Angola Day

Angola Day, a conference on development and reconstruction in Angola, was hosted by the Woodrow Wilson Center's Africa Program on May 9, 2007. Speakers and panels were invited to present their perspectives on current developments in the country, as well as progress and prospects within the public and private sectors.

An initial panel set the stage for the event with welcoming remarks and a keynote address. Howard Wolpe, Director of the Africa Program at the Woodrow Wilson Center opened the event by expressing appreciation to its sponsors, as well as to the staff of the Wilson Center and the Embassy of Angola. Walter North, Senior Deputy Assistant Administrator of the Africa Bureau, USAID, acknowledged his appreciation for the Wilson Center and the participants in the event, particularly the diplomatic community. As the former Mission Director for USAID in Zambia during the war in Angola, he witnessed with pride the support provided by the Agency for the refugees of the conflict. He noted that USAID continues to support this key ally and partner of the United States. The Executive Director of the U.S.-Angola Chamber of Commerce, Paul Hare, extended a particular welcome to those coming from Angola for the event, who represented a sampling of the 100 members of the Chamber. Josefina Diakité, Ambassador of Angola to the United States, echoed Paul Hare's remarks, identifying the ministers and deputy ministers in attendance, and welcoming members of the larger diplomatic community. Ambassador Diakité reminded participants that there is a long history of diplomatic ties between Angola and the United States and expressed confidence that the Angola Day event would build upon these relations.

KEYNOTE ADDRESS

The first Keynote Address was delivered by Joaquim David, Minister of Industry for the Government of Angola. Minister David introduced two of the key themes of the conference: 1) the necessity to improve current knowledge of the political and economic realities of Angola and 2) the importance of strengthening relations between the United States and Angola.

Minister David emphasized areas of post-war progress, including preparation for upcoming elections, lasting employment gains and economic growth and the adoption of socially just and environmentally friendly policies. Economic progress is evident in the stability of the value of the Angolan Kwanza (the currency of Angola), the diversification of the economy beyond oil (including agriculture, energy and civil construction), and the integration of the informal economy into the formal.

As for future prospects, the Minister predicted continued economic and social growth, namely through a steady decline in the unemployment rate, paralleled with improvements in infrastructure and living conditions. Given the current conditions, the Minister concluded that the time is ripe for investment in Angola, closing with the following call: "I call upon American investors to take advantage of current climate in Angola by partnering with Angolan businesses to help develop a modern, democratic and prosperous society."

PANEL DISCUSSION – CURRENT DEVELOPMENTS IN ANGOLA

The relevance of the theme of the first panel discussion was underscored by its moderator, Cynthia Efird, U.S. Ambassador to Angola, who referred to the lack of current information as the biggest problem in effective foreign policy or business formation.

Current developments and prospects for U.S.-Angolan relations were outlined by former Ambassador Princeton Lyman, Adjunct Senior Fellow for Africa Policy Studies, Council on Foreign Relations. Ambassador Lyman expounded upon the potential ways in which the U.S. and Angola could create and sustain a relationship to realize important strategic, energy, security and development benefits. Due to the difficult, long history between the two countries, building a relationship will take time and dialogue to build confidence and identify shared interests and concerns. This relationship will not be built primarily on aid, but rather will require a more comprehensive partnership involving several federal agencies. There are opportunities for the United States to support Angola in building a free trade agreement, in demobilizing soldiers, training its police force and increasing the capacity of the new African Command. Ambassador Lyman mentioned a number of areas where, while there is progress to report, challenges remain, most notably in ensuring compliance with the Extractive Industries Transparency Initiative (EITI) and in the role of the upcoming elections in solidifying the institutions of democracy. Ambassador Lyman acknowledged Angolans's awareness of such challenges: "The encouraging thing that came out of our report and what others have found is that Angolans are perfectly conscious of all of these challenges and these problems and there are many people there working on them."

Of primary importance to Francisco Carneiro, Senior Country Economist for Angola at the World Bank, is to plan for long-term development, prioritizing certain challenges in order to reconstruct the country. Based on current oil production projects, Angola is likely to be faced with managing 20 billion to 40 billion USD a year of oil revenues alone. The paradox is that despite this inflow of foreign exchange, Angola's social indicators —such as the Human Development Index- rank among the lowest in the world. This "paradox of plenty" is common to many countries endowed with similar valuable natural resources. Thus, the resources have to be managed carefully to "avoid the erosion of diversity and balance in the economy." Carneiro argued that Angola has the potential to play a strategic role in Africa. For Angola to realize its potential, the country must: conclude the transition to a market economy; address deficiencies in policy design and implementation; define a clear strategy to manage its growing mineral wealth; make improvements and investments in the business environment; prioritize the development of the agriculture sector; and improve the quality and supply of public services to the poor.

