Anthem: A Portuguesa
|Government||Unitary Salazarist one-party parliamentary republic under an authoritarian dictatorship|
|Francisco Craveiro Lopes|
o Consultative chamber
o Legislative chamber
|19 March 1933|
|14 December 1955|
|25 April 1974|
|1940||2,168,071 km2 (837,097 sq mi)|
|1970||2,168,071 km2 (837,097 sq mi)|
The Second Portuguese Republic (Portuguese: Segunda República Portuguesa), or more commonly known as Estado Novo (Portuguese pronunciation: [(?)?'tadu, -ðu 'novu], "New State"), was the corporatist regime installed in Portugal in 1933. It evolved from the Ditadura Nacional ("National Dictatorship") formed after the coup d'état of 28 May 1926 against the democratic and unstable First Republic. Together, the Ditadura Nacional and the Estado Novo are recognised as the Second Portuguese Republic.[by whom?] The Estado Novo, greatly inspired by conservative and autocratic ideologies, was developed by António de Oliveira Salazar, who was President of the Council of Ministers from 1932 until illness forced him out of office in 1968.
Fiercely criticized by most of the international community after World War II and decolonization, the Estado Novo was one of the longest-surviving authoritarian regimes in Europe. Opposed to communism, socialism, anarchism, liberalism and anti-colonialism,[a] the regime was conservative, corporatist, and nationalist in nature, defending Portugal's traditional Catholicism. Its policy envisaged the perpetuation of Portugal as a pluricontinental nation under the doctrine of lusotropicalism, with Angola, Mozambique, and other Portuguese territories as extensions of Portugal itself, and it being a supposed source of civilization and stability to the overseas societies in the African and Asian possessions. Under the Estado Novo, Portugal tried to perpetuate a vast, centuries-old empire with a total area of 2,168,071 square kilometres (837,097 sq mi), while other former colonial powers had largely already acceded to global calls for self-determination and independence.
Portugal joined the United Nations (UN) in 1955, and was a founding member of NATO (1949), OECD (1961), and EFTA (1960). In 1968, Marcello Caetano was appointed the new head and he continued to pave the way towards economic integration with Europe achieving the signature of the free trade agreement with the EEC in 1972. By the late 1950s Estado Novo had succeeded in pulling Portugal out of the educational abyss in which it had long found itself: illiteracy among children of school age virtually disappeared.
From 1950 until Salazar's death in 1970, Portugal saw its GDP per capita increase at an annual average rate of 5.7 per cent. The economic growth and levels of capital formation from 1960 to 1973 were characterized by an unparalleled robust annual growth rates of GDP (6.9 per cent), industrial production (9 per cent), private consumption (6.5 per cent) and gross fixed capital formation (7.8 per cent). In 1960, at the initiation of Salazar's more outward-looking economic policy, Portugal's per capita GDP was only 38 percent of the European Community (EC-12) average; by the end of the Salazar period, in 1968, it had risen to 48 percent; and in 1973, under the leadership of Marcelo Caetano, Portugal's per capita GDP had reached 56.4 percent of the EC-12 average. On a long term analysis, after a long period of economic divergence before 1914, and a period of chaos during the First Republic, the Portuguese economy recovered slightly until 1950, entering thereafter on a path of strong economic convergence with the wealthiest economies of Western Europe, until the Carnation Revolution in April 1974.
Despite the remarkable growth, and economic convergence, by the fall of the Estado Novo in 1974, Portugal still had the lowest per capita income in Western Europe, as well as the highest rate of preventable deaths and infant mortality rate in Europe. On 25 April 1974, the Carnation Revolution in Lisbon, a military coup organized by left-wing Portuguese military officers - the Armed Forces Movement (MFA) - overthrew the Estado Novo regime.
King Carlos I of Portugal confirmed colonial treaties of the 19th century that stabilized the situation in Portuguese Africa. These agreements were, however, unpopular in Portugal, where they were seen as being to the disadvantage of the country. In addition, Portugal was declared bankrupt twice--first on 14 June 1892 and again on 10 May 1902--causing industrial disturbances, socialist and republican antagonism, and press criticism of the monarchy. Carlos responded by appointing João Franco as Prime Minister and subsequently accepting Parliament's dissolution. In 1908, Carlos I was assassinated in Lisbon. The Portuguese monarchy lasted until 1910 when, through the 5 October revolution, it was overthrown and Portugal was proclaimed a republic. The overthrow of the Portuguese monarchy in 1910 led to a 16-year struggle to sustain parliamentary democracy under republicanism - the Portuguese First Republic (1910-1926).
The 28 May 1926 coup d'état or, during the period of Estado Novo, the National Revolution (Portuguese: Revolução Nacional), was a military action that put an end to the chaotic Portuguese First Republic and initiated the Ditadura Nacional (National Dictatorship) (years later, renamed Estado Novo).
With fascist organizations being popular and widely supported across many countries (like Italian Fascism and National Socialism) as an antagonist of communist ideologies, António de Oliveira Salazar developed the Estado Novo which can be described as a right leaning corporatist. The basis of his regime was a platform of stability, in direct contrast to the unstable environment of the First Republic.
According to some Portuguese scholars like Jaime Nogueira Pinto and Rui Ramos, his early reforms and policies changed the whole nation since they allowed political and financial stability and therefore social order and economic growth, after the politically unstable and financially chaotic years of the Portuguese First Republic (1910-1926). After the First Republic, when not even public order was achieved, this looked like an impressive breakthrough to most of the population; Salazar achieved his height in popularity at this point. This transfiguration of Portugal was then known as A Lição de Salazar - "Salazar's Lesson". Salazar's program was opposed to communism, socialism, and liberalism. It was pro-Catholic, conservative, and nationalistic. Its policy envisaged the perpetuation of Portugal as a pluricontinental empire, financially autonomous and politically independent from the dominating superpowers, and a source of civilization and stability to the overseas societies in the African and Asian possessions.
