A SUMMARY OF THE PROGRAM OF

ECONOMIC AND SOCIAL COOPERATION

BETWEEN

PORTUGAL AND THE UNITED STATES

November, 1989 I. Review of Portuguese Economic Context 1

A brief review of the economic and political context in Portugal during the period convered: 1975 to 1979, 1980 to 1985, and 1985 to 1989.

11. Summary of the Parameters and Hodalities of U.S. 3 Assistance

A summary of the basic guidelines related to U.S. economic assistance and a description of the mechanisms through which such assistance was provided.

111. Programs and Projects of U.S. Assistance 5

A. SUMMARY

-- The following is a summary of U.S. economic assistance to Portugal by activity. Each individual activity is described in detail in the pages that follow:

B. Balance of Payments Assistance and Cash Grants

C. Food Assistance

D. Angola airlift and Refugee Assistance E. Major Capital Projects and Long-term Institution 19 - Building Projects

1. Housing for Low-Income Families 19

2. Secondary School Construction

3. Basic Sanitation for Rural areas

4. Construction of Rural Health Centers

- 5. Development and Support of Regional Universities

6. Agricultural Production Program

7. Azores Rehabilitation and Reconstruction 43

8. Feasibility Studies and Consulting Services 45 Lo an

F. Other Technical Cooperation and Training 47

1. Agricultural Planning and Development 47

(Agricultural Production Program - described under D.6 above)

3. Control of Forest Fires and Management of 48 National Parks

(Assistance to Rural Universities - described under D.5 above)

5. Administration of Agricultural Credit 49

6. Consultant Services and Training in Public Health

7. Hospital Administration and Health Management Information System

8. National Health Survey 53

9. Emergency Medical Services 53

10. (Technical Assistance in Basic Sanitation 54 - described under D.3 above) Assistance to Education Planning

Vocational and Continuing Adult Education

Business Administration Training - New University of Lisbon

Management Training - IPE / CIFAG

Management Consultations - IESC

Training and Consultant Services - Ministry of Finance, Plan and Bank of Portugal

Development of Regional Coordinating Commissions

Assistance in Administrative Reform

Development of National Statistics Institute

Development of Science and Technology Coordinating Agency and Program (JNICT)

Industrial and Trade Promotion

Assistance in Alternative Energy Sources

Environmental Planning at Sines

Development of National Civil Engineering Laboratory (LNEC) - Water Resources

(Consultants and Training in Low-Income Housing - included in D. 1 above) Training in Transportation and Communication

Training Assistance to the Ministry of Labor

Assistance to Labor Unions

Development of Cooperatives

Assistance to the Investment Bank of Portugal

Assistance to the Foreign Investment Institute 73 Privatization and Development of Capital Markets Development of Luso-American Development Foundation (LADF) Assistance to Women's Commission (Development of the University of the Azores - included in D.5 above) Agriculture and Fisheries Studies in the Azores Assistance in Dairy, Livestock, and Forage Development in the Azores Health Studies in the Azores Assistance in Regional Planning in the Azores (GREPA) Vocational Training in the Azores Assistance in Dairy Industry in the Azores Assistance in Transportation and Communication in the Azores Investment Promotion in the Azores Geothermal Energy Development in the Azores Housing Reconstruction in the Azores

Jojoba and Tropical Fruit Development in Madeira Control of Forest Fires in Madeira Assistance in Public Administration and Finance in Hadeira Water Resource Management in Madeira Language Training and Program Support Research Grants 52. Trilateral Cooperation in Portuguese Speaking Africa

53. Assistance to School of Dentistry

54. Managing Energy - Efficient Cities

IV. Summary of Assistance to the Azores and Hadeira 88

- A brief recapitulation (through a brief summary narrative and listing) of those projects described above which benefitted the Autonomous Regions of the Azores and Madeira.

I. Major Program Successes 89

An identification of the 4 or 5 activities described above which can be considered the most successful and why. The major event of modern Portuguese history was the revolution of April 25, 1974 which brought to an end almost 50 years of dictatorship and set in motion the process of disengagement from Portugal's African colonies. The resulting upheaval affected virtually every aspect of Portuguese life;

- - An explosion of rising expectations of Western Europe's poorest population in the face of years of neglect in education, health, housing, etc;

- A flight of capital and skills from the country; - Political turmoil in which the non-democratic forces of the extreme left gained increasing prominence; - Balance of payments crises due to sharply rising food and other imports, loss of emigrants' remittances, dislocation of trade with the former colonies and declining domestic production because of labor unrest.

It was in this period, when the outcome of a stable democratic Portugal increasingly tied to Europe was by no means a certainty, that Western donors began a major effort of economic assistance and the strong encouragement of democratic institutions and sound economic policies.

The elections first held on April 25, 1976 marked the begining of the consolidation of strength of the democratic forces. Six provisional governments (i.8. those established prior to the drafting of a new constitution) managed the country's affairs until 1979. A first agreement with the IHF was signed in 1977, and the resulting program won wide Western support. This program was renewed in 1979.

In the meantime, Portugal had been innundated with close to 1 million refugees from the former African Colonies, most with skills, but without jobs or prospects in an already weak Portuguese economy. Furthermore, a distinctly statist constitution adopted in 1976 had set the pattern for massive nationalizations of enterprises (including agricultural land) operating at huge losses. Following elections in 1979, a new government was formed again carrying forward the IHF program and making efforts to reduce budgetary deficits and increase incentives for private investment and export. Attempts were made to restore labor discipline and to introduce improved management practices into the public sector including the nationalized enterprises.

It was during this slow but essential process of improving management and the capacity to analyze policy alternatives that very flexible U.S. and other Western technical assistance and training were offered so that Portugal might have as broad a range of expertise as possible upon which to draw.

In 1985, a majority government of a single party was elected for the first time and the process of privatization and eventual amendment of the constitution took place. Most importantly, in 1986 Portugal entered the European Community as a full member, and Western European support and assistance increased. During the 1985-1989 period, the banking sector was opened to private initiatives, measures to encourage investment and export were expanded, unemployment decreased from 12% in 1984 to 6.5% in 1989. It was clear that Portugal was taking its place fully within the European Community with democratic institutions and an open economy assured.

Thus U . S . assistance declined, and a Luso-American Development Foundation was established to continue to foster economic, technical, social, and cultural exchange between U.S. and Portuguese institutions. II. OF u-m

The U.S. program of economic assistance to Portugal initiated early in 1975, represented the first U.S. concessional assistance (grants and low-interest loans) directed to a Western European country since the period immediately following the Second World War. In spite of the fact that Portugal was the lowest-income country in Western Europe, it was the highest income country in the world (along with Israel) to which the U.S. provided economic _ assistance.

The purpose of this extraordinary program of economic cooperation between Portugal and the United States was to show clear, strong, and very tangible support for the consolidation of democratic institutions and processes in the aftermath of the April 25, 1974 revolution and to provide economic and social benefits to the Portuguese population, particularly those in the rural and less developed areas of the country. The U.S. also encouraged maximum Western European assistance, and desired to coordinate its program to the maximum extent with those of other Western donors.

The program included the following elements:

- balance of payments loans related to stabilization programs agreed upon with the International Monetary Fund; - cash grants related to use of the air base at Lajes, in the Azores;

- food assistance through U.S. Public Law 480; - grants for emergency assistance such as the transportation and relief of refugees from the former African colonies - and the reconstruction after the earthquake in the Azores in 1980;

- concessional loans for capital construction projects; - investement guaranties for low-income housing; and - grant assistance for technical consultants and training in a variety of fields.(the major share of these funds $12,750,000 were provided through the Technical Consultants and Training Project. In addition, Portuguese activities from approximately $3 million of additional funds administered on a world-wide basis by A.I.D. in Washington). Concessional loans were made at an interest rate of 5% for 25 years with a 5 year grace period. Food assistance under PL 480 was provided on repayment terms of 4.5% over a period of 18 years with a 2 year grace period.

The program operated with maximum flexibility to respond to changing Portuguese Government priorities and initiatives. As the program increasing concentration was placed on the Portuguese Government priorities of private sector development, low-income housing, agricultural production and improved management in both the public and private sectors. Particularly noteworthy was the catch-all grant project entitled Technical Consultants and Training (A. I .D. PROJECT 150-0001) under which virtually all of the 600 U.S. consultants working on subprojects were financed as well as the approximately 900 Portuguese participants who were trained in the U.S.. Activities took place throughout continental Portugal and in the Azores and Madeira.

The program was administered by a minimum staff which at its maximum point consisted of 7 U.S. nationals and 17 Portuguese nationals.

1. Balance of Payments Support

2. Refugee Assistance

3. Cash Grants - Azores Base

4. Azores Reconstruction Grant

5. Housing Guarantees .- 6. Capital Project Loans

7. Technical Consultant and Training Grants ( including Agricultural production)

8. Food Assistance (PL 480)

TOTAL The following is a summary of U.S. economic assistance to Portugal by activity. Each individual activity is described in detail in the pages that follow: m - Lfuumwu $3OO,OOO,000 L B. Balance of Payments Assistance and Cash Grants $421,212, 105 G

C. Food Assistance $206,928,781 L

D. Angola airlift and Refugee Assistance $ 43,500,000 G

E. Major Capital Projects and Long-term Institution N/ A N/A - Building Projects

1. Housing for Low-Income Families

2. Secondary School Construction $ 24,417,343 L

3. Basic Sanitation for Rural areas

4. Construction of Rural Health Centers $ 15,748,715 L

$ 5,143,425 L 5. Development and Support of Regional Universities $ 4,192,978 G

6. Agricultural Production Program $ 10,531,203 G

7. Azores Rehabilitation and Reconstruction $ 10,750,000 G

8. Feasibility Studies and Consulting Services Loan $ 576,242 L F. Other Technical Cooperation and Training

Agricultural Planning and Development $ 175,313 G

(Agricultural Production Program - ($ 533,349) (G) described under D.6 above)

Control of Forest Fires and Hanagenent of $ 149,184 G National Parks

(Assistance to Rural Universities - ($ 3,311,270) (G) described under D.5 above) Administration of Agricultural Credit $ 26,448 G Consultant Services and Training in $ 77,125 G Public Health

Hospital Administration and Health Hanagement Information System

National Health Survey

Emergency Hedical Services $ 145,968 G

(Technical Assistance in Basic Sanitation ($ 44,145) (G) - described under D.3 above)

Assistance to Education Planning $ 58,648 G

Vocational and Continuing Adult Education $ 138,847 G

Business Administration Training - $ 817,772 G New University of Lisbon

Management Training - IPE / CIFAG $ 411,138 G

Management Consultations - IESC $ 50,000 G

16. Training and Consultant Services - $ 234,271 G Hinistry of Finance, Plan and Bank of Portugal

Development of Regional Coordinating Commissions

18. Assistance in Administrative Reform $ 141,552 G

19. Development of National Statistics $ 12,351 G Institute Development of Science and Technology Coordinating Agency and Program (JNICT) Industrial and Trade Promotion Assistance in Alternative Energy Sources Environmental Planning at Sines

Development of National Civil Engineering Laboratory (LNEC) - Water Resources (Consultants and Training in Low-Income 894,896) (G) Housing - included in D.1 above) Training in Transportation and Communicat ion Training Assistance to the Ministry of Labor Assistance to Labor Unions Development of Cooperatives Assistance to the Investment Bank of Portugal Assistance to the Foreign Investment Institute Privatization and Development of Capital Markets Development of Luso-American Development Foundation (LADF) Assistance to Women's Commission (Development of the University of the 571,571) (G) Azores - included in D.5 above) Agriculture and Fisheries Studies in the Azores Assistance in Dairy, Livestock, and Forage Development in the Azores Health Studies in the Azores Assistance in Regional Planning in the Azores (GREPA) Vocational Training in the Azores

Assistance in Dairy Industry in the Azores

Assistance in Transportation and Communication in the Azores

Investment Promotion in the Azores

Geothermal Energy Development in the Azores

Housing Reconstruction in the Azores

Jojoba and Tropical Fruit Development in Madeira

Control of Forest Fires in Madeira

Assistance in Public Adninistration and Finance in Madeira

Water Resource Management in Madeira

Language Training and Program Support

Research Grants

Trilateral Cooperation in Portuguese Speaking Africa

Assistance to School of Dentistry

Managing Energy - Efficient Cities A.I.D. Project : 150-K-013 3/11/78 $300 million-loan A.I.D. Projects: 150-K-602-615 1979-1989 $421,212,000-grant

In 1978, following Portugal's successful negotiations with the International Monetary Fund for a second "stand-by" Agreement, the U.S. joined other western countries and Japan in providing large scale balance of payments support to Portugal. The U.S., by far the largest donor, contributed $300 million.

Cash Transfer Grants from the U.S. from 1979 to 1989 totalling $421,212,000 enabled the Portuguese Government to support the Economic and Social Development Program of the Azores and to endow the Luso-American Development Foundation.

1 L. CE OF PAYMENTS LOAN March 1978 $300,000, 000

In 1977, Portugal's large balance of payments deficit (at $1.2 billion) was the most serious economic problem facing the country with no prospect for improvement in 1978. After three years of economic, political and social dislocation related to the revolution of April, 1974, Portugal agreed on an economic reform program with the International Monetary Fund.

