OTL the non-aligned movement simply could not compete with the two Super Blocks but the Portuguese Third Way TTL will force Moscow and Washington to be more forthright in their dealings.

The Israeli-Arab relations will be much forstier TTL with Israel unshakled by the more moderating US influence.
 
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Lusitania

Donor
OTL the non-aligned movement simply could not compete with the two Super Blocks but the Portuguese Third Way TTL will force Moscow and Washington to be more forthright in their dealings.
The Portuguese have benefited from a stronger or more aggressive Communist movement. Just like in the 1950s iotl the Americans supported Portugal here the Americans through a combination of more aggressive and expansive Communism and Portuguese power made the Portuguese third way a necessary ally for the American.

the important thing is that the Lusitanian commonwealth provides countries with real economic prosperity and political clout so that it becomes able to stand on its own when the US no longer feels it is in its interest to support it. This was what happened iOTL, in the 1960s the US felt it was in its interests to throw Portugal to the heaps and deal directly with African countries left behind.

this led me to nudge or influence events so that the world in many ways is different from IOTL. For example:
1) we have a Balkanized Indian subcontinent
2) Balkanized south east Asia
3) PRC without Mao in the 1960s
4) More economically prosperous Argentina and Brazil
5) United Germany
6) communist insurrections on verge of capturing several countries in South America by end of 1960s
7) actual communist states in Africa under direct soviet control like Warsaw countries in Europe)
8) Hardliners in control of Moscow in late 1960s
9) American dominance challenged in its own backyard with South American communist threat many times greater.
10) the resurgent French community under greater French economic, military and political control as result of both Federation power in Africa but even more as result of Soviet control of remnants of the pan African countries.
11) 1948 iron curtain crises led to split of Czechoslovakia into western Czech and eastern Slovakia and weakening of communism is Europe during the 1950s with them only starting to regrow in the middle of the 1960s resulting in stronger socialist and centrist parties.
12) nationalist China bring twice as strong both economically and militarily with control of Hainan island along with Taiwan.
13) collapse of white minority rule in South Africa and Rhodesia in the 1960s leading to ANC gaining power and more importantly exodus of most whites from SA.

What other changes have you noticed?
 
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What other changes have you noticed?
The situation in West Africa with the Mali Federation surviving was a nice bonus.

I feel like Balkanized India would suit the people much more than slow, cumbersome and monolithic unified subcontinent. Unlike China no single ethnicity/culture passes the 50% mark, much less 90%+.

Overall the world seems much more prepared for a more balanced economic growth.
 

Lusitania

Donor
The Israeli-Arab relations will be much forstier TTL with Israel unshakled by the more moderating US influence.
Yes there are several changes is Israeli attitude. This started during War of independence in 1948. Close to 5,000 battle seasoned Portuguese -Jewish troops volunteered to fight for Israel. While they volunteered the Portuguese government equipped them and they were instrumental in capturing all of Jerusalem while Jewish troops supported by Portugal pushed Israeli border of the Golan heights several kilometers east of the river. Then tens of thousands of Jews who would of perished in the Holocaust and had found refuge in Portugal settled in Israel thus laying a string Portuguese - Israeli foundation.

during the 1950s Israeli economy was bolstered by ties with Federation. Innsbruck 1960s it’s defense industry grew stronger and better equipped than iotl. It nuclear capabilities were 5x larger than iotl by 1967 snd with Portuguese bombers capable destroying every Arab capital in region.

the French had taught it to not rely solely on one ally but to keep their options open. American politics do not allow it to abandon Israel for Arab allies. But Israel wants the US to know it not the only option and that Israel with support from other allies it can set its own policies.

following the 1967 6 Day war. (Remember iotl it was 7 day war. Two factors led the war to be shorter. On Arab side Egypt kept control over Syria till the war but it’s forces and security apparatus were just as occupied in suppressing Syrians. On the Israeli side they had several Portuguese-Israeli weapons such as falcon rockets which destroyed not only Arab infrastructure but airports and military targets including several ships in port.

then several Israeli agents whipped up Palestinian fears and the Israeli not stop the exodus of half the Palestinians. This allowed the Israeli to dismantle all refugee camps in occupied territories and move towards a more inclusive and integrative approach with remaining Palestinians.

the Portuguese sent few armored transport ships to Israel with supplies following the war and the Americans afraid of being seen as weak sent even greater support.

Therefore because of region but more importantly that Israel controls the holy land and what the Jews have faced in last century the American government be they republican or Democratic are not prepared to “betray” Israel when doing so would political suicide in America and they feel without American influence Israel have to self control. So be best to have some influence than no influence. Meanwhile the Federation provides Israel support without any restrictions.
 
It would be nice if we saw how the British started losing a lot of jobs by the decline of Portuguese British trade. I would think that the British economy is badly hurting. I hope we can see the perspective of British people.
 

Lusitania

Donor
I wonder if the Federation might be able to integrate Arab immigrants?
Hm.. the Portuguese struggled with Muslims and non Christians within the Federation during the 1950s. While the constitution did not specify a single religion and/or denomination it would still be hard fir non Christians during the 1st half. The hardest would be in areas of non-Christian majority. Over the decade the non-Christians proved both hard working and loyal as they sensing they were on crusp unprecedented acceptance and ability to integrate into a European dominated country. They were some of the most learn to learn Portuguese and show their allegiance to the country and placing religion as private matter and not something to flaunt. At same time they were rewarded by being allowed to build temples, mosques and churches in new areas they settled and rebuild ones in traditional areas.

One of the reasons they were left to practice their religion without public intervention was the ability of DGS in infiltrating these religious groups but just as important the willingness of many moderate to cooperate with DGS agents. The DGS only concern was any religious leader or person within the denomination/organization who advocated or spoke out against the country. These individuals would always be arrested for something else many times either moral failing such as infidelity, theft or other incident. Thus a cooperate attitude was born which people were left to practice their faith alone.

So we jump to the 1960s and the Federation absorb tens of thousands of new non-Christians. These are from several sources: 1) from India the agreement with Indians nations allowing tens of thousand people to emigrate to the federation (but had to move to non Indian subcontinent provinces) 2) from East Asian countries of east Indonesia and South Mollucas 3) growing Lusitania Commonwealth. Including with that was two Muslim countries Kingdoms of Fez and Marrakesh.

The ability of the Federation to absorb these immigrants would not of been possible with the positive experience for both groups since the 1950s.

This takes us your question ability to absorb Arabs. They started doing that in the middle of the 1960s with Christian churches sponsoring Christian Arabs from what would become Syria and Iraq. This would be followed by Christians from Lebanon. In late 1960s and the 1970s a new major refugee crises would arise in the Middle East the dismantling and exodus of Palestinian refugees (more to follow next decade) that would not only challenge Federation but also commonwealth countries as they grappled with accepting people who in part blamed them for their predicament.

