Družboslovne razprave, Vol. XI (1995), No .19-20, pp .169-182
UDK: 364 .2(469):304
Poverty and Social Exclusion in Portugal :
A General Overview of Situations, Processes
and Policies
JOSE PEREIRINHA*
Portugal presently has one ofthe highest poverty rates among the countries
ofthe European Union . Although this is a structural characteristic of Por-
tuguese society, it has only recently become an openly-debated social prob-
lem; social exclusion is now on the political agenda ofgovernment, political
parties and social partners . This has given rise, in recent years, to new,
albeit modest, directions in social policy which aim to combat it. In this
article we present a few relevant aspects ofpoverty and social exclusion in .
Portugal with reference to situations and processes of social exclusion as
they are at present. A general description will be made of some of the major
directions of social policy and an assessment of their impact in terms of
their effectiveness in combating social exclusion in some of those areas iden-
tified as citizens' rights .
Keywords: Portugal, poverty, social exclusion, social policies, European
Union
1 Poverty and Social Exclusion in Portugal : An Introduction
The debate on social exclusion is very a recent one in Portugal, and still very rare
both at the academic and the political levels, despite the fact that this social phe-
nomenon is a serious one and is historically-rooted in Portuguese society, if we
consider the dominant model of econoinic development followed in Portugal in
recent decades . ] Only recently has this debate coine on to the agenda of the polit-
ical parties and social partners, gaining importance since the early 1990s . This is
due, to some extent, to external influences (following the EU debates on the So-
cial Charter, the Council Resolution on social exclusion and EU initiatives to com-
bat poverty). Social exclusion has clearly become a policy concern of the government
and is evident, although in a modest way, in some policy measures which have
been drawn up to combat it .
In the early 1980s, poverty and social exclusion were not openly referred to by
politicians . However; large proportions of the Portuguese population were living
in very distressing situations below the estimated poverty line . A pioneer study
published in the mid-1980s assessed that 35% of households were living in abso-
* Dr. Jose Pereirinha is a professor of Economics and Social Policy at the Instituto
Superior de Economia e Gestao (Technical University of Lisbon) . This article is based
upon Portuguese reports for the Observatory on Policies to Combat Social Exclusion
(EC-DGV) and spin-off documents .
Jose Pereirinha
lute poverty in 1980 (Costa, Silva, Pereirinha, Matos, 1985) . With reference to
the same year, another study published later (EUROSTAT, 1990) compared Por-
tugal with other EU countries : 20.4% of households had adult-equivalent expend-
iture below 40% of the national average, while this figure was, for the same year,
11 .9% in Spain and 11 .6% in Greece .
Recent studies have pointed out the tendency for poverty to remain at high
levels and the fact that very little progress was made during the 1980s . According
to Ferreira (1993), and although he was using a different definition (poverty line
defined as 50% of the median of per adult equivalent income), the incidence of
poverty was reduced from 11 .5% in 1980 to 9 .4% in 1990, but such a reduction
was more visible in rural areas (a reduction from 13 .1% to 10 .3%), while it rose
slightly in urban areas (from 6 .8% to 6 .9%) .2
One may say that, in Portugal, poverty : (i) has the characteristics of a struc-
tural phenomenon rooted in the low social and economic development of the coun-
try; (ii) is also, to a great extent, the result of the present process of economic and
social change which is giving rise to new mechanisms of poverty generation ; and
(iii) has not yet been met by adequate social policy that deals with these structur-
al causes and the consequences of these processes of poverty generation . We will
further examine some of these issues .
2 Main Situations and Processes of Social Exclusion in Portugal
If we look at figures related to poverty (in the strict sense : households below a
"minimum" income level), the following groups are to be found with the highest
incidence of poverty : agricultural workers and fariners, the elderly/retired popup
lation and manual workers in the manufacturing industries ."
2.1 The Rural Population and Agriculture
The higher incidence of poverty in rural areas (in comparison with urban areas)
has been verified in some Portuguese studies . The first estiinates of poverty in
Portugal were made for 1973-74 and already pointed out the same pattern, with
an incidence of poverty 4 in rural areas 37% higher than that in urban areas (Cos-
ta, Silva, Pereirinha, Matos, 1985) . This study also showed that the highest inci-
dence of poverty was found in households mainly involved in agricultural activities .
According to estimates made in this study for 1973-74, the incidence of poverty
for those households whose head is an agricultural employer or is self-employed
in agriculture was 80% higher than that of total households, and the incidence of
poverty for households whose heads are agriculture workers was twice that of
total households in the country.
