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Page history last edited by Brian D Butler 9 years, 3 months ago




Portugal is a country located on the Iberian peninsula, sharing its borders with Spain in Western Europe. Lisbon is the capital city and the administrative center of the country. Major sectors represented in Portugal are shared service centers, electronics, services and automotive.


Within the automotive area there is an emphasis on attracting first and second tier manufacturing operations to locate alongside Autoeuropa, a transnational initiative which represents 2.1% of Portugals’ GDP and 11% of the country’s exports. Companies involved in Autoeuropa include Ford, Volkswagen, Citroen, Delphi, Johnson Controls and Mitsubishi Motors.


Portugal has become a major location for call center operations and, on the back of this, a cluster of companies has emerged providing hardware and software services to the call center operators. Companies include Nortel, Lucent and Easyphone which is a global leader in software solutions for call centers.


Over 45,000 people are employed in the electronics sector with global investors such as Texas Instruments, Microsoft, Infineon Technologies, Siemens, Visteon, Alcatel and Pioneer.


Universities located in the major urban areas (eg Lisbon and Porto) provide the required workforce for these sectors.



Portuguese History (in Video)


As, you may follow the situation in Portugal, they need to get some money from the European Community and the Finns don't want to give any, so they made this cool, funny ad about the history of Portugal.... enjoy...






Austerity 2010:


"The Socialist government of Jose Socrates has announced a range of austerity measures aimed at cutting the deficit to 7.3% this year and 4.6% in 2011.  Top earners in the public sector, including politicians, will see a 5% pay cut.  VAT will rise by 1% and there will be income tax hikes for those earning more than 150,000 euros. By 2013 they will face a 45% tax rate.  By 2013 military spending will have been cut by 40% and the government is delaying the launch of two high-speed rail links - the Lisbon-Porto and Porto-Vigo routes."  read more here:  BBC.com




Current Issues / Trends


Portugal is being increasingly overshadowed by lower-cost producers in Central Europe and Asia as a target for FDI. A poor educational system, in particular, has been an obstacle to greater productivity and growth. Portugal is caught in a difficult bind between the mounting need to cut spending in order to gain control over its fiscal deficit and the desire to use the regional funds supplied by the EU. The government’s clampdown on public spending has prompted a wave of strikes.


Fishing industry woes


Portugal (along with Spain, Greece and one or two other EU member states) has built up substantial excess capacity in this industry and local fish supplies are now seriously depleted.



Main industries


Portugal has developed an increasingly service-based economy.


Agriculture accounts for 2.8% of GDP, a large drop from the 24% it claimed in 1960. However, farming still provides employment for more than 12% of the work force. This reflects the low productivity of the agricultural sector. The main agricultural products include citrus fruits, olives, wines and vegetables. Cork is grown for export, and the country has an important fishery industry. Yet Portugal's farmers are the poorest in the EU. They benefit least from the Common Agricultural Policy because these funds are channelled mainly to meat, dairy and cereal production, which is limited in the country.


Tourism is an especially important sector, accounting for 10% of employment. Tourism receipts accounted for 4.4% of GDP in 2006. Experts predict that Portugal could become the world’s 10th largest market by 2020, pulling in 44 million visitors a year. To achieve this goal, the industry is planning to diversify into new regions and create new attractions. In 2006, the government approved €677 million in new investments and more approvals are expected soon.


The country’s manufacturing sector has survived on account of low wages. Cheap labour, combined with unrestricted access to the EU market, has attracted foreign investment, particularly in the automotive and electronics sectors.


Inflows have slowed in recent years however, as alternative low-cost manufacturing locations in central and Eastern Europe (which are often better placed geographically to supply the main European markets and have recently joined the EU) become more appealing to foreign investors.


Portugal depends on other EU countries for 85% of its export sales and its traditional low-cost, cheap-labour industries have fallen substantially as a percentage of total exports. Their place has been taken by higher value-added, more technologically sophisticated sectors such as car components, electronics and chemicals. These trends are encouraging, but Portuguese exporters also face growing competition from other economies – including new members of the EU – which are following a similar path.


Some of the economy’s problems include: low levels of labour productivity in most sectors; a misallocation of capital equipment in the business sector and a reluctance to adopt new technologies.




Portugal has extremely limited domestic energy resources, and must import about 90% of its energy needs, much of which is oil.


The government has been working with Spain towards integrating the two countries' electricity markets in order to create a regional market. Despite decades of exploration activity, Portugal has yet to discover a commercially viable oil deposit. Portugal has two refineries with a combined capacity of 304,000 barrels per day. The natural gas sector has grown considerably in the last few years, although there are no commercially viable reserves. Privatisation in the Portuguese oil sector (nationalised in 1975) began in 1992, but the state retains a controlling share in the country's oil company.





Investment Promotion Agency:


Mr Miguel Fontoura

Co-ordinator, promotion sector


Avenida 5 de Outubro






tel: +351 21 793 0103

fax: +351 21 793 5028




Places in Portugal




In the north of Portugal, on the Atlantic coast is the country’s second city, Porto. With a population of 700,000, Porto is a thriving city on the banks of the River Douro, which has been designated European City of Culture in 2001. This coincides with the expansion of its main airport, which serves many international and European routes.


Recent hi-tech initiatives in the city include collaboration between the University of Porto and the city council aimed at promoting the Liunx platform, under the motto of " Porto - Linux City, Technology City ".




The capital of Portugal has some 700,000 inhabitants and is located on the Atlantic coast in the center of the country. Since hosting the World Expo recently the city has excellent local and international transport and communications infrastructures.


Key technology sectors include electronics, but the city has seen recently an influx of internet companies such as QXL and Meta4.


The city is home to five universities and a host of research institutes



External Links




Library of Congress: Country Studies


Excellent source of historical information about a country; "The Country Studies Series presents a description and analysis of the historical setting and the social, economic, political, and national security systems and institutions of countries throughout the world.






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