GNP, after growing 3.9% in 1974 had fallen 4-52 in 1975. Sectors heavily dependent on exports (textiles, shoes, wine, tomato processing, fish canning and shipbuilding repair) suffered heavily. Accelerated inflation, depreciation of the Escudo, unemployment (at 15%) and rapid population growth (due to the influx of refugees from the former African colonies) resulted in a precipitous decline in personal living standards. The economic stabilization program entered into between Portugal and the IMF included the following austerity measures designed to curb consumption and imports and to stimulate investment and exports.

- limiting wage increases to 15%;

- raising government budgetary expenditures by 10-20%;

- raising interest rates by an average of 4%;

_ - measures to encourage remittances from emigrants; - devaluation of the escudo by 15% and adoption of a floating exchange rate;

- increasing fuel prices by 20%;

- establisment of a National Investment Fund.

To support such an effort, the U.S. took a vigorous lead in mobilizing international assistance to help underwrite the austerity program, without which agreement with the IMP would not have been possible. The $300 million U.S. contribution was a major part of a $750 million total support provided by the western democracies. The remaining $450 million was provided by Switzerland, Federal Republic of Germany, Belgium, Netherlands, United Kingdom, Norway, Ireland, France, Italy, Sweden, Austria, Canada, Venezuela, and Japan. All of the participating countries coordinated the timing and conditions of their respective loans which were disbursed over an 18 month period.

The $300 million U.S. loan was made under the following conditions: a maturity period of 10 years including a grace period of three years and interest at the cost of ten-year money to the U.S. Treasury (approximately 7.5%). Disbursements took place in two tranches and were made conditional upon continued cooperation by Portugal with the IMF in its economic stabilization program. A.1 .D. Project A.I.D. Project A.I.D. Project A.1 .D. Project A.I.D. Project A.I.D. Project A.I.D. Project A.I.D. Project - A.I.D. Project A.I.D. Project A.I.D. Project A.I.D. Project A.I.D. Project

On June, 18, 1979 Diplomatic Notes were signed in Lisbon by Cyrus R. Vance, U.S. Secretary of State and Dr. Freitas Cruz, Portuguese Foreign Minister extending the U.S. rights to use of the Lajes Base in the Azores. The extension covered a period of nine years dating from February, 1974 through February, 1983.

It was also agreed at that time that the U.S. would provide economic and military assistance to Portugal totalling $140 million. The economic assistance portion is referred to in the folowing manner:

"Further, the United States agrees to provide to the Government of Portugal, subject to congressional authorization and appropriation, non-military assistance on a grant basis totalling $80 million during the years 1979/80, 1980/81, 1981/82 and 1982/83. In this connection, the Government of the United States understands that it is _the intention of the Government of Portugal that, in accordance with the provisions of the Portuguese constitution and Portuguese legislation, the non- military assistance will be used for economic and social development purposes in the Azores"

It was further agreed with the Portuguese Government that the $80 million grant for economic and social development would be disbursed in four equal installments of $20 million in 1980 through 1983. Initially the U.S. provided a cash grant into a U.S. account of the Government of Portugal. The Portuguese Government then deposited an equivalent amount in escudos into an Azorean Development Fund for use by the Regional Government of the Azores for programs of economic and social development.

The funds went directly into the investment and operating budget of the Azores, and thus specific projects cannot be attributed to the U.S. funds. - Nevertheless, such funding was a major factor in the following investments:

- port, airport, and telecommunications construction, expansion, and modernization;

- education, health and housing programs; - general budgetary support to the Regional Government of the Azores.

In 1984 and subsequent years the agreement was extended and modified in several ways:

- provision was made for the establisment of a Luso- American Development Foundation by the Government of Portugal and contributions of funds were made to the Foundation. (These totalled $110 million).

- contribution of $2 million was applied to the Technical Consultations and Training Project of A. I .D. in Portugal.

- removal of the direct linkage between the amount of the cash grant and the magnitude of Portuguese Government support to social and economic development in the Azores.

In 1989, the conditions of the grant were subsequently modified to provide for the following uses of part of the United States dollars: 1) financing the importation of raw materials and capital goods or services and essential consumer goods from the United States; 2) servicing of external debt owed to the United States Government; 3) servicing of debt owed to multilateral development banks or to the International Monetary Fund and 4) other purposes or uses as agreed in writing between the parties. The Cash Transfer Grants over the years were instrumental in at least three aspects:

- They contributed essential foreign exchange for the import of goods and services into Portugal.

- They greatly contributed to the pace of investment for economic and social development in the Azores.

- They helped establish and initiate operations of the Luso- American Development Foundation

TITLE I

3/18/76 - loan 3/ 18/76 amendment - loan 3/ 18/76 amendment - loan 3/ 18/76 amendment - loan 3/ 18/76 amendment - loan

Under U.S. Public Law 480, Title I, programs of concessional food sales were made available to Portugal in every year between 1976 and 1980. Since the importation of food and agricultural products into Portugal during those years constituted a major drain on the limited foreign exchange resources of the country, the availability of food imports on concessional terms was of major benefit to the Portuguese economy.

Products imported were rice, wheat and wheat flour, corn, feedgrains, sorghum, tobacco, and upland cotton. Terms of repayment were at 4.5% to 5% interest over 15 to 18 years with a 2-3 year grace period.

Local currency proceeds of sales were programmed within the Portuguese budget for the mutually agreed upon programs related to agricultural production and rural development. Grant - 1975 $ 7,500,000 A.1 .D. Project : 150 - 007 2/23/76 $15,000,000 5/25/76 $20,000,000 9/15/77 $ 1,000,000

In response to urgent requests by the Portuguese Government, the United States financed the transport in October and November 1975 of approximately 36,000 refugees from Angola to Portugal at a cost of $7.5 million.

In 1976, the United States Congress authorized $35 million in disaster relief grant assistance for refugee emergency relief and resettlement. Funds were used to reimburse the Portuguese Government for expenses incurred in providing clothing and other basic necessities, medical services, education allowances, and emergency fanily assistance to returnees from Portugal's former colonies.

Of the $35 million provided to the Portuguese Government, $1.5 million was set aside to support relief activities being conducted by private voluntary relief agencies. These funds were subsequently allocated to Caritas Portuguesa (through the U.S. Catholic Relief Services) and the Alianca Nacional das ACM's de Portugal, an affiliate of the Y.M.C.A.

In September 1977, with the agreement of the Government of Portugal, A. I .D. allocated an additional $1 million through the U.S. Catholic Relief Services to Caritas Portuguesa for the continuation of its refugee relief programs.

1. $7,500,000 grant

On August 27, 1975, the then Portuguese President Francisco da Costa Gornes sent to President Ford an urgent letter which in part read as follows: "As for Angola, the present situation there is causing the Portuguese Government the greatest of concern. Indeed, the differences among the liberation movements have brought about an intense political confrontation accompanied by real armed conflict which has spread over the entire national territory."

"The problem has also become especially acute in the social sector. As a social and humanitarian gesture for the purpose of protecting the public, a program of assistance has been put into effect in order to facilitate and speed up the evacuation of all those who indicate the desire to leave Angola for Portugal."

"It is under these circumstances, Hr. President, that Portugal, facing the great task of mobilizing the necessary resources, has asked friendly nations to lend their support to this purely humanitarian task."

"The assistance of the United States of America, as I have already had occasion to mention to U.S. Ambassador Frank C. Carlucci, would be particularly useful, especially in evacuating Portuguese citizens from Angola to Lisbon, a task which requires material means which we do not have at the present time."

Thus began U.S. participation in an around-the-clock airlift of many of the 750,000 refugees which fled Angola to Portugal. Two planes were chartered by the U.S. and took their place along with others provided by Portugal, and various European countries. Virtually the entire international fleet of TAP, the national airline of Portugal, was pressed into service. At the height of the airlift flights departed from Luanda every hour arriving full in Lisbon or Porto, depositing the refugees into the care of Portuguese Red Cross, governmental and private entities and then returning to Luanda for the next load of refugees.

On the ground in Luanda Portuguese military forces protected access to the airport and security in the vicinity of the airport to permit the evacuation of the population. Processing of refugees took place prior to departure with special attention given to those in particular need-small children, aged, disabled, etc. Once in Lisbon, (or Porto where about one quarter of flights were directed), refugees were immediately presented necessary clothing, given medical attention, and taken to temporary lodging usually in hotels, pensions, private residences, military and religious facilities etc. pressed into service throughout the country for the purpose.

The U.S. in addition to providing planes to transport some 36,000 refugees contributed the services of technical specialists to assist under Portuguese direction in emergency airport and air traffic operations. This continued over the better part of the month.

For those U.S. personnel participating in this multi- national effort at the time under Portuguese leadership, the airlift carried out with efficency and virtually no loss of life was a herculean task accomplished by a country in the midst of upheaval and with very scarce resources. It was one of Portugal's finest hours.

The U.S. over the following year 1975 - 1976 made grants totalling $35 million to help resettle the close to 1 million refugees from Portuguese Africa. Financing was provided for the following:

- immediate personal requirements such as clothing, blankets, tents, bedding, medical supplies, kitchen utensils;

- simple hand tools for purposes such as farming, construction and repair of equipment and dwellings; - basic home furnishings; - cash allowances for essential medical services, educational needs, and direct and emergency family assistance; - technical assistance as requested by the Portuguese Government related to the management of the program;

- administrative expenses of voluntary, charitable and community service agencies and international service agencies operating within Portugal related to the refugee program.

Later in the program, funds were used to establish and carry out a small-loan program to stimulate employment and to establish productive enterprises and to facilitate the expansion, renovat ion and construction of houses. Close to 100,000 such small loans were made to refugee families for re-starting their lives in Portugal.

In addition to direct support through Portuguese Government entities, the U.S. granted to Catholic Relief Services of the U.S., in collaboration with Caritas Portuguesa, a sum of $1 million to provide the most urgent needs, both human and material, of the neediest 45,000 of the refugees. These included:

- warm clothing, blankets, bedding, beds, basic furniture, kitchen and dining utensils;

- hand tools and minor equipment, seeds, fertilizers, etc;

- special health and welfare needs for aged, blind, mentally retarded, etc;

- materials for self-help home construction and expansion.

Likewise, $750,000 of the funds was made available to the Portuguese Association of YM/YWCA's to do the following:

- organize services for children with special physical and mental disabilities; -provide emergency food, lodging and medical assistance to the poorest of the refugee families;

- remodel and adapt existing facilities to house elderly refugees;

- administrative costs;

The entire refugee effort was led and carried out by the Portuguese authorities and entities both public and

- private and coordinated by the office of the High Commissioner for Refugees. The U.S. was by far the major foreign contributor. The rapid disbursement of grant funds to reimburse Portuguese expenditures contributed greatly to ease the Portuguese balance of payments at a critical time. In addition, it permitted timely and effective assistance to about 750,000 refugees. Most importantly, the U.S. was directly responsible for the establishment of the small-loan program to stimulate employment of the refugees which within two years had reached over 85X, a seeming unreachable goal at the height of the Angola evacuation.

This program must certainly count as one of the most successful joint efforts by Portugal and the U.S. in recent times . A.I.D. Project : 150-HG-001 11/03/75 A.I.D. Project : 150-HG-002 9/30/77 A.I.D. Project : 150- 2-005 6/30/75 A.1 .D. Project : 150- K-008 3/04/77 A.I.D. Project : 150-HG-003 2/13/85 A.I.D. Project : 150-0001 Continuing 1989 Project 9/89 1980 Project 9/89

U.S. assistance for housing for low-income families in Portugal began in 1975 and continues through 1989. Assistance has been provided through direct loans ($23.25 million), Housing Guarantees ($170 million) and grant financing for technical consultants and training ($1.5 million). The Housing Guaranty Program is one in which A.I.D. guaranties long-tera loans raised in the U.S. capital markets to finance low-income housing and urban development projects.

.-Through 1988, U.S. financing had resulted in homes for more than 15,000 Portuguese families in all parts of the country. In addition another 30,000 families are expected to benefit from already signed programs presently being implemented.

Consultant services have been provided throughout the program as well as training of some 50 Portuguese specialists in all aspects of housing and urban development. Portugal after the revolution of 1974 was faced with a severe deficit of housing estimated at 500,000 units. This was the result of years of neglect, greatly increased rural to urban migration, and returning Portuguese from the former African colonies. Surveys revealed that of existing housing at the time, 60% was without plumbing and 10% was overcrowded to the extent of 3 or more persons per room.

The principal national agency to carry out housing policy and programs was the Fundo de Fomento de Habita~iio (FFH) which constructed, rented and managed low-income housing. Units were generally of high quality and high cost ($16,000 at the time) requiring a large element of budgetary subsidy.

U.S. assistance at that time had three objectives: to rapidly construct additional units to meet the housing need, to stimulate employment and construction activity at a time of social and economic upheaval, and to conduct dialogue with Portuguese housing authorities to put the program on a sounder financial and economic basis. Under the Housing Guaranty program $40 million was made available from the Federal Home Loan Bank of New York, and $23.25 million was provided in direct A.I.D. loans. Terms of the former were 30 years at an interest rate of about 8% with a 10 year grace period. The direct A.I.D. loans were provided on terms of 25 years at 5% interest with a 5 years grace period.