If we look at the situation of households whose heads are agricultural employ-
ers or are self-employed and of households whose heads are agriculture workers
(Table 1) we may conclude that important changes occurred for both socio-eco-
noinic groups in the 1980s . There was a significant decrease in their population
share and the incidence of poverty rose for both socio-economic groups in that
decade .
170
	
DR, Vo1 .Xl(1995)19p20
Poverty and Social Exclusion in Portugal: A General Overview of Situations, Processes and Policies
Table 1 . Incidence of poverty for households making a living from agriculture .
Agricultural employers
and self-employed
	
Agricultural workers
in agriculture
Population share (%)
1980 15.00 6.20
1990 7.30 3.50
Incidence of poverty (%) (a)
1980 10 .99 18.27
1990	11 .31 22.95
Source: Ferreira (1993) .
(a) Estimated as a percentage of individuals with net adult-equivalent income below
50% of the median .
Rural areas are not homogeneous zones in terms of socio-economic categories of
households and their sources of income . It is true that agricultural employers,
the self-employed in agriculture and agricultural workers are located in rural
areas, but industrial workers are also present (with a rising share, given the loca-
tion of some manufacturing industries in rural areas and the importance, in some
rural areas, of employment in construction and public infrastructural work), as
are households whose inain income source is in the form of transfers (social secu-
rity pensions), given the high percentage of elderly people in rural areas . The
evolution of these sources of income has been relatively more favourable than
incomes from agricultural activities . This may explain why the incidence of pov-
erty decreased in rural areas in the 1980s despite the fact that poverty rose for
socio-economic groups involved in agriculture . Available information on the char-
acteristics of the rural population as far as the coinposition of their incomes is
concerned is very scarce and in insufficient detail to understand the processes of
social exclusion in these areas . But in order to complement the above considera-
tions of this issue, one should note that presently 4/5 of the farmers work in
agriculture part time, and 47 .5% of the farmers allocate 50% or less of their work-
ing time to it (MPAT, 1993) .
In order to understand the patterns of poverty in rural areas, it is necessary to
analyse a few characteristics of the socio-economic groups referred to above . A
specific survey of the poor population was made in 1985 and was the basis of a
pioneering analysis of poverty in Portugal (Costa, Silva, Pereirinha, Matos, 1985) .
It attempts to identify the major characteristics of the population of those social
groups considered poor Most of the land-owners surveyed cultivated their own
land, alone or with the help of their relatives, and only 11% rented part of their
land (mostly elderly people) . But 35% of the land-owners also cultivate land as
tenant farmers, which is an indication of the insufficiency of the income derived
from their own farms . A great proportion (64%) of the production is for their own
DR, Vol.Xl(1995)19-20 171
Jose Pereirinha
consumption, 8% is sold directly in local markets and 22% through traders that
buy their produce . This is an indication of the low level of inonetarisation of the
activities of the poorer land-owners, which is related to the subsistence charac-
teristics of their agricultural activity, constrained, as they are, by the difficulty of
getting to the market due to their isolation (56% live in areas of fewer than 500
inhabitants) . To this has to be added the fact that a high proportion of these
farmers are elderly and illiterate, which very much limits their access to credit
and harvest insurance (only 6% stated that they had access to credit, and 18% did
not even know of its existence) .
The poor tenant farmers also directly cultivate the rented land, of which 37%
do it alone and 60% with the help of relatives. The same pattern of the destina-
tion of produce occurs with this group : 90% of them state that the produce is
mostly for their own consumption and only 20% is sold (of which 9% is sold direct-
ly in the local markets) .
The poor agriculture workers live in rather precarious conditions : 15% work
occasionally in agriculture, 6% have seasonal work as agricultural workers and
only 9% have a work contract .
These characteristics of the poor population which lives from agricultural activi-
ties can be better understood if we look carefully at the general characteristics of
agriculture in Portugal, the vulnerable nature of agricultural incomes and the
rather asymmetric effects of agricultural policy in recent years .
According to Avillez (1993), three distinct systems of agricultural production
may be distinguished in Portugal :
(1) the "social-type enterprises", which includes most Portuguese farms to the
north of the Tagus river, very small in size (representing about 75% of the total
number of farms but only 13% of the total cultivated area of the country), using
very intensive and traditional methods of cultivation and with low productivity ;
the. poverty of the agricultural population described above corresponds mostly to
this type of agriculture ;
(2) the "potentially viable enterprises" are medium-sized farms, located in the
north, central and southern regions, using more advanced production techniques
and providing higher incomes to the farmers (the author estimates that these
correspond to about 22% of the total cultivated area and contribute to about 45%
of agricultural revenues) ;
(3) the "viable agricultural enterprises", which corresponds to less than 1% of
total farms but to about 25% of the cultivated area, larger in size and using more
capitalpintensive methods of production, providing much higher incomes .
