Helping out the old colonial master

No-one should be surprised to see many Angolans strutting around with a spring in their step. The old colonial master, Portugal, that ruled Angola from the late 15th century and only left in 1975 after a protracted and bloody liberation war, has returned, but this time not to conquer, but to ask for help.

Debt-ridden Portugal has requested Angola to help it survive bankruptcy by offering the Angolans lucrative deals and some of the proverbial family jewels.

Times have changed

Not so long ago Angolans were leaving for Portugal in droves looking for a better life but the tables have now been turned.

A big queue can be seen at the Angolan consulate in Lisbon as hundreds of Portuguese seek to escape the depressing circumstances in Europe by finding employment in Angola.

Portuguese professionals, unable to find work at home and with unemployment expected to rise  above 13% in the coming year, are emigrating to Angola in ever increasing numbers, reversing a migratory flow previously dominated by Angolans seeking residence in Portugal.

The IMF is forecasting an economic growth of 11% next year for Angola while Portugal's will shrink by 1.8%.

No wonder then that Angola is fast becoming a popular destination offering opportunities and salaries that are no longer found in Portugal.

Hard times

Like the rest of Europe Portugal has fallen on hard times and is desperately looking for help.

Turning to the International Monetary Fund  for assistance, Portugal was promised a US$ 107 billion bailout linked to a strict set of conditions.

Portugal was told to privatise certain struggling state-owned firms and close some of its embassies.

In search of potential investors the Portuguese Prime Minister, Pedro Passos Coelho, who spent much of his youth in Angola, decided to pay the West African country a visit to try and convince the Angolans to invest their petrodollars in opportunities in Portugal at bargain prices.

Calculated move

Approaching Angola was a well-calculated but easy move.

Oil-rich Angolan investment in Portugal has risen sharply in recent years. It shot up from US$2.1 million in 2002 to US$156 million in 2009 while Angolan companies own the equivalent of 3.8% of companies listed on Portugal's stock exchange.

With linguistic, cultural, historic and economic ties well established the Portuguese Prime Minister’s offer might just find a receptive audience in Angola.

It must have been awkward for the Portuguese Premier to describe his first official one-day visit to Angola as, “a visit of huge significance. It is a unique opportunity … to build a base for stronger and closer ties between the two countries, their citizens, their companies and states".

Passos Coelho also put on a brave face when he declared that the Portuguese government would look “very favourably” on Angolan investments in Portugal. He was somewhat more honest when he said that, ‘’Angolan capital is very welcome,’’ which was after all, the main reason for his visit. Angolan money could eventually still play a major role in keeping Portugal afloat.

Bargains

The visit held notably more significance for the former colonial master and the success of Passos Coelho’s effort will be determined by the response from the Angolans.

The bargains the Portuguese Prime Minister has on offer inlude the state utility company Energias de Portugal, the national electricity grid REN, the national airline Tap and the Banco Português de Negócios.

The Portuguese government’s decision to turn to Angola, certainly humiliating from a Portuguese perspective, makes economic sense but the consequences are considerable.

Angola already has large investments in Portugal's private sector and should the former colony decide to go bargain hunting it might end up owning not only a considerable chunk of the Portuguese economy but also influence and prestige. This could in future stand Angola in good stead in acquisitions elsewhere.

Satisfying situation

The Angolans must be enjoying the situation and understandably so. Nobody could be mistaken for thinking there was a hint of self-satisfaction in the response of President Eduardo dos Santos when he said, “We’re aware of the difficulties the Portuguese people have faced recently and in such difficult times we must use our trump cards."

Some observers are of the opinion that Angolan President dos Santos was more chivalrous when he told the Portuguese Premier that, ‘’We’re aware of the difficulties the Portuguese people have faced and Angola is open and available to help Portugal face this crisis.’’

In truth, the response from President dos Santos was distinctly measured and stressed the need for mutual benefit from any deals, suggesting cold self-interest will lie at the heart of his decision-making. Clearly, the Angolan president relayed the message that Angola has control of the ball and will determine the pace and direction of the game.

Criticism

Critics and opponents of President dos Santos and the ruling MPLA government warn that although Angola might throw Portugal a lifeline, the latter should be wary of the less than honest practices that have come to characterise the way the Angolan state conducts business.

Angola carries the stigma of being notoriously corrupt and despite assurances by President dos Santos that the matter is receiving serious attention, little has yet transpired to back up his promises.

The dilemma for the Angolan president is the perception that the Futungo, a patronage network of about 200 individuals that includes members of the country’s political elite and members of the presidential family, is supposedly responsible for siphoning off billions of US dollars in state revenues for personal gain.

Critics predict that in light of this tendency there is more than an equal chance that once again, only the Angolan elite will gain from a greater Angolan economic involvement in Portugal while the rest of the population will continue to struggle to make ends meet.

Angola ranks only 148th on the United Nations’ 187-nation Human Development Index with about two-thirds of the 18 million population  living on less than US$2 a day.

In the annual corruption index just released by Transparency International Angola is placed at 168 out of 182 states. In Africa only Equatorial Guinea, Burundi, Sudan and Somalia are ranked as more corrupt.

The irony, according to critics, lies in the fact that while Angola needs all the capital available to improve the socio-economic position of the majority of the country’s population, the government is showing a willingness to bail-out Portugal.

Opportunity

The critics have a valid point but the economic woes of Western Europe and Portugal in particular, present Angola with a golden opportunity to increase not only the scope of its investments in Portugal but also its influence.

The psychological effect is also far-reaching. Not only is it ironic that a former colonial power is asking a former colony for financial assistance but it is also a defining moment in the relations between Portugal and Angola.

The reality of this changed relationship is well described by a Portuguese jurist as that, ‘Historically, the Angolans worked for the Portuguese, but now it’s the Portuguese who are working for the Angolans.’