Portuguese conquest and consolidation of the interior did not begin until the latter half of the 19th century. Portugal lost part of Guinea to French West Africa (including the center of earlier Portuguese commercial interest, the Casamance River region). A dispute with Great Britain over the island of Bolama was settled in Portugal's favor with the involvement of U.S. President Ulysses S. Grant.
Before World War I, Portuguese forces under Maj. Teixeira Pinto, with some assistance from the Muslim population, subdued animist tribes and eventually established the territory's borders. The interior of Portuguese Guinea was brought under control after more than 30 years of fighting; final subjugation of the Bijagos Islands did not occur until 1936. The administrative capital was moved from Bolama to Bissau in 1941, and in 1952, by constitutional amendment, the colony of Portuguese Guinea became an overseas province of Portugal.
In 1956, the African Party for the Independence of Guinea and Cape Verde (PAIGC) was organized clandestinely by Amilcar Cabral and Raphael Barbosa. The PAIGC moved its headquarters to Conakry, Guinea, in 1960 and started an armed rebellion against the Portuguese in 1961.
Despite the presence of Portuguese troops, which grew to more than 35,000, the PAIGC steadily expanded its influence until, by 1968, it controlled most of the country. It established civilian rule in the territory under its control and held elections for a National Assembly. Portuguese forces and civilians increasingly were confined to their garrisons and larger towns. The Portuguese Governor and Commander-in- Chief from 1968 to 1973, Gen. Antonio de Spinola, returned to Portugal and led the movement which brought democracy to Portugal and independence for its colonies.
Amilcar Cabral was assassinated in Conakry in 1973, and party leadership fell to Aristides Pereira, who later became the first president of the Republic of Cape Verde. The PAIGC National Assembly met at Boe in the southeastern region and declared the independence of Guinea-Bissau on September 24, 1973. Following Portugal's April 1974 revolution, it granted independence to Guinea-Bissau on September 10, 1974. The United States recognized the new nation that day. Luis Cabral, Amilcar Cabral's half-brother, became President of Guinea-Bissau. In late 1980, the government was overthrown in a relatively bloodless coup led by Prime Minister and former armed forces commander Joao Bernardo Vieira.
From November 1980 to May 1984, power was held by a provisional government responsible to a Revolutionary Council headed by President Joao Bernardo Vieira. In 1984, the council was dissolved, and the 150- member National Popular Assembly (ANP) was reconstituted. The single- party assembly approved a new constitution, elected President Vieira to a new 5-year term, and elected a Council of State, which is the executive agent of the ANP. Under this system, the president presides over the Council of State and serves as head of state and government. The president is also head of the PAIGC and commander in chief of the armed forces.
There were alleged coup plots against the Vieira Government in 1983, 1985, and 1993. In 1986, first Vice President Paulo Correia and five others were executed for treason following a lengthy trial.
In 1987, the government launched a program of economic reform and signed an agreement for a structural adjustment program with the World Bank. A second structural adjustment credit, worth about $18 million, was negotiated with the World Bank in 1989.
Trade reform and price liberalization are the most successful areas of the country's structural adjustment program. While institutional weaknesses in the public and private sectors persist, reforms and the development of the private sector have begun to invigorate the economy. Real gross domestic product has grown steadily at 3%-to-6% per annum.
Inflation decreased from 70% in 1992 to 30% in 1993. There were major reforms in tax revenue and customs collections. Monetary expansion was reduced from 118% in 1992 to 40% in 1993. However, with an external debt of $600 million, the country has a debt-to-GDP ratio of 300% and an annual debt service more than twice the value of exports.
At independence, Guinea-Bissau had little infrastructure and its industry consisted of one factory--a brewery. A socialist-statist program for light industries during the late 1970s resulted in extensive foreign debt and failed enterprises. A corrective program has been established to privatize parastatal organizations. The country plans to develop its timber resources and rich offshore fish and shellfish production.
Mineral deposits have proved difficult to develop, and any potential off-shore petroleum reserves may lie in the area which the International Court of Justice declared in 1991 to be Senegalese maritime territory. Bissau's port facilities have been expanded and improved in recent years, with better shipping connections to European ports. The city's international airport can accommodate any type of jet aircraft; a new passenger terminal is under construction. The country has 2,600 kilometers (1,600 mi.) of roads, of which 550 (350 mi.) kilometers are paved.
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