In the general context of the low profitability of agricultural enterprises, agri-
cultural pricing policies before the accession of Portugal to the EC consisted in
establishing higher prices for agricultural products and imposing restrictions on
imports. These policies had positive impacts on agricultural incomes, but with
large inequalities across the country, the larger farms benefiting much more from
the pricing policies than the small farins, and thus with fewer benefits for the
poorer farmers. As far as credit policy is concerned, in the years before accession
to the EC the author recognizes that "it was far froin achieving the desired re-
sults. In practice, its main users were the agricultural enterprises that appeared
from the outset to have the greater technical and economic viability and there-
fore had less need of it ; this was undoubtedly not only because they were better at
172
	
DR, vol.XI(1995)19-20
Poverty and Social Exclusion in Portugal: A General Overview of Situations, Processes and Policies
submitting financially-viable investment projects but because they had easier ac-
cess to the financial institutions through which the subsidies were channelled"
(Avillez, 1993 : 34-35) . Public investment in agriculture (infrastructures), of fun-
damental iinportance for its inodernisation, declined at the beginning of the 1980s
as a result of the budgetary constraints imposed by the short-term economic pol-
icy.
After the accession of Portugal to the EC, there was an inversion of some
trends: investment in agriculture rose greatly and prices, no longer under policy
control but instead under the terins of competition from foreign agriculture prod-
ucts, have fallen. This had different effects on agricultural enterprises but the
general trend was a continuation, or even an aggravation, of the existing inequal-
ities . 5
The large amounts of funds allocated to agriculture after 1986, and the aid
prograinmes for public infrastructures which support agricultural activities, have
probably had a significant impact on this sector of activity . But we should say
soinething about the biased direction of these funds, and the concentration of
their allocation . Indeed, according to Avillez (1993) the larger farins (above 20 ha)
benefit from these funds (either aids to investment under the EEC Reg . No 797/
85 or EEC Reg. No 355/77) more than do the smaller ones. Following Avillez, we
can expect Portuguese agriculture to follow a "bimodal" (or dualistic) process of
modernisation in which the inost viable enterprises can survive and gain in comp
petitiveness, while most of the agriculture population are kept marginalised -
there are negative effects on their incoines and the desertion of the interior re-
gions continues .
But the characteristics of the poor agricultural population tends to be trans-
mitted to successive generations . Educational, cultural and economic factors in-
duce children to start working very early. According to the above-quoted study
(Costa, Silva, Pereirinha, Matos, 1985), among the population surveyed 6% had
started working below the age of 6 years, and almost 50% below 10 years old . The
poor living conditions of many households also contribute to school failure and
then the abandonment of studies . Vocational training is also very rare . Other
elements of mobility may be added. According to the same study, the percentage
of poor land-owners who declared that their parents were also poor was 50%, and
this percentage rose to 79 .3% for tenant farmers and to 93 .6% for agricultural
employees . Other elements of mobility are also interesting. according to the same
study, 46% of the poor land-owners had fathers who were also land-owners, and
the rate of "staying" in the same socio-economic category from one generation to
the next was 44% for the tenant farmers and 31% for agricultural employees .
The existing structural factors that dominate the major features of Portu-
guese agriculture, in addition to the socio-economic characteristics of the rural
population, mean that the process of impoverishment may continue for soine so-
cial groups in rural areas . The establishment of small and inediuin-sized indus-
tries in some rural areas (benefiting from the still abundant labour force and low
wages in these rural areas) will probably compensate for the limits imposed by
the agricultural sector on the improvement of the economic conditions of the
rural population . But this will probably mean that rural areas will persist as are-
as of poverty.
DR, VoI .Xl(1995)19-20
	
173
Jose Pereirinha
2.2 Labour Market and Education
If we look at urban poverty, the figures point to the worsening of the incidence of
poverty between 1980 and 1990. In urban areas, low incoine is, to a great extent,
associated with low-skill levels of the labour force, low wages, insecure jobs, long-
term unemployment and, for the elderly, very low pensions . The functioning of
the labour market and the insufficient social security are crucial issues in under-
standing poverty in urban areas . 6 Thus, soine illustrations are required in order
to grasp some of the basic mechanisms of iinpoverishment related to these fac-
tors .