The Estado Novo based its political philosophy around a close interpretation of the Catholic social doctrine, much like the contemporary regime of Engelbert Dollfuss in Austria. The economic system, known as corporatism, was based on similar interpretations of the papal encyclicals Rerum novarum (Leo XIII, 1891) and Quadragesimo anno (Pius XI, 1931), which were meant to prevent class struggle and transform economic concerns secondary to social values. Rerum novarum argued that labor associations were part of the natural order, like the family. The right of men to organise into trade unions and to engage in labor activities was thus inherent and could not be denied by employers or the state. Quadragesimo anno provided the blueprint for the erection of the corporatist system.
A new constitution was drafted by a group of lawyers, businessmen, clerics and university professors, with Salazar as the leading spirit and Marcelo Caetano also playing a major role. The constitution created the Estado Novo ("New State"), in theory a corporatist state representing interest groups rather than individuals. The leaders wanted a system in which the people would be represented through corporations, rather than through divisive parties, and where national interest was given priority over sectional claims. Salazar thought that the party system had failed irrevocably in Portugal.
Unlike Mussolini or Hitler, Salazar never had the intention to create a party-state. Salazar was against the whole-party concept and in 1930 he created the National Union a single-party, but he created it as a non-party. The National Union was set up to control and restrain public opinion rather than to mobilize it, the goal was to strengthen and preserve traditional values rather than to induce a new social order. Ministers, diplomats and civil servants were never compelled to join the National Union.
The legislature, called the National Assembly, was restricted to members of the National Union. It could initiate legislation, but only concerning matters that did not require government expenditures. The parallel Corporative Chamber included representatives of municipalities, religious, cultural and professional groups and of the official workers' syndicates that replaced free trade unions.
According to Howard Wiarda, "the men who came to power in the Estado Novo were genuinely concerned with the poverty and backwardness of their nation, divorcing themselves from Anglo-American political influences while developing a new indigenous political model and alleviating the miserable living conditions of both rural and urban poor.
The new constitution introduced by Salazar established an anti-parliamentarian and authoritarian government that would last until 1974. The president was to be elected by popular vote for a period of seven years. On paper, the new document vested sweeping, almost dictatorial powers in the hands of the president, including the power to appoint and dismiss the prime minister. The president was elevated to a position of preeminence as the "balance wheel", the defender and ultimate arbiter of national politics.[b] President Carmona, however, had allowed Salazar more or less a free hand since appointing him prime minister and continued to do so; Carmona and his successors would largely be figureheads as he wielded the true power. Wiarda argues that Salazar achieved his position of power not just because of constitutional stipulations, but also because of his character: domineering, absolutist, ambitious, hardworking and intellectually brilliant.
The corporatist constitution was approved in the national Portuguese constitutional referendum of 19 March 1933. A draft had been published one year before, and the public was invited to state any objections in the press. These tended to stay in the realm of generalities and only a handful of people, less than 6,000, voted against the new constitution.  The new constitution was approved with 99.5% of the vote, but with 488,840 abstentions (in a registered electorate of 1,330,258) counting as "yes". Hugh Kay points out that the large number of abstentions might be attributable to the fact that voters were presented with a package deal to which they had to say "yes" or "no" with no opportunity to accept one clause and reject another. In this referendum, women were allowed to vote for the first time in Portugal. Their right to vote had not been obtained during the First Republic, despite feminist efforts, and even in the referendum vote, secondary education was a requirement for female voters, whereas males only needed to be able to read and write. The right for women to vote was later broadened twice under the Estado Novo. The first time was in 1946 and the second time in 1968 under Marcelo Caetano, law 2137 proclaimed the equality of men and women for electoral purposes. The 1968 electoral law did not make any distinction between men and women.
The year 1933 marked a watershed of legislation in Portuguese history. Under Salazar's supervision, Teotónio Pereira, the Sub-Secretary of State of Corporations and Social Welfare, reporting directly to Salazar, enacted extensive legislation that shaped the corporatist structure and initiated a comprehensive social welfare system. This system was equally anti-capitalist and anti-socialist. The corporatisation of the working class was accompanied by strict legislation regulating business. Workers' organisations were subordinated to state control, but granted a legitimacy that they had never before enjoyed and were made beneficiaries of a variety of new social programs. Nevertheless, it is important to note that even in the enthusiastic early years, corporatist agencies were not at the centre of power and therefore corporatism was not the true base of the whole system.
In 1934, Portugal crushed the Portuguese Fascist Movement and exiled Francisco Rolão Preto as a part of a purge of the leadership of the Portuguese National Syndicalists, also known as the camisas azuis ("Blue Shirts"). Salazar denounced the National Syndicalists as "inspired by certain foreign models" (meaning German Nazism) and condemned their "exaltation of youth, the cult of force through direct action, the principle of the superiority of state political power in social life, [and] the propensity for organising masses behind a single leader" as fundamental differences between fascism and the Catholic corporatism of the Estado Novo. Salazar's own party, the National Union, was formed as a subservient umbrella organisation to support the regime itself, and therefore did not have its own philosophy. At the time, many European countries feared the destructive potential of communism. Salazar not only forbade Marxist parties, but also revolutionary fascist-syndicalist parties. One overriding criticism of his regime is that stability was bought and maintained at the expense of suppression of human rights and liberties.
