1.4 Structure of the study
2.2.3 Economic profile
Angola's warring past is quite int mately reflected in the economic situation that the country has experienced for the pasIthree decades.Angola is one of the African countries with a great deal of natural wealth. s Alex Vines (1998:30) indicates, Angola possesses
many natural resources such as gol , zinc, lead, wolfam, vanadium, titanium, chromium, beryl, oil, bauxite, diamond, granfte, iron ore, marble, salt, phosphates, magnesium, copper. Its industrial potential an activities include mining, petroleum refining, food processing, textiles, fishing, const ction materials, brewing, sugar refining, tobacco products, hydroelectric resources. s agricultural potential and products include coffee, sugar, bananas, cassava, maize, sweetpotatoes (Vines 1998:30; BAA 2006).
However, after independence from ortuguese colonialism in 1975 and the beginning of civil war between MPLA and UNI A, the country's economy relied mainly on oil and diamond alone (Hodges 2004:31). All other sectors continuously decreased and many ceased to operate completely. Beca se of war conditions, including planting of landmines throughout the countryside, agri ulture was brought to a near standstill (Hodges 2004:31).Vines (1998:30)observes that only about 3% of the country's 1,246,700 square kilometres have been cultivated as arable cropland. As a result, the country has had to import about half of its industrial fo dstock. The industrial sector also declined soon after independence, as most nationalised and state controlled companies fell out of operation (Vines 1998:30;BAA 2006; Hodge 2004:31).
The MPLA government held a cen rally planned economic system until the early 1990s under the portfolio of the Ministv of Planning (Hodges 2004:103). This economic approach was enacted in 1982 urder the law 2/82 which assigned both economic governance and full economic efecution to the state. "Financial programmes and policies, annual government budgetIand foreign exchange-budget" were annually framed according to the Ministry of Plann ng's vision for each year (Hodges 2004: 103, 124).
During the civil war, though the M LA government was administratively represented in all provincial capitals of the count y, economic enterprise was however limited to the coastal region around Luanda, wher the government held its stronghold. The rest of the country was basically cut off and eceded to a basic form of subsistence. Many of the government-controlled pockets in t e hinterland were only linked to the coastal towns by costly air transport (Hodges 2004: 1 3).
From 1987 onwards, the MPLA go ernment began a process of economic reform aimed at transiting Angola's economic Interprise from a centralised planning system to a 'mixed-economy based on the lawJ of the market' (Hodges 2004: 124). The government launched about eleven succcssivd short-term economic and development programs involving social projects, liberaliJed monetary and fiscal policies, privatisation, and outsourcing. The last of this seribs of programmes is PGG 200512006, Government General Programme for the Bi-Ann al2005/06. Itwas launched in October 2004. Itaims to achieve two objectives: "fight unger and poverty" and promote "social stability"
(MINFIN 2006).
Unlike most African and develOPijg countries, Angola's economy was not funded nor regulated by the IMF and the WOrll Bank, apart from unsuccessful experiments made for implementation of IMF staff-monJtored programmes in the period between 1995 and 2005 (Hodges 2004: 110). Angola
IS
economically only dealt with individual countries, multinationals and transcorporatio s, with international market firms and export credit agencies. It has resorted to 'oil gu ranteed loan' strategy to amortise its budget deficit and external debt owed to inte ational financial and export credit firms (Hodges 2004:110). With its official debt to the Russian Federation written off in 1996, by 2002 Angola's external debt only amoun ed to US$ 10,134 million (World Bank Report 2004).Portugal, USA, Germany, France, J pan, Brazil, and the Netherlands have been Angola's main trade partners; USA being th main exports market, and France the main source of imports (Vines 1998:30; BAA 2006 .
The MPLA regime has used Angola's rich diamond deposits mostly for personal enrichment and conservation of pbwer. For example, Hodges (2004) indicates, "the regime has accorded diamond concbssions as a means of rewarding loyalty". UNIT A, on the other hand, controlled the most raluable diamond mining areas in the northeast of the country, which it explored and used the revenue to bankroll its war against Luanda. For example, between 1992 and 1997, ITA was estimated to have marketed on average about $600 million worth of diamo d annually (Hodges 2004: 174). The third party that explored the diamond sector was th Garimpeiros i.e.practitioners of Garimpo, which is
an informal exploration and trajing of diamond by civilians, both Ango1ans and foreigners (BAA 2006; Hodges 200:4:190).
Alongside the formal economy, th re have been parallel informal commercial initiatives by Ango1an masses. In early 1980 , however, this parallel market was repressed by the state through a number of measur s such as goods confiscation and jailing of vendors.
The principal forms of such initiatives are Candonga i.e. retailing or buy and sell business, and Kinguila i.e. inform 1 currency exchange business, dealing mainly with Kwanza and US dollar transacti n (Tvedten 1997:70). Through Candonga a large number of informal markets have een created across the country with Luanda's Roque Santeiro market being the biggest of them. These markets receive good supply from small-scale agricultural activities; from goods acquired through lojas do povo i.e.
people's stores, which are still used as distribution means for auio-consumo'system; and through informal import (Tvedten ~99 7 : 72-73 ; Lopes 2004:34). Candonga has also been a main source of foreign
currenc~
for the Kinguila business besides cooperantes i.e.foreign personnel contracted by the State. The latter regularly trade in the informal market and Candongueiros' need d llar for foreign good import.