Portugal is moving deeper into the 21st century in more ways than one as it struggles to take its place among the leading capitalist economies of western Europe.

Portugal today is a land in transition. The country is long past the quasifascism of the Salazar era and the leftist excesses (including revolution) that followed when the government fell in 1974. Portugal has moved forward since then, although its growth rate still runs at only half the productivity rate of the E.U. average.

An increasing trend toward revitalization has targeted the horribly inefficient state-run companies, including the national bus company. Banks and other financial institutions, newspapers, petroleum refineries, and food processors, among others, continue to fall into private hands.

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Workers, however, still earn only about a third of the pay of their counterparts in the United Kingdom and France. Nearly half of the country's residents can barely read or do simple math, according to a post-millennium literacy study. One-quarter of Portuguese households remain below the poverty level.

Portugal joined the European Union in 1986, instigating a major overhaul of the country. Fellow members of the European Union, along with investors in the United States and elsewhere, continue to pump money into Portugal, fueling industry and improving infrastructure. The use of that money is apparent in vastly improved railways, new highways, better schools, more advanced hospitals, and vastly upgraded port and airport facilities. Telecommunications and transport are improving, and greater numbers of young Portuguese are receiving on-the-job training to help them compete in the modern world, especially in the computer industry. Resort hotels continue to sprout around the country, and many old palaces are being reconditioned and opened to paying guests for the first time in their long histories.

Regrettably, however, all this refurbishing has led to Portugal's becoming quite expensive. Before the late 1990s, it was the unequivocal bargain-vacation paradise of western Europe. Now, in the 21st century, its hotels and restaurants are as expensive as those elsewhere in Europe -- although, even in Lisbon, the prices are nowhere near as staggering as those in London, Paris, or Oslo.

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There's a general feeling of optimism in Portugal; in spite of a world economic downturn, the Portuguese have high hopes for the new century. Lisbon's sidewalks are as crowded in the evening as Madrid's. Young Portuguese are much better tuned in to Europe than their parents were. The younger generation is as well versed in the electronic music coming out of London and Los Angeles as in fado repertoires, and more taken with French and Spanish films than with Portuguese lyric poetry. Still, as Portugal advances with determination deeper into the 21st century, its people retain pride in their historic culture.

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The economy helps maintain this rosy scenario. Portugal was hard hit by international economic crisis in 2009. The shock cut short the progress Portugal had been making since the 1980s when it emerged from decades of dictatorship and years of post-revolutionary turmoil. From 2009 to 2013 the economy shrank by 8%. Unemployment hit record levels. Since 2015, however, the economy has bounced back. Talented youngsters who emigrated during the lean years have been tempted home, bringing new skills and experiences that are helping renew Lisbon’s creative buzz.

Textiles, shoemaking, agriculture, and other traditional mainstays are winning markets with a new focus on high-quality production. Tourism has boomed, thanks in part to security fears in rival Mediterranean destinations. Tourism revenues doubled between 2012 and 2018 to total 16 billion €.
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Lisbon and Porto have thriving tech scenes, boosted by the annual Web Summit, the world’s biggest geek gathering which moved from Dublin to the banks of the Tagus in 2015, bringing in 11,000 CEOs. Porto-based online fashion retailer Farfetch became the country’s first unicorn startup, valued at $5.8 billion at its 2018 flotation on the New York Stock Exchange. Volkswagen recently more than doubled production at its state-of-the-art plant south of Lisbon. Unemployment has halved since 2015, but many fear the recovery remains fragile given the national debt at over 120% of economic output.

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It’s not just big businesses that are investing. Foreign homebuyers are fueling a real-estate boom that has brought urban renewal in downtown Lisbon and Porto, but also pushed out many local residents; vacation rentals now account for over half of housing in some historic neighborhoods.

Portugal looks toward Europe, but retains close economic, political, cultural, and personal ties with its former colonies. Brazilians make up the biggest immigrant community. Angola is a major trade partner. International networking helped Portugal’s push to have former Prime Minister António Guterres appointed secretary general of the United Nations in 2017.
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The country is now firmly established as a European democracy unrecognizable from the poor, backward dictatorship of the early 1970s. Back then, under over 4 decades of authoritarian rule instituted by dictator António de Oliveira Salazar, Portuguese women were forbidden to travel without the permission of husbands or fathers, homosexuality was outlawed, and poor children left school illiterate with minimal education.

Today, women make up 35% of lawmakers (compared to 27% in Canada and 20% in the United States). Of the five main political parties, two are led by women. The mainly Roman Catholic nation legalized same-sex marriage in 2010 and gave gay couples equal adoption rights in 2016. Education is free and compulsory until the age of 18, and foreign students are flocking to its increasingly well-reputed universities.

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Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.