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The Hidden Revolution in Portugal

Marcello Caetano, the deposed former prime minister of Portugal, and the exiled stalwarts of the old regime gathered recently in Rio de Janeiro with some satisfaction. Their nemesis António de Spínola was being shuttled from Spain to Brazil to Argentina to Brazil again, while his modest home in Lisbon was ransacked and his famous book, Portugal and the Future, burned by a vengeful mob. The events of a single year had in their view justified fifty. The Portuguese people had once more demonstrated their incapacity for self-rule, their need for firm authoritarian direction. The shrill falsetto of the old master Salazar echoed in their ears as ever, vindicated by history as he always believed he would be.

In Lisbon the jails held more political prisoners than before the April revolution. The Portuguese Communist party held the center of the stage with its discipline, its dour puritanism, and its dogmatic self-righteousness, the mirror image of Caetano’s fallen dictatorship. Each day the political, strategic, and ideological stakes increase, and Portugal moves closer to social revolution and civil war. While next door the Franco regime totters toward collapse, the Italian and French left watches events in Portugal intently. And the fragile settlement in Angola too depends on what happens in Lisbon. Before the US government, NATO, and The New York Times talk themselves into a Dominican-type intervention in Lisbon it is worth examining in some detail what happened to the “Revolution of Flowers.”

I

When the Caetano regime collapsed on April 25 last year there was much bewilderment, and the world press turned for explanations to the unlikely but familiar figure of General Spínola, whose book, it was thought, both explained and had incited the revolution. Scant attention was paid to the “Armed Forces Movement,” the phrase itself often taken as if it were a descriptive epithet rather than the specific title of the compact group of revolutionary officers who had made the coup. While correspondents waded patiently through the baroque syntax of Spínola’s Portugal and the Future the movement’s own “program” was little discussed, despite the fact that it was soon promulgated into the transitional constitution of the Portuguese Republic. This was a serious misjudgment. The curious truth was that in a land of much rhetoric and little content a document had appeared that meant exactly what it said. And in particular what it said about a policy in favor of “the least advantaged sectors of the population” and “the defense of the interests of the working classes.”

Moreover, the MFA’s ambiguous phrases about colonial policy and the “need for a political not military solution” were if anything a gross understatement. The MFA program and Spínola’s book were in fact the two key documents of the Portuguese revolution and they set out positions so diametrically opposed that they contained seeds for a conflict that could only be resolved by the victory of one over the other. The nature of the revolution disguised for a time the seriousness of the divergences within the new regime, and in particular disguised the degree to which the young officers who had made the coup were intensely political men. But the conflict staked out at the beginning reflected the entire Portuguese situation, which was at its heart a conflict between revolutionary and evolutionary change in Europe and between immediate decolonization and gradual disengagement in Africa.

The failure to see the importance of the MFA was caused in part by the ambiguity of the transfer of power which was itself a result of Spínola’s crafty political footwork. The general knew perfectly well what was happening. Four and a half months before the revolution of April 25 he knew that the MFA had been formed and that it had decided, on December 1, 1973, to overthrow the regime. He was shown the MFA program after its approval by a secret assembly in Cascais on March 5, 1974, and he made important modifications in its language. He was briefed in detail on operations the evening before the coup by Major Otelo de Carvalho, the head of the military committee of the MFA.

Spínola’s “legalist” position, however, was such that he both “knew and did not know,” a device that allowed him to state quite seriously on April 25 that “he was not one of those who take up arms against their government.” Thus the deceptive and contrived appearance of continuity when he arrived dramatically at the Carmo barracks of the Republican Guard (GNR) to “receive” from Caetano the transfer of authority. This was a maneuver to prevent, in Caetano’s words, “power falling into the streets.” It also served to keep the young captains and majors who had executed the coup from openly taking power at first.

But Caetano’s fears came true. The popular response to the coup was far beyond the plotters’ expectations. Loyalist units found themselves greeted as if they were insurgents; crowds milled around the armored vehicles with little sense of danger. This bloodless revolution, however, resolved few contradictions.

Although Spínola could agree in principle to the Armed Forces Movement’s program, the interpretation of that program was another matter. The MFA wanted much more than the shifting of a few ministers while the structures that had supported and sustained them for almost fifty years remained intact. Their program spoke of cleaning out (sanear) but where did saneamento begin? More important, where did it end? Spínola had insisted that the MFA program describe neither the aim of the coup as “democratic” nor its enemy as “fascist”; and he deleted a paragraph on colonial policy which spoke of “the clear recognition of the people to self-determination.” Major Vitor Alves, chairman of the committee of officers that drew up the document, regarded Spínola’s federative scheme as “his personal dream.” Yet during his first months in office Spínola spoke privately of a timetable for decolonization over “a generation or so,” during which time the people “would be given democracy and equipped to choose.”