The corporatist state had some similarities to Benito Mussolini's Italian fascism, but considerable differences in its moral approach to governing. Although Salazar admired Mussolini and was influenced by his Labour Charter of 1927, Salazar distanced himself from fascist dictatorship, which he considered a pagan Caesarist political system that recognised neither legal nor moral limits. Salazar also viewed German Nazism as espousing pagan elements that he considered repugnant. Just before World War II, Salazar made this declaration: "We are opposed to all forms of Internationalism, Communism, Socialism, Syndicalism and everything that may divide or minimise, or break up the family. We are against class warfare, irreligion and disloyalty to one's country; against serfdom, a materialistic conception of life, and might over right." however the Estado Novo adopted many fascist characteristics with the Legião Portuguesa and Mocidade Portuguesa being the most prominent examples, however these institutions were a little more than window dressing and had no political influence; after the end of the Spanish Civil War Salazar distanced his regime from fascism due to its pro-British orientation
Portugal was officially neutral in the Spanish Civil War (1936-39), but quietly furnished help to the nationalists of Francisco Franco. During World War II, 1939-1945, Portugal remained officially neutral, giving its highest priority to avoiding a Nazi invasion of the sort that was so devastating in most other European countries. The regime at first showed some pro-Axis sympathies; Salazar for example expressed approval for the German invasion of the Soviet Union. This support, however, can be mainly attributed to Salazar's staunch anti-communist position rather than actual support for Hitler, or the Nazi regime. From 1943 onward, Portugal favoured the Allies, leasing air bases in the Azores. Portugal reluctantly leased the Azores as a direct result of being threatened with invasion should Portugal not cater to the requests of the Allies. As an official neutral, Portugal traded with both sides. It cut off vital shipments of tungsten and rubber to Germany in 1944, after heavy pressure from the Allies. Lisbon was the base for International Red Cross operations aiding Allied POWs, and was the main air transit point between Britain and the U.S.
In 1942, Australian troops briefly occupied Portuguese Timor, but were soon overwhelmed by invading Japanese. Salazar worked to regain control of East Timor, which came about after the Japanese surrender in 1945.
After World War II, however, the corporatist economic model was less and less applicable. Nevertheless, Salazar clung to it, thereby retarding the nation's long-term economic development. Salazar's postwar policy allowed some liberalization in politics, in terms of organized opposition with more freedom of the press. Opposition parties were tolerated to an extent, but they were also controlled, limited, and manipulated, with the result that they split into factions and never formed a united opposition. He permitted the formation of Movement of Democratic Unity (Movimento de Unidade Democrática) in 1945. It boycotted the election and Salazar won handily, on 18 November 1945. In 1949 Portugal became a founding member of NATO.
President Óscar Carmona died in 1951 after 25 years in office and was succeeded by Francisco Craveiro Lopes. However, Lopes was not willing to give Salazar the free hand that Carmona had given him, and was forced to resign just before the end of his term in 1958. Naval Minister Américo Tomás, a staunch conservative, ran in the 1958 elections as the official candidate. General Humberto Delgado was the opposition candidate. Delgado was credited with only around 25% of the votes with 52.6% in favour of Tomás. The election had initially been seen as little better than a pantomime of democracy before a reporter asked Delgado whether he would retain Salazar if elected. Delgado famously replied, "Obviamente, demito-o!" ("Obviously, I'll sack him!") He was well aware that the president's power to dismiss the prime minister was, on paper, the only check on Salazar's power. Delgado's rallies subsequently attracted vast crowds. Evidence later surfaced that the PIDE had stuffed the ballot boxes with votes for Tomás, leading many neutral observers to conclude that Delgado would have won had Salazar allowed an honest election.
After the elections, Delgado was expelled from the Portuguese Military, and took refuge in the Brazilian embassy before going into exile, spending much of it in Brazil and later in Algeria. Not willing to chance an opposition victory in 1965, Salazar abolished direct election of presidents in favour of election by the National Assembly--which was firmly controlled by the regime--serving as an electoral college.
On 23 January 1961, military officer and politician Henrique Galvão led the hijacking of the Portuguese passenger ship Santa Maria. The terrorist operation was successful as anti-regime propaganda but killed one man in the process. Galvão claimed that his intentions were to sail to the Overseas Province of Angola to set up a renegade Portuguese Government in opposition to Salazar in Luanda. Galvão released the passengers in negotiation with Brazilian officials in exchange for political asylum in Brazil. Later that year hijackers forced an aircraft to circle Lisbon to drop leaflets against the dictatorship. After that, the 6 hijackers forced the crew to fly them back to Morocco.
In 1962, the Academic Crisis occurred. The regime, fearing the growing popularity of both purely democratic and communist ideas among the students, carried out the boycott and closure of several student associations and organizations, including the important National Secretariat of Portuguese Students. Most members of this organization were opposition militants, among them many communists. The political activists who were anti-regime used to be investigated and persecuted by PIDE-DGS, the secret police, and according to the gravity of the offense, were usually sent to jail or transferred from one university to another in order to destabilize oppositionist networks and its hierarchical organization. The students, with strong support from the clandestine Portuguese Communist Party, responded with demonstrations which culminated on 24 March with a huge student demonstration in Lisbon, that was vigorously suppressed by the riot police. Marcelo Caetano, distinguished member of the regime and the incumbent rector of the University of Lisbon, resigned.