The Middle East will continue to be a volatile region. Egypt and the countries around it will be even worse than iotl. Lebanon, Syria and Jordan like iotl be bad. Then we have the explosive situation in Iran at end of decade.

The Portuguese ability to be an open place for Arabs and Muslims will also be dependent on the Portuguese Muslim Association to police themselves and provide a healthy and positive experience for its people and positive interaction with non Muslims. More on that in the 1970s.
 
that would not only challenge Federation but also commonwealth countries as they grappled with accepting people who in part blamed them for their predicament.
That's surprising. I didn't see the Portuguese accepting them. I guess they would only take the most educated and most assimilable.
 

Lusitania

Donor
The situation in West Africa with the Mali Federation surviving was a nice bonus.

I feel like Balkanized India would suit the people much more than slow, cumbersome and monolithic unified subcontinent. Unlike China no single ethnicity/culture passes the 50% mark, much less 90%+.

Overall the world seems much more prepared for a more balanced economic growth.
The Mali Federation is actually much larger than iotl with the “gift” of Mauritania by the Portuguese. It provided a clear message to those who opposed the Federations of the true consequences. Not only regime changes but wiping out the country from the map. It would be one of four such consequences. The second one was conquest of communist guinea by Guinea with help from Federation. Third Togo absorbing northern Benin and lastly Gabon absorbing northern Congo.

these changes more than federation setting up friendly countries in occupied territory showed that there were many who were willing to work and collaborate with the Federation especially if it meant they received additional territory and more power.

this leads us to the creation of six separate countries surrounding the Federation on occupied territory. Signaling that if you refuse to engage with the Federation then it will seek to resolve territory and peace on its own. This is different than say iotl Israel occupied Palestinian territory that continued to be occupied and had limited self rule. These territories were given the tools to be independent, they were responsible for security and economic development. Much like the Soviet Union did with communist Eastern Europe countries after WW2.

The Balkanized Indian Subcontinent resulted in a “Korea” type of situation. The southern countries economically started surpassing Indian republic in addition to being democratic. So we have a complete crapshoot where US supports autocratic India while the democratic Indian states have a closer relationship with Federation, Britain and France. The economic development of the southern Indian nations translated into better lifestyle and standard of living for its people and by end of 1960s we starting to see a stark difference. The biggest problem for the southern countries is the potential for them to be overwhelmed by waves of fleeing Indians from the Republic of India. The heavily fortified border between republic of India and its southern neighbors will only be a deterrent as long as the nations enforce it. Plus they are accessible by sea. So we will have to see what transpires in future.

Similarly in south East Asia the Balkanized iotl Indonesia will result in some countries having greater economic development and its people better off while others being dragged down.

as you indicated the world as a while will see more development in Africa, South America and Asia.
 

Lusitania

Donor
It would be nice if we saw how the British started losing a lot of jobs by the decline of Portuguese British trade. I would think that the British economy is badly hurting. I hope we can see the perspective of British people.
The British government and business underestimated the extent of integration of the two economies in the 1960s. The reason being that many firms that exported materials and equipment to the Federation were underreporting their sales and dealings with the Federation. The reason being that British tax rates were 20% higher than Federation. Therefore most companies underreported both the amount and value of their exports to their Portuguese subsidiaries. Hardly any company sold directly to Portuguese companies but instead to subsidiaries or partnerships in the federation which in turn sold to Portuguese based companies. You may of noticed I said Portuguese based companies since many were British in origin but as the Federation economy grew and incentives were established to manufacture and assembly plants in the federation many firms had setup factories and operations in the federation. Sometimes going into partnership with competitors or friends.

The British military and procurement was probably the most knowledgeable of the British government agencies/entities in regards to Portuguese involvement since many projects were dependent on Portuguese participation. But even so many projects partially funded by Portuguese would have different specs and participants for the Portuguese portion of the project.

the British government and bureaucracy due to mostly ignorance overlooked the impact and by 1965 when most people thought 5% of British economy was linked to federation it was closer to 15%. Therefore much of the information that the Labor government relied on was grossly inadequate and was caught flat footed when the shit hit the fan.

The Labor party position against the Federation had been formed and guided by left wing intellectuals who argued regardless of the pain the UK had a moral duty to stop it from supporting such undemocratic government. The criticism of South Africa or Rhodesia with their white minority rule seemed mute when compared to the criticism of the Federation. Some historians attributed that to both racism of not criticizing fellow English speaking country but mostly because they had locals governing themselves as opposed to Federation being governed from Europe. Therefore the Labor party came to power and wondered how satisfy this small but very loud part of the party. The initial response was to limit and illuminate the Portuguese participation in critical industries and joint procurement of military projects where Portuguese were more and more becoming a competitor. This was of course followed by "year the world turned upside down" as on commentator stated. The year 1967 was when things changed forever between the Federation and UK, Portuguese involvement in the collapse of SA and Rhodesia and the exodus of the remaining whites from SA, the defeat of African countries and imposition of Portuguese aligned governments in British Commonwealth countries and declaration of Federation being a nuclear power was incomprehensible to both the British government and public. The leftist elitists were joined by university student groups, British nationalists, and confused individuals who were swayed by reports that everything was the fault of the Portuguese. The Government now in shock and attempting to get ahead of the criticism and demonstrations lest they also be a casualty of the Federation enacted more stringent trade embargo against the Federation.

The election of the Labor party had not been looked upon with concern by business groups dealing with the Federation at first but when they enacted the first trade restrictions some forward thinking companies which relied on the Federation for majority of their business started the process of moving their business to the Federation. This involved expanding or building plants, head offices and distribution centers in the Federation. This was done without announcements and many denied such a move to workers or public while actively doing such thing. Some companies looked to Europe and EEC as an alternative and took steps to separate the two markets by selling/licensing their operations and/or products in the Federation. But this only affected a small fraction of the British-Federation trade. When the government announced the complete embargo that was when Business owners cried foul and only due to intense lobbying were the British firms given a transition period to end of 1969.

The first major indication of the scope and business disruption of the government legislation was in December 1967. Called the Xmas without spirit, that month over 50,000 workers received notice that their jobs would be lost in the next 3 months. Companies caught of guard were left scrounging at the loss of big market and what that would mean for the company and more importantly their employees in the UK. Those that could transferred their operations to the Federation. Some simply announced that end of December all UK employees would be laid off and the firm would only exist in the Federation. Production in the Federation was expanded, critical employees invited to move to the Federation with the owners who left the UK before Xmas holidays were over. During 1968 the government tried to assure the public who were growing more despondent and angry at the government and their handling of the affair. Special incentives and government programs were announced to allow firms to reorganize and programs put in place to help workers. But many firms faced a huge hurdle in trying to tap other markets since there were in most cases established firms already in those markets notably the US firms. iOTL this had happened much sooner in Britain where many firms and brands disappeared to be replaced by US brands. Layoffs continued and closures and reorganizing continued for next two years and unfortunely was followed by layoffs and closures in secondary industries as well as service industries. When newspapers announced the loss of jobs had reached over 200,000 by end of 1968 the government stated that the worse was over and that with government programs and access to EEC market British firms were on track to whether the storm and make a full recovery.

