NEWS ANALYSIS : Postwar Path Looks Relatively Smooth : Angola: Agreement on free-market principles, lack of ethnic antagonism, and rich oil and mineral resources build optimism for the nation’s recovery.

The historic accord signed Friday to end the 16-year civil war in Angola is no ticket to peace and prosperity, but it offers the first glimmer of hope for democracy and economic recovery in what has been one of Africa’s most troubled nations.

“There are a lot of things that can still go wrong,” said Gerald J. Bender, an international expert on Angola at USC. “But, basically, it’s going to be surprisingly smooth for a country that just fought a long civil war.”

One reason for optimism is the remarkable ideological similarity between the chief combatants: the once-Marxist government of Jose Eduardo dos Santos and the pro-capitalist guerrillas of Jonas Savimbi.

As they lay down their weapons and campaign for votes, Dos Santos and Savimbi will both be stumping for an economic recovery based on the Western principles of the free market.

Another positive sign is the lack of ethnic antagonism, which has fueled post-independence conflicts in much of the rest of Africa.

But Angola’s hopes for the future rest primarily on what lies beneath its soil. It already is the second-largest producer of oil in black-ruled Africa, and its mineral reserves include the highest-quality gemstones in the world. Those resources, combined with an atmosphere of peace and democracy, could make Angola an attractive investment for foreigners and create a swift and dramatic economic recovery.

As it takes the first steps toward democracy, though, the country finds itself in desperate shape.

Food shortages are endemic, despite the relatively small population--about 10 million in a fertile country three times the size of California.

The economy has been sapped so long by the war effort that the small infrastructure inherited at independence from Portugal in 1975 has crumbled. Roads are potholed, water shortages in Luanda, the capital, are frequent, and the barter system has virtually replaced the official currency, the kwanza, as the most reliable method of transaction.

The countryside has been brutally savaged by back-to-back wars--a 14-year war for independence and the 16-year civil war that followed.

The firepower of the Cubans and Soviets on the government side and the South Africans and Americans on the rebel side has taken an immense toll. An estimated 320,000 died in the civil war. Thousands of children have been orphaned, and tens of thousands of people walk the streets with artificial limbs, having lost legs and arms to land mines.

In Luanda, crime has increased sharply since a 14-year curfew was lifted in March, and many citizens are armed. A police raid in a heavily populated section of Luanda this week netted 27 rifles, nine hand grenades and an assortment of handguns.

Despite a two-year effort by the government to apply the tonic of free-market capitalism, the economy is moribund. Colonial Angola’s 300,000 white settlers, who monopolized every skilled job from taxi driver to banker to commercial farmer, fled en masse at independence, and the country still is woefully short of trained technicians.

Many of the country’s diamond mines, located in areas controlled by Savimbi’s guerrillas, have stopped production. And oil, which once accounted for only a third of the country’s foreign exchange earnings, now supports the entire economy, bringing in 95% of today’s desperately needed dollar earnings.

Of those earnings, more than half--or about $1 billion a year--has been going to the war effort.

Americans, who Angolans believe could hold the key to their recovery, have found themselves on both sides of the conflict.

The U.S. government has supported Savimbi’s movement, the National Union for the Total Independence of Angola (UNITA), with more than $15 million in covert aid annually.

But 65% of Angola’s oil is exported to the United States, and companies such as Chevron and Gulf produce oil in Cabinda, an oil-rich Angolan enclave separated from the rest of the country by a sliver of Zaire.

For several years, the Angolan government has sought diplomatic links with Washington, and it is said that an ocean-view tract outside Luanda has been earmarked for a future American Embassy. U.S. interests have been represented by the Italian Embassy, but the United States has decided to open a diplomatic observer mission in the capital.

Now that a peace pact has been signed and foreign armies are gone, the most difficult task facing Angola is getting citizens who have never known democracy to behave democratically as they prepare to hold elections, due next year.

Savimbi, who has operated out of headquarters in the southern Angola bush, plans to set up a UNITA office in Luanda in the coming weeks. But the UNITA leader, who is considered the backbone of the organization, is reviled in the capital, and the success of the democratic process may hinge on his safety.

Savimbi is considered a strong contender for the presidency, and his election would probably bring in plenty of Western investment and generate friendly ties with South Africa, the economic powerhouse of Africa.

But UNITA has few other well-known leaders, and no one knows for sure what would happen to the movement without him.

Savimbi and Dos Santos harbor no personal animosity toward each other, analysts say, and UNITA has agreed to allow Dos Santos to remain as head of the interim government. Both say they are willing to abide by the will of the people.

“I will participate in the elections as leader of UNITA,” Savimbi said this week in Pretoria, South Africa. “If we lose, I will lead the opposition. That is part of the democratic process.”

Dos Santos, a 49-year-old Soviet-trained petroleum engineer, has gained support inside the country for ending the civil war. But the current economic austerity program is unlikely to increase his popularity as election day approaches.

Savimbi has been quoted as saying that one of the more difficult immediate tasks will be to meld rebel and government troops into one army of 40,000 and disarm 200,000 soldiers excluded from that national force.