The reluctance of many young men to embrace the hardships of the Portuguese Colonial War resulted in hundreds of thousands of Portuguese citizens each year leaving to seek economic opportunities abroad in order to escape conscription. In over 15 years, nearly one million emigrated to France, another million to the United States, many hundreds of thousands to Germany, Switzerland, the United Kingdom, Luxembourg, Venezuela, or Brazil. Political parties, such as the Socialist Party, persecuted at home, were established in exile. The only party which managed to continue (illegally) operating in Portugal during all the dictatorship was the Portuguese Communist Party.
In 1964, Delgado founded the Portuguese National Liberation Front in Rome, stating in public that the only way to end the Estado Novo would be by a military coup, while many others advocated a national uprising approach.
Delgado and his Brazilian secretary, Arajaryr Moreira de Campos, were murdered on 13 February 1965 in Spain after being lured into an ambush by PIDE.
According to some Portuguese conservative scholars like Jaime Nogueira Pinto and Rui Ramos, Salazar's early reforms and policies allowed political and financial stability and therefore social order and economic growth, after the politically unstable and financially chaotic years of the Portuguese First Republic (1910-1926). Other historians like, the also left-wing politician, Fernando Rosas, point out that Salazar's policies from the 1930s to the 1950s, led to economic and social stagnation and rampant emigration, turning Portugal into one of the poorest countries in Europe, that was also thwarted by scoring lower on literacy than its peers of the Northern Hemisphere.
Salazar suffered a stroke in 1968. As it was thought that he did not have long to live, Tomás replaced him with Marcelo Caetano, a reputed scholar of the University of Lisbon Law School, statesman and a distinguished member of the regime. Salazar was never informed of this decision, and reportedly died in 1970 still believing he was prime minister. Most of the people hoped Caetano would soften the edges of Salazar's authoritarian regime and modernize the already growing economy. Caetano moved on to foster economic growth and made important social improvements, such as the awarding of a monthly pension to rural workers who had never had the chance to pay social security. Some large scale investments were made at national level, such as the building of a major oil processing centre in Sines. The economy reacted very well at first, but into the 1970s some serious problems began to show, due in part to two-digit inflation (from 1970 and on) and to the effects of the 1973 oil crisis. However, the oil crisis of 1973 had a potentially beneficial effect to Portugal because the largely unexploited oil reserves that Portugal had in its overseas territories of Angola, and São Tomé and Príncipe were being developed at a fast pace.
Although Caetano was fundamentally an authoritarian, he did make some efforts to open up the regime. Soon after taking power, he rebranded the regime as the "Social State", and slightly increased freedom of speech and the press. These measures did not go nearly far enough for a significant element of the population who had no memory of the instability which preceded Salazar. The people were also disappointed that Caetano was unwilling to open up the electoral system. The conduct of the 1969 and 1973 elections was little different from past elections over the previous four decades. The National Union--renamed People's National Action--swept every seat, as before. Also as before, the opposition was still barely tolerated; opposition candidates were subjected to harsh repression. However, Caetano had to expend all of his political capital to wring even these meager reforms had out of the hardliners in the regime--most notably Tomás, who was not nearly as content to give Caetano the free rein that he gave Salazar. Caetano was thus in no position to resist when Tomás and the other hardliners forced the end of the reform experiment in 1973.
Portugal's overriding problem in 1926 was its enormous public debt. Several times between 1926 and 1928, Salazar turned down appointment to the finance ministry. He pleaded ill-health, devotion to his aged parents and a preference for the academic cloisters. In 1927, under the ministry of Sinel de Cordes, the public deficit kept on growing. The government tried to obtain loans from Baring Brothers under the auspices of the League of Nations, but the conditions were considered unacceptable. With Portugal under the threat of an imminent financial collapse, Salazar finally agreed to become its 81st Finance Minister on 26 April 1928 after the republican and Freemason Óscar Carmona was elected president. However, before accepting the position, he personally secured from Carmona a categorical assurance that as finance minister he would have a free hand to veto expenditure in all government departments, not just his own. Salazar was the financial czar virtually from the day he took office.
Within one year, armed with special powers, Salazar balanced the budget and stabilized Portugal's currency. Restoring order to the national accounts, enforcing austerity and red-penciling waste, Salazar produced the first of many budgetary surpluses, an unparalleled novelty in Portugal.
In July 1940, the American Life magazine featured an article on Portugal, and, referring to its recent chaotic history, asserted that "anyone who saw Portugal 15 years ago might well have said it deserved to die. It was atrociously governed, bankrupt, squalid, ridden with disease and poverty. It was such a mess that the League of Nations coined a word to describe the absolute low in national welfare: "Portuguese". Then the Army overthrew the Republic which had brought the country to this sorry pass". Life added that ruling Portugal was difficult and explained how Salazar "found a country in chaos and poverty" and then reformed it.
From 1950 until Salazar's death in 1970, Portugal saw its GDP per capita increase at an annual average rate of 5.7 per cent. The rise of new technocrats in the early 1960s with a background in economics and technical-industrial expertise led to a new period of economic fostering, with Portugal as an attractive country for international investment. Industrial development and economic growth would continue throughout the 1960s. During Salazar's tenure, Portugal participated in the founding of the European Free Trade Association (EFTA) in 1960 and the Organisation for Economic Co-operation and Development (OECD) in 1961. In the early 1960s, Portugal also added its membership in the General Agreement on Tariffs and Trade (GATT), the International Monetary Fund (IMF), and the World Bank. This marked the initiation of Salazar's more outward-looking economic policy. Portuguese foreign trade increased by 52 per cent in exports and 40 per cent in imports. The economic growth and levels of capital formation from 1960 to 1973 were characterized by an unparalleled robust annual growth rates of GDP (6.9 per cent), industrial production (9 per cent), private consumption (6.5 per cent) and gross fixed capital formation (7.8 per cent).