But 1969 would end up being an even greater calamity than the previous year as the world entered a recession caused by the tripling of oil prices as Arab producers announced the boycott of Western nations due to their continued support for Israel. While oil prices jumped what caused the British economy to be jolted was a lack of supplies that left the country with a severe oil shortage and oil prices twice as high as rest of Europe. Britain relied on Portuguese oil for about 1/3-1/4 of its oil supplies. Since 1966 the Portuguese had refused to sign long term contracts and instead agreed to only yearly contracts. When 1969 started and prices started going through the roof oil deliveries to Britain became erratic. Several reasons were given but in reality Portuguese were using oil to extract guarantees on technology transfers and unhindered transfer of products and firms from Britain to the Federation. To the labor government rescue came the house of lords which held up most of the government legislation in 1969 to demand that government honor all prior agreements (technology transfers) and allow business owners to maintain their companies in best way they saw. Thus allowing remaining companies to transfer their operations and / or sell their products to Federation. Thus the Portuguese "fixed" the supply problem but the harm was done and British economy continued its decline and unemployment reached level not seen since the depression.

The British public during all this was in shock and unsure what to believe, news reports and government announcements changed and as reality of British support and interconnection between the two countries became know and public knowledge anger replaced the shock. Many who had protested Federation switched their anger to government. Of special interest was the anger and despair that descended on British Universities as news of bleak jobs market and many who had participated in protests against the Federation started considering jobs in the Federation or Lusitania Commonwealth.

Of special interest was that from 1966-1970 over 100,000 British citizens moved to Federation or commonwealth and both British companies in Federation as well as Federation companies using British recruitment companies targeted educated and trained workers. The problem was that both Canada, as well as Australia targeted the same workers and Britain witnessed a huge migration of people out of the country.

So in summary as the 1960s ended the British people were in turmoil as the country raced to adjust a post Federation and concentrate on EEC market. In meantime the labor market was in upheaval and the mood of the public was very negative and government approval was below 30%. Demonstrations many organized by Labor friendly unions denounced the government and its ineptitude government policies. People tried to get through the turmoil as best they could. Anger towards government from both left and right was rampant and the ironic thing was that just few years before the Federation was the most hated symbol in country it had gone from monster to victim and that the government especially the bureaucrats became the inept and monsters. Right wing newspapers published exposes on the leading leftists intellectuals and their universities or other organizations which had led the attack on the British trade with the Federation while the leftists published similar articles on rightwing nationalists who "offended" by British commonwealth failure had attacked the Federation.

Regardless the British economy at end of the 1960s was still stronger than iOTL due to it belonging to the EEC but the turmoil was greater as British firms faced a new reckoning that iOTL had occurred following WW2 and iTTL had been postponed due to Federation market. The biggest losers were the British people who suffered a much faster turmoil of the 1st oil shock while dealing with reorganization. Seemingly overnight consumers lost several brands which left only with the British market disappeared to be replaced by American and other foreign brands. The British pound lost 1/3 of its value during 1968-1970. Its exports dropped substantially when with the expanded commonwealth and growing economies in those countries along with stable Federation economy they could of grown. A huge lost for the British economy but one that pushed it firmly towards EEC and away from some of traditional markets.
 
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It seems decoupling will be a very serious affair TTL with the Brexit example. Developed nations might become more cautious on who they link their economies with.
 
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Lusitania

Donor
That's surprising. I didn't see the Portuguese accepting them. I guess they would only take the most educated and most assimilable.
So we are dealing with two different scenarios. The 1960s would see a major decline in the immigration of Europeans to the Federation and see a growth of Indian, African, and Asian emigrants . While from the perspective of racial harmony the Portuguese did not discriminate against any of these groups the traditional planners fretted about the "balance" of the various ethnic groups and races. One major area that had not been targeted was the Christians of Middle East. But the problem was that the hostile relations between most of these countries and the Federation so a different approach was used. Over dinners between various government officials and religious leaders the plight of the various Arab Christians living under Muslim rule was discussed. Inquiries later about church and local parish sponsorship would subsequently be given the green light and in early 1960s the first Christian private sponsorships were launched bringing families to the Federation. These Arab Christian were from Egypt, Syria (till 1967 joint with Egypt), Iran, Pakistan and Iraq. In 1968 Christians started being sponsored from Turkey also. New Christian churches appeared in the Federation and overall during the 1960s about 32,000 Arab Christians immigrated to the Federation.

The one group that seemed to be missing was Christian Palestinians who like their Muslim brothers distrusted and some equally blamed the Federation and Israel for their plight. Now that does not mean they did not emigrate to commonwealth countries such as Brazil and Argentina. But they for political and security purposes were not present in the Federation. Following the 1967 6-day war and the exodus of Palestinians from the Gaza strip and West Bank to their Arab neighbors there was a subsequent emigration to other countries but again regardless of their religion the Federation was not a country they emigrated to. With a huge refugee population in Lebanon, Syria, Jordan and Egypt these countries had no desire to have that many refugees in their countries and welcomed the refugees flight away. The only people who did not want them to leave were the Palestinian leaders who hopped to take advantage of their people's plight and circumstances to form an army they could use to attack Israel which made them less welcome in the host countries. The Western countries of choice for settlings were Canada, USA and Australia with a smaller number going to New Zealand. France rejected any attempt of Palestinians to migrate to its territory while Britain facing economic crises shut the door on all migrants. Germany facing a labor shortage was the European country which accepted the most. This still left thousands clamoring to leave and once again it would be Argentina and Brazil who would takes thousands of refugees but all refugees were only allowed to migrate if they agreed to leave all Palestinian political issues behind.

Missing from the equation was the Gulf Arab countries who only paid lip service to the plight of the Palestinians and refused to provide them with opportunity to settle in their country. The exodus of the 1960s was only a preview of the great tragedy and plight of hundreds of thousands of Arabs (both Muslim and Christian) that the world would witness in the 1970s and 1980s. More on that in future sections.

This then brings us to the question if the Portuguese could assimilate Arabs (Muslims) and the answer is yes but prior to that the Portuguese Muslim society and groups would need to been seen as loyal and non-aggressive. I will cover these groups and Portuguese Islamic Society role in policing itself during the 1970s.
 
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Lusitania

Donor
It seems decoupling will be a very serious affair TTL with the Brexit example. Developed nations might become more cautious on who they link their economies with.
The decoupling as you mention can be a very serious affair, iOTL we have seen the shortages of products and disruption of trade in Britain as a result of it leaving EU. Trade continued between EU and Britain and the problems were all due to trade being disrupted by need for inspections and filling out paperwork and paying duty.

iTTL now imagine where the government announces a trade embargo with one of your most important markets and with companies only being given 2 years to adjust. Everyone in the same boat. There just was not enough capacity to transfer everything and even the business who are successful in moving or selling their business it leaves a huge hole in the British economy.