The functioning of the labour market has been recognized, in official EU doc-
uments, as a crucial aspect for understanding the processes of social exclusion,
since the first documents on this issue : the EC Social Charter and the Council
Resolution on Social Exclusion (September 1989) . In the context of the growth
and modernisation of the economy, the existence of labour market segmentation,
co-existent with contracting and expanding sectors, may create "pull-mechanisms"
where the latter can absorb the abundant labour force generated by the former ;
or "push-mechanisms" may become dominant for some categories of workers (those
less skilled, facing more difficulties in sectoral, occupational and geographical
mobility), thus creating situations of exclusion from the labour market (Andersen,
1991) . This process generates impoverishment for some of those with specific job
skills and for social groups in cases of an insufficient employment and vocational
training policy and cumulatively in cases of poor levels of unemployment benefit .
This is the case with Portugal .
In Portugal, social exclusion in the labour market, as it is observed presently,
is basically the result of two effects : (i) a short-term effect, which results from the
reduction of the rate of growth of GDP since the early 1990s, and even economic
depression, which is felt more acutely in some sectors and regions ; (ii) a structurp
al effect that, originated in the existing features of the economy under a process of
change, coimbined with the characteristics of labour force which cannot accoinop
date to the demands of the most modern and dynamic sectors and companies .
Looking at the structural aspects of the Portuguese economy (as far the size of
the firms is concerned), 76% of firms have fewer than 10 workers, and only 2%
have inore than 100 . Traditional sectors are still important in the Portuguese
econoiny, and some of them are facing strong competition froin abroad . This is
the case with textiles, which has a large share of total employment in inanufac p
turing industry and which is facing technological backwardness and a surplus of
labour. The crisis in some sectors and the ongoing process of restructuring and
modernisation in others has generated actual or potential uneinployment in some
manufacturing sectors and regions, affecting particular social groups more seri-
ously: women, young people and the less-skilled workers, who face great difficulp
ties entering the labour market and adapting to the structural changes in the
economy.
Education and professional training are important factors which limit the pos-
sibilities of the unemployed to re-enter the labour market . The illiteracy rate is
still very high in Portugal (11 .2% in 1991), although it decreased in the last decp
ade by 9%. The educational level of Portuguese workers is rather low, although
the improvement in the educational level of the population as a whole has already
174
	
DR, Vol .XI(1995)19-20
Poverty and Social Exclusion in Portugal : A General Overview ofSituations, Processes and Policies
had some effects on the educational performance of the labour force : according to
official figures (MPAT, 1993), in 1990 68% of the workers had 6 or fewer years of
school education, but this percentage had been much higher in 1985 (76 .8%) ; and
in the same period the percentage of young workers (below 25 years old) with
secondary education rose from 16% in 1984 to 25% in 1991 .
In spite of the rising uneinployment rate in Portugal since the early 1990s
(4.1% in 1991 and 5 .6% in 1993), Portugal still has one of the lowest rates in the
EU. The rise in unemployment has been accompanied by a bigger share of the
unemployed in search of a new job (over 80% of the total number of unemployed)
and also a rise in the share of the long-term unemployed (about 30% of the total) .
The social gravity of the very long-term unemployed (VLTU) 7 is widely recog-
nized as a major syinptom of social exclusion in the labour market, given the very
low social security they are afforded and the further difficulties of entering the
labour market . A study made with reference to this social group in 1991 by region
(Mendes, Rego, 1992) show that, although with some regional differences, the
VLTU represent between 25% and 40% of the total number of registered unem-
ployed . They are mainly women, mostly from 25 to 49 years old and with a low
level of education (about 75% with fewer than 6 years of schooling) . The main
reasons given by those surveyed as to why they were in such a situation were that
they had been fired or that they had had a non-permanent (and thus insecure)
job, the latter reason being significant for all regions and given as the main rea-
son by over 20% of the VLTU. This is a good indicator of the vulnerability of this
social group as far as employment is concerned. Indeed, the existence of short-
term contracts, temporary jobs, subcontracts involving the loss of social benefits,
involuntary part-time jobs, work at home, low wages and delay in wage payments
work as factors of income insecurity for a significant percentage of workers, mainly
in the sectors most vulnerable to foreign competition (such as textiles) .
If we look at the personal reasons stated by those surveyed, it seems clear that
some of them indicate serious obstacles to entry into the labour market . Indeed,
important reasons stated by the unemployed were their age, their level of educa-
tion and the fact that they had no qualifications or skills . This was a general
response for all regions, to which we can add a further one, which has more rele-
vance in the south : the area of residence, which constitutes a serious obstacle to
easy access to work . This also applies to the solutions considered by the unem-
ployed themselves as necessary for their reintegration into the labour market :
professional training (either short-term or long-term) is considered the most nec-
essary by a significant percentage of the unemployed .
Social protection in uneinployment is inadequate in Portugal . Unemployment
benefit is not guaranteed for long periods and is given in small amounts . This is
the reason why 12% of the VLTU at most consider unemployment benefit to be
the main means of subsistence, while most of them (above 50%) consider the
"fainily" to be the main source of subsistence, and about 15% make use of occa-
sional jobs to cover their income needs in situations of very long-term unemploy-
ment .