In 1960, at the initiation of Salazar's more outward-looking economic policy, Portugal's per capita GDP was only 38 percent of the European Community (EC-12) average; by the end of the Salazar period, in 1968, it had risen to 48 percent; and in 1973, under the leadership of Marcelo Caetano, Portugal's per capita GDP had reached 56.4 percent of the EC-12 average. On a long term analysis, after a long period of economic divergence before 1914, and a period of chaos during the First Republic, the Portuguese economy recovered slightly until 1950, entering thereafter on a path of strong economic convergence with the wealthiest economies of Western Europe, until the Carnation Revolution in April 1974. Portuguese economic growth in the period 1960 to 1973 under the Estado Novo regime (and even with the effects of an expensive war effort in African territories against independence guerrilla groups), created an opportunity for real integration with the developed economies of Western Europe. Through emigration, trade, tourism and foreign investment, individuals and firms changed their patterns of production and consumption, bringing about a structural transformation. Simultaneously, the increasing complexity of a growing economy raised new technical and organizational challenges, stimulating the formation of modern professional and management teams.
Regarding the overseas territories, beyond military measures, the official Portuguese response to the "winds of change" in the African colonies was to integrate them administratively and economically more closely with the mainland. This was accomplished through population and capital transfers, trade liberalization, and the creation of a common currency, the so-called Escudo Area. The integration program established in 1961 provided for the removal of Portugal's duties on imports from its overseas territories by January 1964. The latter, on the other hand, were permitted to continue to levy duties on goods imported from Portugal but at a preferential rate, in most cases 50 percent of the normal duties levied by the territories on goods originating outside the Escudo Area. The effect of this two-tier tariff system was to give Portugal's exports preferential access to its colonial markets. The economies of the overseas provinces, especially those of both the Overseas Province of Angola and Mozambique, boomed.
The liberalization of the Portuguese economy gained a new impetus under Salazar's successor, Prime Minister Marcello José das Neves Caetano (1968-1974), whose administration abolished industrial licensing requirements for firms in most sectors and in 1972 signed a free trade agreement with the newly enlarged European Community. Under the agreement, which took effect at the beginning of 1973, Portugal was given until 1980 to abolish its restrictions on most community goods and until 1985 on certain sensitive products amounting to some 10 percent of the EC's total exports to Portugal. Starting in 1960, EFTA membership and a growing foreign investor presence contributed to Portugal's industrial modernization and export diversification between 1960 and 1973. Caetano moved on to foster economic growth and some social improvements, such as the awarding of a monthly pension to rural workers who had never had the chance to pay social security. Some large scale investments were made at national level, such as the building of a major oil processing center in Sines.
Notwithstanding the concentration of the means of production in the hands of a small number of family-based financial-industrial groups, Portuguese business culture permitted a surprising upward mobility of university-educated individuals with middle-class backgrounds into professional management careers.
Before the 1974 Carnation Revolution, the largest, most technologically advanced (and most recently organized) firms offered the greatest opportunity for management careers based on merit rather than by accident of birth.
By the early 1970s Portugal's fast economic growth with increasing consumption and purchase of new automobiles set the priority for improvements in transportation. Brisa - Autoestradas de Portugal was founded in 1972 and the State granted the company a 30-year concession to design, build, manage, and maintain a modern network of express motorways.
The economy of Portugal and its overseas territories on the eve of the Carnation Revolution (a military coup on 25 April 1974) was growing well above the European average. Average family purchasing power was rising together with new consumption patterns and trends and this was promoting both investment in new capital equipment and consumption expenditure for durable and nondurable consumer goods.
The Estado Novo regime economic policy encouraged and created conditions for the formation of large and successful business conglomerates. Economically, the Estado Novo regime maintained a policy of corporatism that resulted in the placement of a big part of the Portuguese economy in the hands of a number of strong conglomerates, including those founded by the families of António Champalimaud (Banco Pinto & Sotto Mayor, Cimpor), José Manuel de Mello (CUF - Companhia União Fabril, Banco Totta & Açores), Américo Amorim (Corticeira Amorim) and the dos Santos family (Jerónimo Martins). Those Portuguese conglomerates had a business model with similarities to Japanese keiretsus and zaibatsus. The Companhia União Fabril (CUF) was one of the largest and most diversified Portuguese conglomerates with its core businesses (cement, chemicals, petrochemicals, agrochemicals, textiles, beer, beverages, metallurgy, naval engineering, electrical engineering, insurance, banking, paper, tourism, mining, etc.) and corporate headquarters located in mainland Portugal, but also with branches, plants and several developing business projects all around the Portuguese Empire, especially in the Portuguese territories of Angola and Mozambique. Other medium-sized family companies specialized in textiles (for instance those located in the city of Covilhã and the northwest), ceramics, porcelain, glass and crystal (like those of Alcobaça, Caldas da Rainha and Marinha Grande), engineered wood (like SONAE near Porto), canned fish (like those of Algarve and the northwest), fishing, food and beverages (alcoholic beverages, from liqueurs like Licor Beirão and Ginjinha, to beer like Sagres, were produced across the entire country, but Port Wine was one of its most reputed and exported alcoholic beverages), tourism (well established in Estoril/Cascais/Sintra and growing as an international attraction in the Algarve since the 1960s) and in agriculture (like the ones scattered around the Alentejo - known as the breadbasket of Portugal) completed the panorama of the national economy by the early 1970s. In addition, the rural population was committed to agrarianism--greatly important for a majority of the total population, with many families living exclusively from agriculture or complementing their salaries with farming, husbandry and forestry yields.