IOTL , history has many examples of large countries like US implementing trade policies that leave developing countries devastated or at the mercy of larger economies. We can see many examples of that in Latin America where US government policies have over the decades contributed to the poverty, lack of development and instability in the region.

In the TL we do have a huge disruption and in typical British manner it is self inflicted. IOTL there were so many innovations that came out of Britain, example there were two passenger jet companies who developed and manufactured planes and jets in the 1950-1960s but could not compete with the Americans same with military jets as well as a host of other companies and during the 1960s the British government forced then to merge in hope of saving industry but in the end they could not compete with US firms on their own and needed to join with European countries to compete.

iTTL the British market practically doubled in size for British companies following the war with the inclusion of the Federation economy. Over time many firms facing continued market erosion in Britain did either move to Federation or closed, but overall the British economy did much better and was 14% bigger by 1965 than iotl but that was almost wiped out by the decoupling.

What lessons were learned from the British-Federation separation? As you can imagine dozens of books were written about the process (some of which were censored when they tried to write about classified topics such as the post war debt agreement and British federation business partnership). Regardless of the political leaning of these books they all pretty much came up with similar conclusions:
1) the government was grossly unprepared for the outcome of their legislation.
2) lack of transparency and information about the extent of the business link and extent of trade. This was in part due to prior governments not wanting to alarm public or draw attention to the business relationship and the role British had in postwar development of the federation. It was like they embarrassed about their participation but at same time wanting to continue receiving the economic benefits.
3) the role business associations had in suppressing the trade links with the Federation as criticism of the Federation grew in late 1950s and 1960s as Europe was gripped in decolonization mentality and Federation was still viewed by many people especially those on left as still occupying parts of world.
 
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1960s - Foreign Affairs (3 of 3)

Lusitania

Donor
1960 – 1969

Foreign Affair ( 3 of 3)


Portuguese Federation - Africa relationship changed drastically during the 1960s, it had started out as one of tolerance and weariness, with the new independent countries willing to work with the Federation but weary of Portuguese intentions and power. Those that aligned themselves with Soviet Union were the first to openly became hostile to the Federation but following the Congo Crises the majority of African countries changed to one of adversaries and in many cases enemy.

The Congo Crises became the defining moment in Portuguese – African relationship as many countries’ view of the Federation was one of fear that the Portuguese both had the capabilities and willingness to either overthrow a country’s government or support political or tribal group dispute and establish independent country. Seemingly overnight the Federation was surrounded by enemies with the Pan African Alliance being it largest adversary. In the north Morocco joined other African Arab countries against both Federation and France. Meanwhile to the south, South Africa and Rhodesia also looked upon the Federation as a dangerous adversary, both economically but more importantly because they viewed the Portuguese Federation as threat to their white minority rule.

Following the Congo Crises saw the emergence of several armed groups operating outside the Federation claiming to represent groups within the Federation demanding to be independent. They were supported and operated in countries opposed to the Federation and advocated an armed struggle against the Federation. Portuguese counter insurgency operations against these groups showed that majority of the fighters were in fact foreigners. In 1966 the African continent went up in flames with the South Africa Civil War and in 1967 the Portuguese African war had touched almost three quarters of the countries on the continent as African countries attacked not only the Federation but also French African provinces. The subsequent defeat of most of these countries by both the Federation and France resulted in maps being redrawn, regime changes and establishment of friendly regimes to either Federation and France in many of the countries bordering both the Portuguese Federation and French provinces on the continent.

At the end of the decade the situation in Africa was greatly different, the Federation had established or influenced friendly regimes in Senegal-Mali Federation, Guinea, Togo, and Gabon. It had established Portuguese aligned governments in Guinea Boke, Katanga, Namibia, Botswana, Rhodesia, Zambia and Mali. With no peace foreseeable with Morocco, Congo, Zaire and Tanzania the Portuguese established independent countries in the occupied border areas of these countries. The Kingdom of Fez and Kingdom of Marrakesh were established on Portuguese occupied Moroccan territory, while Kingdom of Kongo was established on border areas of Republic of Congo and Zaire while the republics of Rovuma and Zanzibar were established in occupied Tanzania. Lastly the Republic of Cassamase was established on all lands between Gambia and Portuguese Guinea.

France itself also had a hand in regime changes in both Tunisia and Algiers while it had split Somalia with Ethiopia and Kenya. It had re-established the French Community including all French Speaking countries in Africa and strengthened both its influence and military presence in these countries. In the south, the South African Federation arose out of the ashes of South Africa and parts of Botswana while the Soviet’s influence had been drastically reduced to just Islamic State of Morocco, Libya, Egypt and Sudan. While the remaining countries of Pan African Alliance Zaire, Uganda and Tanzania had become full-fledged communist countries and following their defeat they had come under direct Soviet control as the number of Soviet and Warsaw pact advisors and military presence grew. By 1970 Soviet and Warsaw Pact military presence in the Pan African countries had surpassed 40,000 and more importantly the Soviet Union had gained an important Indian Ocean port for its growing naval presence in the Indian Ocean. While the Islamic North African states of Islamic State of Morocco, Libya, Egypt, and Sudan continued their alignment themselves with the Soviet Union unlike the Pan African countries they had maintained their independence. They were able to extract considerable military and economic concessions from the Soviets. In 1969 a major diplomatic and financial row erupted between the Portuguese aligned countries and Soviet Union, as the new governments refused to acknowledge any debts incurred by previous governments to the Soviet Union and other communist countries for the military hardware purchased to fight the Portuguese Federation. These countries defaulted on all their loans and issued new currencies tied to the Federation escudo.

The British influence on the African Continent was greatly reduced with British Commonwealth being reduced to a half dozen countries. In the west the British commonwealth comprises of Gambia, Sierra Leone, and Nigeria, in the south there was Lesotho and Natal while in east only Kenya remained. But while these countries belonged to British Commonwealth the US was the primary economic and military partner of the two largest of these countries: Nigeria and Kenya with the USA having both military and naval bases in both countries.

By 1969 the Portuguese Federation had re-established diplomatic relations with all French Community nations as well as British Commonwealth nations, although its diplomatic presence in the British Commonwealth countries was substantially smaller than the French Community countries where the embassies assisted Portuguese companies participating in the development of these countries. Relations between the Federation and rest of African countries either was informal such as South Africa which while having no relations with the Federation allowed indirect trade to occur through intermediary countries such as Lesotho. While the Pan African Alliance and Arab African countries had no diplomatic relations or economic trade with the Federation and relied on 3rd party countries for all communications.