The situation regarding children's work is also a mechanism which generates
social exclusion, not only because it clearly violates a fundamental right of the
citizen, but because it has opposite consequences for their future integration into
the labour market (due to their poor educational background) and the opposite
DR, Voi .Xl(1995)19-20
	
175
Jose Pereirinha
effect on further generations . The work performed illegally 8 by children is char-
acterised by low wages, no social security and bad working conditions This is
recognized as a difficult problem, given the confluence of several factors : the be-
haviour of enterprises which employ low-paid workers, the economic needs of
poor households for whom the children's wages are a significant component of
their income, and a culturally-rooted form of looking at apprenticeship at the
factories as a way of preparing children for working life which is a better alterna-
tive to the educational system .
Evidence from research (Pereirinha, 1988 ; Cardoso, 1991) shows that educa-
tion is a crucial factor in good performance on the labour market, and differences
in the educational levels of workers are an important factor leading to inequality
and poverty in Portugal . And the intra- and inter-generational transmission of
job insecurity and low wages lead to situations of social exclusion . Table 2 pro-
vides general information on education by region. Some indicators reveal inter-
regional differences either in the literacy rate or in educational success and
illustrate what was said above, namely that the phenomenon of failure at school
and of abandonment of studies are both related to the early participation of chil-
dren in the labour market . This is a mere sketch of important factors which will
act as agents of social exclusion in the near future for this and successive genera-
tions .
A recent study was made of the factors that determine the abandonment of
school education in the 2nd and 3rd cycles of basic education (from the 5th to the
9th year of education) on a very detailed regional basis (Ferrao, Neves, 1992) .
This study assessed the different factors at work at the regional level . There is a
strong relation to the sociopcultural and economic conditions of the population,
but different patterns emerge: (i) in some regions with high poverty rates, abanp
donment is associated with problems of integration into school, and this abandonp
ment occurs very early (2nd cycle); (ii) in other regions abandonment occurs in
association with the existence of demand for seasonal and unskilled labour, which
generates abandonment at the 3rd cycle ; (iii) in other regions (urban) the simul-
taneous existence of abandonment and repeated failure points to other reasons :
more intensive socio-cultural pressure to remain at school, and the existence of
alternatives (private schools) .
176
	
DR, VoI .Xl(1995)19-20
Poverty and Social Exclusion in Portugal : A General Overview ofSituations, Processes and Policies
Table 2 . Educational factors by region in Portugal .
Illiteracy rate School failure % students who Employment rate
1987-88
	
rate 1st cycle completed 9 of children 10-14
(1990-91) years of school years old
North 13 .1 25.8 36.7 Lit (10.7) Int (6 .5)
Centre 18 .2 25 .5 45 .1 Lit (8 .4) Int (11 .5)
Lisbon &
Tagus Valley 10.4 21 .4 60 .7 Lit (2 .3) Int (4 .8)
Alentejo 28.9 24 .1 52 .0 0.6
Algarve 22 .4 26 .4 56 .4 -
PORTUGAL
(Mainland) 14.3 - 44.0 6 .9
Source : Silva, M . (1991) .
Low education is a factor which determines social exclusion in the labour market,
with effects on other areas of social exclusion . And it is also a factor in the transp
mission of vulnerability to social exclusion to successive generations (it is well
known as a factor which has dynamic effects) . The expressive character of the
inequality of educational attainment, and its inter-regional differences, will have
obvious effects on social exclusion in the future . This is presently one of the most
serious problems facing Portuguese society .
3 The Recent General Direction of Social Policies and Their
Potential Effects on Social Exclusion
Given that social exclusion is a multi-dimensional phenomenon, coordinated ac-
tion between the various areas of social policy are required to fight it (see Room,
1992). By coordination we mean "the general principle that governs the design
and implementation of social policies, which translates into specific actions un-
dertaken by the government and which aim to increase the effectiveness of policy
measures by preventing the duplication of actions, reducing the external social
costs resulting from these interventions when they have different objectives and
promoting the complementary nature of policy measures and social practices by
all actors involved" (Pereirinha, 1993) . An analysis of the effectiveness of social
policies with regard to their effects on social exclusion requires, to a great extent,
an analysis of attempts at policy coordination. That is what we will do, although
in rather artificial terms, in this section .
We cannot really talk of a tradition of effective coordination of social policies
in Portugal as far as social exclusion is concerned . But some trends have become
visible in the last few years regarding the intention to coordinate efforts and
policies in some areas .