The divergence over economic policy was equally fundamental. Spínola made plain his commitment to stepped-up investment, rapid industrialization, and the “rationalization” of archaic economic structures in preparation for Portugal’s admission into the EEC. It was a view close to important sectors of Portuguese capital, in particular such industrial magnates as António Champalimaud, Jorge de Melo, Miguel Quiná, and Manuel Espírito Santo. But the MFA program insisted that “the new economic policy…will necessarily imply an antimonopolistic strategy.” And each of these gentlemen headed empires that were monopolies—monopolies moreover in which was concentrated a large proportion of the wealth of Portugal under the control of a very small number of family combines. Known to the European international bankers who dealt with them as “Paleo-Capitalists,” the gentlemen in control were far from being the very models of the modern manager they portrayed themselves as being. Nonetheless it was precisely these magnates who rushed to build the “New Portugal” and through their connections with Spínola believed they had in some way helped to create it. By which they meant they had not opposed it. Which was true.

Like Spínola they wished to see a rapid remodeling of the Portuguese economy on Western European lines, the elimination of inefficient and undercapitalized small and medium businesses, and the strengthening of larger enterprises which could sustain European competition. Well prepared for the new situation, they established their own front organization, the “Dynamizing Movement Business-Society,” and brought out amid much publicity their own economic plan. Not surprisingly it called for large public investment in their favorite privately owned projects, the Lisnave and Setenave (Setubal) shipbuilding complexes, the Sines refining and petro chemical complex project, and tourism. The program they said would create 100,000 new jobs.

The major monopolies, however, stood at the center of the conflict between Spínola and the MFA. Because of the nature of their interests, pannational and international in scope, the problem of the economic system in Portugal and the nature of decolonization were two sides of the same coin. The greatest of the monopolies, Jorge de Melo’s CUF (Companhia União Fabril), is a vast conglomerate of 186 enterprises, built up around a near monopoly of the tobacco market, but long diversified into chemicals, shipbuilding, fertilizers, soap, textiles, mining, cellulose, refining, insurance, real estate, tourism, and restaurants. In addition to numerous joint ventures with foreign multinationals, CUF is linked through the Banco Totta Aliança into a vast spider’s web of international interests, with connections to all the southern African giants, De Beers, Union Minière, and Standard and Chartered (15 percent owned by Chase Manhattan). CUF’s stockholders equity last year was almost $537 million, and its assets at least two and a half billion dollars.

Dr. Miguel Quiná, son-in-law and heir to the count of Covilhã, heads a group containing at least sixty companies. The Quiná empire has large interests in southern Africa, three banks (Borges e Irmão, Banco Credito e Industrial, Banco do Alentejo), and interests in insurance, plastics, tires with General Tire and Rubber (Mabor, which in Angola has a ten-year monopoly), civil construction, textiles, fishing, oil in Angola, data processing, newspapers (Diario Popular, Journal do Comércio, part ownership in Primeiro do Janeiro), marketing and advertising with J. Walter Thompson (Latina Thompson Associados).

The Espírito Santo group, whose chief administrator was Franco Nogueiro, Salazar’s former foreign minister, with twenty of its major companies directly administered by members of the Espírito Santo family, comprises the Banco Espírito Santo e Comercial, insurance (Tranquilidade), large agricultural holdings in Africa, pulp paper in Angola, petroleum in Angola in association with Belgium Petrofina (Petrangol), cellulose, tires (with Firestone), a near monopoly of beer in Portugal and similar interest in Angola, telecommunications, and tourism (ITT/Sheraton). Espírito Santo is associated with the First National City Bank of New York in Africa (Banco InterUnido). Champalimaud’s empire contains banking (Banco Pinto e Sotto Mayor), a cement monopoly, the national steel monopoly, stock ranching in Angola, insurance, paper, and tourism.

The magnates, like General Spínola, regarded the retention of the African territories, even in the short run, as essential to their proposals for the development of Portugal. The economic relationship with Guinea was of little importance—the Cape Verde Islands lying off it are of more interest to NATO than to Portugal—but the stakes in Mozambique and Angola were very high indeed. With Portugal’s own chronic trade deficits, and economic depression already affecting the remittances from Portuguese abroad and from tourism, the large surplus from the African territories would be painful to lose. In 1973 such earnings represented as much as 5 percent of GNP, about $540 million. All the cotton of Mozambique was exported to Portugal and 99.7 percent of its sugar, both at well below world prices. At the same time the wages of Mozambique miners working in South Africa were converted into gold shipments to Lisbon—in effect a hidden subsidy to the Portuguese war effort since the bullion was valued at the official rate of $42.20 an ounce instead of the inflated world market price which rose to nearly $200. During the past three years the official value of this gold amounted to at least $180 million.

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