Portuguese Federation – India(s) relationship was for most part was peaceful and without major issues when compared to other parts of the world. The Indian subcontinent was not only politically divided but also divided in geopolitical influence by the superpowers. The largest of the Indian states was the Republic of India an ally of the USA. The Republic of India struggled during the decade and suffered constant resistance and government repression. Meanwhile the Soviet Union was an ally of Pakistan which was divided into East and West Pakistan bordering the Republic of India, it like Republic of India suffered economically and politically as East Pakistan’s resentment at the government in West Pakistan continued to grow while at same time both parts of Pakistan continued to witness religious and ethnic tensions both between Muslims and against both minority Christians and Hindus. The two countries political instability coupled with low economic growth and continued growing poverty made the two larger countries unstable.

To the south of the Republic of India was the various smaller Indian countries that had emerged independent of the Republic of India. Most of these countries had agreed to form the Indian Economic Community (IEC) in 1962. The IEC was similar in many was to the European EEC and its formation was the major economic and political event that dominated the subcontinent during the 1960s. The IEC comprised the countries of Kingdom of Baroda, Democratic Union of India, Kingdom of Hyderabad, Kingdom of Mysore and Tamil Nadu. Both the Portuguese Federation and France which also had a province on the Indian Subcontinent signed associated trade agreements with IEC. These agreements allowed both Portuguese and French companies access to the IEC markets. French India continued to emphasize the use of French language in the province and made French language education mandatory. They like the Portuguese Indian provinces stood apart from the rest of Indian countries who themselves emphasized local Indian languages. The IEC economies made huge strides with most countries experiencing growth over 7% a year during the decade.

The lone communist country in the subcontinent, the Socialist Republic of Travancore continued to be a hermit country struggling to feed its own people and having little to no interactions with non-communist neighboring countries. In the 1960s it involved itself in the communist struggles in the Malaysian Peninsula and on the island of Sumatra much to the resentment of all countries involved.

In 1968 the Portuguese declaration that countries of IEC were under the Portuguese Nuclear umbrella caused major ripples through the region, this coupled with both Mysore and Hyderabad announcing agreements with the Federation to construct nuclear power plants drew condemnation and accusation by both the Republic of India and Pakistan who sought their own nuclear capabilities. The Portuguese Federation relations with the IEC continued friendly although some politicians from DUI resented both the presence and influence of the Federation in the subcontinent. The Portuguese Federation finally established an embassy in the Republic of India in 1965 but relations were strained. Meanwhile it had no diplomatic relations with either Pakistan or Socialist Republic of Travancore.

By the 1960s the Portuguese Federation provinces were amongst the most developed in the subcontinent and had a very educated workforce and population whose primary language of communication was Portuguese. All television, radio stations and media were in Portuguese with English as the secondary language. The IEC had adopted English as the official language of the organization, while each country was responsible in translating the documents and information to their various local languages and dialects.

Portuguese Federation – East Indies relationship was one of continued resentment and resignation to the Federations continued presence in the region. The Portuguese East Indies provinces along with its two major allies the Republic of Lombok and Republic of Bali witnessed continued high economic growth along with massive infrastructure investment. Standard of living in the provinces made great gains and over the decade the Portuguese provinces were the subject of strong migration both legal and illegal by the thousands of people from the surrounding countries.

In 1962 the Federation of Malaya proposed unification with the two remaining British colonies on the island of Borneo. This plan became opposed by Indonesia, Riau, Sultan of Pontianak and Dayak Federation. But the greatest opposition was actually in Sabah and Sarawak while the British were in favor the unification. On 5 January 1963 Federation of Malaya prime minister Tunku Abdul Rahman as well as many government officials were killed in a terrorist attack. The unification talks collapsed as the Federation of Malaya collapsed into civil war when communist rebels and Islamic fundamental militants began fighting each other as well as the government on the peninsula. Within months the conflict spread to the island of Sumatra and surrounding small islands, engulfing Indonesia, Republic of Riau and Islamic Republic of Aceh. British and commonwealth troops were once more were drawn to the region, but Australia which was involved in the Vietnam war was not able to participate so the Portuguese volunteered to send troops into the Federation of Malay. By 1965 the Portuguese had increased their troop strength on the peninsula to a full division along with air force and naval support. On the island of Sumatra, the Islamic Republic of Aceh fought the communist forces of Riau as well as sent troops to the Malaya Peninsula, meanwhile the Republic of Riau was fighting a two-front war against the Islamic Republic of Aceh to the north and Republic of Indonesia to the south while supporting the communists on the peninsula. In 1965 Socialist Republic of Travancore sent troops to help Riau. In 1967 after four years of fighting and little change peace returned to the island of Sumatra with all three countries on the island entering into peace treaty and borders returning to status quo.

The Federation of Malaya meanwhile continued to be rocked by war. Islamic hardline Malays supported by Islamic Republic of Aceh state proclaimed an Islamic state in Johor and over the next year they were able to capture 2/3 of the peninsula with the western states protected by both Britain and Portuguese Federation the only parts able to resist. By 1968 only the Malay states of Malacca, Negeri Sembilan, Selangor and Southern Perak held out against the Islamic forces and their harsh interpretation of the Koran. Thousands of moderate Muslims, Christians and other religions fled the self-title Islamic State of Malaysia. The Portuguese and British differed on how to resolve the issue with British favoring dialog and still advocating uniting Malay with British Borneo colonies while Portuguese supported the two separate Malaysias proposal being advocated by Christian Malaysians. At the end of 1968 the Portuguese Indic Naval fleet moved to the region and Portuguese announced the move of 3 infantry and 1 mechanized divisions to the Malacca Federation as well as increase military sale and support to the Malacca Federation. The announcement of deployment of thousands of Portuguese troops alarmed the Federation of Malaya and they agreed to negotiate, a cease fire was agreed to on 1 February 1969.

On 1 March 1969 the Malacca Federation, the Federation of Malaya, Sarawak and Brunei leaders met in Singapore and signed a peace treaty. Both the Malacca Federation and the Federation of Malaya recognized each other while the Kingdoms of Brunei and Sarawak rejected any unification talks and instead demanded complete independence from Britain. In subsequent negotiations the two kingdoms independence was set for 1 January 1970. Although Britain would still provide continued military support to both and continue using the Brunei military bases and ports. The Portuguese Federation scaled down its troop presence on the Malaysian Peninsula but continued to provide military support to Malacca Federation and provided the region with protection and support in return for recognition and increase in trade.

The region’s largest country was the Republic of Indonesia the USA’s main ally in the region who received both military and economic support from the USA and was USA primary ally against the communist government of Riau and growing Islamic movement of the region. As a price for its support the USA turned a blind eye to the suppression and atrocities the government of Indonesia committed against those opposed to the government especially communists and Islamic fundamentalists. Meanwhile the Republic of Indonesia and Portuguese Federation continued to live side by side but ignore each other (not that the federation did not make overtures to normalize relations since both countries had similar adversaries)

Portuguese relationship with the two independent countries on the island of Borneo, the Sultan of Pontianak and the Dayak Federation was cordial as they continued their neutral stand with regards to the Federation. The business and trade relationship with the Sultan of Pontianak and Dayak Federation continued strong with Portuguese companies heavily involved in the exploration and develop oil, gas, palm oil and other resources in the two countries. At same time Portuguese support in the development, education and infrastructure improvements by agreeing to provide favorable royalties and payments terms which continued to increase Portuguese influence and respect in the two countries and eventually in region.