DR, Vol .Xl(1995)19-20 177
Jose Pereirinha
One such area consists of the coordination of sectoral social policies whose
implementation is the responsibility of each of the ministries involved but which
are oriented towards the complementary nature of policy action, thus reinforcing
the efficacy of each of them separately. There are some examples of this form of
coordination in Portugal, but one should stress the efforts to coordinate educa-
tion policy and employment and vocational training policy .
Vocational training policy has been, since 1990, an important component of
social policy in Portugal, very much addressed to the initial training of young
people, the training of workers in order to facilitate their integration into the
labour market, and, in general, the training of those vulnerable groups facing
more serious problems of integration .
Some convergence of education policy with the objectives of vocational train-
ing policy is evident . The education policy followed in Portugal since 1986 (when
the reform of the education system was initiated) is very much oriented to com-
bating social exclusion in education (failure at school and early abandonment of
studies) . The raising of the school-leaving age froin 9 years to 15 years was ac-
companied by curriculum reform and the implementation of educational pro-
grammes . Changes may be taken as a measure of the willingness of the government
to better prepare the students for employment, and to remove some of the obsta-
cles which still exist . An example of the former is the creation of vocational train-
ing as a special education module .
The second direction to be stressed is the creation of programmes, involving
several ministries, that address a specific social problem . This demonstrates more
visibly the intention to coordinate policy, involving the creation of coordinating
bodies without any major changes in the structure of public administration, and,
mostly, cooperation among institutions . Examples of this form of coordination
may be found in the creation of interpministerial programmes intended to tackle
the socio-economic barriers to educational success, and a national programme to
combat drug-addition ("Projecto Vida") .
Some (more effective) coordination has appeared with the creation of new in-
stitutions set up to tackle problems experienced by specific social groups, with
the aim of developing policies aimed at these groups and involving further chang-
es in public administration with respect to the design and implementation of such
policies . Examples include the creation of General Directorates and Institutes
with responsibility for policies addressed to a number of social groups : elderly
people, women, young people, the handicapped, etc .
Finally, another form of coordination consists of the creation of programmes
to address the multi-dimensional disadvantage of the most vulnerable groups .
Specific policies, of a multi-dimensional character, to combat situations of social
exclusion have consisted of the design and implementation of programmes to com-
bat poverty, some of them launched by the EC in the context of the EC Poverty 3
Action Programme, and others, countrypwide and financed by the state, coordi-
nated by two Regional Commissariat (one for the north and the other for the
south), and involving, presently, about 90 projects running for a period of 2 to 5
years on average .
Such projects involve the participation of several social actors (central adminp
istration, municipalities, nonpgovernmental organisations (NGOs) and other prip
vate bodies at the local level) as a basic feature of their design and implementation .
178
	
DR, VoI.XI0995)19-20
Poverty and Social Exclusion in Portugal : A General Overview of Situations, Processes and Policies
But as the problem of poverty in Portugal is determined by structural factors
rooted in the model of development followed in Portugal (and which remains as a
structural constraint limiting the possibility of the eradication of poverty in the
short term), these projects cannot be seen as a programme for poverty eradica-
tion in the country. It is mostly a programme oriented, on the one hand, to the
solving (or alleviating) of local situations of poverty and, on the other, to the
creation of effects of synergy which, through the mobilisation of local social ac-
tors, can contribute to the establishment of mechanisms of local development .
The design and implementation of social policy involves a wide range of actors
(government departments at the central, regional and local levels, social part-
ners, professional organisations, NGOs, etc) which are linked through a given
institutional (formal and informal) arrangement, which determines the forms of
their functioning in society .
This institutional arrangeinent is dynamic, and the way in which it evolves
may lead to greater coherence in their actions and therefore to greater effective-
ness in coinbating social exclusion . It may also, however, create new barriers to
the exercise of social rights and ineffectiveness in the implementation of policies
and programmes . In the last few years, some institutional changes have occurred
in Portugal which have changed the role of actors in social policy and which have
had some effects on policies to combat social exclusion . Some of these changes
seem to have had potentially positive effects in efforts to combat social exclusion .
Others seem to have had the opposite effect .
Three major trends are evident when we look at the legislation and/or the
actual policy practices (notably since the early 1990s) : (i) the broader and more
active participation of social actors on the design, implementation and monitor-
ing of social policy ; (ii) the greater decentralisation and fragmentation of activi-
ties; and (iii) the privatisation of services, changing the role of the state in the
provision and financing of such services . Examples of these trends are evident
mainly in the following areas of social policy : healthcare, social security and em-
ployinent and vocational training .
