Angola

In 1482, when the Portuguese first landed in what is now northern Angola, they encountered the Kingdom of the Congo, which stretched from modern Gabon in the north to the Kwanza River in the south. Mbanza Congo, the capital, had a population of 50,000 people. South of this Kingdom were various important states, of which the Kingdom of Ndongo, ruled by the Ngola (King), was most significant. Modern Angola derives its name from the king of Ndongo. The Portuguese gradually took control of the coastal strip throughout the 16th century by a series of treaties and wars. The Dutch occupied Luanda from 1641-48, providing a boost for anti-Portuguese states. In 1648, Brazilian-based Portuguese forces re-took Luanda and initiated a process of military conquest of the Congo and Ndongo states that ended with Portuguese victory in 1671. Full Portuguese administrative control of the interior did not occur until the beginning of the 20th century.

Portugal's primary interest in Angola quickly turned to slavery. The slaving system began early in the 16th century with the purchase from African chiefs of people to work on sugar plantations in Sao Tome, Principe, and Brazil. Many scholars agree that by the 19th century, Angola was the largest source of slaves not only for Brazil, but for the Americas, including the United States. By the end of the 19th century, a massive forced labor system had replaced formal slavery and would continue until outlawed in 1961. It was this forced labor that provided the basis for development of a plantation economy and, by the mid-20th century, a major mining sector. Forced labor combined with British financing to construct three railroads from the coast to the interior, the most important of which was the transcontinental Benguela railroad that linked the port of Lobito with the copper zones of the Belgian Congo and what is now Zambia.

Colonial economic development did not translate into social development for native Angolans. The Portuguese regime encouraged white immigration, especially after 1950, which intensified racial antagonisms. As decolonization progressed elsewhere in Africa, Portugal, under the Salazar and Caetano dictatorships, rejected independence and treated its African colonies as overseas provinces. Consequently, three independence movements emerged: the Popular Movement for the Liberation of Angola (MPLA), with a base among Kimbundu and the mixed-race intelligentsia of Luanda, and links to communist parties in Portugal and the East Bloc; the National Liberation Front of Angola (FNLA), with an ethnic base in the Bakongo region of the north and links to the United States and the Mobutu regime in Kinshasa; and the National Union for the Total Independence of Angola (UNITA), led by Jonas Malheiro Savimbi with an ethnic and regional base in the Ovimbundu heartland in the center of the country.

From the early 1960s, elements of these movements fought against the Portuguese. A 1974 coup d'etat in Portugal established a military government that promptly ceased the war and agreed to hand over power to a coalition of the three movements. The coalition quickly broke down and turned into a civil war. By late 1975, Cuban forces had intervened on behalf of the MPLA and South African troops for UNITA, effectively internationalizing the Angolan conflict. In control of Luanda and the coastal strip (and increasingly lucrative oil fields), the MPLA declared independence on November 11, 1975, the day the Portuguese abandoned the capital. Augustinho Neto became the first president, followed by Jose Eduardo dos Santos in 1979.

Civil war between UNITA and the MPLA continued until 1989. For much of this time, UNITA controlled vast swaths of the interior and was backed by U.S. resources and South African troops. Similarly, tens of thousands of Cuban troops remained in support of the MPLA, often fighting South Africans on the front lines. A U.S.-brokered agreement resulted in withdrawal of foreign troops in 1989 and led to the Bicesse Accord in 1991, which spelled out an electoral process for a democratic Angola under the supervision of the United Nations. When UNITA's Jonas Savimbi failed to win the first round of the presidential election in 1992 (he won 40% to dos Santos's 49%, which meant a runoff), he called the election fraudulent and returned to war. Another peace accord was brokered in Lusaka, Zambia, and signed in 1994. This agreement, too, collapsed in 1998 when Savimbi renewed the war for a second time, claiming the MPLA was not fulfilling its obligations. The UN Security Council voted on August 28, 1997 to impose sanctions on UNITA. The Angolan military launched a massive offensive in 1999, which destroyed UNITA's conventional capacity and recaptured all major cities previously held by Savimbi's forces. Savimbi then declared a return to guerrilla tactics, which continued until his death in combat in February 2002.