Under this program a total of about 7,000 units were built in more than 40 locations throughout the country including the Autonomous Regions of the Azores and Madeira.

financing involved four types of projects : - standard rental apartments comprising 2 or 3 bedroom units constructed by the FFH through private contract and rented to low-income families at subsidized rates;

- co-participation projects with municipalities and local governments;

- cooperative projects in which credit was provided directly to cooperatives for construction of individually owned units; - aided self-help under which materials and credit were made available to slum dwellers for self -help shelter construction.

The vast majority of U.S. funds were used for the first of these types of activities.

Disbursements of funds were made during the course of construction on the basis of work actually completed. U.S. - financing was 85% of the agreed-upon costs of completed units including the cost of related urbanization (water, sewage, etc.).

During this period, short-term U.S. consultants visited Portugal related to building institutionnal capacity to finance and manage such programs. In addition, some 25 Portuguese specialists were sent to the U.S. for training and observation visits in aspects of housing program design and implementation.

In early 1985, the U .S. provided another $75 million Housing Guaranty as well as just over $800,000 in grant funds to finance technical consultations and training related to the housing program. The U.S., along with the Portuguese Government recognized the need for a modification of housing policy to put the program on a sounder economic foundation.

It was clear to the Portuguese Government that the FFH could not continue as the principal builder, owner, and manager of low-income housing. The FFH was abolished and another institution, the Instituto Nacional de Habita~Bo(INH) was established to a) channel financing to private developers, housing cooperatives, and municipal agencies, b) manage available subsidies as an incentive for local developers to produce low-income housing, and c) provide a base for policy dialogue and technical assistance to local developers and municipalities to promote innovative housing programs.

The objective of the U.S. program was to support these policy initiatives, especially the channelling of financing to private developers, and reduce the unit costs of housing construction. By the end of 1989, an additional 5,220 housing units were financed by the U.S. under this phase of the program.

As importantly, the average unit financed by the INH with U.S. funds was being sold at about 25% less (in real terms adjusted for inflation) than units built previously under social housing programs.

All U.S. financing was for homes built for sale rather than - rental. Furthermore, reflows from the initial U.S. financing would provide funds for additional low-income housing far into the future.

In addition to funds for housing construction, $800,000 in grant funds financed the consultant services and training in the following areas:

- housing finance including mortgage and title processing and secondary mortgage marketing;

- simplification of housing legislation and revision and updating of building codes; - continued technical review and incentives to encourage innovative design and reduce unit costs; - assessment of market supply and demand for low cost housing; - expanding the "product line" of INH beyond apartment units to include renovation of existing housing stock, infrastructure improvement in clandestine neighborhoods, self-help cooperative housing, etc;

- rehabilitation and sale of public and privately owned rental stock; - analysis and design of new housing programs for development after 1989.

Early in 1989, the U.S. agreed to initiate a new $55 million program to be developed in the 1989-1991 period. This new program will continue to support policies and activities that increase and open new windows of credit to local developers and help promote investment in low-income housing, land, infrastructure, community facilities, and

home and neighborhood improvements. An additional $600,000 in grant funds will continue the exchange of housing consultants and trainees between the United States and Portugal through 1992.

Again, reflows from the Housing Guaranty financing will continue to fund low-income housing in Portugal long after

- U.S. participation has terminated.

I

A.1 .D. Project : 150-0004 loan 8/13/76 A.I.D. Project : 150-0018 loan 9/30/77

The United States financed the construction of 47 preparatory and secondary schools serving an estimated 30,000 students principally in rural areas of the country.

In 1964, obligatory education was increased in Portugal from the four years of the primary cycle to six years of both the primary and preparatory levels. This was further increased to eight years, but facilities were severely lacking to make this requirement operable. While almost 100% of the primary school-age children were in school in 1975 the figure dropped to less then 64% of the children aged 11 to 15. Secondary education had been largely private, and the drop- out after the primary school was universally recognized as a key factor in unemployability and lack of social mobility. The already acute shortage of secondary schools was accentuated by the arrival of approximately one million refugees (of which approximately half were under the age of 16) from the former African colonies. Under the agreed-upon program, the Portuguese Government increased expenditure in education from 11%of budget in 1970 to 17% in 1975 with a further increase of 34% in 1976 over the previous year's expenditures. The Ministry of Education estimated the cost of each school to be constructed, and the U .S. agreed to finance 75% of such an established cost. Disbursements were made during the course of construction on the basis of work actualy accomplished. Schools were selected on the basis of need, and an attempt was made to achieve a wide distribution throughout the

- country. Construction was carried out totally by the appropriate agencies of the Portuguese Government under normal procedures for design, contracting, payment, etc.

The terms of the two loans were as follows: repayment over a period of 25 years at an interest rate of five percent per annum after a grace period of five years.

U.S. funds were applied (on a 75% of cost basis) to the following schools. (The U.S. Ambassador participated in the dedication of several of the schools.)

er Schonl C- Loan_APreement I (SlQ.47 mll.lron)

Lages (Pico) S. Roque (Pico)

Ourique Serpa

~ctof Rru

Vieira do Minho

t of Earo

Silves . . ~ctnf Leu

Porto de H6s

Azambu j a Lisbon, Olivais Oeiras, Damaia Oeiras, Hiraf lores

C6mara de Lobos, Estreito

Le~ada Palmeira Penafiel ( Second phase ) Hatosinhos, Senhora da Hora

Abrantes, Tramagal Alpiar~a GolegQ Pernes

Hoita, Baixa da Banheira Palmeira, Pinhal Novo

t of Vila Real

Alij6 Hontalegre

Resende Nordeste (S. Higuel) Ribeira Grande (S. Higuel) Velas (S. Jorge) Calheta (S. Jorge) Santa Cruz (Flores)

Ilhavo, Gafanha da Nazar6

Vimioso

Coirnbra

Silves, S. Bartolomeu de Messines (Preparatory and extension)

Oeiras, Damaia (Secondary and extention) Azambu j a Vila Franca de Xira

Vila Nova de Gaia, Valadares Hatosinhos, Senhora da Hora (Extension) Le~ada Palmeira (Extension) Cartaxo Ferreira do Z6zere

t nf Sew

Hoita, Baixa da Banheira (Extension)

t of Vim

Hoimenta da Beira

A.I.D. Project : 150-0005 8/13/76 - Loan ($6,891,048) A.I.D. Project : 150-0010 9/20/77 - Loan ($10,756,419) A.I.D. Project : 150-0001 - Grant ($ 44,145)

The U.S. financed the construction of 43 water supply systems and 28 sewage systems serving an estimated population of 300,000 in rural areas throughout the country. In addition short-term consultant services and training were provided in planing and management of water supply systems.

In 1974, it was estimated that only 53% of the houses in Portugal had indoor bathrooms and running water. In the district of Bragan~afor example, only 10% of the houses were reported to have running water and sanitary installations. Similar figures for Beja and Castelo Branco were 12% and 16% respectively. There had been recent and repeat outbreaks of cholera in Porto and the Algarve. Portugal had the highest death-rate of children in Europe in part attributable to water-borne diseases. To meet the acute need, the Portuguse Government increased its budget allocation for basic sanitation to three times the level of 1973. Decentralization of planning and construction to various basic sanitation regions throughout the country was initiated. From the list of approved and designed projects, the Ministry of Public Works and A.I.D. agreed on those projects to which U.S. funds were to be applied. An estimated cost was established, and the U.S. agreed to finance 75% of such a cost with disbursements made during the course of construction as reimbursement to the Portuguese Government for work actually completed. Actual construction was carried out totally by Portuguese firms operating under the normal procedures of the Ministry for design, contracting, quality control, etc.

The terms of the two U.S. loans were as follows: repayment over a period of 25 years at an interest rate of five percent per annum after a grace period of five years.

In addition to construction activities, approximately $44,000 was made available for 4 person-months of consultant services, some equipment, and the training of 8 Portuguese specialists in the U.S.

These included :

- seminars on Basic Sanitation in the Azores;

- consultation for an Algarve Hydrogeologic Study;

- review of Porto Masterplan for basis sanitation;

- study tour of sanitary engineering in Brazil;

- equipment, films and training materials for the Laboratorio Nacional de Engenharia Civil, and for other engineering institutes in Coimbra, Lisbon, Algarve and Porto.

U.S. funds were applied (on a 75% of cost basis) to the following water and sewage systems: Angra do Heroismo (Terceira)-Water

Beja, Penedo Gordo - Sewerage Ferreira do Alentejo, Odivelas - Water Odemira, Sta. Clara-a-Velha - Water and Sewerage Odemira, SiZo Teot6nio - Water

Vila Verde - Sewerage Vieira do Moinho - Sewerage

Castelo Branco, Caf6de - Water and Sewerage Castelo Branco, Juncal do Campo - Water and Sewerage Castelo Branco, Freixial do Campo - Water and Sewerage Castelo Branco, Louri~aldo Campo - Water and Sewerage Castelo Branco, Lardosa - Water and Sewerage Castelo Branco, Belmonte - Sewerage Castelo Branco, Caria - Sewerage

Oliveira do Hospital - Water

t of 2vm

Borba, Orada - Water and Sewerage Montenor-o-Novo, Cabrela - Sewerage

ict of G-

Trancoso, Vila Franca das Naves - Water and Sewage

t of Portaleera

Sousel, Santo Amaro - Water and Sewerage Ferreira do ZGzere - Sewerage Golegii - Sewerage

t 0-

Palmela, Pinhal Novo (2nd phase) - Water

Alij6, Sanfins do Douro - Water and Sewerage Alij6, Pinhiio - Sewerage

Viseu, Ranhados - Water and Sewerage Sta. Conba DiXo, Pinheiro d'Azere, Uvoa - Water

t I1 (U.76 million)

Azores Horta (Faial), Canada das Doutras - Water Nordeste (S. Higuel), Algarvia - Water Lonbos da PovoacSo (S. Higuel) - (1st and 2nd phase) - Water

Castelo de Paiva, Pedorido - Water

ict nf Be>_a

Odemira, S. Teot6nio - Sewerage Serpa, Pias - Water

ct of Bru

Cabeceiras de Basto, Arco de Bahlhe - Water Mogadouro, Ventozelo - Water and Sewerage Vimioso, Ca~arelhos- Water and Sewerage

Alvaiazere, Covaes - Water Figueir6 dos Vinhos, Almofala - Water

Mafra, Cheleiros - Water Vila Franca de Xira, Cachoeiras - Sewerage

Funchal, Sector Central - Water Funchal, Cidriio - Water Coll. Gallery Santana, Ilha, FajS Alta e Tranquada - Water Santana, Corujeira, Igreja - Water

Elvas and Campo Maior - Water

ct nf P- Gondomar, S. Pedro da Cova - Water

rct of Setubal

..- Palmela, Pinhal Novo - Sewerage

Ponte da Barca - Sewerage

lct nf Vlla Real Alij6, Alij6 and Granja - Sewerage Alij6, Favaios - Sewerage Sta. Comba DEo, Fontainhas e Coval - Water

A.I.D. Project : 150-0011 9/30/77

- 1977 - 1981

Under this project the U.S. financed the construction of 14 rural health centers serving an estimated population of 320,000. It also financed the establishement and construction of a nursing school in the Azores at a cost of approximately $800,000.

The project supported the Government of Portugal's reform of the primary health delivery system to achieve a more equitable geographic distribution of facilities and resources and to improve the quality of primary health care services, both curative and preventive, both in the rural areas and in poor urban centers. In the Azores (because of the emigration of skilled people) the critical need was for staffing of existing fabilities, and there was an acute shortage of nurses trained in primary care and preventive services.

-- The health centers, constructed and equipped with U.S. funds provided the first level care maternal and child care, imunizations, family planning, and basic curative services including referral to district and regional hospitals and specialized services. A major objective was to reduce pressure on the overcrowded urban hospitals by providing primary care facilities more accessible to the rural population.

Three types of facilities were constructed: - C-3 facilities with outpatient clinical facilities, (vaccinations, maternal health, children's services, basic dental profilaxis, etc.)

- C-2 facilities in the larger communities containing clinical facilities for a wider range of medical specialities including radiology, electrocardiography, etc. and 30 - 35 beds for in-patient care. - C-1 facilities with even expanded diagnostic facilities and space for administration and management.

The nursing school at Ponta Delgada in the Azores was constructed and equipped to handle a student capacity of approximatly 150 nurses.

Under the program an estimated cost was arrived at by the Portuguese Government prior to construction, and the U.S. agreed to reimburse 75% of such an amount. Disbursements were made during the course of construction on the basis of work actually completed. Selection of sites, and the contracting and supervision of construction were carried out completely by the Portuguese Government following their normal procedures for such activities.

Funding for the project was through a loan, repayment of which was to be made over a period of 25 years at an interest rate of 5% per year with a grace period of 5 years.

The following Health Centers were constructed and equipped under the project:

Braga Terras do Bouro

Guarda Meda

Viseu Silo Joiio da Pesqueira

Viseu Nelas

Coimbra tliranda do Corvo

Coimbra Vila Nova de Poiares 7. Beja Ferreira do Alentejo

8. Viana do Castelo Helga~o

9. Aveiro Vale de Cambra

10. Braga Celourico de Basto

11. Viana do Castelo Arcos de Valdevez

12. Beja Hdrtola 13. Setibal Grdndola

14. Lisbon Oeiras

The School of Nursing at Ponta Delgada in the Azores was also constructed and equipped with U.S. funds.

