Economy
Although Portugal is a modern industrial state, it remains one of the least developed countries in western Europe. Industrial development and economic growth occurred during the 1960's and early 1970's. Sustained economic growth, however, was hampered by a variety of factors, including a lack of fuels and other industrial raw materials, large-scale emigration, and heavy military expenditures for fighting rebellions in the country's African territories.
A coup in 1974 led to major economic changes. Chief among these changes was the nationalization of many industries. Economic decline occurred during the late 1970's and early 1980's. High unemployment, caused chiefly by the return of Portuguese settlers and soldiers from former colonies, was one of many economic problems. By the mid-1980's, however, the economy began to show signs of improvement, especially after Portugal joined what is now the European Union, in 1986. A program to return most nationalized industries to private ownership was initiated in 1989. By the mid-1990's many state concerns had been privatized.
The manufacturing or processing of agricultural, fishery, and forest products has long been a mainstay of Portugal's economy. Among the chief products are wine, olive oil, sardines, cork, and resins. The making of textiles, a major export, provides the greatest number of manufacturing jobs. Other manufacturing includes automobile assembly and the making of footwear electronic equipment, steel, pulp and paper, refined petroleum and petrochemical products, cement, ceramics and fertilizer. Portugal also has sizable shipbuilding and ship repairing facilities. Almost all of the industry is concentrated in the Lisbon, Oporto, and Sines areas.
Fourteen per cent of Portugal's workforce is engaged in agriculture, one of the highest percentages in western Europe. Poor farming methods and a lack of investment in agriculture, however, have kept productivity low, and Portugal must import food products to meet domestic demand. Small farms, many less than five acres (two hectares), predominate in the north; larger farms are found in the south.
Potatoes, wheat, and corn are grown in the largest amounts. Other major crops include rye, rice, oats, barley, beans, tomatoes, grapes (mainly for wine), almonds, olives, and citrus fruit. Wines, particularly Port, Madeira, and Rosé, have been major exports for many years. Sheep, pigs, and, to a lesser extent, cattle and goats make up most of the livestock.
Portugal is a seafaring nation of long tradition, and fishing is a well-established industry. Fish from distant Atlantic waters account for most of the catch. The most important species from these waters, are cod, hake, and tuna. Of the many species taken in coastal waters, the most valuable is the sardine. Much of the sardine catch is canned for export.
Forests cover slightly more than a third of Portugal and consist mainly of pines, cork oak, other oaks, and chestnut. From them come major products and exports, including cork, resin, turpentine, and wood for pulp. Portugal is one of the world's largest producers and exporters of cork.
Mining is of limited importance. Many minerals are produced, but few in significant amounts, rarely enough to meet domestic needs. Pyrite (mainly for sulfur) and copper are normally the leaders in production. Iron ore, kaolin, gold, tin, and silver are also produced. When prices on the world market are sufficiently high, tungsten and beryl are mined for export.
Highways link most large towns and cities. The bridge over the Tagus River at Lisbon is one of the longest suspension bridges in the world. The railway system is owned and operated by the government. Lisbon and Oporto (Porto) are the chief ports. Lisbon's Portela Airport is a major European air terminal, serving TAP, the national airline, and other international carriers.
Portugal trades mainly with western European nations and the United States. Portugal is one of the least expensive countries in Europe to visit, and tourism has become a major industry.