The two neighboring countries the Federation had the closest relationship with was Republic of East Indonesia and Republic of South Moluccas which were also targeted by Republic of Indonesia. They slowly warmed up to the Federation as a result of being rebuffed by the USA due to its alliance with the Republic of Indonesia. During the 1960s relations with the Federation grew first cordial and slowly friendly as the two countries established diplomatic relations and normalized trade with the Federation. The Portuguese also increased its trade with both Thailand and Philippines.

The biggest disruptor in the region during the 1960s was the admission of the Malacca Federation in 1969 to the Lusitania Commonwealth as full member and Republic of China as associate member. While the admission of the Republic of China was an economic move the admission of Malacca Federation brought it into full military alliance with the Federation and increased the Federation’s presence and strength in the Straits of Malacca. In addition, both Malacca Federation and Republic of China at the end of 1969 start negotiating with Federation the construction of nuclear power plants heightening the tension in the region.

Portuguese Federation – British Commonwealth relationship during the 1960s was rocky as events involving the Federation resulted in several countries either leaving the Commonwealth or being expelled. This also corresponded to the Federation’s own deteriorating relationship with Britain. The diversity of the countries belonging to the Commonwealth made a single approach by the Federation impossible and the Federation pursued independent relations with each country and paid little heed to the British Commonwealth as its power and influence like Britain took a huge hit during the 1960s.

During the 1960s the British hurried the independence of their colonies and dependencies on the African continent. This was followed by departure of several countries namely Tanzania and Uganda from the Commonwealth followed soon by Zambia and Malawi. The presence of the Federation seemed to inflame the situation on the continent with its influence being attributed for the expulsion of non-Africans from many African countries, the destabilization of South Africa culminating in the SA civil war and the Portuguese African Wars.[1] These events would inevitably redraw both the economic, political and international alliances and influences on the continent. The repercussions were huge both in terms of the prestige and strength of the British Commonwealth as it lost close to half dozen countries on the African continent. The Commonwealth lost Tanzania, Uganda, Zambia, Malawi, Rhodesia, Swaziland, Botswana, South Africa while only gaining Natal.[2]

In addition to the African continent other major factors affecting the British Commonwealth was the communist threat in the Americas which affected the majority of British Caribbean and Latin American. With British forces involved in various theaters the British requested Canadian assistance. The military operations involving both British and Canadian forces was able to defeat the communist threats by end of the decade. Meanwhile British plans for the Malaya Republic were shelved as it fell to Islamic forces and Malacca Federation left while the two British colonies on the island of Borneo signed agreement to become independent. But the biggest change and loss of prestige would be reserved for Britain which saw its reach and influence being dramatically reduced during the decade as its colonies gained independence while coming under the influence and alliance of either USA or Soviet Union. The late 1960s also saw its economy being rocked by contractions as business reacted to British government decision to severely limit all trade, investment and ties with the Federation.

The British Commonwealth two emerging countries during the 1960s was Canada and Australia which along with New Zealand continued to grow and prosper during the 1960s. These three countries took in hundreds of thousands political and war refugees from other Commonwealth countries. As the British presence and prestige within the Commonwealth dimmed, they along with several of the Indian nations became the new backbone and strength of the commonwealth.

The Portuguese attempted to improve their relationship with the more developed countries such as Canada, Australia and New Zealand.

Canada, Australia and New Zealand during the 1960s saw an increased role and prestige in the Commonwealth as both their economies and population increased substantially during the decade. Canada population increased by close to 5.2 million to 23.4 and its economy increased by 90%. As the country took in hundreds of thousands of refugees and migrants from other Commonwealth countries including refugees from Africa, India and British Caribbean. During the 1960s it had also taken a leading role fight against communist in British Caribbean and the increased military presence resulted in increased Canadian investment in the region as well as acceptance of thousands of people from the Caribbean to Canada. Australia too had seen a huge population increase but while Canada had accepted Africans and Asians the Australians had been very selective who they accepted. They had accepted hundreds of thousands of whites from Africa and South Africa as well smaller amounts of mixed race and Asians but no Africans. By 1970 its population had grown to 13.5 million while New Zealand population reached 3.5 million.

Portuguese Federation – Islamic World relationship worsened during the 1960s, the defeat of the Arab African League plus Portuguese support of Israel brought condemnation from the Arab countries. The Portuguese involvement in the Malaysian Peninsula against the Islamic Malaysia resulted in many hardline clerics issued calls for Jihad against not only the Portuguese but all westerners. Any diplomatic contact on behalf of the Federation to some of the more moderate Arab and Islamic countries was only possible through the use of intermediaries.

Portuguese Federation – USSR and Communist countries relationship went from difficult to tense and in some ways outright hostile. The continued Portuguese persecution of communists within the Federation and the Soviet arming of armed groups on the borders with the Federation kept contact between the Portuguese Federation and communist countries to a minimum. During the middle 1960s the massive arming of Portuguese neighbors and placement of Soviet and Communist European advisors in those countries made matters worse. The ease in which the Portuguese defeated the Russian supplied African and Arab countries incensed the Soviet government and the extent in which Portuguese captured Soviet advisors and Soviet military weapons brought the two countries close to outbreak of hostilities. Only the uncertainty of NATO reaction stopped the Soviets, when the Portuguese exploded their own nuclear bomb, the Kremlin was shocked and like most of the world at a loss how to react. The Soviet Union withdrew their ambassador from Lisbon and announced the expulsion of Portuguese Ambassador and announced that it would only open its embassy when Portuguese withdrew from all occupied territory. Communist European countries kept their embassies open though and Portuguese Embassies in those countries also continued open.

The Soviet Union continued to witness several power struggles as dissatisfaction with the direction of the country and ongoing losses to America and the most unlikely of nations rattled the politburo confidence in Soviet leadership with Vladimir Semichastny becoming the 3rd leader of the Soviet Union during the 60s. The Soviet Union increased in stranglehold on the Pan African Countries with the placement of increased political and military control on the countries of the Pan African Alliance. Economically the Soviet Union continued to fall behind the west as the communist countries standard of living began to falter after rising during the 1950s and early 1960s. The costly military interventions and support to various countries throughout the world as well as bloated military including nuclear weapons put huge strains on the Soviet economy.

In the 1960s the Soviet waged a new war with the USA for prestige and glory. Space war with the Soviet Union being the first country to put a man in space and during the early 1960s the Soviet had established many first but as the race progressed the Americans not only pulled ahead but were the first to land a man on the moon and successfully return him to earth. The new Soviet leadership vowed not to be cowed and increased their funding to the Soviet space program.

