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Portugal Nationalization
The reorganization of the MFA coordinating committee in
March
1975 brought into prominence a group of Marxist-oriented
officers
who, in league with the General Confederation of
Portuguese
Workers-National Intersindical (Confederação Geral dos
Trabalhadores Portugueses-Intersindical
Nacional--CGTP-IN), the
communist-dominated trade union confederation known as
Intersindical prior to 1977, sought the radical
transformation of
the nation's social system and political economy.
Abandoning its
moderate-reformist posture, the MFA leadership set out on
a
course of sweeping nationalizations and land
expropriations.
During the balance of that year, the government
nationalized all
Portuguese-owned capital in the banking, insurance,
petrochemical, fertilizer, tobacco, cement, and wood pulp
sectors
of the economy, as well as the Portuguese iron and steel
company,
the major breweries, the large shipping lines, most public
transport, two of the three principal shipyards, core
companies
of the Companhia União Fabril (CUF) conglomerate, the
radio and
TV networks (except that of the Roman Catholic Church),
and
important companies in the glass, mining, fishing, and
agricultural sectors. Because of the key role of the
domestic
banks as holders of stock, the government indirectly
acquired
equity positions in hundreds of other firms. An Institute
for
State Participation was created to deal with the many
disparate
(often tiny) enterprises in which the state had thus
obtained a
majority shareholding. Another 300 small to medium
enterprises
came under public management as the government
"intervened" to
rescue them from bankruptcy following their takeover by
workers
or abandonment by management.
Although foreign direct investment was statutorily
exempted
from nationalization, many foreign-controlled enterprises
curtailed or ceased operation because of costly forced
labor
settlements or worker takeovers. The combination of
revolutionary
policies and negative business climate brought about a
sharp
reversal in the trend of direct investment inflows from
abroad.
A study by the economists Maria Belmira Martins and
José
Chaves Rosa showed that a total of 244 private enterprises
were
directly nationalized during the sixteen-month interval
from
March 14, 1975 to July 29, 1976. Nationalization was
followed by
the consolidation of the several private firms in each
industry
into state monopolies. As an example, Quimigal, the
chemical and
fertilizer entity, represented a merger of five firms.
Four large
companies were integrated to form the national oil
company,
Petroleos de Portugal (Petrogal). Portucel brought
together five
pulp and paper companies. The fourteen private electric
power
enterprises were joined into a single power generation and
transmission monopoly, Electricidade de Portugal (EDP).
With the
nationalization and amalgamation of the three tobacco
firms under
Tabaqueira, the state gained complete control of this
industry.
The several breweries and beer distribution companies were
integrated into two state firms, Central de Cervejas
(Centralcer)
and Unicer; and a single state enterprise, Rodoviaria, was
created by joining the ninety-three nationalized trucking
and bus
lines. The forty-seven cement plants, formerly controlled
by the
Champalimaud interests, were integrated into Cimentos de
Portugal
(Cimpor). The government also acquired a dominant position
in the
export-oriented shipbuilding and ship repair industry.
Former
private monopolies retained their company designations
following
nationalization. Included among these were the iron and
steel
company, Siderurgia Nacional; the railway, Caminhos de
Ferro
Portugueses (CP); and the national airline, Transportes
Aéreos
Portugueses (TAP).
Unlike other sectors, where existing private firms were
typically consolidated into state monopolies, the
commercial
banking system and insurance industry were left with a
degree of
competition. By 1979 the number of domestic commercial
banks was
reduced from fifteen to nine. Notwithstanding their public
status, the remaining banks competed with each other and
retained
their individual identities and certain differences in
their
activities.
Before the revolution, private enterprise ownership
dominated
the Portuguese economy to a degree unmatched in other West
European countries. Only a handful of wholly owned or
majority
owned state entities existed; these included the post
office, the
armaments industry, and the ports, as well as the National
Development Bank and Caixa Geral de Depósitos, the largest
savings bank. The Portuguese government held minority
interests
in TAP, the national airline; in Siderurgia Nacional, the
integrated steel mill; and in oil refining and oil
marketing
firms. The railroads, two colonial banks, and the Bank of
Portugal were majority privately owned but publicly
administered.
Finally, although privately owned, the tobacco companies
and
Radio Marconi were operated under government concessions.
Two years after the military coup, the enlarged public
sector
accounted for 47 percent of the country's gross fixed
capital
formation (GFCF), 30 percent of total value added (VA),
and 24
percent of employment. These shares should be compared
with 10
percent of GFCF, 9 percent of VA, and 13 percent of
employment
for the traditional public sector of 1973. Expansion of
the
public sector since the revolution is particularly
noteworthy in
heavy manufacturing; in public services, including
electricity,
gas, transport and communications; and in banking and
insurance.
Further, according to the Institute for State
Participation,
these figures did not include private enterprises under
temporary
state intervention, private enterprises with minority
state
participation (less than 50 percent of the common stock),
or
worker-managed firms and agricultural collectives.
Data as of January 1993
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