ABSTRACT
This chapter focuses on political and economic change. The economic challenge facing Portugal is to maintain the rhythm of growth during recessionary downturns in order to ensure that the gap continues to close. It is a measure of the progress achieved over the previous two decades that by the end of the twentieth century Portugal faced a new set of challenges. The rate and scale of change had been impressive, yet much remained to be done to close the gap separating Portugal from the advanced European economies. The change in the national mood from optimism to introspection was reflected during 2001. Reform of the unwieldy and change-resistant bureaucracy has long been identified as a necessary structural reform that successive governments have paid lip-service to, but failed to tackle. Portugal's transformation from a labour exporter to a net importer must be regarded as a major social development in late twentieth century Portugal.