Health policy is an area of state intervention which may have the opposite
effect on social exclusion following legislation in the 1990s . The healthcare sys-
tem in Portugal evolved from a system predominantly based on social insurance
(until the late 1970s) to a tax-financed National Health Service in 1979, a change
which was justified on the grounds of equity (both in terms of the distribution of
the burden of payments and in the provision of healthcare) . The policy of the
1990s has been characterised by higher direct payments (flat rate co-payment for
healthcare), the creation of alternative health insurance (which benefits the bet-
ter-off), and the heightening of public and private competition in the provision of
health services . These policy directions correspond to a development of the health-
care system on the grounds of efficiency, with potential negative effects on equity.
The costs will be rising inequality in access to healthcare, and social exclusion for
the more vulnerable social groups . 10
As far as social security policy (regimes) is concerned, policy measures have
been taken in order to better coordinate existing schemes and provide incentives
to take out alternative (private) social security. The low level of pensions, in spite
of the annual increase in pensions above the rate of inflation in recent years,
creates serious economic difficulties for those groups for whom the social security
DR, Vol.X1(1995)19-20
	
179
Jose Pereirinha
pension is the main source of income ." No important policy measures have so far
been envisaged to tackle this serious problem, generating social exclusion for a
high percentage of the Portuguese population . Portugal is still one of the few
countries of the EU that does not have a guaranteed minimum wage, and it is
surprising that the creation of this scheme was proposed by the main opposition
party only very recently. As far as social services are concerned there is a political
willingness to coordinate public services more effectively with the setting-up of a
General Directorate of Social Action. Other forms of cooperation have been de-
signed through the more active intervention of private institutions (the NGOs)
and coordination among these and public services . A tendency for greater decen-
tralisation of social services through the creation of local services corresponds to
the need for increased effectiveness in dealing with problems afflicting the most
vulnerable groups at the local level . However, in spite of an increase in the capac-
ity to respond to social needs, and inore effective coordination among social ac-
tors, serious limits in the capacity to meet all social needs still exist .
As far as employment and vocational training is concerned, some relevant in-
stitutional changes have occurred since 1990 with the aiin of improving employ-
ment and vocational training policies by changing the role of the actors involved
and by encouraging the more active participation of social partners and NGOs .
The general aim is for a better coordination of policies and institutions, following
the Social Agreement on the Policy of Vocational Training in 1991 .
The state is still dominant in Portugal and is rather centralised since interme-
diate decision-making levels, between central administration and local adminis-
tration (municipalities), are still absent. This centralisation sometimes creates
difficulties in coordination with other social actors . The trends, visible in some
areas of social policy, of the decentralisation of responsibility to lower levels of
administration, look as though they might facilitate cooperation among the acp
tors involved. This may improve effectiveness in the fight against social exclu-
sion. But it is sometimes difficult to distinguish decentralisation (as a form of the
approximation of the administration to the real needs of the population) from the
"de-responsibilisation" of the central government to deal with these problems .
For exainple, the transfer of competences to the municipalities has been inet by
financial constraints imposed by central government (with responsibilities to pro-
vide part of the financial resources needed for the implementation of activities at
the municipal level) . The dependence of the NGOs on the state (the state as tutor,
the dependence on the state for financial resources) also raises some doubts about
the actual effectiveness of the increasing intervention that they are called to make
in some areas of social policy.
Notes
1 . For an analysis of Portuguese economic development in recent decades and its ef-
fect on inequalities of income, see Pereirinha (1988) .
2. The rather different figures on poverty rates using different methodologies is a
good example of the very common difficulties of presenting widely-accepted diagp
noses of the situation .
3 . Either based on an absolute poverty line (Costa, A .B. et al., 1985) or in relative
terms, the poverty line was defined as a given percentage of the median income
180
	
DR, Vol .XI(1995)19-20
Poverty and Social Exclusion in Portugal : A General Overview of Situations, Processes and Policies
(Ferreira, 1993) . According to the former study, and for a global incidence of pov-
erty of 35% for the whole population in 1980, incidence of poverty (using an abso-
lute poverty approach) was the following for these social groups : elderly/retired
(42.4%), agriculture workers and farmers (between 48-49%), manual workers in
manufacturing industries (35 .4%) . According to the latter study, based upon a relap
tive approach (50% below the median adult-equivalent income), incidence of pov-
erty decreased from 11 .5% in 1980 to 9 .4% in 1990 and the following trends occurred
for incidence of poverty in these social groups : elderly/retired (23.7% in 1980 and
19.3% in 1990), agriculture workers (from 18.3% in 1980 to 23% in 1990), farmers
(from 11% in 1980 to 11 .3% in 1990) and manual workers in manufacturing (from
8.1% in 1980 to 4% in 1990) . The disparate figures result from different methods of
poverty measurement, as stated above .
