Black Market Is Key Player as Angola Begins Climb Back
The world’s best is for sale in Roque Santeiro, the vast black market that symbolizes the devastation wrought on the Angolan economy by 16 years of Marxist mismanagement and civil war.
“This is the market economy’s answer to the centralized system,” Vittorio L. Guandalini, a European Community adviser, said of the profusion of Japanese electronic equipment, French cognac, Dutch butter and other goods.
Roque Santeiro, named for a Brazilian TV soap opera, deals not only in contraband but in goods obtained directly from state-owned factories or “people’s stores” and resold at inflated prices.
The Angolan kwanza was artificially pegged at 33 to a U.S. dollar from 1975 until a devaluation in March, but a dollar bought up to 3,000 on the black market. The rate now is 66 to the dollar officially and about 800 on the black market.
A health worker’s monthly salary of 10,000 kwanzas will feed a family for just four days. Most people prefer payment in goods, which can be resold on the black market.
“With three cases of soft drinks, a worker can sell on the black market and earn three times his salary,” said a Western businessman based in Luanda.
President Jose Eduardo dos Santos pledged recently to introduce a market economy.
It will be difficult. Prices will rise when subsidies are removed, many public employees will lose their jobs and the currency will be worth even less, creating more hardship for people already in dire poverty.
Help could come from foreign investment, as Angola opens its economy.
“Angola is one of the few African countries with a genuine development capacity,” a World Bank economist said. “A real turnaround may not take five or 10 years. It could come in the next one or two years.”
More than 90% of foreign earnings come from oil, most of it in or off the Cabinda enclave, and petroleum exports will probably remain the economic mainstay. Angola is the sixth-ranking foreign supplier to the United States.
Prospecting for new oil reserves along the coast is expected to increase.
Angola is fifth in world diamond production; exports earned $240 million in 1990. The war’s end makes increased production and exploration possible in the diamond country of the remote northeast.
The de Beers diamond cartel has begun a $50-million prospecting program and has expressed willingness to invest $1 billion more in extraction.
There also are plans to reactivate the plantations that once made Angola No. 4 in world coffee production.
Its food needs can be met by reviving farming on the fertile central plateau, restocking cattle herds on the southern plains and developing fishing along the coast.