A.I.D. Project : 150-0012 9/20/77 loan $5,143,526 A. I .D. Project : 150-0001 2/28/75 grant $4,192,978

Under this program, the United States was instrumental in the early support of four regional polytechnical and university institutes in the Azores, in Vila Real, in Bvora, and in Covilhii and thus in expanding the base of Portuguese higher education. Initially, support was provided for construction of expanded facilities and equipment for - laboratories, experimental farms, classrons, etc. Long-term technical assistance through the University of Rhode Island (to the Azores) and through Purdue University (to Vila Real, Zvora, and Covilhs) greatly expanded and improved the quality of instruction and research permitting the transformation of all the schools into full-fledged Portuguese Universities. The U.S., through loan, financed $5.1 million in the expansion of facilities and in the equipping of laboratories experimental farms and other facilities at the schools. Through grant financing a total of about 300 person-months of U.S. consultant services were provided, and about 140 Portuguese were trained in the United States in long and short-term programs in agriculture, fisheries, regional economic development, industry, etc. Through these institutions and this project, the U.S. played a major role in expanding educational opportunity in Portugal.

The four regional universities under this program had been established by the Portuguese Government in 1973 as polytechnical institutes and university institutes to serve as centers for development in their respective regions. The four were: - - University Institute of the Azores (later University of the Azores) serving the Autonomous Region of the Azores;

- University Institute of Evora (later University of Zvora) serving the Alentejo and the south of Portugal;

- Polytechnical Institute of Covilhg (later the University of the Beira Interior) serving the central interior of the country; and

- Polytechnical Institute of Vila Real ( later the University of Tras-0s-Montes and Alto Douro) serving the north east region of the country.

The regional development focus of these institutions represented a radical departure for Portugal's traditional system of higher education dominated by the traditional universities of Coimbra, Lisbon and Porto. The four institutions were to foster:

- applied research appropriate to regional needs;

- consultant services for regional planning authorities;

- post-secondary general and technical education, including the on-site training of extensionists; -- - institutional support for state extension services, including health, vocational education, and agricultural extension services;

- reproduction and dissemination of materials containing information of use or interest to the rural populations, either independently or in conjuction with state extension services;

- primary and secondary teacher training; - formal and non-formal adult education tailored to the needs of the region. The U.S. program was initiated in 1977 with the signature of a loan for $6 million (of which $5,143,526 was disbursed) for the construction, equipping and provision of materials for classroms, laboratories, experimental farm facilities, extension facilities, etc. In addition technical assistance at a cost of $881,707 was provided primarily through a contract with the University of Rhode Island to provide long-term institutional support to the University of the Azores, principally in fisheries and agriculture. The Rectors and senior faculty of the four universities were sent to the U.S. for observation visits, and short-term consultants and training were provided. In 1980, a long-term contract was signed with Purdue University under which assistance was provided to the three mainland schools over the next seven years terminating in December 1987 at a cost of $2,822,425. This was supplemented by $488,845 in grant funds for technical assistance to the same three universities which was of high priority to the schools but outside of the parameters of the contrract with Purdue. Finally, $1.5 million equivalent in escudo funds generated under the U.S. PL 480 program were made available to the universities for in-country development costs of the institutions.

1. University of the Azores

The U.S. financed the remodelling of classroom buildings, the equipping of laboratories, and constructing and equipping of facilities at the Granja Experimental Farm. A fisheries training vessel was purchased and fitted with U.S. funds, and vehicles were provided for extension activities.

Concentrating on agriculture and fisheries, the A.I.D. contract with the University of Rhode Island provided the University of the Azores with consultant services and training from 1977 to 1983. Under this contract 2 long-term advisors were resident at the university, one in fisheries and the other in agriculture. Seventy-one person-months of short-term consultant services were provided in fisheries (33 person-months), soils and animal science(l2 person-months), food technology, rural extension, and project management. Two faculty members were trained at the Ph. D Level and three at the Haster's level under the project. Twelve short- term training programs were arranged in the U.S. for university faculty and extension personnel. Under the project, laboratories in soils, animal nutrition, and dairy technology were developed; greenhouses were built for the university farm, fisheries laboratories were developed and stock assessments carried out. Student enrollment expanded almost 10-fold during the period, and the curriculum was broadened and improved.

In addition to the direct U.S. assistance to the University of the Azores the U.S. financed several studies for the Regional Government of the Azores (particularly in agriculture and fisheries) in which the university was a contractor and beneficiary gaining valuable practical experience in regional development problems.

University of Tras-0s-Montes and Alto Douro (UTAD), University of Beira Interior (UBI) and University of Evora (U.E.).

Physical facilities and equipment as well as technical assistance under the Purdue University contract was provided as follows: a. UTAD at Vila Real

The U.S. financed remodelling of the administration building, construction of an animal husbandry building, warehouses and workshops for the experimental farm, laboratories and equipment throughout the University and equipment for the experimental farm and extension activities.

Two long-term consultants were provided by Purdue University in soils and agricultural services and a total of 98 person-months of assistance was provided in such diverse fields as hydraulics and soil erosion, pastures and forages, forestry, plant pathology, potato crop production and storage, agricultural machinery and structures, quantitative genetics, international trade, product ion of sheep, and management of the Teaching Learning Resources Center. A total of 143 person-months of training was provided to the faculty in the U.S. including 4 at the Ph. D Level and 8 at the Master's level.

Aside from overall institutional development at Vila Real, major accomplishments were the establishment of a Teaching Learning Research Center (TLRC) to support all research, extension, and teaching programs of the school. The Soils and Plant Analyses Laboratory developed under the project increased testing capacity from 200 to over 80,000 samples per year. Facu 1t y upgrading and curriculum development made it possible to offer graduate level courses for the first time in 1988. Extension programs were created and expanded, teaching programs in agricultural engineering were established, and applied research was initiated in farm mechanization, tillage and harvesting activities, etc.

University of evora

The U.S. financed the expansion of the main administration building of the university, the construction of an agro-meteorological station and conference service center, and the remodelling of classrooms and equipping of laboratories.

With the help of Purdue University 4 staff members were trained at the M.S. levels and about 30 other faculty received short-term professional training in the U.S.. Approximately 56 person-months of consultant services were provided in such fields as land use planning, pastures and forages, horticulture, agricultural economics, farm management, and soils testing.

Under the project the Soils Testing Laboratory was established and provided major support to the region's farmers; a new Department of Extension was developed and the Animal Sciences Department was considerably upgraded. Most importantly, University of evora involvement in the whole range of development problems of the Alentejo was dramatically enhanced. c. University of the Beira Interior (UBI) at Covilhz

The U.S. financed reconstruction of the main administration building as well as classrooms and textiles laboratories.

Through both Purdue and Clemson Universities 85 person-months of technical assistance was provided in all aspects of textile production as well as appraisal of investment projects, pulp and paper engineering, extension management, economics, and accounting information systems. Nine faculty members were trained in the U.S. at the M.S. levels and one at the Ph. D. level.

At the center of an industrial region, principally textiles, the University greatly expanded its extension activities among industrial enterprises in the region, through workshops, seminars, conferences, and direct extension activities. A major accomplishment was the establishment of a Teaching Learning Resource Center, as well as the upgrading of teaching programs throughout the school, and the development of applied research programs. d. Teaching Learning Resources Center (TLRC) and other activities

Under the project TLRC's were established at each of the three universities in mainland Portugal and have since become major sources of information collection and dissemination related to the entire range of development activities in their respective regions. Thus they have become invaluable not only for university faculty and students but for industries, business, agriculturalists, government and private agencies and international institutions involved in the regions.

At all of the schools English language training programs were greatly expanded, and equipment and materials provided for such training. Likewise, workshops, seminars, and conferences at each of the schools greatly increased linkages between the universities and the communities and regions which they were designed to serve.

A.I.D. Project : 150-0023 9/16/89 grant A.I.D. Project : 150-0001 grant

SUMMARY

The U . S . , beginning in September, 1980 provided assistance principally through the U.S. Department of Agriculture to the Portuguese Ministry of Agriculture and Fisheries in its so-called PROCALFER program. This program was aimed at correcting acid soils, principally in the north of the country, improving the use of fertilizers, increasing forage production, and improving research and extension activities in related areas.

Under the program 2-3 full-time resident project managers were provided through the U.S. Department of Agriculture. More than 30 Portuguese were trained in the U.S. at either the Master's or Ph. D. levels. Over 260 person-months of consultant services were provided under the various sub- activities. The U.S. financed laboratory, research and - extension equipment and materials as well as vehicles. Approximately 800 Portuguese participated in seminars, short-courses and workshops organized under the project. Escudos generated under the PL 480 program were used by the Portuguese Government as a principal source of financing of non-foreign exchange costs.

The project was divided into twelve sub-activities coordinated on the U.S. side by two long-term resident advisers from the U.S. Department of Agricultural and by a Portuguese Coordinating Group within the Ministry of Agricultural and Fisheries. Specific sub-activities were as follows: - Limestone Production, Transportation and Distribution: improved the capability of PROCALFER to increase application of limestone seven-fold over the life of the project. Fourteen Portuguese Cooperative Managers were trained in the U.S. and two short-courses were held in Portugal for cooperative managers. About 33 person/month of specialized consultant services were financed. As a result of this project, most of the farms in the northern part of the country now have excess to limestone, and corn yield have correspondingly increased dramatically (at least three times former yields).

- Soils Analysis: improved the ability of soils laboratories to develop modern and efficient testing systems. Capacity for soils testing doubled between 1980 and 1988. The U.S. provided laboratory equipment, computers, vehicles, and other essential commodities. Training at the Ph.D. level was provided for one Portuguese scientist, two at the Master's level and others in short-term programs. Approximately 650 Portuguese technical personnel received training in Portugal under the program. Seven person/month of U.S. technical services were financed.

Extension: improved the technical capacity of the regional services at the local level and the overall administrative capacity of the General Directorate of Rural Extension. The project established over 1000 demonstration plots throughout Portugal; video teams were developed to continue to produce extension materials; training at the Ph. D. and Master's levels was provided to 3 individuals and approximately 300Lextension agents were trained in Portugal. About 13 person-months of specialized U.S. technical services were financed.

- Forage Production: improved the capacity for seed multiplication, processing, and certification. The result was increased use of new varieties of forages. Three short courses were held in Portugal for 74 specialists, and 1 Ph. D. and 5 Masters programs were financed in the U.S.. About 6 1/2 months of U.S. technical services were financed.

- Agricultural Credit: currency generated by the PL 480 sale of food financed a major share of agriculture credit available during the course of the project. Three Master's programs and three short courses for credit managers were held. Seven months of U.S. consultant services were also provided. - Project Implementation and Management System: the PROCALFER program involved complex administration related to cooperatives, producers, suppliers, credit agencies and other government agencies as well as most departments of the Ministry of Agriculture. Study tours in planning, budgeting, monitoring and evaluation were provided to 6 Portuguese managers. About 18 person-months of specialized U.S. consultant services were also provided.

- Animal Production: aimed at increasing productivity especially of sheep and goats. Important outputs were extension activities, technical training, basic data collection, and in-service seminars and workshops. Ten Master's Degree programs were financed in the U.S. as well as two Ph. D. programs; two study tours for 30 participants, and computer programming training. Twenty- one person-months of U.S. consultant services were financed.

- Agricultural Marketing: after the provision of 14 person- months of U.S. consultant services in this area, this activity was discontinued by the Minister of Agriculture. - Farming Products and Systems: related to investigating production and marketing decision-making at the farm level as a basis for extension and information programs. Twenty- five person-months of consulting services were provided as part of economic studies, but generated little Portuguese interest and was discontinued.

- Policy and Economic Studies: reviews of price and subsidy policies especially related to harmonization with those of the European Community. Some 23 research reports were produced which were used by Portuguese policy-makers in EC entry analyses and negotiations. Short courses and workshops involved more than 235 Portuguese professionals. Four Hasters Degree programs were financed in the U.S.. Thirty-nine months of U.S. consultant services were provided in Portugal.

- Agricultural Research: initiation of practical research programs related to soil correction, fertilization and forage and animal production. Eight person-months of consultations were provided by U.S. specialists as well as long and short-term training of Portuguese. (These latter are accounted for under other sub-activities of the project). - Training Design and Administration: preparation of a comprehensive plan to support PROCALFER's program. Sixteen person-months of consultant services were provided.

1/1980 Emergency Relief grant - A.I.D. Project : 150-0019 grant 6/27/80 150-0025 grant 6/19/81

In the first weeks after the devastating earthquake of January 1, 1980 in the Azores, the United States Government provided approximatly $750,000 of emergency assistance, including tents, blankets, mattresses, food and shelter.

In order to assist in the reconstruction effort, in June 1980 the United States agreed to reimburse the cost of pre- fabricated modules for homes, stores, and offices; and reconstruction materials such as wood, cement, and reinforcing rods. An addition $5 million was made available during 1981 for reconstruction of low-income housing on Terceira island.

- On January 1, 1980 an earthquake devastated parts of three islands in the Azores. Most severely affected was the city of Angra do Heroismo on the island of Terceira. There were 61 killed and some 600 injured. About 10,000 homes had been destroyed leaving 21,300 people homeless. Almost all of the historic monuments, public buildings, centuries old monasteries, palaces, and churches on the island of Terceira were heavily damaged or destroyed. Cost of reconstruction and repair were estimated at $360 million.