During a visit to the country last fall, Jeffrey Krilla, U.S. Deputy Assistant Secretary of State for Democracy, Human Rights and Labor, was struck by the incredible growth in city of Luanda. He remarked on the growing economy and stabilizing political environment, as well as the government's demonstrated commitment to combating corruption, rebuilding infrastructure, removing landmines and reducing malaria.

While significant progress has been made in preparing for upcoming elections, he challenged the government to engage in greater electoral reform and to produce a timetable for legislative and presidential elections. He referred to the State Department's support and continued commitment to electoral reform. He further affirmed the importance of the distribution of the fruits of Angola's natural resources for the benefit of all Angolans and underscored the necessity to assure transparency in the accounting of oil revenues. Finally, he spoke of the important role civil society plays in developing a strong, solid democracy. In this respect, he noted the State Department's surprise and disappointment at the arrest of Dr. Sarah Wykes, a British national and senior campaigner at Global Witness, by Angolan authorities. He closed by referring the Angola's potential to become a "great stabilizing force on the continent."

The main challenge for Angola, insisted Irene Neto, Vice-Minister of Foreign Affairs, Government of Angola, is the promotion of a new type of relations between Angola and the international community. She gave the example of Angola's partnership with China, with whom it enjoys "excellent relations, shared interests and mutual respect" and stated Angola's interest in strengthening its ties with the United States.

The call for diversification of the economy made by Francisco Carneiro, as well as the interest to improve relations with the international community were echoed by Joaquim David, the Minister of Industry for the Government of Angola. He insisted, for example, that the rehabilitation of the country's infrastructure needs to be given priority, beginning with the repair and rebuilding of roads, bridges, water and electricity systems. Without sufficient infrastructure, Angola will be unable to realize the full benefits of trade agreements such as AGOA or of potential regional alliances, such as SADC. Minister David concluded with a list of key areas of investment opportunity for American companies, including infrastructure, mining, agriculture, industry, paper-pulp and construction material production.

LUNCHEON ADDRESS

Jendayi Frazer, the U.S. Assistant Secretary of State for African Affairs delivered an address during the luncheon. Her speech focused on how the administration will develop and strengthen the relationships between the United States and Angola. She noted that the historical relationship between the two countries goes back hundreds of years, as the first African slaves to reach the United States were Angolan. She went on to highlight areas of progress in Angola within the past five years, mentioning the disarmament and reintegration of former soldiers, the repatriation of refugees, landmine removal, agricultural development, and preparations for upcoming elections. She also applauded Angola's increasing leadership role within the region in the Gulf of Guinea Commission, within the African Command, as Chair of the UN Peace Building Commission, in support of constructive dialogue with Zimbabwe, and as a member of OPEC.

Frazer outlined some of the key responsibilities for Angolan leaders that are associated with the country's emerging regional and continental role, requesting that the government complete voter registration, to publish an election timeline and to strengthen civil society organizations. The United States is currently assisting Angola by building the capacity of its Ministry of Finance, assisting in the fight against malaria and supporting the flow of trade through AGOA. Since 2002, these investments have come to nearly $500 million USD. For its part, the American private sector has invested millions of dollars in developing Angola's petroleum industry, food processing, construction and diamond industries. Two possibilities for strengthening these relationships are through the Trade and Investment Framework Agreement and the Extractive Industries Transparency Initiative (EITI).

PANEL DISCUSSION – ACHIEVEMENTS AND CHALLENGES IN THE PUBLIC SECTOR

The moderator for the session on achievements and challenges in the public sector, Lima Campos, Administrator, Angolan Bank of Development, set the context by explaining that the country has achieved significant progress since its reconstruction and rehabilitation program began in 2002.

According to Alves da Rocha, Special Advisor to the Ministry of Planning and Professor at the Catholic University of Angola, Angola's achievements in the public sector are attributable to its application of its own model of macro-economic development. He cited intense economic growth averaging 14% a year, as well as controlled inflation, stability in the exchange policy and public finances and import reserves currently worth 8 months of imports. The country's economic growth has not yet translated into improvements in social development and much work remains to be done in improving education and health systems and the country's employment rate, he stated.

José Ferreira, Vice-Minister of Public Works, Government of Angola, began by listing priority sectors for the rehabilitation of the country's infrastructure, notably in roads, bridges, highways and harbors. The Ministry of Public Works is planning a technician training program in infrastructure rehabilitation and civil construction and has an interest in developing the cement, glazing and wood industry. He shared plans for a new university campus, the construction of low income housing units, the construction of a water treatment plant and dams for hydroelectric power plants. All of these plans require financing, presenting real opportunities for American investors.

