The political economy of Angolan growth: Social & regional structure

Abstract

Too often macroeconomic trends and long term growth prospects are considered in isolation from the very real effect of the physical, social and economic structures. This is particularly so in the case of Angola as its huge flows of revenue from mineral exports collide with the legacy of external debt. However, the interaction of the overarching macro trends with existing political and regional divisions magnifies the difficulties of resolving either the economic or the political problems that have prevented progress for several decades. This paper discusses the ways in which the political divides that have existed for centuries not only remain important even in the post-colonial era, but interact with macroeconomic trends to generate a path of growth and development that is unique to Angola. It is argued that a long term political accommodation involving a solution to Angola's internal political tensions requires addressing all of these issues simultaneously since they all contribute to the current problems and line up precisely the same groups in opposition to each other. These ‘axes of polarisation’ include coastal vs. interior, rural vs. urban/industrial, Mbundu/mestiço vs. Ovimbundu and MPLA vs. UNITA. This discussion proposes a way to overcome these problems and achieve sustained long-term growth.

Notes

1. See Da Rocha 1999 and 2000 and Ministerio do Planeamento 2003 for a discussion of the current economic situation and prospects for the future.

2. See IMF 2004

3. In evaluating these macroeconomic distortions it is important to recognise that the causal mechanism is sparked by large inflows of foreign exchange. From a purely economic standpoint (though not from a political one) it is immaterial whether the inflows derive from oil, diamonds or some other source. What is important is that the flows are large compared to the rest of the economy.

4. See Hodges 2001 and Malaquias 2001. It is also true that oil and diamond income have themselves directly contributed to the war effort, often determining the extent and timing of military activity; see Frynas and Wood 2001.

5. See Hodges 2001, p. 65.

6. See World Bank Development Indicators http://www.worldbank.org/cgi-bin/sendoff.cgi?page=/data/countrydata/aag

7. See the IMF 2002.

8. This statement refers to Angola's comparatively low cost conditions for agricultural production and export. Prior to independence and the oil boom Angola exported more than 400,000 MT of maize annually and was the world's fourth largest exporter of coffee. It also exported a variety of other products and was largely self sufficient in food and fiber products. It is the underlying cost advantage that is the basis for statements regarding comparative advantage. It has been argued in some quarters that continued reliance on these sectors is not in the long run interest of developing economies. In more recent times US and European subsidies have been pointed to as major obstacles to exploitation of inherent cost advantages. Nevertheless, it is the basic low cost conditions themselves (soil, water, cheap labour) which generate the potential for profitable export and there can be little doubt that Angola is well favored in this sense.

9. See Bloom and Sachs, 1998, pp. 207–273.

10. See Vansina 1962 375–390.

11. See Birmingham 2000, especially pp. 45–47.

12. See Birmingham 2000, p.77.

13. See Birmingham 2000, pp. 80–88.

14. See Henderson 1979; see also Boxer 1969.

15. See, for example, Schiff and Valdes 1992.

16. See Kyle 1997, pp. 89–104 for a discussion of the relative comparative advantages of coastal vs. interior areas; see also World Bank 1994.

17. For a discussion of structural transformation and the changes that this entails, see Chenery and Syrquin 1986 pp.11–118.

18. See Chilcote 1967, p. 73.

19. Though it took the Portuguese more than forty years to conquer Ndongo, the most important of the Mbundu kingdoms, this was finally accomplished by 1621. The final destruction of these kingdoms was accomplished by 50 years later. See Birmingham 1965, pp. 24–42.

20. Hodges 2000, reports that almost half of today's children are brought up speaking Portuguese as their first language (p. 26).

21. Zenos is quoted by Hodges 2000, p. 28 as documenting the ethnic bases of conflict in Luanda in 1992.

22. See Munslow 1999, pp. 551–68.

23. See Ministerio de Administração do Territorio 2002 for a discussion of Angola's decentralisation law.

24. Vidal (2003) documents the evolution of elite privilege within the government from independence to the present time while Aguilar 2003 discusses the relationship between oil rents and the oligarchy.