ABSTRACT

This chapter provides an assessment of the industrial policies that have been adopted in Portugal since joining the European Economic Community (EEC) in 1986. The adjustment programme agreed between Portuguese government and troika composed of the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission (EC), as a condition to access official financial assistance, included measures aimed at curtailing public expenditures and at increasing revenues in mid-term, producing a strong recessionary impact in the country. Besides the measures directly targeted at improving public finances in the mid-term, the adjustment programme included a number of so-called "structural reforms" intended to improve the performance of labour and product markets. The Portuguese economic fabric is historically characterised by a large proportion of low value added activities, low knowledge intensity, and low technological intensity. The country's process of industrialisation had largely been driven since 1960s by successive waves of foreign direct investment (FDI), which were based on that specialisation profile.