On April 4, 2002, the Angolan Government and UNITA signed the Luena Memorandum of Understanding, which formalized the de facto cease-fire that prevailed following Savimbi's death. In accordance with the MOU, UNITA recommitted to the peace framework in the 1994 Lusaka Protocol, returned all remaining territory to Angolan Government control, quartered all military personnel in predetermined locations, and relinquished all arms. In August 2002, UNITA demobilized all military personnel and in September 2002, together with the government, reconstituted the UN-sponsored Joint Commission to resolve all outstanding political issues under the Lusaka Protocol. On November 21, 2002, UNITA and the government declared all outstanding issues resolved and the Lusaka Protocol fully implemented. UN Security Council sanctions on UNITA were lifted on December 9, 2002. National elections are projected for 2004 or 2005. In the interim, both sides will need to focus on national reconciliation and the resettlement/reintegration of over 4 million Angolans displaced by the decades of conflict.

Angola has a fast-growing economy largely due to a major oil boom, but it also ranks in the bottom 10 of almost every socioeconomic indicator. Aside from the oil sector and diamonds, it is in economic disarray because of 27 years of nearly continuous warfare, corruption, and economic mismanagement. Despite abundant natural resources, output per capita remains among the world's lowest. Subsistence agriculture and dependence on humanitarian food assistance sustain the large majority of the population.

By contrast, the rapidly expanding petroleum industry now producing up to 900,000 barrels per day (bpd), behind only Nigeria in Africa, accounts for 51.7% of GNP, 89% of exports, and 90% of government revenues. Oil production remains largely offshore and has few linkages with other sectors of the economy. Block Zero, located in the enclave of Cabinda, currently provides the majority of Angola's crude oil production.

ChevronTexaco, through its subsidiary Cabinda Gulf Oil Company, is the operator with a 39.2% share. SONANGOL (the Angolan state oil company), TotalFinaElf, and ENI-Agip are partners in the concession. ChevronTexaco also operates Angola's first producing deepwater section, Block 14, which started pumping in January 2000. Production from these Cabinda fields will be eclipsed by deepwater production further south in the Kwanza Basin scheduled to come on-line by 2007. TotalFinaElf brought the first of these deepwater blocks on-line with production from its Block 17 concession beginning in February 2002. Additional significant discoveries have been made in deepwater Blocks 15, 18, and 24, in which ExxonMobil, BP, Statoil, Norsk Hydro, and Agip have major interests. Exploration is ongoing in recently awarded ultra deep water concessions and in deep water and shallow concessions in the Namibe Basin. BP made the first significant ultra-deep water find in its Block 31 concession in 2002. TotalFinaElf operates Angola's one refinery (in Luanda) as a joint venture with SONANGOL; plans for a second refinery in Lobito are moving forward. ChevronTexaco and Sonangol are exploring the feasibility of a liquefied natural gas plant at Soyo. The United States purchases more than half of Angola's petroleum production, by far the largest importer. Exports to Asian countries, particularly China, have grown rapidly in recent years.

Diamonds make up most of Angola's remaining exports. Despite increased corporate ownership of diamond fields, much production is currently in the hands of smallscale prospectors, often operating illegally. The government is making an increased effort to register and license these prospectors. Legal sales of rough diamonds may occur only through the government's diamond-buying parastatal, although many producers continue to try and bypass the system to obtain higher prices. The government has established an export certification scheme consistent with the "Kimberley Process" to identify legitimate production and sales. Other mineral resources, including, gold remain largely undeveloped.

In the last decade of the colonial period, Angola was a major African food exporter. Because of severe wartime conditions, including extensive laying of landmines throughout the countryside, agricultural activities have been brought to a near standstill, and the country is now forced to import most of its food. Some efforts at agricultural recovery have gone forward, notably in fisheries, but most of the country's vast potential remains untapped. Coffee production, though a fraction of its pre-1975 level, is sufficient for domestic needs and some exports.

An economic reform effort was launched in 1998 but has been only marginally successful in addressing persistent fiscal mismanagement and corruption. In April 2000, Angola started an International Monetary Fund (IMF) Staff-Monitored Program (SMP). The program formally lapsed in June 2001 over IMF concerns about lack of adequate Angolan progress in key areas. However, the Government of Angola did succeed in unifying exchange rates and has raised fuel, electricity, and water rates. Efforts to initiate a new IMF program are ongoing but are contingent on progress in budget transparency and accountability. The Commercial Code, telecommunications law, land tenure law, and Foreign Investment Code are outdated. Revisions are in progress. A privatization effort, prepared with World Bank assistance, has begun with the BCI bank.

Angola is the third-largest trading partner of the United States in Sub-Saharan Africa, largely because of its petroleum exports. About 7% of U.S. non-OPEC oil imports are from Angola, a share which should continue to increase. By the same token, U.S. companies account for more than half the investment in Angola, with Chevron-Texaco leading the way. The U.S. exports to Angola industrial goods and services--such as oilfield equipment, mining equipment, chemicals, aircraft, and food.