NOVEMBER, 1994

A Sunday shower can’t keep the Roman Catholic faithful from church on the island of Madeira, home of sweet wine and independent spirits. A politically autonomous region of Portugal since 1976, Madeira now finds itself pulled into the fray of Europe’s new common market, while wondering: What must we give up to grow ?

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I AM WALKING THROUGH A CLOUD, and Álvaro Silva is showing me the way. Propelling himself with a wooden staff that is as tall as he, Silva, 76, leads me through an otherworldly landscape of mossy pastures and enormous gnarled trees. We are on Faial, a plateau region on Madeira, the principal island of the archipelago of the same name, and though the sun rose more than an hour ago, the thick fog that has settled all around us seems to swallow all its light.

Silva has come to shear his sheep. In the distance, through the fog, we can hear them calling with thin, anxious voices. Silva pauses to pour some watery red wine into a cup made from a bull’s horn. "We’re losing this land," he tells me, "because nobody cares anymore. Everything is finished for the Madeira Islands."

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Hours later I am standing on a stretch of flawless white sand beach on the edge of Porto Santo, Madeira’s sister island. A stiff wind sweeps over the turquoise waters from Morocco, 400 mile east of here, lifting the hair of a girl in a bikini who is navigating her way to shore aboard one of Duarte Drummond’s sailboards.

Drummond, a 25-year-old entrepreneur who rents sailboards to tourists, stands beside me. A sturdy young man with a well-developed tan, he wears only a bathing suit and a watch that is set not to local time but an hour ahead, to continental European time.

In a voice plummy with confidence, he tells me, “Now is when everything is beginning for the Madeiras. This is the moment when everything is going to take off.”

Steep slopes squeeze houses in the fishing village of Câmara de Lobos and elsewhere on Madeira: with 865 people per square mile, the island is one of Europe’s most densely populated regions.

Such contrasts are not uncommon in the Madeira Islands, a region of Portugal cast between the Azores and Africa that includes Madeira, Porto Santo, and two groups of uninhabited isles known as the Desertas and the Selvagens. Thought by romantics to be part of Plato’s lost continent of Atlantis, these pristine islands of farmers and fishermen remained virtually unchanged for centuries.

That is until 1974, when a revolution in Lisbon ended 42 years of dictatorship in Portugal and the Madeira Islands.

For the first time since the islands were originally inhabited in the 15th century, Madeirans took hold of their own destiny. Losing no time, the newly elected local government mapped out a bold path of economic growth: While aggressively promoting tourism, which today has replaced small-scale farming as the islands’ economic mainstay, the region also made plans to turn itself into an international centre of offshore commerce.

Madeiran prosperity was given a vigorous boost in 1986 when Portugal  and the archipelago along with it  joined the European Community, now called the European Union (EU). A cacophony of construction is audible in almost every comer of the main island; half visible through churning clouds of dust are signboards proclaiming yet another project funded by the EU. The regional capital, Funchal, bustles with the kinetic, coin-jangling energy of any European city.

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