In 1969 the Soviet Union received both good and bad economic news. The increase in the price of oil allowed the Soviet leadership to increase its development and export to Europe for much needed foreign reserves just as several former Soviet allied countries in Africa refused to honor the debt incurred by the former administration and defaulted on their loans. This caused the Soviet Union to prioritize mineral, oil and gas development and exports to shore up the economy and began courting West European nations as partners.

Portuguese Federation – Asia relationship with many of Asia’s leading and important countries improved as the Federation both politically and economically became more important. Countries like South Korea and Japan grew more independent in their foreign policy and sought out new markets for their exports. Korean and Japanese companies started to view Federation and Lusitania Commonwealth as important markets. Japanese companies especially car companies started setting up plants in Brazil but became entangled in minimum % rules for many years unable to export out of Brazil.

The Federation’s relationship with both communist China and Republic of China were complete contrasts. The Portuguese Federation and Communist China continued to have little diplomatic relations and trade. During the 1960s Communist China was involved in a border war and diplomatic feud with USSR. Having at times over 1 million troops along its border with Soviet Union. There were periodic battles culminating with the war over Mongolia and its decision to join the Soviet Union. The Chinese invaded Mongolia to stop it but were pushed back by Mongolian and Soviet forces. Following the Mongolian Incident both countries maintained its forces on alert. Tensions only eased at end of the decade when China developed nuclear weapons and Soviet and China decided to ease tensions and reduce their troop levels along the border, but the two communist countries had grown into communist rivals sometimes sponsoring rival guerrilla groups in same country.

The Portuguese maintained its Embassy in Taipei and refused to recognize communist China. The Chinese for their part had been hesitant to take any action against the Federation over their “provincial status” of Macau which they still claimed but refused to recognize Portuguese sovereignty over Macau like they refused to accept British sovereignty over Hong Kong and expected both territories to be returned. In 1966 when Nationalist China leader Chiang Kai-shekstart visited Lisbon to expand trade and to sign several major weapons agreements he recognized the Federation sovereignty over Macau and the Portuguese government announced that Macau was an integral part of the Federation. News of the recognition and Portuguese declaration was condemned by Beijing who began looking at military options to retake Macau. As Portuguese African wars happened in 1967 Communist China saw its opportunity, but the swiftness of the Portuguese victory and its demonstration of nuclear weapons stopped the Chinese from moving forward with their plans. Meanwhile during the 1960s The both the Federations relations and trade with Nationalist China continued to grow each year. In 1966 and 1969 the Portuguese signed large military hardware sales to Nationalist China much to the anger of Communist China. At the end of decade Nationalist China joined the Lusitania Commonwealth as Associate member increasing its influence and closeness to the Federation much to the anger of US government.

Meanwhile trade and relationship with Thailand continued friendly as the Thai government sought Portuguese influence as a counter to the American presence in the region. Trade in military equipment, raw materials and manufactured goods continued to grow over 10% a year. The other country that increased its trade and cooperation with the Federation was Philippines.

Portuguese Federation –Spain continued ignoring each other both economically and politically. Following the death of Franco and the rupture of Spain with Galicia, Basque and Catalonia all separating from Spain what remained of the country continued forward. The proud Spanish people refused to give in, and the country attempted to rebuild. While trade and diplomatic contact between the Federation and Spain was negligible the Federation continued to be a destination for Spanish citizens in search of better life. The USA continued to be Spain’s greatest beneficiary providing Spain with both economic and military aid. The USA saw Spain a both a great base to counter Soviet as well as Portuguese influence and power. During the 1960s the Spanish economy started grew at over 5% a year and Spain made great strides in both reducing unemployment and raising the standard of living. New companies and factories in new industrial areas emerged both in the north, around Madrid and along the Mediterranean after the loss of the industrialized Catalonia and Basque regions.

Portuguese Federation – NATO relationship continued to be one of leeriness on both sides, while the alliance was based in Europe it was dominated by the Americans. While Portuguese commitment to the alliance remained strong during the decade the USA sought out ways to lessen the Portuguese involvement in the organization. In 1964, they proposed the splitting of patrolling of the Atlantic from Cape Verde to the Azores with Spain even though Spain’s naval capabilities were far inferior to the Portuguese and its ships lagged the Federation in technology. The US proposal was voted down by the European members much to the displeasure of the USA. The biggest shakeup to the organization was the Portuguese demonstration it had developed nuclear weapons. The withdrawal of the Portuguese Federation from “dubious” USA nuclear weapons umbrella and proclamation of its own self-nuclear determination provided the Portuguese with greater flexibility and like the French meant it no longer was dependent on a foreign country for its own defense. The 1960s also witnessed the continued advancement in Portuguese military ability and technology. Surpassing the Soviets and being equal with many French, British and some US military hardware and technology. The US which had a total arms embargo against the Portuguese continued to press the Europeans to enact their own military ban against the Portuguese.


[1] See 1960 – 1969, World-Africa.
[2] In 1968 at the British Commonwealth meeting in Bombay the British Commonwealth expelled Rhodesia, Zambia and Malawi due to the Portuguese imposed governments in those countries. Missing at the meeting were the countries of South Africa, Uganda, and Tanzania who had revoked their membership in the organization. These communist countries rejected the Commonwealth as a legacy of colonialism.


We finish the foreign Affairs which is both a recap of the major events in these countries but also a opportunity to discuss their relationship with the Federation.. Questions/Comments????

Return on October 31 when we start the 1970s.
 
Fear, begrudging respect, and necessity seems to be a common theme in the relationships of the Federation.
The British Commonwealth might actually remain a potent power into the future because the other three members feel and are more powerful within the organization and the competing influence of the Lusitanian Commonwealth.
 
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The British government and business underestimated the extent of integration of the two economies in the 1960s. The reason being that many firms that exported materials and equipment to the Federation were underreporting their sales and dealings with the Federation. The reason being that British tax rates were 20% higher than Federation. Therefore most companies underreported both the amount and value of their exports to their Portuguese subsidiaries. Hardly any company sold directly to Portuguese companies but instead to subsidiaries or partnerships in the federation which in turn sold to Portuguese based companies. You may of noticed I said Portuguese based companies since many were British in origin but as the Federation economy grew and incentives were established to manufacture and assembly plants in the federation many firms had setup factories and operations in the federation. Sometimes going into partnership with competitors or friends.

The British military and procurement was probably the most knowledgeable of the British government agencies/entities in regards to Portuguese involvement since many projects were dependent on Portuguese participation. But even so many projects partially funded by Portuguese would have different specs and participants for the Portuguese portion of the project.

the British government and bureaucracy due to mostly ignorance overlooked the impact and by 1965 when most people thought 5% of British economy was linked to federation it was closer to 15%. Therefore much of the information that the Labor government relied on was grossly inadequate and was caught flat footed when the shit hit the fan.

