Figure 1.--Here we see a street scene in Lisbon during 1965. At the time, Europe was in he midst of the European econmic miracles, rising from the ruins of World War II to buidd modern infrastructure and bight shiny new cities. Portugal remained an unchanged backwater with a population mired in poverty amid European prosperity. The aged little street car is crammed full of people wih barefoot children hanging out of the side. The municipality had prohibited going barefoot on the streets for more than two decades.

At the turn-of-the 20th century, Portugal was a poor European backwater. Per capita GDP was well below half of the Western European average. 【Bolt and van Zanden】 Only about 25 percent of the population was literate. 【UNESCO, p. 127.】 Among increasing chaos and economic problems the monarchy fell (1910). The First Republic made little progress in solving the country's significant problems (1910–1926). The result was a national dictatorship (1926). Finance Minister António de Oliveira Salazar brought public finances under control. He created a single-party state and economic system, the Estado Novo (1930s). The Portuguese economy stagnated with little economic development. It continued to be dominated by agriculture. Portugal managed to stay out of World War II, but the country actually declined further relative to he rest of Western Europe. The Portuguese GDP per capita declined to only a little above a third of the Western European average (1960). 【Library of Congress】 A Socialist Revolution showed some hope of reinvigorating the country (1975). Portugal granted independence to its colony which meant reorienting is economy toward Europe. Portugal joined the European Union which meant gaining access to extensive development funds (1986). Portugal with these funds seemed to prosper. One assessment maintains that European membership spurred 'strong and steady economic growth'. But this may have been largely illusionary. EU aid has proved no more effective in modernizing Europe than it has in modernizing former European colonies in Africa. Socialist governments created welfare state, but not a strong economy to support the various entitlements. The Portuguese today are the least educated in Europe. Less than 30 percent have complete high school. And the dropout rate is the highest in Europe. 【OECD】 The public school system is a failure and the country's impending debt crisis will make it very difficult for the Government to take needed steps to improve it. 【Forelle, p. A1, 14.】 Some industries prospered with low wages, but these industries like textiles have been undercut by Asian producers. The entry of the Eastern European countries with stronger economies and populations anxious to shake off Socialist economics has further undercut Portugal. Portugal's economy is now a services economy. he are the largest sector witha substantial manufactuing sector. Agriculture had declined in imprance and now a relatively minor, sector, only 3 percent of output.

Sources

Bolt, J. and J.L van Zanden. "Maddison Project Database, version 2013". Maddison Project Database. (2014)

Forelle, Charles. "A nation of dropouts shakes Europe," Wall Street Journal (March 25, 2011), pp. A1, 14.

Library of Congress. Portugal Country Studies (GPO: 1993).

Organization for European Economic Cooperation and Development (OECD). Statistics.

UNESCO. "Progress of Literacy in various countries, (1953).

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