Local authorities and Portuguese and American military personnel from the nearby air base at Lajes organized relief and rescue operations and restored public utilities and communications. A. I .D. immediatly provided temporary housing for over 600 homeless, plus mattresses, blankets, tents, and other supplies for about 2,000 more.

Priority was then given to permanent reconstruction and repair of housing as well as of essential public services like hospitals, schools, sewage systems, etc.

About 5,300 homes had been totally destroyed and about 4,350 required major repair. The Regional Government of the Azores initiated the following programs:

- distribution at minimal cost basic construction materials for self-help reconstruction; - subsidized loans for reconstruction of homes and other facilities;

- grants to municipalities for repair of municipal infrastructure such as electric lines, water systems, streets, sewage systems, etc; - armed forces worker brigades to help these families in greatest need ;

- repair of public buildings and historic monuments;

A U.S. grant in June of 1980 reimbursed the Regional Government for the following expenditures:

Building Materials ...... $ 2,260,790.08 Pre-fab acquisitions ...... $1,747,221.00 .. Transportation ...... $ 722,287.18 Petroleum Products ...... $ 37,215.26 Local Government Expenses ...... $ 104,357.90 Technical Assistance Services ...... $ 22,944.95 Other Rehabilitation and Reconstruction Expenditures ...... $ 150,183.63

A second U.S. grant was made in June, 1981 to construct approximately 255 pre-fabricated houses and utility infrastructure and external works at Terra ChS site near Angra do Heroismo. In addition $800,000 financed the purchase and transport of building materials and repair of social infrastructure such as schools and health facilities. Disbursements were made during the course of construction for 90% of the agreed-upon costs of the structures.

All contracting, construction and quality control was carried out under the direction of the Regional Government of the Azores.

A.I.D. Project : 150-0002 - Loan

In February, 1975, as part of its initial assistance program to Portugal, the U.S. made available $1 million to finance needed project design and technical studies to develop projects for external financing. Such funds were intended to help accelerate actual initiation of projects not just by the U.S. but by the World Bank, the EEC and private investors. The Portuguese Government could propose specific uses of the funds in accordance with their priorities and needs. Some studies foreseen were in transportation (railroads, ports), agri'culture (irrigation systems, food processing), industry (possibly textiles), etc.

The studies actually undertaken were as follows:

a study requested by the Regional Secretary for Agriculture of the Azores related to the five year investment program proposed by the Regional Government. A contract was signed with Multinational Agribusiness Systems, Inc. of the U.S. A study of the potential environmental impact of proposed investments in Sines carried out by the U.S. firm Engineering Science, Inc.

- A study by the United States Geological Survey of technical feasibility of proposed geothermal energy development in the Azores.

Of the original loan of $1 million the Portuguese Government used $576,242 with the remainder being de-obligated and returned to the U.S. Treasury. The terms of the loan included repayment over 25 years at a rate of interest of 5% after a grace period of 5 years. The activities described above were of a major and long-term institutions-building as well as capital projects. Those listed below were for the most part shorter-term efforts, but were still related whenever possibler to broader institutions-building in Portugal.

A.I.D. Project : 150-0001

In response to requests from the Ministry of Agriculture and Fisheries for support in its effort to upgrade its technical and managerial expertise, the U.S. financed over the five year period 1977 to 1982 both the short-term training of Portuguese specialists in the U.S. and the participation of American agricultural specialists in studies, seminars workshops, or conferences as requested by the Portuguese Government .

A total of 22 Portuguese received short-term training and observation visits in the U.S. in the following fields:

- grain storage and marketing;

- identification, control, and utilization of aquatic plants; - small farmer credit policy; - rural development and agrarian reform;

- analysis of capital projects in agriculture; - managing implementation of agricultural programs;

- problems and practices in irrigation programs;

- food quality control;

- operation of agricultural extension programs; In many cases, individual programs were arranged in the U.S. for the specific needs of the Portuguese visitor. Training programs ranged from 2 weeks to 8 months. In addition, the U.S. financed 12 short-term U.S. consultants in agricultural areas. These included the following:

- a study by the U.S. firm Price-Waterhouse Inc. of the organizational structure and the planning and management systems in the Ministry of Agriculture;

- - a study of the nationalized fishing industry; - a review of the economic implications of alternative policies related to agrarian reform;

- a diagonostic study of the fishing industry;

- participation in symposia on commercial vegetable production and processing.

A total of approximate by 7 person-months of consultant services was financed .

This project is included in D.6 above.

A.I.D. Project : 150-0001 $149,184

The serious drought which began affecting Portugal in 1980 aggravated a longstanding critical situation of control of forest fires and caused massive losses of valuable forestland. To develop a more effective system for controlling forest fires A.I.D. provided approximately $130,000 over a three-year period (1982-84) to finance technical assistance in Portugal (13 person-months of U.S. instructional and advisory services at a cost of $112,000): training of Portuguese fire managers in the U.S. (three- person-months of training estimated at $7,000); and the purchase and shipment of fire attack demonstration handtools ($11,000).

The initial survey study, prepared in 1982 for the Secretary of State for Agricultural Production by a team of three U.S. Forest Service (USES) advisors, emphasized the need for development of an integrated forest fire control system, including fire prevention, development of a National Fire Academy, and training of fire staff - "Bombeiros". Subsequent cooperation activities included a survey and fire investigation course in Madeira, and various state-of-the- art courses and field operations (air and ground attack, fire investigation, rescue operations, communications) conducted by the California Department of Forestry (CDF) in cooperation with the Portuguese National Fire Service (SNB - Servi~o Nacional de Bombeiros). CDF course materials were translated and adapted to Portugal and training courses were replicated at national level.

At the request of the Director General of Forestry for the Ministry of Agriculture and Fisheries, the Director of Peneda-Gergs National Park participated in 6 weeks training in the U .S. and Canada in National Park Administration.

In addition two specialists from the U.S. National Park Service did a study of plans and programs related to the Ger6s National Park.

This project is included in D.5 above.

-

A.I.D. Project : 150-0001

IFADAP, the Portuguese agency for the managing of agricultural credit was the recipient of a significant part of the escudo generations of PL 480 sales to Portugal. At the request of IFADAP, the U.S. financed the participation of 2 U.S. Department of Agriculture officials in a seminar in Portugal on agricultural credit policies and administration.

In addition a director of IFADAP operations in Evora was sent to a 3-month course in the U.S. on the analysis of agricultural projects.

A.I.D. Project : 150-0001 $77,125

In the 1975-1978 period Hinistry of Social Affairs, (at that time responsible for health activities) requested the consultant services of two U.S. public health specialists to help develop the U.S. Health Sector Support program which resulted in the construction of health centers throughout rural Portugal.

In addition 12 Portuguese related to the tiinistry's Office of Planning and Studies were sent to the U.S. for short-term studies and observation visits. Two officials received academic training at the Haster of Public Health level. Four specialists in hospital' construction and administrat ion received training in their fields and three in the area of family planning.

Books and periodicals in public health were also provided to the Hinistry by the U .S..

A. I .D. Project : 150-0001 $1,283,735 This project was directed at assisting the Hinistry of Health to reduce hospital costs and increase productivity through the implementation of a fully integrated information system for the management and financing of hospitals. Approximately 35 person-months of U.S. consultation services were provided and some 90 Portuguese (44 person- months of training) visited or received training in the U.S. The project has expanded to the majority of government controlled hospitals (86). A new hospital payment system based on equitable reimbursement criteria was introduced. Government of Portugal support to the project, initially some $850,000, was estimated at more than $3 million in 1989. Support included contracting with U.S. health specialists after A.I.D. assistance terminated, financing of project staff, and the provision of microcomputers and related technology.

In 1976 an American professional health team visited Portugal to discuss a national information system for health planning and hospital management. The project was to address the Government's concerns in controlling rapidly rising hospital costs while providing mechanisms for health policy decision-makers and hospital managers to efficiently plan, allocate, and administer financial and human resources.

In 1981 the Hinistry of Health introduced a new hospital financing system based on very simple patient classification records developed with the cooperation of U.S. health specialists. The system was based on sound management principles already tested in the U.S. hospitals and allowed reimbursement of hospitals in a rational manner, while creating incentives to increase productivity and reduce costs, and developing within hospitals the managerial capability to respond to those incentives.

The project was initiated in 1982 with the award of a 3-year contract ($300,000) to Hanagement Sciences for Health (HSH). Initially, the project addressed the adaptation and application to Portugal of two key hospital management tools originally developed by Boston University (the Appropriateness Evaluation Protocol - AEP) and by Yale (Diagnostic Related Groups - DRGs). The Appropriateness Evaluation Protocol (AEP) is an objective criteria based technique used to determine unnecessary patient admissions and unnecessary days of care, and to identify the reasons for such occurences. The concept of Diagnostic Related Groups (DRGs) is a classification system which defines hospital outputs based on the characteristics of patients receiving similar sets of hospital services or inputs. This powerful DRG management tool, combined with the AEP and hospital cost accounting systems, allows for the estimation of output-specific cost functions and permits establishment of equitable reibursement criteria.

Selected subprojects were implemented on a pilot basis in a limited number of Portuguese hospitals to demonstrate that such systems were appropriate and useful to Portugal.

The Governments of Portugal and the U.S., encouraged by the success of those initial steps, agreed to support project expansion at the national level. In 1985 A.I.D. provided $800,000 for the Ministry of Health to contract with a consortium of U. S. universities (Boston, Yale, and Wisconsin) for a four year period (1985-89).

The purpose of this final A.I.D. financed contract with Boston University, the prime contractor, was to establish a network of information within and between all the government controlled hospitals to standardize hospital practices and procedures initiated under the previous contract. Boston University coordinated assistance for the twelve subprojects. Over the four-year period the U.S. experience was successfully adapted 'to Portugal through this consortium of U.S. universities. In the process, the role of project and hospital staff (hospital administrators, physicians, and nurses ) was enhaced through modern hospital management techniques. Training in the U .S. and in Portugal was - administered by staff of the University of Wisconsin Industrial Health Engineering program.

As hospital staff became involved in the project they also became more aware of different patient needs on different units. Hotivation for measuring results of innapropriate hospital admissions, patients need for discharge planning, operating room utilization, nursing unit inventory, and other measurable indicators, gradually developed and reflected positively on increased productivity, or better control of departments within hospitals. The project's initial challenge has been to overcome deeply rooted traditional health and hospital policies and practices, and bridge the gap between two different cultures.

A.I.D. Project : 150-0001

- A.I.D. Central Funding

In response to requests from the Ministry of Health for U.S. specialists to help in the design and implementation of a National Health Survey, 4 consultants short-term services in Portugal were financed by A.I.D.. These included design of a morbidity survey, data processing, and design of a pilot integrated health study of the Lisbon area. Consultants were from the U.S. Bureau of Census and the National Center for Health Statistics. Total services were about 2 person- mon t hs .

Four Portuguese received short-term training in the U.S. in health survey design methodology and health information management .

Following these initial' efforts, a grant of $140,000 was made to assist the Ministry of Health Planning Department (DEPS) in planning and implementing a nationwide health/family planning survey. The survey addressed current health and family planning practices in Portugal. It uas planned and implemented with the help of two specialists from the U.S. Bureau of Census and the National center for Health Statistics. U.S. assistance also financed a part of the in-country costs of gathering and processing the health information.

A.I.D. Project : 150-0001 Emergency Medical Services (EHS) were being developed in Portugal since 1972 as part of a primary health care system. In 1980 the Ministry of Health, through the "Gabinete de Emergencia Medica", subsequently to become the National Institute of Emergency Medical Services (INEH), initiated a four-year cooperative venture with the Health Resources and Services Administration (HRSA) of the U. S. Public Health

- service. A.I.D. support totalled approximately $146,000 and financed technical services of HRSA health professionals (total of 3 person-months in Portugal); training and orientation in the U.S. of 19 Portuguese (total of 34 person-months); and limited EHS demonstration equipment ($32,000) for the three regional training centers located in Lisbon, Porto, and Coinbra.

The project addressed the need to establish a comprehensive EMS system on a nationwide basis centered around the development of an EMS manpower corps of appropriately trained and certified health professionals, paramedical staff, and allied health personnel. The project also contemplated improvement of health and medical aspects of disaster management, and the development of a poison control information center.

Essentially, the project has introduced the EHS system concepts nationwide and has identified the need for regionalization and continued EMS education and training.

The U .S. trained Portuguese instructors provided EHS expertise to hospital physicians, nurses, and ambulance attendants; nurse instructors introduced EMS training in the curriculum of nursing schools; and the Poison Control Center is operating effectively.

10. (TECHBICAT. ASSISTANCE IN BdSIC -)

This project is included in D.3 above. A. I .D. Project : 150-0001

1976 - 1983

The Hinistry of Education from time to time requested the services of U.S. education specialists to help review problems and programs with their Portuguese counterparts.

Three specialists in science curriculum for secondary schools participated in the evaluation of school texts and teachers' manuals in the physical and biological sciences. Total consultant services did not exceed three months.