The Labor party position against the Federation had been formed and guided by left wing intellectuals who argued regardless of the pain the UK had a moral duty to stop it from supporting such undemocratic government. The criticism of South Africa or Rhodesia with their white minority rule seemed mute when compared to the criticism of the Federation. Some historians attributed that to both racism of not criticizing fellow English speaking country but mostly because they had locals governing themselves as opposed to Federation being governed from Europe. Therefore the Labor party came to power and wondered how satisfy this small but very loud part of the party. The initial response was to limit and illuminate the Portuguese participation in critical industries and joint procurement of military projects where Portuguese were more and more becoming a competitor. This was of course followed by "year the world turned upside down" as on commentator stated. The year 1967 was when things changed forever between the Federation and UK, Portuguese involvement in the collapse of SA and Rhodesia and the exodus of the remaining whites from SA, the defeat of African countries and imposition of Portuguese aligned governments in British Commonwealth countries and declaration of Federation being a nuclear power was incomprehensible to both the British government and public. The leftist elitists were joined by university student groups, British nationalists, and confused individuals who were swayed by reports that everything was the fault of the Portuguese. The Government now in shock and attempting to get ahead of the criticism and demonstrations lest they also be a casualty of the Federation enacted more stringent trade embargo against the Federation.

The election of the Labor party had not been looked upon with concern by business groups dealing with the Federation at first but when they enacted the first trade restrictions some forward thinking companies which relied on the Federation for majority of their business started the process of moving their business to the Federation. This involved expanding or building plants, head offices and distribution centers in the Federation. This was done without announcements and many denied such a move to workers or public while actively doing such thing. Some companies looked to Europe and EEC as an alternative and took steps to separate the two markets by selling/licensing their operations and/or products in the Federation. But this only affected a small fraction of the British-Federation trade. When the government announced the complete embargo that was when Business owners cried foul and only due to intense lobbying were the British firms given a transition period to end of 1969.

The first major indication of the scope and business disruption of the government legislation was in December 1967. Called the Xmas without spirit, that month over 50,000 workers received notice that their jobs would be lost in the next 3 months. Companies caught of guard were left scrounging at the loss of big market and what that would mean for the company and more importantly their employees in the UK. Those that could transferred their operations to the Federation. Some simply announced that end of December all UK employees would be laid off and the firm would only exist in the Federation. Production in the Federation was expanded, critical employees invited to move to the Federation with the owners who left the UK before Xmas holidays were over. During 1968 the government tried to assure the public who were growing more despondent and angry at the government and their handling of the affair. Special incentives and government programs were announced to allow firms to reorganize and programs put in place to help workers. But many firms faced a huge hurdle in trying to tap other markets since there were in most cases established firms already in those markets notably the US firms. iOTL this had happened much sooner in Britain where many firms and brands disappeared to be replaced by US brands. Layoffs continued and closures and reorganizing continued for next two years and unfortunely was followed by layoffs and closures in secondary industries as well as service industries. When newspapers announced the loss of jobs had reached over 200,000 by end of 1968 the government stated that the worse was over and that with government programs and access to EEC market British firms were on track to whether the storm and make a full recovery.

But 1969 would end up being an even greater calamity than the previous year as the world entered a recession caused by the tripling of oil prices as Arab producers announced the boycott of Western nations due to their continued support for Israel. While oil prices jumped what caused the British economy to be jolted was a lack of supplies that left the country with a severe oil shortage and oil prices twice as high as rest of Europe. Britain relied on Portuguese oil for about 1/3-1/4 of its oil supplies. Since 1966 the Portuguese had refused to sign long term contracts and instead agreed to only yearly contracts. When 1969 started and prices started going through the roof oil deliveries to Britain became erratic. Several reasons were given but in reality Portuguese were using oil to extract guarantees on technology transfers and unhindered transfer of products and firms from Britain to the Federation. To the labor government rescue came the house of lords which held up most of the government legislation in 1969 to demand that government honor all prior agreements (technology transfers) and allow business owners to maintain their companies in best way they saw. Thus allowing remaining companies to transfer their operations and / or sell their products to Federation. Thus the Portuguese "fixed" the supply problem but the harm was done and British economy continued its decline and unemployment reached level not seen since the depression.

The British public during all this was in shock and unsure what to believe, news reports and government announcements changed and as reality of British support and interconnection between the two countries became know and public knowledge anger replaced the shock. Many who had protested Federation switched their anger to government. Of special interest was the anger and despair that descended on British Universities as news of bleak jobs market and many who had participated in protests against the Federation started considering jobs in the Federation or Lusitania Commonwealth.

Of special interest was that from 1966-1970 over 100,000 British citizens moved to Federation or commonwealth and both British companies in Federation as well as Federation companies using British recruitment companies targeted educated and trained workers. The problem was that both Canada, as well as Australia targeted the same workers and Britain witnessed a huge migration of people out of the country.

So in summary as the 1960s ended the British people were in turmoil as the country raced to adjust a post Federation and concentrate on EEC market. In meantime the labor market was in upheaval and the mood of the public was very negative and government approval was below 30%. Demonstrations many organized by Labor friendly unions denounced the government and its ineptitude government policies. People tried to get through the turmoil as best they could. Anger towards government from both left and right was rampant and the ironic thing was that just few years before the Federation was the most hated symbol in country it had gone from monster to victim and that the government especially the bureaucrats became the inept and monsters. Right wing newspapers published exposes on the leading leftists intellectuals and their universities or other organizations which had led the attack on the British trade with the Federation while the leftists published similar articles on rightwing nationalists who "offended" by British commonwealth failure had attacked the Federation.

Regardless the British economy at end of the 1960s was still stronger than iOTL due to it belonging to the EEC but the turmoil was greater as British firms faced a new reckoning that iOTL had occurred following WW2 and iTTL had been postponed due to Federation market. The biggest losers were the British people who suffered a much faster turmoil of the 1st oil shock while dealing with reorganization. Seemingly overnight consumers lost several brands which left only with the British market disappeared to be replaced by American and other foreign brands. The British pound lost 1/3 of its value during 1968-1970. Its exports dropped substantially when with the expanded commonwealth and growing economies in those countries along with stable Federation economy they could of grown. A huge lost for the British economy but one that pushed it firmly towards EEC and away from some of traditional markets.
Interesting how likely hundreds of economists over decades didn't realise that obviously false numbers were in fact, false.
 

Lusitania

Donor
Interesting how likely hundreds of economists over decades didn't realise that obviously false numbers were in fact, false.
It was interesting that companies could and did under report the value of their sales. Something that did lead to reforms.
 
This is starting to look like a multipolar world with India far weakened the only countries that can influence the world significantly seems to be the USA, the soviets, communist china and the Portuguese and with the soviets lagging behind economically I think by the 2010 we will see a 3 way battle for influence between Lisbon, Beijing, and washington
 
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