战略与国际研究中心-Africa-Notes_-The-Angolan-Economy_-A-Status-Report_6页_1mb

The Angolan Economy: A Status Report Summary

Core Content

Angola, an oil-exporting nation, has been significantly impacted by the sharp decline in oil prices starting in December 1985. This decline, combined with the long-term effects of a 25-year civil war and a decade of overcentralization since independence in 1975, has placed immense pressure on the country's economy. Despite these challenges, Angola's outlook is considered more resilient than that of many other Third World states, primarily due to its strong credit rating, international banking support, and ongoing oil production and investment.

Main Points

• Economic Resilience: Angola's economy is not as dire as others due to:

  • Significant cuts in non-essential spending with minimal impact.
  • A good credit rating and sympathetic treatment from international banks.
  • Rising oil production partially offsetting the price drop.
  • Decentralization measures introduced at the MPLA's Second Congress in December 1985.

• Oil Industry Overview:

  • Oil provides approximately 90% of Angola’s foreign exchange earnings.
  • The 1986 budget assumed oil prices of $25 per barrel, but prices fell to $18 and then to below $10.
  • Despite the drop, production is expected to reach 300,000 b/d, generating 50-67% of last year’s revenue.
  • Total investment in oil is expected to increase by 46% in 1986.
  • Major foreign oil companies include Chevron, Conoco, Elf Aquitaine, and others, with some showing strong commitment to Angola's operations.

• War's Economic Impact:

  • The war has severely disrupted the agricultural sector, leading to food shortages and high prices in black markets.
  • The agricultural output has been hampered by land mine planting, sabotage, and lack of infrastructure.
  • Angola imports about 80% of its food, costing $250–$300 million annually.
  • The diamond industry has also suffered from UNITA attacks and smuggling, with production at under a third of pre-independence levels.

• U.S. Policy and Oil Companies:

  • U.S. policy toward Angola has shifted, with the Reagan administration now emphasizing U.S. national interests over corporate ones.
  • The U.S. Export-Import Bank has adopted a policy to avoid financing sales that benefit the MPLA or support the war effort.
  • The "Chevron-Gulf Out of Angola" campaign, led by a conservative group, pressures Chevron to withdraw, but other companies like Elf are ready to take over.
  • Angola’s improved contract negotiation skills could lead to more favorable terms with future investors.

• Debt Management:

  • Angola’s total debt is around $2.7 billion, with about half owed to the West.
  • Payment delays have been negotiated with European banks, with some flexibility shown.
  • The possibility of joining the IMF and World Bank was considered but delayed due to U.S. pressure.
  • The debt service ratio is expected to rise to nearly 30% due to reduced oil revenues.

• MPLA's Second Congress:

  • Introduced decentralization and incentives for local production.
  • Emphasized the need for local replacements in technical roles and the completion of existing projects.
  • The new investment code is expected to be issued in early 1987 to attract foreign investment.

• Austerity Measures:

  • Implemented quickly after the oil price drop, targeting unnecessary spending.
  • Reduced imports, especially those not contributing to foreign exchange earnings.
  • Delayed infrastructure projects due to resource constraints.

• Economic Potential:

  • Angola is rich in natural resources, including oil, diamonds, and minerals.
  • The country has untapped potential in natural gas, manganese, copper, and other metals.
  • The Luanda oil refinery is operating near capacity and will expand.
  • The Cuanza River dam project and other energy initiatives could boost regional energy supply if security improves.

Key Information

• Oil Production: Rises from 130,000 b/d in the late 1970s to 285,000 b/d in 1985.
• Foreign Investment: Chevron, Conoco, Elf, and others are active in Angola, with no major withdrawals except Mobil.
• War Impact: Estimated 300,000–500,000 people are affected by hunger and undernourishment.
• Debt Management: Banks are flexible with payment delays, and Angola may avoid a general rescheduling.
• Political and Economic Reforms: The MPLA's Second Congress introduced decentralization and incentives for local production and foreign investment.
• Economic Diversification: While still reliant on oil and diamonds, Angola has untapped potential in other sectors like agriculture and industry.

Conclusion

Despite the challenges posed by falling oil prices and ongoing conflict, Angola's economic resilience is supported by its creditworthiness, international banking relations, and the potential for increased production and investment. The war has significantly impacted the agricultural and diamond sectors, but the country’s long-term economic prospects remain promising, particularly if peace is achieved and the economy is restructured to better utilize its resources.