An overview of the state of education in Angola was provided by Pinda Simão, the Vice-Minister of Education for the Government of Angola. During the war, Angola had one of the worst school attendance records in the world, as well as a high illiteracy rate. Now attendance is up and illiteracy is down, but systemic problems remain in both formal and informal education.

The health sector faces similar staggering obstacles, according to Evelize Frestas, Vice-Minister of Health, Government of Angola. The population is highly vulnerable to a host of poverty related diseases, including malaria (the country's leading killer) HIV/AIDS, TB, respiratory disease, polio, measles, diabetes, cancer, cholera, Marburg Fever, avian flu, and obesity. Through the dissemination of information and mosquito nets supported by President Bush's Malaria Initiative, Angola has begun to see abatement in the number of malaria cases. Cooperation with the U.S. Center for Disease Control in public health, HIV/AIDS and avian flu as well as with USAID in the eradication of polio, has been critical in addressing the spread of these diseases. The Vice-Minister sees an opportunity for the U.S. to play an even greater role through international NGOs or private corporations. Eventually she would like Angola to have a facility to manufacture medication and mosquito nets, as well as its own biological labs.

PANEL DISCUSSION – ACHIEVEMENTS AND CHALLENGES IN THE PRIVATE SECTOR

John Simon, Executive Vice-President of OPIC (Overseas Private Investment Corporation) explained that his corporation aims to promote development through private investment. Specifically, OPIC offers political risk insurance, finance guarantees and investment funds. He presented a series of challenges that can be simultaneously viewed as opportunities in the private sector, namely the elimination of perception challenges, identification of local partners for US investors, diversification away from oil and streamlining business procedures.

Achievements and challenges for private investment in the agriculture sector were presented by Filomena Delgado, Vice-Minister of Agriculture, Government of Angola. She argued that this sector was the most affected by the war and is the country's most important in terms of development. With an open mind to new ways of agricultural organization, conducive weather conditions, a favorable environment for investment and a sizable internal market, there is significant investment potential. Hampering the agricultural sector's potential are the current state of its current roads, insufficient storage facilities, a frail infrastructure, competition from neighboring countries with better structures, limited access to market structures. She sees specific opportunities in coffee and cattle production, forestry, irrigation and agribusiness.

The importance of diversification of the economy was underscored by Ari Carvalho, Board Member of the Angolan National Private Investment Agency (ANIP), who suggested that in terms of private investment, "we should talk about everything but oil." Presently, the U.S. is the biggest export destination for Angola, all in oil. The goal is to diversify what is exported to the United States and beyond. With its incentive packages for investment and its population of 14 million, Angola offers some of the best returns on investment. Thus far, the most popular sectors of foreign investment are in the construction industry and and service (restaurant/hotel)sectors. The government incentive system is structured so that it promotes investment in areas most affected by the war.

The current state of Angola's financial sector and major challenges for its future were presented by Emídio Pinheiro, Chairman of the Banco de Fomento in Angola. According to Mr. Pinheiro, the country is experiencing accelerating growth, declining inflation, increasing oil production and higher reserves, a strong currency and positive real interest rates. There is systematic growth in the banking sector in terms of the number of people with a bank account and the rising use of ATMs. Finally, there are indications that there is movement from an informal to a formal economy.

Closing the Private Sector Panel was Jorge Jover, President of MITC Investimentos. Mr. Jover reiterated opportunities within the agricultural sector, which has been neglected for many years. He outlined advantages to investment in agriculture, explaining that it employs 2/3 of Angola's population of 14 million and that the country's climate is diverse, thus conducive for growing a variety of crops. He cautions, however, that currently there are some significant constraints, such as soil quality, harvest and storage techniques, and a lack of purchasing power to buy fertilizer at market price. In order to realize its potential, the agriculture sector requires the following: careful commitment and planning, investment in processing plants and a transformation to a market based system. Specific opportunities for investment are in the processing of fruits and vegetables, palm oil, cereal production, new crops for bio-diesel fuels and sustainable forest management.

"Angola Day" was concluded with a reception and cultural entertainment featuring Angolan musicians Yuri da Cunha and the group Kituxi. Also, throughout the conference and reception, paintings by Angolan artists, Francisco Van-Dúnem ("Van") and Alvaro Macieira were on display.

Drafted by Jennifer Graham, Conference rapporteur, and edited by Roseline Fodouop Tekeu and Steve McDonald