4. This study used an absolute poverty approach to the estimate of incidence of pov-
erty in rural areas and urban centres and by socio-economic population groups .
5. According to Avillez (1993), agricultural incomes declined in the period 1985-89 :
the cash value added per unit of labour at real prices declined about 9% and the
cash income of family labour per family unit of labour/year declined by 16% at real
prices. But the author estimates that these falls were nearly three times higher in
the smaller farms than in the larger ones .
6. Research we carried out on the factors explaining income inequality in 1980
(Pereirinha, 1988) has shown that, in Portugal, inequalities in household income
are determined by different factors in urban and rural areas, the latter being more
influenced by household size and the age of the head of the household, while in
urban areas the influence of education on inequality in household income is more
important . Looking at wage income (as that source of income with the highest
contribution to inequality in household income), and using Theil decomposition
analysis, the causes are to be found either in human capital variables (using educa-
tion and age as proxies), accounting for 45% of the total "explanation", and seg-
mentation variables (sex, sector of activity, region and size of location as proxies),
accounting for 42% of the total "explanation" . Although not directly related to
poverty, these findings point out the structural character of inequality in income
and poverty in Portugal, where the characteristics of the labour market are impor-
tant for explaining it .
7. This means those unemployed who are registered at Employment Centres for 4
years and more .
8. Recent legislation (1991) establishes 15 years old as the lower age-limit for a job .
Although statistics on this phenomenon are unreliable, more than 30,000 children
are illegally engaged in work, according to official figures by the General Labour
Inspectorate .
9. This part of the article reproduces the summary of the national report prepared by
Portuguese experts to be published in the synthesis report by G . Room (1992), pp-
31-34. A slightly different version of it was published in Pereirinha (1993) .
10 . See Pereira and Pinto (1993) for a recent analysis of equity in healthcare in Portu-
gal .
11. According to our estimate of a poverty line for 1989, the minimum pension for the
general regime was about 56% of the urban poverty line and the minimum pension
for the special regime for the agricultural population about 60% of the rural povp
erty line. For the same year (and for purposes of comparison) the average pension
represented about 34% of the average wage .
DR, Vol .XI(1995)19-20
	
181
Jose Pereirinha
References
Andersen, B .R. (1991), Economic change and social exclusion, Mimeo
Avillez, F (1993), Portuguese agriculture and the Common Agricultural Policy, in : Lopes,
J. (1993), Portugal and EC membership evaluated, Pinter Pub., London; St. Mar-
tin's Press, New York
Costa, A.B ., Silva, M., Pereirinha, J., Matos, M . (1985), A Pobreza em Portugal, Caritas
EUROSTAT (1990), La pauvreté en chiffres: l'Europe au debut des années 80
Ferrao, J., Neves, A .O. (1992), Caracterizaçao regional dos factores de abandono escolar
nos 2° e 3' ciclos do ensino básico, s/e
Ferreira, L.V (1993), Pobreza em Portugal - variaçao e decomposiçao de medidas de
pobreza a partir de Orçamentos Familiares de 1980/81 e 1989/90, CISEP
Mendes, A., Castro Rego, L . (1992), Perfil do desemprego de longa duraçao em Portu-
gal, 1991, DSEEMT, IEFP Lisbon
MPAT (1993), Preparar Portugal para o século XXI: Análise Económica e Social,
Ministério do Planeamento e Administraçao do Território
Pereira, J., Pinto, C.G. (1993), Equity in the finance and delivery of health care in
Portugal, in: Van Doorslaen, E., Wagstaff, A ., Rutten, F (eds), Equity in the finance
and delivery of health . care, Oxford University Press
Pereirinha, J. (1988), Inequalities, household income distribution and development in
Portugal, PhD dissertation, ISS, The Hague, Netherlands
Pereirinha, J. (1993), Social Exclusion in Portugal, in : Lopes, J. (ed .) (1993), Portugal
and EC membership evaluated, Pinter Pub., London; St. Martin's Press, New York
Pereirinha, J. (1994a), Social exclusion in Portugal : situations, processes and policies,
Observatory on National Policies to Combat Social Exclusion, CISEP Lisbon
Pereirinha, J. (1994b), Spatial location of social exclusion in Portugal, Observatory on
National Policies to Combat Social Exclusion, CISEP Lisbon
Room, G. (1992), Agencies, institutions and programmes: their interrelationhips and
coordination. in efforts to combat social exclusion, DGV EEIG, Lille
Silva, M . (1991), A pobreza infantil em. Portugal, UNICEF
182
	
DR, Vol .XI(1995)19-20