A total of 11 Portuguese specialists from a diverse range of institutions related to the Hinistry of Education were sent to the U.S. on short-term study programs ranging from 9 days to almost 9 months. Areas of study included:

- organization of short-term post-secondary education programs at U.S. Community Colleges;

- education testing;

- academic training in urban development and regional studies;

- school design and construction;

- conference on shipyard design and industrial engineering.

A.I.D. Project : 150-0001 $136,847

Under these two activities consultants and short-term training and observation visits were provided in response to requests by divisions of the Hinistry of Education responsible for vocational and continuing adult education and to polytechnical institutes in Setubal and Faro.

Specifically, the following activities were financed:

1. The services in 1980 of about 1 person-month of an American consultant in continuing education programs for adults through the use of self-teaching modules employing programmed learning methodologies. This was at the requested of the Secretary of State for Education

2. Follow-up services of the same U.S. consultant on a short-term basis in 1980-1984 to help design a comprehensive continuing adult education program for the Director General of Adult Education. Activities included needs assessment curriculum design, and staff training. Participation in tiinistry of Education program design seminars was also requested.

3. Three U.S. specialists visited Portugal in 1981 to review both curriculum and teacher training programs in industrial and vocational training at the secondary level. This assistance was in response to a request by the Director General of Secondary Education.

4. Training in the U.S. was provided as follows:

- four Portuguese specialists from the polytechnical institutes of Faro and Setcbal and from the tiinistry of Education studied U. S. approaches to vocational educational systems at various sites in the U.S. in 1983.

- seven officials of the tiinistry of Education observed continuing adult education programs in the U.S. in 1981.

A.I.D. Project : 150-0001 $817,772 In 1979, the Ministry of Education sought A.1 .D. assistance to establish the first Master of Business Administration (MBA) Program in Portugal. The main goal was to prepare a critical mass of business executives for key sectors of the economy. After an initial survey of accredited American business schools, it was decided that a one-year intensive HBA should be developed with the cooperation of the Wharton School, University of Pennsylvania, and financial support of the U.S. Government. Over a period of eight years (1980-88) A.I.D. provided approximately $770,000 to support costs of American visiting faculty (96 person-months of consulting services at a cost of $710,000) involved in curriculum development, teaching, and periodic program evaluations; book purchases contributing to MBA library expansion ($50,000); and observation visits to the U.S. ($10,000) of Prof. Alfredo de Sousa, the first NUL Rector, and Prof. Carlos Barral, the first MBA Director, both instrumental in program development.

The Program has gained prestige within the Portuguese and international academic and business communities. Portuguese and American professors teach MBA regular courses (in English), executive seminars, and provide selective consulting services. Portuguese and foreign companies established in Portugal are highly committed to the program and provide support in the form of grants and scholarships to the carefully selected and highly motivated student body (220 MBA graduates in the first 8 years) who now hold leadership positions in the private and public sector of Portugal.

In view of the success of the Lisbon MBA Program was selected to launch a second MBA Program in Porto. Courses started in October 1988 with foreign visiting faculty, mostly American, teaching courses and seminars in Lisbon and Porto. This Northern Region business community managed program functions within the University of Porto with financial support mostly from the private sector.

In addition to the technical assistance described above, books were provided to the library of the Economic Faculty of the University. A.I.D. Project : 150-0001

1975-1987

There was intense interest in management training in the

- early stages of the post-revolution period. One of the institutions most responsible was the Institute of State Participation (IPE - Investimentos e Participac6es do Estado), a government holding company created in 1975 and the largest Portuguese economic group, and its Management Training Center (CIFAG - Centro de Informaciio, FormacHo e Aperfeicoamento em GestHo), initially a non-degree granting public training institution.

A.I.D. assistance to the IPE (approximately $410,000 over a 12 year period) has two objectives: (1) strengthen IPE's capability in administering its diversified portfolio of some 70 companies; and (2) support institutional development of CIFAG.

Initial A.I.D. assistance ($244,000 for 103 person-months of training between 1975-79) focused exclusively on financing advanced management programs in the U.S. for 22 Portuguese public managers selected by I.P.E., mostly from nationalized industries and the banking sector. In 1980 cooperation with IPE continued on a different basis. While the primary objective was to assist CIFAG to administer a program of activities focusing on middle management education and training, encouragement of entrepreneurship, and the promotion of small and medium businesses, A.I.D. supported IPE's efforts ( 1986-87) in privatizing and restructuring of partially owned state enterprises by financing executive level management training and orientation in the U.S. for senior IPE administrators. Over a seven-year period (1980- 87) A.I.D. provided approximately $166,000, of which $88,000 was for technical assistance to CIFAG (seven person-months of advisory services obtained through an American company, Human Resources Management, and the University of Wisconsin Small Business Development Center); $77,000 for management training and orientation in the U.S. (a total of 16 different programs totalling twelve person-months of training, including CIFAG instructors and IPE administrators); and limited educational materials ($1,000) for CIFAG library. Although CIFAG has been unable to retain the initial core of five U.S. trained CIFAG instructors (the majority has moved to more rewarding management positions), and U. S. inputs were small compared to the scope of foreign assistance from which CIFAG has benefitted since its inception, the U.S. collaboration has contributed to lay the basis for changing traditional management concepts by exposing a force of public managers and trainers to different management philosophies and tools.

A.I.D. Project : 150-0001 $50,000

In 1979, when growing emphasis was being placed on private sector development in Portugal, business circles expressed interest in obtaining U.S. managemed expertise to improve in the Portuguese industrial sector. At the request of the Ministry of Industry, A.I.D. made available a $50,000 grant to the International Executive Service Corps (IESC) to assist Portuguese industries modernize their technology and improve productivity.

Over a three-year period 20 senior American executives provided support to twenty selected small and medium . businesses in key industrial sectors. The largest group - Manufacturing - comprised textiles, electrical appliances, steel tools, abrasives, furniture, chipboard, and toys. Other industries included agribusiness and food processing, aquaculture, stone quarrying, retailing, and wholesale distribution.

As IESC presence in Portugal became known the demand for its advisory services continued to increase. By 1985, a total of 52 projects (of which 20 were A.I.D. supported) had benefitted from IESC expertise. A. I .D. Project : 150-0001 $234,271

- The principal activity financed in this area was assistance to the Bank of Portugal as described below. In addition the U.S. financed diverse observation visits to the U.S. by officials of the Ministries of Finance and Plan.

A. Assistance in Economic Analysis to the Bank of Portugal

The period 1975 to 1978 was one of intensive economic adjustment in Portugal. Negotiations with the International Monetary Fund, the European Community, the World Bank and others required the upgrading of analytic skills in the Bank of Portugal and the analysis of the effects of policy and program alternatives.

At the request of the Governor of the Bank of Portugal, the U.S. financed the services of Professor Richard Eckaus of the Massachusetts Institute of Technology, four colleagues from the HIT faculty, and seven graduate students selected by him (of which one was a Portuguese national). They worked over three summer periods on specific studies for the Bank as follows: - problems of investment financing including criteria for the allocation of investment credit;

- calculation of shadow prices for use in cost-benefit analysis of major investment projects; - problems of monetary and credit policy;

- debt servicing problems and relationship to balance of payments.

A total of 32 person-months of services were financed. In addition one Bank of Portugal official participated in short-term observation and training in the U.S. on the operation of capital markets.

B. Other Assistance to the Ministries of Finance and Plan

Short-term training and observation visits were arranged for 20 Portuguese officials in the U.S. over the 1977 to 1987 period as requested by various agencies of the Ministries of Finance and Plan. In addition two officials of the Finance Ministry received academic training at the Master's level under the program.

Short-term training included:

- tax policy and administration;

- banking and credit program management;

- international financial negotiations;

- project planning and evaluation; - public sector procurement and contracting;

Approximately 60 person-months of training were financed.

In addition 3 weeks of consultant services of 2 U.S. specialists were financed in capital markets operations and budget formulation.

A.1 .D. Project : 150-0001 A.I.D. Central Funding

The Portuguese Government, through the Ministry of Internal Administration established Regional Coordinating Commissions including those for the North, Center, and the Algarve and Alentejo in the South. These institutions were to stimulate regional development through analysis of investment opportunities and priorities both public and private. Composed of highly skilled economic, technical and management talent, the coordinating commissions are important resources for information and technical skills to local governments throughout their respective regions.

The U.S. supported each of the commissions in a variety of ways:

- Consultant services for specific studies as requested by the comission;

- Training of commission staff;

- Provision of books and periodicals to broaden Comissions' information base.

Under the program 18 Portuguese specialists were provided short-term training in the following fields:

- regional economic planning;

- project planning and evaluation; - remote sensing; - land use planning.

Specific studies and consultant services were provided as follows:

An analysis of the proposal to establish a metropolitan Council and Coordinating Hechanism and planning unit for the Porto metropolitan area. The function of such a unit was to analyze policy options, coordinate planning and develop information systems for the nine communities comprising the Porto metropolitain area. A senior U.S. regional planning specialist reviewed proposals and recommended courses of action for future development. 2. Analysis of requirements to establish an Information Association of the Central Region. (AIRC)

The purpose of the AIRC was to perform certain information and accounting functions for all of the municipalities of the Central Region. These included utility billing, payroll, inventories, etc. A U.S. consultant reviewed proposed developnent plans and recommended courses of action including staff training, hardware and software requirements, etc.

3. Bioenergy Development in Central Portugal

A study was made of bioenergy developnent plans and prospects including integrating agricultural and energy systems (particularly biogas), methane generation from municipal waste, and utilization of wastes from sawmill and woodpulp industries.

4. Proposal for development of Geographic Information Systems for Land, Water, and Coastal Zone Management in the Algarve and Alentejo.

This was a study of remote sensing related to land and water use and planning in the southern region of the country.

5. Identification of priority private sector investments projects in the Douro region.

- A study by the U.S. firm Coopers and Lybrand of some 34 industrial and commercial projects in the north of the country including the following: integrated tourism activities, seed production, marketing of table wine and olives, mushroom production, and production of essential oil and pharmaceutical drug crops.

6. Training of Trainers Seminars for Project Managers in the Public Sector.

Provision of consultants from Management Systems International to develop seminars in Portugal to train instructors who in turn were to provide in-service training to project managers. Such managers were mostly from local municipalities of the Northern Region with responsibility for public investment projects.

7. Hanaging Energy and Resource-Eff icient Cities. (MEREC)

A major effort at energy management in the Central - Region was carried out with the help of consultants from the U.S. Tennessee Valley Authority. Because of the size of this activity, it is described separately under section F. 54. below.

As a result of experience gained in carrying studies like those listed above, the Regional Commissions developed into the principal institutional channel for EEC and other investments in their respective regions.

A. I .D. Project : 150-0001 $141.552

The U.S. was prepared to respond with great flexibility to requests from the Portuguese Government for assistance on problems related to improving the efficiency of public sector agencies and increasing their responsiveness and service to the citizens.

A diverse range of short-term consultant and training services was financed. In addition one Portuguese official of the Planning Off ice of the Hinistry of Industry was financed for academic training at the Master's level in the U.S.

A. Administrative Reform

The major expenditure under this activity was the provision in 1978 of a high-level team of the U.S. consultants headed by Mr. John Macy, former Director of the United States Civil Service Commission. The purpose was to provide the then Ministry of Administrative Reform with a study of the structure of central government agencies, the process for controlling the use of public funds, the relationship of central ministries to local authorities, etc, and to make recommendations for consideration of the Portuguese Government. The team was composed of other distinguished American leaders of

- local government and public administration. They reported their findings to the Prime Minister.

Unfortunately, the government was soon replaced by another and the work of the team had little if any practical effect. A total of about $32,000 was spent on the effort.

One result was the development of short-term training programs in the U.S. for the Secretary of State and other personnel of the Directory General of Administrative Reform in personnel and financial management policies and procedures.

B. Other Consultants and Training in Public Administration

Short-term consultants were provided in response to Portuguese Government requests as follows:

- the Director of the U.S. Tax Administration Advisory Services of the Internal Revenue Service conducted a study of Tax Administration in Portugal recommending specific action programs;

- 2 consultants were provided for 2 weeks each in regional planning to discuss processes of delegation of authority and decentralization of services to local authorities;

- 9 consultants for 1 month each were financed to conduct a Training of Trainers in Management seminars in the following areas planning, programming, budgeting, and evaluation for public sector managers. Observation visit and short-term training in the U.S. were arranged for 9 Portuguese officials in general administrative reform, personnel management, executive training, and financial management.

A.1 .D. Project : 150-0001

In preparation for a 1980 National Census in Portugal, the National Statistics Institute (INE) requested the trainning of 4 specialists in the U.S. in several fields: the management of population census, conduct of economic surveys, information management and processing, etc.

A total of 5 person-months of training was provided.

A.I.D. Project : 150-0001 1982- 1986 $575,000

A program of cooperation with Portugal's National Board for Scientific and Technological Research (JNICT - Junta Nacional de InvestigagEo Cientifica e Tecnol6gica) was initiated in 1982 to encourage science and technology development between institutions and individuals in the U.S. and Portugal, while addressing major development issues. The project was administered jointly by the U.S. National Academy of Sciences (NAS) and JNICT and contemplated eight major areas: energy conservation, marine sciences, research for economic development, water resources, biotechnology, forestry, innovation based technology, and innovation in light industry. Under a 4 1/2 year contract ($575,000) with NAS eight workshops were held in Portugal; thirty-six related training and orientation programs were developed in the U.S., for Portuguese scientists and engineers; eleven U.S. scientists provided selected follow-up assistance to Portuguese research projects; and thirty-six U.S. advisors participated in workshops panels. Each workshop was attended by some thirty-five Portuguese participants representing the private and public sectors, including the academic community, scientists, engineers, entrepreneurs, and public officials.