Besides that, the overseas territories were also displaying impressive economic growth and development rates from the 1920s onwards. Even during the Portuguese Colonial War (1961-1974), a counterinsurgency war against independentist guerrilla and terrorism, the overseas territories of Angola and Mozambique (Portuguese Overseas Provinces at the time) had continuous economic growth rates and several sectors of its local economies were booming. They were internationally notable centres of production of oil, coffee, cotton, cashew, coconut, timber, minerals (like diamonds), metals (like iron and aluminum), banana, citrus, tea, sisal, beer (Cuca and Laurentina were successful beer brands produced locally), cement, fish and other sea products, beef and textiles. Tourism was also a fast developing activity in Portuguese Africa both by the growing development of and demand for beach resorts and wildlife reserves. While the counterinsurgency war was won in Angola, it was less than satisfactorily contained in Mozambique and dangerously stalemated in Portuguese Guinea from the Portuguese point of view, so the Portuguese Government decided to create sustainability policies in order to allow continuous sources of financing for the war effort in the long run. On 13 November 1972, a sovereign wealth fund (Fundo do Ultramar - The Overseas Fund) was enacted through the Decree Law Decreto-Lei n.º 448/ /72 and the Ministry of Defense ordinance Portaria 696/72, in order to finance the counterinsurgency effort in the Portuguese overseas territories. In addition, new Decree Laws (Decree Law: Decretos-Leis n.os 353, de 13 de Julho de 1973, e 409, de 20 de Agosto) were enforced in order to cut down military expenses and increase the number of officers by incorporating irregular militia as if they were regular military academy officers.
Labour unions were not allowed and a minimum wage policy was not enforced. However, in a context of an expanding economy, bringing better living conditions for the Portuguese population in the 1960s, the outbreak of the colonial wars in Africa set off significant social changes, among them the rapid incorporation of more and more women into the labour market. Marcelo Caetano moved on to foster economic growth and some social improvements, such as the awarding of a monthly pension to rural workers who had never had the chance to pay social security. The objectives of Caetano's pension reform were threefold: enhancing equity, reducing fiscal and actuarial imbalance, and achieving more efficiency for the economy as a whole, for example, by establishing contributions less distortive to labour markets or by allowing the savings generated by pension funds to increase the investments in the economy. In 1969, with the replacement of Salazar by Marcelo Caetano, the Estado Novo-controlled nation got indeed a very slight taste of democracy and Caetano allowed the formation of the first democratic labour union movement since the 1920s.
Although the militants of the First Republic had chosen education as one of their banner causes, the evidence shows that the First Republic was less successful than the Estado Novo in expanding elementary education. Compared with the First Republic, the Estado Novo ended by having a much bigger role in the field of human capital formation. Under the First Republic, literacy levels in children aged 7 to 14 registered an increase from 26% in 1911 to 33% in 1930 while under the Estado Novo, literacy levels in children aged 7 to 14 increased to 56% in 1940, 77% in 1950 and 97% in 1960 (see table below). Furthermore, while in the First Republic, between 1911 and 1930, Portugal's literacy grew from 29.7% to a 39.2%, under the Estado Novo the added percentage of the country's literacy rate, between 1930 and 1950, reached twice the extent of the previous variation, changing from 39.2% to 59.6%.
|Children aged 7-14||20%||26%||31%||33%||56%||77%||97%|
|People aged 7 or over||26%||31%||34%||38%||48%||60%||70%|
With its founding 1933 political constitution, the Estado Novo would establish compulsory education at three years. Compulsory education was first introduced in Portugal during the Monarchy (in 1844) with the duration of three years, then increased to five years during the First Republic, but it was never really enforced. The political constitution defines public education as aiming for: "in addition to the physical reinvigoration and the improvement of intellectual faculties, the formation of character, professional value and all civic and moral virtues" (Constituição de 1933, Artigo 43).
During the first three years of the Estado Novo, the then Ministry of Public Instruction, had a total of four different ministers.
In 1936, António Carneiro Pacheco (then Rector of the University of Lisbon) is nominated as the Minister of the Public Instruction. In the same year, his Ministry issues a law that alters the Ministry's name to Ministry of National Education, and includes a National Board of Education (Junta Nacional da Educação). This National Board of Education aimed to study and inform the Minister in all matters of both education and culture. Parents and educators were to be represented in all sections of this Board, except for the cultural relations and scientific research section. This Board would replace the Superior Council for Public Instruction, which had existed since 1835, along with other consulting boards, such as the National Board of Excavations and Antiques.
Further events of note during Carneiro Pacheco's mandate were the creation of the Mocidade Portuguesa, the Plan of the Centenarians (Plano dos Centenários), and the adoption of a single, national textbook for each grade.
The Mocidade Portuguesa would be established in 1936, defined as a "national and pre-military organization that is able to stimulate the integral development of [the youth's] physical capacities, the formation of [their] character and devotion to the Fatherland and put [them] in conditions to be able to compete effectively for its defense" (Law 1941, Base XI).
The Plan of The Centenarians aimed to build a network of schools, uniformed by region, that would obey the pedagogical and hygienic criteria of the time. The buildings would be adapted to reflect the differences in climate, material resources, and processes of construction of each region. The plan was officially approved in 1939, but due to World War II, would only start its first phase in 1944. It would extend well beyond Carneiro Pacheco's mandate, with its VI phase in 1959. It is replaced in 1961 by the "New Plan of Constructions". Between 1930 and 1940, the number of primary schools grew from 27 000 to 40 000.
