Portugal's Stalled Revolution

...THREE YEARS AFTERWARD Portugal's Stalled Revolution BY MARGO HAMMOND & WILLIAM J GAILLARD MARIO SOARES Lisbon Saudade is a Portuguese word that translates roughly as a sense of vague melancholy, a regretful longing for what might have been More than three years after the revolugao dos craveiros, the revolution of the red carnations that followed with so much promise nearly half a century of fascism and over a decade of colonial war, it perhaps best describes the mood of the people here A look at the country's dismal economic state would appear to justify their pessimism The inflation rate has hit 26 per cent, unemployment afflicts 10 5 per cent of the labor force, and the foreign debt is $2 5 billion (almost $300 per inhabitant) Intersindacal, the united trade union federation, claims that many workers' standard of living is lower now than before the revolution Moreover, not only have Portugal's monetary reserves dwindled to next to nothing, but one-third of the $1 2 billion in gold held by Lisbon has had to be used as collateral for the spiraling debt And although the government has pursued an investment program, industrial spending is generally down Portuguese businessmen, never very adventurous in the past, are letting their money rest quietly in Swiss banks, foreign capital is shying away, too With productivity low, many Portuguese companies?state-owned, privately-owned and self-managed—are fighting against bankruptcy Meanwhile, private savings have decreased, but the wage increases of 1974-75 have spurred consumption and consequently imports, worsening an already grave balance of payments deficit (The figure for 1976 was a whopping $1 1 billion ) That situation has been made more desperate by a drop in emigrants' remittances, an essential component of the balance of payments Finally, with thousands of refugees from Portugal's former colonies (retornados) weighing heavily on the national budget, and the once-reliable tourism industry taking a nosedive, the prognosis for economic health has never been poorer To prevent the country from sinking further into the depths of depression—and to meet the generous social goals proclaimed by the revolution—the government has looked abroad for aid Early this year Prime Minister Mario Soares announced his intention to secure $1 5 billion in loans from an international consortium by May With 1977 swiftly drawing to a close, though, just half of the money has reached the banks of Lisbon's Tagus River The United States made an emergency loan of $300 million in February, and Washington and Bonn produced an additional $500 million in May The rest of the asked-for assistance still has not been granted As part of his campaign to attract international backers, Soares launched a tough domestic austerity program On February 25 he announced a 15 per cent devaluation of the es-cudo, as well as a 15 per cent limit on wage increases, new taxes on luxury products and imported consumer goods, and price hikes But the devaluation proved so ineffective that in August the Prime Minister declared he was floating the escudo The remaining measures have not significantly altered Portugal's economic condition either, they have succeeded only in making the Lisbon administration less and less popular, thus adding to its problems on the political front Soares' minority Socialist government—faced with strong opposition from both Left and Right—is engaged in a delicate balancing act Like the central regions of the country, it is trying to be a buffer between the two souls of a disgruntled nation the North and the South, the conservative and the revolutionary, the Catholic and the anticlerical, the small farmer and the cooperative Playing the middleman's role, however, often seems to prevent Soares from acting with the decisiveness many here believe is necessary for neutralizing Portugal's opposing forces "Soares and the Socialist leaders are more criticized for the many things they haven't done and ought to have done rather than for what they have done," says Lopes Cardoso, the Left-wing Socialist who resigned his post as minister of agriculture in protest over the Prime Minister s agrarian reform policy "The government has been indecisive about self-management, about nationalization and about the various programs of public intervention to get the economy going " The Left heavily censures the government for agreeing that the land and factories occupied by the peasants and workers since the revolution should be restored to their former owners, the Right complains that Lisbon is too tolerant toward spontaneously established cooperatives The Left is arduously pushing for a more Socialist kind of development, as prescribed by the new Constitution, the Right is fighting to restore and stabilize the old capitalist economic framework (Thus neither side was completely pleased when the Council of the Revolution, Portugal's constitutional watchdog, ruled in mid-September that some farmland seized by workers in 1975 had to be returned, and that a law aimed at restricting the power of workers committees was unconstitutional ) Soares, for his part, is strenuously promoting another alternative social democracy In this effort he is being backed both politically and financially by the powerful Northern European Social Democratic parties—especially West Germany's—who see Portugal as the new beachhead for their ideological offensive into Southern Europe To date, the campaign has had mixed results Partly successful in Spain, it has been a patent failure in Italy and was stopped in extremis in Turkey after the June elections there In Portugal it seems destined to be an uphill battle For most European Social Democratic experiments have rested on the redistribution of income generated by an advanced capitalist economy, and in Portugal today, very little is left to redistribute In addition, neither the high-salaried blue-collar workers nor the professionals and technicians who form the backbone of West German, Austrian and Scandinavian Socialism have any real counterpart here Instead, the country's social composition reflects its backward economy It consists of subsistence farmers in the North, radicalized