This experience in research and development has laid the basis for durable linkages between the U.S. and Portugal by encouraging science and technology transfer and providing opportunities for joint ventures.

A.I.D. Project : 150-0001

The U.S. responded to ad hoc requests of the Portuguese Government for consultant services and training related to industrial and trade promotion as follows:

a. Pyrite Development

The short-term services of a U.S. specialist were financed to analyze the feasibility of the Moncorvo iron ore development potential for the production of pyrites. In addition 8 Portuguese specialists were sent for training in the U.S. ranging from 1 month to 8 months in the economic and technical analyses of pyrite processing. The Ministry of Industry (Ferrominas) was responsible for the program. -

b. Other industrial and trade development

The Export Development Fund proposed 5 of their staff for training programs in the U.S. ranging from 2 weeks to 6 months. Programs undertaken were in export promotion, commercial information processing, and managing of foreign trade transactions. Three officials within the Xinistry of Industry were sent on short-term programs to the U.S. in operations of industrial parks and in industrial project planning and evaluation.

A short-term observation visit related to export industry and trade development was prepared in the U.S. for the Secretary General of the Portuguese Chamber of Commerce.

The Association of Portuguese Industry requested the consultant services of a U.S. specialist in food packaging for an industry-wide seminar in Portugal

A. I .D. Project : 150-0001 1979-1985 $52,276

A.I.D. assistance to the Directorate General of Energy (DGE) initially exposed the Director General (1979) and selected technical staff to projects in the U.S. utilizing renewable energy sources, particularly wind energy. Another team of Portuguese from a private firm "Quasis", also visited the U.S. for the same purpose.

In 1983, A.I.D. provided $40,000 to finance a contract with an American firm AETA Corporation, to jointly launch and develop a pilot wind energy project in Portugal with the participation of public (DGE and other Portuguese agencies) and private (Quasis) institutions. This cost-sharing project was initiated in 1983 and remained on schedule until 1984 when major delays and other implementation problems, including fatal accidents, brought the project to a standstill. Although limited transfer of technology from the U.S. to Portugal did take place (5 consultants for a total of 2.5 person-months of services), it was insufficient to permit the completion of this project.

A.I.D. Project : 150-0001 The Sines Industrial Complex was planned and initiated prior to the revolution of April, 1974, and concern grew in the 1976 period on the inadequate study of environmental impact of existing industries (including an oil refinery) as well as planned industrial projects.

The office of the Sines Complex (GAS) within the Portuguese Government requested the assistance of U.S. consultants in - assessing environmental impact within the complex.

Studies were conducted of overall environmental assessment and protection activities within the Sines Office as well as brief overviews of water, air, and soil pollution from the complex.

Both short and long-term training programs were arranged in the U.S. for Portuguese specialists in the areas of environmental impact evaluation, pollution control, marine biology, occupational health, and control of industrial solid wastes. A total of about 47 person-months of training was financed.

A.I.D. Project : 150-0001

1977-1978

The National Civil Engineering Laboratory (LNEC) was a semi- autonomous organization within the Portuguese Government responsible for the design and engineering review and approval for major publicly financed capital projects in Portugal.

In 1977 LNEC was heavily involved in the design and planning of dams and river control activities related to irrigation, hydroelectric power generation, and the control of flooding. A total of 8 Portuguese engineers received specialized training in the U.S. in water resource management as well as the design of dams. A total of 52 person-months of training was provided.

A short-term U.S. consultant was also provided to LNEC to review a Water Resources Development Plan for the Algarve and Alentejo regions.

This project is included in D. 1 above

A.I.D. Project : 150-0001

In the four-year period 1977-1981 the Ministry of Transportation and Communications requested the development of observation and short-term training programs in the U.S. for 10 specialists in a variety of fields:

- directors of the telephone systems (CTT and TLP) studied telecommunications operations in several areas of the U.S.;

- specialists from the National Bus Company and from the Lisbon and Porto public transportation system studied - public transportation in the urban areas (including subway operations) and inter-city transportation;

- specialists from the Hinistry and from Lisbon reviewed city traffic management and planning and vehicle safety policies in the U.S.;

-3 Portuguese officials participated in an urban transportation seminar held at the Hassachusetts Institute of Technology. A total of approximately 15 person-months of training was financed.

In addition one U.S. consultant visited Portugal for 2 weeks to participate in conferences related to urban traffic regulation and control

A.1 .D. Project : 150-0001 1976-1981 $157,216

When the government's austerity program was initiated in 1976, labor reforms became a major concern of the Ministry of Labor. The lack of reliable statistics and trained staff hindered the Ministry's task. To assist the Ministry develop its human resources A.I.D. financed programs and seminars in the U.S. for some 36 Ministry of Labor officials (approximately fifty-five person-months of training at a cost of $160,000) in selected priority areas: employment promot ion; economic growth and income distribution; labor force relations and characteristics; wage analysis and forecasts; and general labor statistics.

This five-year (1976-81) program for the Ministry of Labor was implemented in cooperation with the U.S. Bureau of Labor Statistics.

28. CE TO

A. I .D. Project : 150-0001 1978-1985

The purpose of A.I.D. assistance was to further the growth and acceptance of democratic representative labor unions and structures in Portugal. This was achieved through the establishement of a union-to-union exchange program between the UGT and two U.S. labor institutions: the Free Trade Union Institute (FTUI) and the Asian-American Free Labor Institute (AAFLI), operating in Portugal through the American Federation of Labor (AFL-CIO). A.I.D. support ($570,000 over seven years, 1978-85) financed an initial survey of the labor movement; approximately thirty-five person-months of U.S. technical services in Portugal for implementation of some 50 seminars in Lisbon and Porto; twelve person-months of training and orientation visits in the U.S.; and educational training materials.

A. I .D. Project : 150-0001

In 1977, under the early Provisional Governments there was intense interest in Portugal in development and promotion of cooperatives, not just in agriculture but also in housing, handicrafts, light manufacture and consumer cooperatives. The President of the Portuguese agency responsible (INSCOOP) studied for 1 month the legal and financial structure of cooperatives in the U.S. and Latin American.

Three other officials of INSCOOP were sent to the U.S. for 5 weeks each in 1977 to study the operations and management of cooperatives.

In 1985, seven leaders of non-collective Portuguese agricultural cooperatives along with an agricultural credit specialist studied the functioning of agricultural cooperatives in the U .S .\

30. OF PO- -~ A.I.D. Project : 150-0001

In 1981, after the relaxation of the 1975 nationalization of the banking sector, a private group under the leadership of Dr. Artur Santos Silva established the first private investment company (SPI-Sociedade Portuguesa de Investimentos) in Portugal. SPI's objectives were to promote and to provide capital for the creation and expansion of private productive enterprises in Portugal at a time when the prospect for the evolution of the Portuguese economy was not optimistic.

A. I .D. contributed to the launching and administration of SPI and subsequently BPI (SPI was converted in 1984 into the first private investment bank, BPI-Banco Portugues de Investimento), by providing advisory services of two consultants (15 person-months of services at a cost of $80,000), during the first four years and later (1987-88) - supporting contracting costs ($195,000) of two major U.S. financial institutions, McKinsey & Company and First Boston Corporation. The purpose of these contracts was to provide technical assistance in the use of innovative management information systems and investment finance instruments to develop the expertise and maximize efficiency of BPI human resources. The objective was to assist BPI as a lead institution in the areas of capital and financial markets to further investment opportunities. Over this six-year period A. I.D. contribution also included senior management training in the U.S. of four BPI executives ($65,000).

As a result of a U.S. private sector team visit to Portugal in June, 1982, a $65,000 grant was awarded to the Investment Bank of Portugal. The grant financed an analysis of the productivity of private sector firms in export products such as textiles, garments, wood products and footwear. The study was conducted by Sears World trade to identify potential export markets.

The steady evolution of BPI'S activities has confirmed its leading position within Portugal's financial and capital markets and its key role in stimulating investment and private sector growth.

31. mCETO THE FWGN 1N-m

A.I.D. Project : 150-0001 A.I.D. Central Funding

The Foreign Investment Institute (IIE) was responsible for

73 the regulation and promotion of foreign invesnent in Portugal.

A major study was requested and financed by the U.S. with the firm of Price-Waterhouse, Inc. to provide both a review of major investment opportunities and obstacles sector by sector, and also to develop a promotional handbook for potential foreign investors in Portugal. About 5 person- months were involved in the study.

- In addition four Portuguese staff of IIE were sent on short- term training programs in the U.S. in project planning and evaluation as well as international economic negotiations. A total of 7 person-months were financed.

A. I .D. Project : 150-0001

As part of the Portuguese Government's interest in privatization of state-owned enterprises in 1986 the U.S. financed a comprehensive study of the opportunities and obstacles to privatization and the outline of an effective strategy for bringing it about. This study was subsequently made available to the Prime Minister and leading Ministers, business leaders, and economists in Portugal.

A related study was also financed to assess the state of capital market development in Portugal. The study carried out by the U.S. firm of Arthur Young, Inc reviewed the - legislative and regulatory environment as well as tax incentives, bank credit availability, etc. Some of the recommendations of the study included:

- creation and funding for a Capital Market Authority or Commission; - modification of the Company Law; - strenghthening of the role and audit responsibility of the accounting profession; - modifications of procedures related to tax administration and financial management.

Three Portuguese specialists from a nationalized insurance company (Fidelidade) were sent on observation visit to the U.S. to observe portfolio management and investment strategies related to U.S. insurance companies. A total of 1 1/2 person-months of training was involved.

The Luso-American Foundation is a Portuguese Foundation created in May, 1985. The goal of the LADF was to contribute to Portugal's economic and social development by promoting cooperation between Portugal and the United States in scientific, technical, cultural, educational, commercial and entrepreneurial fields.

The endowment of the Foundation (about $100 million) was established by the contribution of Portuguese funds derived from U.S. Cash Transfer Grants (described in 111. A above).

During the start-up period the U.S. financed temporarily the services (about 3 months) of the incoming President of the Executive Council, a U.S. national.

As of the end 1988, the Foundation had received over 1,300 requests for the assistance and had approved more than 500 with a total value of $43 million of which about $30 million has been disbursed. Grants and loans have been provided to individuals, private companies and institutions.

The U.S. Ambassador to Portugal sits on the Foundation's Directive Council and programs are administered by the Foundation's Executive Council. A.1 .D. Project : 150-0001

The concern for promoting sensitivity to the status of women was an element of emphasis in A.I.D. programs worldwide. In Portugal, the Commission for the Status of Women was created - shortly after the 1974 revolution and located in the Prime Minister's Office.

Under the U.S. program, the Director of that Commision was sent to the U.S. to establish contacts and become familiar with U.S. programs and activities. As a result, important linkages were established.

Six other officials of the Commission also visited the U.S. to study education and publicity programs, and a variety of counseling services related to women.

A total of about 5 person-months training was provided.

The services of three American consultants were also requested by the Commission in nonformal education methodology, communications techniques, and information dissemination. A total of about 2 person-months of services were financed.

In addition, the U.S. contributed books and other publications and training materials to the Comission totalling about $4,000.

(This project is included under D.5. above, Development and Support of Regional Universities.) A. I .D. Project : 150-0001 $310,136

a. Study of Commercial Potential of Seaweed

The marine alga, Ptero- is one of the most important marine resourses of the Azores. These plants serve as a source of chemical extract known as agar-agar which is used in hospital and biological laboratories to culture bacteria. In addition, seaweeds are an important source of products used in meat and dairy processing and canning, in paints and manufacture of cosmetics and other products.

The U.S. financed the periodic services over a 3-year period of Dr. Richard Fralick and colleagues from New Hampshire. They worked in collaboration with a scientist at the University of Lisbon to determine the potential commercialization of this Azorean resource. Specifically the study produced:

- a comprehensive resource management plan;

- future projections for the resources;

- improvement of bar-vesting techniques;

- improvement of drying techniques;

- an economic study of market potential; - - development of an export plan

The study was carried out in colaboration with the University of the Azores and the results presented to them and to Regional Government. The cost was approximately $40,000

b. Agriculture, Fisheries, and Forestry Study in the Azores. A study was undertaken in 1977 by Hultinational Agribusiness Systems, Inc. (HASI) to help the Regional Government of the Azores prepare an inventory of agriculture and fisheries resources in the islands as well as to determine those areas of most promising potential for increased investment, employment, and export. Key policy and administrative impediments were also identified.

Consultant visits were made by agricultural economists as well as by specialists in agronomy and horticulture, rural sociology, food technology and agribusiness, fisheries, forestry, transportation, livestock and agricultural marketing. The study carried out over a 4 month period at a cost of $271,000 was completed in August, 1977 and submitted to the Regional Government of the Azores.

A.I.D. Project : 150-0001 $12,396

In addition to the large-scale assistance in agriculture and fisheries financed under the overall U.S. support to the University of the Azores, A.I.D. provided short-term training to 5 specialists in the Regional Secretariate of Agriculture and Fisheries totalling 4 person-months.