In 1952, while 81.4% of the children aged 10 to 11 were literate, only 6.3% of them had finished the three years of compulsory education. In this same year, a vast multi-pronged Plan for Popular Education was launched with the intent of reducing adolescent and adult illiteracy and put into school every child of school age. This plan included fines for parents who did not comply, and these were strictly enforced.
In 1956, compulsory education for boys (and girls in 1960) was raised from three to four years.
In 1959, the Education Minister Leite Pinto promotes the first conversations between Portugal and OECD, that would lead to Portugal being included in an OECD project (DEEB, Development and Economy in Educational Building) to help mediterranean countries in 1963.
In 1962, the Overseas Ministry, then headed by Adriano Moreira, founded universities in the overseas provinces of Angola (University of Luanda) and Mozambique (University of Lourenço Marques). In addition, the long established Lisbon and Coimbra universities were highly expanded and modernized in this decade. New buildings and campuses were constructed, like the Cidade Universitária (Lisbon) and the Alta Universitária (Coimbra).
In 1964, compulsory education is raised from four to six years.
In 1970, during the Marcelist Spring, José Veiga Simão (then Rector of Universidade de Lourenço Marques) becomes the last Minister of Education of the Estado Novo. In 1971, Veiga Simão would go on TV to present two projects, one aimed at reforming the school system, the other aimed at reforming higher education. In that same year, his ministry would recognize the Portuguese Catholic University. In July 1973, after ample social discussion of his projects, Veiga Simão would launch a "Basic Law of Education", which aimed to democratize education in Portugal and, in August of that year, would also launch a decree that would create the Nova de Lisboa, Aveiro and Minho Universities, the Instituto Universitário de Évora, several politechnical schools (e.g., Covilhã, Faro, Leiria, Setúbal, Tomar, Vila Real) and superior schools (e.g., Beja, Bragança, Castelo Branco, Funchal, Ponta Delgada). Less than a year later, the Carnation Revolution would take place, ending the Estado Novo.
After India achieved independence in 1947 under the Attlee government, pro-Indian residents of the Portuguese overseas territory of Dadra and Nagar Haveli, with the support of the Indian government and the help of pro-independence organizations, liberated Dadra and Nagar Haveli from Portuguese rule in 1954. In 1961, the Fort of São João Baptista de Ajudá's annexation by the Republic of Dahomey was the start of a process that led to the final dissolution of the centuries-old Portuguese Empire. According to the census of 1921 São João Baptista de Ajudá had 5 inhabitants and, at the moment of the ultimatum by the Dahomey Government, it had only 2 inhabitants representing Portuguese Sovereignty. Another forcible retreat from overseas territories occurred in December 1961 when Portugal refused to relinquish the territories of Goa, Daman and Diu. As a result, the Portuguese army and navy were involved in armed conflict in its colony of Portuguese India against the Indian Armed Forces. The operations resulted in the defeat of the limited Portuguese defensive garrison, which was forced to surrender to a much larger military force. The outcome was the loss of the remaining Portuguese territories in the Indian subcontinent. The Portuguese regime refused to recognize Indian sovereignty over the annexed territories, which continued to be represented in Portugal's National Assembly. The so-called "Winds of Change" concerning historical colonization in Europe-ruled overseas territories, started to have influence over the centuries-old empire. The end of the Estado Novo effectively began with the uprisings in the overseas territories in Africa during the 1960s. The independence movements active in Portuguese Angola, Portuguese Mozambique and Portuguese Guinea were supported by both the United States and the Soviet Union, which both wanted to end all colonial empires and expand their own spheres of influence.
For the Portuguese ruling regime, the centuries-old overseas empire was a matter of national interest. The criticism against some kinds of racial discrimination in the Portuguese African territories were refuted on the grounds that all Portuguese Africans would be Westernized and assimilated in due time, through a process called civilizing mission. The wars had the same effects in Portugal as the Vietnam War in the United States, or the Afghanistan War in the Soviet Union; they were unpopular and expensive lengthy wars which were isolating Portugal's diplomacy, leading many to question the continuation of the war and, by extension, the government. Although Portugal was able to maintain some superiority in the colonies by its use of elite paratroopers and special operations troops, the foreign support to the guerrillas, including arms embargoes and other sanctions against the Portuguese, made them more manoeuvrable, allowing them to inflict losses on the Portuguese army. The international community isolated Portugal due to the long-lasting Colonial War. The situation was aggravated by the illness of Salazar, the strong man of the regime, in 1968. His replacement was one of his closest advisors, Marcelo Caetano, who tried to slowly democratize the country, but could not hide the obvious dictatorship that oppressed Portugal. Salazar died in 1970.
After spending the early years of his priesthood in Africa, the British priest Adrian Hastings created a storm in 1973 with an article in The Times about the "Wiriyamu Massacre" in Mozambique, revealing that the Portuguese Army had massacred some 400 villagers at the village of Wiriyamu, near Tete, in December 1972. His report was printed a week before the Portuguese prime minister, Marcelo Caetano, was due to visit Britain to celebrate the 600th anniversary of the Anglo-Portuguese Alliance. Portugal's growing isolation following Hastings's claims has often been cited as a factor that helped to bring about the "carnation revolution" coup which deposed the Caetano regime in 1974.
