page_title: Economic history of Portugal
section_title: Expansion in South America
hierarchical_section_title: Economic history of Portugal / Kingdom of Portugal / Expansion in South America
caption_attribution_description: English: Map of Brazil in the Miller Atlas of 1519.
context_page_description: The economic history of Portugal covers the development of the economy throughout the course of Portuguese history. It has its roots prior to nationality, when Roman occupation developed a thriving economy in Hispania, in the provinces of Lusitania and Gallaecia, as producers and exporters to the Roman Empire. This continued under the Visigoths and then Al-Andalus Moorish rule, until the Kingdom of Portugal was established in 1139.
  With the end of Portuguese reconquista and integration in the European Middle Age economy, the Portuguese were at the forefront of maritime exploration of the age of discovery, expanding to become the first global empire. Portugal then became the world's main economic power during the Renaissance, introducing most of Africa and the East to European society, and establishing a multi-continental trading system extending from Japan to Brazil.
  In 1822, Portugal lost its main colony, Brazil. The transition from absolutism to a parliamentary monarchy involved a devastating Civil War from 1828-34.
context_section_description: During the 16th century, Portugal also started to colonize its newly discovered territory of Brazil. However, temporary trading posts were established earlier to collect Brazilwood, used as a dye, and with permanent settlements came the establishment of the sugar cane industry and its intensive labor. Several early settlements were founded, among them the colonial capital, Salvador, established in 1549 at the Bay of All Saints in the north, and the city of Rio de Janeiro in the south, in March 1567. The Portuguese colonists adopted an economy based on the production of agricultural goods that were exported to Europe. Sugar became by far the most important Brazilian colonial product until the early 18th century, when gold and other minerals assumed a higher importance.
  The first attempt to establish a Portuguese presence in Brazil was made by John III in 1533. His solution was simplistic; he divided the coastline into fifteen sections, each about 150 miles long, and granted these strips of land, on a hereditary basis, to fifteen courtiers, who become known as donatários. Each courtier was told that he and his heirs could found cities, grant land, and levy taxes over as much territory as they could colonize inland from their stretch of coastline. Only two of the donatários were to have any success in this venture. In the 1540s, John III was forced to change his policy. He placed Brazil under direct royal control (as in Spanish America) and appointed a governor general. The first governor general of Brazil arrived in 1549 and headquartered himself at Bahia (today known as Salvador). It remained the capital of Portuguese Brazil for more than two centuries, until replaced by Rio de Janeiro in 1763.
  The economic strength of Portuguese Brazil derived at first from sugar plantations in the north, established as early as the 1530s by one of the two successful donatários. But from the late 17th century onward, Brazil benefited at last from the mineral wealth which underpinned Spanish America. Gold was found in 1693 in the southern inland region of Minas Gerais. The discovery set off the first great gold rush of the Americas, opening up the interior as prospectors swarmed westwards, and underpinning Brazil's economy for much of the 18th century. Diamonds were also discovered in large quantities in the same region in the 18th century.
  Colonists gradually moved west into the interior. Accompanying the first governor general in 1549 were members of the newly founded order of Jesuits. In their mission to convert the Indians, they were often the first European presence in new regions far from the coast. They frequently clashed with adventurers also pressing inland (in great expeditions known as bandeiras) to find silver and gold or to capture Indians as slaves. These two groups, with their very different motives, brought a Portuguese presence far beyond the Tordesillas Line. By the late 17th century, the territory of Brazil encompassed the entire basin of the Amazon as far west as the Andes. At the same time, Portuguese colonists had moved south along the coast beyond Rio de Janeiro. The Portuguese Colony of Sacramento was established on the River Plate in 1680, provoking a century of Spanish-Portuguese border conflicts in what is now Uruguay. Meanwhile, the use of the Portuguese language gradually gave the central region of South America an identity and a culture distinct from that of its Spanish neighbours.
caption: Portuguese map by Lopo Homem (c. 1519) showing the coast of Brazil and natives extracting brazilwood, as well as Portuguese ships.
exif: {}