Three Azoreans studied the processing and storage of forage - in the U.S., and two studied the provision of veterinary services related to dairy and livestock development.

A.I.D. Project : 150-0001 The construction of basic sanitation and community water and sewage facilities throughout Portugal was financed by loan from the U.S., and four of the projects financed were located in the Azores.

Under the grant for Technical Consultants and Training, two U.S. consultants advised the Regional Government on the planning and mangement of basic sanitation facilities, - including maintenance procedures. A total of about 3 person- months of services were financed.

In 1977, the Regional Government of the Azores requested the U.S. firm of Family Health Care, Inc. to prepare an inventory and assessment of health facilities, and priority needs, and recommended program investments in the health sector in the Azores. About 1 1/2 of person-months of services were financed.

A.I.D. Project : 150-0001

The Regional Government of the Azores created a Department of Planning and Studies (DREPA) the purpose of which was to provide analytic studies related to investment proposals throughout the Azorean economy.

The Deputy Director of DREPA was sent to the Massachusetts Institute of Technology to receive a Master's Degree in Regional Development.

Another official of DREPA participated in a 2-month seminar at Georgetown University in Investment Negotiation as part of a larger Portuguese Team. A.I.D. Project : 150-0001

Following consultation with the Regional Secretariate of Labor of the Regional Government of the Azores, the U.S. firm of SER Jobs for Progress, Inc. managed by Portuguese - immigrants in Fall River, Massachusets, proposed a project for basic skills training in the Azores.

The purpose was to help ninth grade students in the transition from school to work. Specifically, pilot programs were initiated in two Azorian high schools, the Domingos Rebelo High School in Ponta Delgada and the Ribeira Grande High School in Ribeira Grande. A total of 111 students participated in the pilot program entitled "In The World of Work". This involved vocational education, guidance counseling and career planning. Two U.S. consultants helped develop course materials.

In addition three Azorean teachers received short-term training in the U.S. in test development student evaluation, and instructional materials development. Apprenticeship and work/study programs were arranged for 40 students in various Azorean industries.

I .D. Project : 150-0001 - A.

At the request of the Regional Secretariate of Commerce and Industry for the Azores, the services of two short-term U.S. consultants were provided in the methodology and quality control of dairy products, particularly cheeses, and in the standardization and diversification of dairy products for alternative export markets. About 3 person-months of services were financed. A.I.D. Project : 150-0001 1977-1981 $200,000

The isolation of the Azores is a major obstacle to the movement of people and goods, not only between the islands and Continental Portugal, and Europe and America, but also among the islands themselves.

The U.S. was responsive to requests from the Regional Government of the Azores for consultant services related to studies of air and sea transport.

Specificaly an overall air transport study including inter- island as well as long-distance transport was completed. This was followed by short-term technical services in the planning and design of small airports.

A major ere-feasibility study was prepared of the port complex at Praia da Vit6ria involving 5 person-months of U.S. consultant services. This study laid the groundwork for future major capital investment in the complex.

Three American consultants also participated in studies of small ports in the various islands.

A total of about 10 1/2 months of consultant services were financed in this field. .

- A.1 .D. Project : 150-0001

In 1981, the Azorean Chamber of Commerce requested the services of two U.S. consultants in reviweing the investement needs of small and medium enterprises in the Azores to serve more effectively both the islands'market and external markets. A total of 4 person-months of services were provided. In addition one Azorean specialist was sent to a small Business Development Seminar in Washington.

A.I.D. Project : 150-0001 $194,703 A.I.D. Project : 150-2-004 $150,000

As a result of the geothermal energy assessment of the Azores commissioned by the Regional Government (RGA) from the U.S. Department of Energy (DOE), and the proposal submitted by the U.S. Geological Survey (USGS) in 1979, A.I.D. agreed to finance recommended studies to further explore and develop geothermal energy resources on SBo Miguel Island.

Over a four-year period (1980-84) A.I.D. funded $340,000 of studies (twelve person-months of services in the Azores) conducted by USGS scientists on SBo Miguel to evaluate geothermal potential of the Furnas, Sete Cidades, and Fogo volcano. The comprehensive reports prepared by the team for the RGA were instrumental in industrial exploration of geothermal resources. A three-week visit to the U.S. by the Director of the RGA geothermal program, was implemented in 1983.

45. -1NT-

A.I.D. Project : 150-0001

Short-term services were provided to the Azorean Regional Government of a U.S. housing engineer to review reconstruction plans and programs following the Azorean earthquake. A.I.D. Project : 150-0001 $26,210

The Regional Government of Madeira was interested in reducing the high dependence presently placed on banana production by introducing alternative crops. Jojoba, a tropical crop used for cosmetic production and requiring little rainfall and adaptable to the salty soils of Porto Santo seemed particularly appropriate. Likewise, the prospects of diversification of fruit production through new crops such as avocado, pineaple, papaya, passion fruit and mango were also considered.

A contract was signed with the University of Arizona to provide 4 short-term consultants and with the University of Hawaii to provide 1 consultant. They recommended the phased introduction of selective non-traditional crops.

In addition to the consultant services 3 Madeira horticultural specialists received about 4 person-months training in the U.S. in jojoba and tropical fruit production.

A.1 .D. Project : 150-0001

..- This activity is described in E.3 above.

A.I.D. Project : 150-0001

1979-1982 In response to several requests from the Regional Secretariate of Finance and Planning of Madeira, short-term consultant services and training was provided by the U.S.

- 2 officials of the Secretariate were trained at Georgetown University in Washington in an Investment Negotiation Seminar for a period of 7 weeks each. The two Madeira participants were part of a larger Portuguese team.

- 2 U .S. specialists in data processing and information management worked with the Regional Secretariate for 1 month in developing a data bank for basic statistics on the Madeira economy.

- 1 U.S. consultant was requested for an assessment of about 3 weeks related to development plans for the Investment Promotion Institute of Madeira.

A.I.D. Project : 150-0001

The Municipal Council of Funchal requested the short-term services of a hydrology specialist to undertake a geological study to improve the prospects for use of underground water in the Cidrfio Tunnel. About 1 month of consultant services was provided.

- A.1 .D. Project : 150-0001 $73,107

English language training and interpreter/translation services financed for a small part of the 800 Portuguese participants travelling to the U.S. under this program. Such training or services were generally reserved for those involved in long-term academic programs in the U.S. or for visitors at the Ministerial or Secretary of State levels.

Program evaluation costs were also financed from this fund. A.I.D. Centrally Funded Program 1984-1989 $2.5 million

A.I.D. maintains two highly popular competitive programs: the Program in Science and Technology Cooperation (PSTC) and the U.S. - Israel Cooperative Development Research Program (CDR), both funded through the A.I.D. Office of the Science Advisor (A.I.D./SCI). These peer-reviewed international competition grants average $150,000 each and are for initial support (usually 2-3 years) of innovative phases of research projects, emphasizing laboratory and field research. Both programs encourage collaborative science research and technology transfer between scientists from middle-income nations and the U.S.. The Israel CDR requires close working- level partnerships with Israeli scientists.

Between 1984 and 1989 some 18 projects (13 under the Israel CDR and 5 under the PSTC) totalling approximately $2.5 million involved collaboration with Portugal. Teams of Portuguese scientists from prestigious institutions were recipients of grants in selected problem areas: engineering, biotechnology, hydrology, aquatic resources, arid lands agriculture, chemistry for food, biological pest control, immunology, and veterinary sciences. Institutions participating were the New University of Lisbon (UNL), the Universities of Lisbon, Porto and gvora, the National Laboratory for Civil Engineering (LNEC), the National Laboratory for Indust~ial and Technological Engineering (LNETI), the Gulbenkian Institute of Science, the National Laboratory for Veterinary Sciences (LNIV), the National Agronomical Center, the National Institute for Fisheries Research (INIP), and the Institute for Tropical Health Sciences. .-

This program has enabled a distinguished corps of Portuguese grantees to make valuable contributions to significant development problems of less developed nations in Africa and Asia, while building resources in Portugal. This activity involves U.S. and Portuguese collaboration in the development and implenent.ation of technical assistance and training activities in Portuguese-speaking Africa. Under the arrangement, the U.S. provides financial support for Portuguese technical assistance needed to implement mutually agreed-upon projects.

Agreements for such projects exist for Guinea-Bissau, and SiZo Tome and Principe. The Portuguese agency responsible is the Institute for Economic Cooperation (ICE).

A.I.D. Centraly Funded Program

Project Hope is a U.S. private voluntary agency involved in health services in developing countries. It receives a grant from the U.S. Government for its activities which are carried out in collaboration with counterpart institutions.

In Portugal the project involved the development of courses at the Escola Superior de tledicina Dentaria (Dental School) of Lisbon for dental laboratory technicians, oral hygienists, and technicians in the maintenance of dental equipment.

Project Hope sent a succession of dental specialists to the schools to both supplement local faculty and upgrade skills and develop new curriculum.

A.1 .D. Central Funding : A.I.D. Project : 150-0001 In collaboration with the Regional Coordinating Commission for the Center (CCRC), the U.S. agreed to carry out a program of studies, training, and demonstration projects in energy and resource conservation. Collaboration was through the Tennessee Valley Authority (TVA).

The pilot project took place in the city of Guarda and involved 15 subprojects in the following areas: - water supply and sewage; - solid waste management;

- agricultural soils and soil use (including irrigation facilities);

- municipal planning;

- civil construction.

The project financed not just the visits of U.S. short-term specialists from TVA but supplemented the budget available to the Guarda Municipal Council for the cost of studies, seminars, and training materials.

Among activities completed were:

- a survey of the city water distribution system and sewage system;

- economic and technical feasibility studies of alternative approaches to Solid waste management; - surveys of soils and soil use; - analysis and promotion of energy quality conservation in civil construction.

The initial project was expanded in 1986 to seven additional cities of the central region. Participating cities were Aveiro, Castelo Branco, CovilhZi, Figueira da Foz, Leiria, nangualde and Viseu. About 7 person-months of consultant services were financed. The Luso-American Development Foundation participated in the financing in the local costs of the activity. IV.

From the very begining of its assistance program, the U.S. made it clear that it wished its assistance to be available to meet the greatest needs of the population whether they be North, Center, South, Azores or Madeira. The autonomous regions shared fully in all U.S. assistance to Portugal.

Because of the location of U.S. leased base facilities in the Azores and the resulting agreements between the national and regional authorities, a large share of U.S. assistance (relative to the population of the islands) was directed to the Azores.

A major part of the Cash Grants to Portugal directly supported the investment and operating budgets of the Azores. Both the Azores and Madeira fully shared in construction projects for school, low-income housing, health centers, and basic sanitation as well as in refugee relief and food assistance programs.

Technical assistance and training was also provided to the two Autonomous Regions as shown in the description of projects listed above. Perhaps the major program success of this extraordinary U.S. economic assistance effort in Portugal was an intangible and unmeasurable one: the unequivocal evidence of U. S. encouragement and support both to the consolidation of democracy in Portugal and for the initiation of long- neglected programs to help improve the opportunity and quality of life of the country's most disadvantaged citizens. Virtually all democratic leaders in Portugal have acknowledged the importance of U.S. and other Western democratic support in the post-revolutionary years.

In judging those activities of greatest success in the program, the following criteria seem most appropriate:

- the quality and timeliness of the U.S. services provided;

- the readiness of the Portuguese authorities to make effective use of assistance provided;

- the likely long-term effect on Portuguese institutions and practices;

- most importantly, the likely concrete effect on improving the opportunity and quality of life for the broadest segment of the Portuguese population.

On this basis, the following projects (each of which is described fully above) would likely be considered the most successful :

- DEVELOPMENT AND SUPPORT OF REGIONAL UNIVERSITIES:

There is no doubt that the development of universities in Vila Real, hora and Covilhii and Azores was given instrumental help by the U.S.. Practical education, regional development and broadened opportunity in the rural areas directly resulted from this major long-term institution-building program.

- ANGOLA AIRLIFT AND REFUGEE ASSISTANCE:

As described above, the U.S. provided timely and substantial help at one of Portugal's most critical hours of need. Particularly the small-loan progran was instrumental in stimulating productive employment among the refugees.

- HOUSING FOR LOW-INCOME FAMILIES:

This largest of U.S. project activities in Portugal has been important not only greatly expanding the housing stock available to low-income families but has also contributed to major reform in housing policy and procedures.

- BUSINESS ADMINISTRATION TRAINING - NEW UNIVERSITY OF LISBON:

The establishement of a Master of Business Administration program of recognized international quality at the New University of Lisbon was likewise one of the most successful U.S. efforts under the program.

Under this program, modern business analysis and operations were introduced into the Portuguese higher education curriculum. The program at N.U.L. has since been replicated in Porto. Graduates of the progran and public enterprises and institutions throughout Portugal.

- HOSPITAL ADMINISTRATIQN AND HEALTH MANAGEMENT INFORMATION SYSTEM :

The results of this project are observable throughout Portuguese hospitals and public health institutions. - Information sustems for management and financing which were introduced under the project are now being used as management tools to control costs to analyze policy and investment alternatives. From the point of view of effective use by the Portuguese authorities, this project must be considered one of the most successful.

Other particularly successful programs were those with the Portuguese Investement Bank, and Energy Efficient Cities (MEREC) carried out with the Regional Commission of the Center. ANNEX ANNEX