The various conflicts forced the Salazar and subsequent Caetano governments to spend more of the country's budget on colonial administration and military expenditures, and Portugal soon found itself increasingly isolated from the rest of the world. After Caetano succeeded to the prime ministership, the colonial war became a major cause of dissent and a focus for anti-government forces in Portuguese society. Many young dissidents, such as left-wing students and anti-war activists, were forced to leave the country so they could escape imprisonment or conscription. However, between 1945 and 1974, there were also three generations of militants of the radical right at the Portuguese universities and schools, guided by a revolutionary nationalism partly influenced by the political sub-culture of European neofascism. The core of the struggle of these radical students lay in an uncompromizing defence of the Portuguese Empire in the days of the authoritarian regime.
By the early 1970s, the Portuguese Colonial War continued to rage on, requiring a steadily increasing budget. The Portuguese military was overstretched and there was no political solution or end in sight. While the human losses were relatively small, the war as a whole had already entered its second decade. The Portuguese ruling regime of Estado Novo faced criticism from the international community and was becoming increasingly isolated. It had a profound impact on Portugal - thousands of young men avoided conscription by emigrating illegally, mainly to France and the US.
The war in the colonies was increasingly unpopular in Portugal itself as the people became weary of war and balked at its ever-rising expense. Many ethnic Portuguese of the African overseas territories were also increasingly willing to accept independence if their economic status could be preserved. However, despite the guerrillas' unpredictable and sporadic attacks against targets all over the countryside of the Portuguese African territories, the economies of both Portuguese Angola and Mozambique were booming, cities and towns were expanding and prospering steadily over time, new transportation networks were being opened to link the well-developed and highly urbanized coastal strip with the more remote inland regions, and the number of ethnic European Portuguese migrants from mainland Portugal (the metrópole) increased rapidly since the 1950s (although always as a small minority of each territory's total population).
Suddenly, after some failed attempts of military rebellion, in April 1974 the Carnation Revolution in Lisbon, organized by left-wing Portuguese military officers - the Armed Forces Movement (MFA), overthrew the Estado Novo regime. The military-led coup can be described as the necessary means of bringing back democracy to Portugal, ending the unpopular Colonial War where thousands of Portuguese soldiers had been commissioned, and replacing the authoritarian Estado Novo (New State) regime and its secret police which repressed elemental civil liberties and political freedoms. However, the military coup's organization started as a professional class protest of Portuguese Armed Forces captains against a decree law: the Dec. Lei nº 353/73 of 1973. Younger military academy graduates resented a program introduced by Marcello Caetano whereby militia officers who completed a brief training program and had served in the overseas territories' defensive campaigns, could be commissioned at the same rank as military academy graduates. Caetano's Portuguese Government had begun the program (which included several other reforms) in order to increase the number of officials employed against the African insurgencies, and at the same time cut down military costs to alleviate an already overburdened government budget. After the coup, the MFA-led National Salvation Junta, a military junta, took power. Caetano resigned, and was flown under custody to the Madeira Islands where he stayed for a few days. He then flew to exile in Brazil. By 1975 the Portuguese Empire had all but collapsed.
After the Estado Novo the country would then experience a turbulent period of provisional governments and a nearly disintegrated state reminiscent of the First Republic, a condition that the Estado Novo had so assiduously attempted to avoid. These provisional governments also briefly censored newspapers and detained oppositionists. Historian Kenneth Maxwell considers that, for many reasons, Portugal, in its transition from authoritarian rule to a more democratic government, resembled Nicaragua more than any other among the South American nations. During the final months of the Francoist State, which had survived to this point, Spain considered invading Portugal to check the perceived threat of communism caused by the Carnation Revolution.
After a period of social unrest, factionalism, and uncertainty in Portuguese politics, between 1974 and 1976, neither far left nor far right radicalism prevailed. However, pro-communist and socialist elements retained control of the country for several months before elections. Álvaro Cunhal's Portuguese Communist Party (PCP) remained Stalinist in outlook and unsympathetic to the sort of reforms that were emerging as "Euro-Communism" in other countries in Western Europe.
The retreat from the colonies and the acceptance of its independence terms which would create newly independent communist states in 1975 (most notably the People's Republic of Angola and the People's Republic of Mozambique) prompted a mass exodus of Portuguese citizens from Portugal's African territories (mostly from Portuguese Angola and Mozambique), creating over a million destitute Portuguese refugees -- the retornados. By 1975, all the Portuguese African territories were independent and Portugal held its first democratic elections in 50 years. However, the country continued to be governed by a military-civilian provisional administration until the Portuguese legislative election of 1976.
For the Portuguese and their former colonies, this was a very difficult period, but many felt that the short-term effects of the Carnation Revolution were well worth the trouble when civil rights and political freedoms were achieved. The Portuguese celebrate Freedom Day on 25 April every year, and the day is a national holiday in Portugal. By refusing to grant independence to its overseas territories in Africa, the Portuguese ruling regime of Estado Novo was criticized by most of the international community, and its leaders Salazar and Caetano were accused of being blind to the "Winds of change". After the Carnation revolution in 1974 and the fall of the incumbent Portuguese authoritarian regime, almost all the Portugal-ruled territories outside Europe became independent. For the regime, the retention of those overseas possessions had been a matter of national interest. Many previously successful Portuguese exporters (i.e. CUF and others) didn't survive the far-left politics, labor movement-inspired PREC (1975) and its influence over the Portuguese economy, society and government policies, including the newly written Portuguese Constitution adopted in 1976. In the following decades, Portugal remained a net beneficiary of European Union Structural and Cohesion Funds and didn't avoid three IMF-led bailouts as a bankrupt country between the late 1970s and the early 2010s.
Financial crisis 1974 Portugal.