farmhands in the South the embryo ot a modern working class, more and more influenced by the Communist party, on the coast (mostly around Lisbon and Setubal), a mass ot impoverished peasant-workers in the primitive "cottage industries ot the interior, thousands of ultraconservative retornados, a speculation-oriented, political alienated upper class, and middle sectors that arc nothing like those of Northern Europe What is more, Portuguese commerce has never been very dynamic or outward-expanding Resting on a network of useless bureaucratic "corporations" and state monopolies, Sal-azanan capitalism, with its 19th-century financial policies, has left Portugal unprepared to face the harsh realities of post-World War II international economic competition What little economic success Portugal has had since the War came from large multinational corporations that, beginning in the early '60s, invested increasing amounts of capital in the country to build up light industry Designed for export and based on low technology, cheap labor and a prohibition of trade union activities, these foreign enclaves were similar to those in Hong Kong, Malaysia or Taiwan Initially they prospered, and for a decade Portugal was a great exporter of Agfa cameras, Timex watches, Grundig television sets, and inexpensive textile products This type of development had a fatal shortcoming Its effect on the rest of the economy was minimal The inhabitants of the impoverished and overpopulated countryside of the North still had no jobs, they found that the only solution was to emigrate to France (Even at present about one-third of the Portuguese labor force works abroad ) The widespread wage increases brought on by the April 1974 revolution wiped out a key advantage enjoyed by the export-oriented multinationals Soon Portuguese-made gadgets could no longer compete with those of their South Korean competitors and factories closed down Multinationals that operated mostly for the local market, such as General Motors, ITT and Hoechst, fearing the growing power of the grass-roots organized "workers' councils," progressively phased out their Portuguese operations as well And the private industrial and financial "giants"?CUF, Espinto Santo and the Cham-palimaud group—were nationalized In short, the revolution of 1974 destroyed large-scale capitalism in Portugal The public sector m industry now covers 260 companies, produces 24 per cent of the total added value of the nation, and absorbs 45 5 per cent of all investment Although Portugal clearly bears no resemblance to the nations of Northern Europe, either socially or economically, Soares hopes to lead it into the European Economic Community (EEC) by 1985, and has warned that otherwise it could become another Cuba But many worry that if it is admitted, it will become another Puerto Rico—that is, a supplier of cheap labor for Northern European factories and a land of vacation or short-term speculation activities for European entrepreneurs Furthermore, the EEC has always been more attentive to the development of members' already industrialized areas than depressed zones—as the sad examples of Southern Italy and Brittany reveal Soares' European schemes have recently been under attack by Ernesto Melo Antunes, an Army captain and former minister of foreign affairs, who believes Portugal should be looking south rather than north One of the main protagonists in the revolution of the red carnations and a fierce opponent of the 1975 Communist-led attempted takeover, Antunes maintains the nation would do better to encourage a new model of development based on a type of democratic Socialism more closely suited to the country's Third-World characteristics and heavily nationalized economy During a recent interview in the French monthly Le Monde Diplomatique, Antunes outlined his program Diplomatically, he said, Portugal should embark on an independent course—a nonaligned position on the Yugoslav or Swedish model, with close ties to its former colonies and the underdeveloped world in general Economically, he advocated the establishment of a partnership between Lisbon and the oil-rich countries of the Middle East and Africa In such a relationship Portugal could contribute manpower and some know-how in limited but important areas like shipbuilding, the oil countries could obviously provide the needed capital for the development of what is the most backward corner of Europe The Antunes design is opposed both by the "Europeans" like Mario Soares, who—perhaps influenced by their long years of exile in Paris—continue to dream of a Portugal that resembles the well-organized suburbs of Northern Europe, and by the Right Conservatives have not yet forsaken the myth of an Imperial Portugal, and while the elections have shown them to be a definite minority in the country as a whole, they currently enjoy a majority in the military After the attempted coup of November 1975, the Army of General (now President) Antonio Ramalho Eanes was purged of its progressive officers (with the notable exception of Melo Antunes), the original leaders of the revolution That is one important reason why, as a saudade-nddtn Portugal hesitates about its political and economic choices, the prospect of a Right-wing reaction looms menacingly on the horizon And as is suggested by the example of Chile?whose revolutionary upheaval parallels Portugal's in several ways?the suppression of the radicalized workers on the coast and farmers of the South would be a high price to pay for stabilization Whether Portugal chooses to identify itself with the industrialized countries of Northern Europe, or the less developed ones of the Mediterranean and the Third World, there is an urgent need to act Indecision, as Cardoso points out, can only favor the Right What happens in the months to come will be crucial in determining the future of this country that is, to paraphrase former Mexican dictator Porfirio Diaz, too far from God and too close to Europe to be either at the center of world economic power or free to choose its own destiny William J. Gaillard is a teacher at John Cabot International College in Rome His wife, Margo Hammond, writes on Mediterranean affairs for the Tokyo daily Yomiri Shimbun...