contact between the two nations. Emigration and sizable Portuguese communities in Massachusetts, Rhode Island, New Jersey, and California has contributed to strong cultural ties. There also are about 16,000 Americans living in Portugal. This exchange was promoted in 1999 when Portugal entered the U.S. Visa Waiver Pilot Program.

U.S.-Portuguese trade is relatively small, with the U.S. exporting $1.05 billion worth of goods in 1999 and importing $1.2 billion. While total Portuguese trade has increased dramatically over the last 10 years, the U.S. percentage of it--both exports and imports--has declined. The Portuguese Government is seeking to increase exports of textiles and footwear to the United States and is encouraging greater bilateral investment.

Principal U.S. Officials
Ambassador--Gerald McGowan
Deputy Chief of Mission--Kathleen Stephens
Political/Economic Affair--Dennis Hankins
Consular Affairs--Leslie Rowe
Administrative Affairs--Gary Bagley
Public Affairs--Jeff Murray
Commercial Affairs--Robert Shipley
Defense and Air Attache--Col. Earl Hanson
Army Attache--Lt. Col. Kelly Langdorf
Navy Attache--Commander Peter Latta
Office of Defense Cooperatio--Capt. Roy Merrill
Consul, Ponta Delgada--Bernice Powell

The U.S. embassy is located at Avenida das Forcas Armadas, 1600 Lisbon, Portugal (tel.: 351-21-727-3300). The embassy homepage is located at www.usia.gov/posts/lisbon.html.

The Ponta Delgada consulate is located at Avenida Infante D. Henrique, Ponta Delgada, Sao Miguel, Azores 9502 (tel.: 296-282216).

The consular agent in Funchal, Madeira is Antonio Drummond Borges (tel.: 291-741088).

FOREIGN RELATIONS
As Portuguese democracy has matured, the country has taken a more active role in international issues. Portugal has proportionally large contingents in both SFOR and KFOR, and the government backed the NATO operations in Kosovo although 60% of the population opposed the campaign. Portugal has created an organization, the CPLP, to improve its ties with other Portuguese-speaking countries, and has participated, along with Spain, in a series of Ibero-American summits. Most importantly, Portugal lobbied long and hard for independence for East Timor, a former Portuguese colony. The violence that followed East Timor's vote for independence triggered the largest demonstrations seen since the revolution. Following the restoration of peace to the territory, Portugal has committed troops and money to help bring stability and economic development to East Timor in close cooperation with the United States.

Although Portugal has long seen itself as an Atlantic, rather than European state, that focus is clearly shifting as Portugal moves toward greater integration with Europe. The saying goes that Europe was the last continent discovered by the Portuguese. Portugal has been one of the greatest beneficiaries of the European Union and is now one of its strongest proponents. In 1998, Portugal met the financial criteria for joining the European Monetary Union and the country's exchange rates, along with those of 10 other EU countries have been tied to the "euro" since January 1, 1999.

Portugal held the presidency of the European Union for the second time during the first half of 2000. Portugal has used its term to launch a dialogue between the EU and Africa and to begin to take steps to make the European economy dynamic and competitive. Portugal's tenure also has been important in making progress on a number of internal EU issues, such as institutional reforms and beginning negotiations with new candidate countries.



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