I’m going to ask you a question and, please, don’t Google it (or read the title, oh wait,
never mind…).
Anyway, we’re betting that you didn’t know that Angola was the world’s most expensive
country…
Right?
Come on… don’t lie…
Well, when it comes to expensive places to live most people think of New York or Hong
Kong or Zurich.
Well, that’s not even close to right...
The world’s most expensive city is LUANDA, the capital of Angola.
And yes, that’s an African country.
If you want rent an apartment in Luanda you can end up paying over $5000 a month.
The cost of a Big Mac menu in Maccie Ds?
Yep, that’s 19 American Dollars.
Want to have an internet connection at home…
well you better hope you’ve got a healthy bank balance, because that’s going to cost
you around $300 a month.
No jokes.
Alright, so now you might be wondering…
Well, what the hell is going on in Angola?
Is this some extremely wealthy country that no one knows about?
Well… no.
The Republic of Angola is one of the world’s biggest oil exporters, surpassing other oil
rich countries like Qatar.
Nevertheless, half of its population has no access to clean water.
2 out of 3 kids suffer from malnutrition and 1 out of 6 dies before being 5 years old.
Meanwhile, right on the other end of the spectrum, Angola is the home of one of the wealthiest
women in the planet, ISABEL DOS SANTOS, who, by the way, is the daughter of the former
president, JOSE EDUARDO DOS SANTOS.
At this point, you might have figured out what is going on here...
Ahh yes, Angola is one of the most corrupt countries in the world.
Indeed it was home to one of the biggest financial fiascos in recent years, with several companies
losing billions of dollars in this country.
Well, perhaps this is no surprise to you…
I mean, at the end of the day, Angola is still a third world country.
Nevertheless, there is a question that must be asked here.
How did they get here?
How could a country possible have such a bizarre economy?
And, more importantly, how is it possible that the ruling party manages to keep control
of this country?
Well, today, we are going to answer these questions… but before we do, let’s take
a look at the history…
DIAMONDS, BLOOD AND…
DIPLOMACY?
The first thing we need to understand when we talk about Africa is that most of the African
countries where colonies in past centuries.
European powerhouses like Belgium, France and Portugal invaded most of the continent,
imposing rules and treating the natives like animals.Angola was no exception.
Until 1975, Portugal made a fortune with its diamond mines in the country.
Nevertheless, in that same year the Portuguese government, pushed by the UN and its own people,
recognized Angola’s self determination.
And then the question was…
What happens after a country stops being a colony?
Who takes care of the governmental affairs after the European colonizers leave?
Well… instead of answering to this question by calling for elections, the many Angolan
tribes created different fronts and started a civil war.
This was a conflict that lasted for over 25 years.
Even today, there are areas where you cannot walk in because they are covered with landmines.
And now you might be wondering…
How is that possible that such a poor country could afford all those weapons?
Well… the answer there lies in those diamonds we just mentioned.
All sides of the war sold diamonds in exchange for arms.
But… who provided these?
Well, after 1976, when there was a true civil war, there were two sides.
On one hand, there was the UNITA group, who dominated the South of the country.
UNITA was supported by South Africa, China and to a lesser extent, the United States.
Those were the days of the cold war.
Every war in any part of the globe was seen as a good opportunity to weaken Soviet influence.
Plus, it was known that Angola had oil reserves…
This also explains why the Soviet Union wanted to take part in the conflict too.
They supported the Angolan People’s Liberation Movement, or as they called it, the MPLA.
For most of the war, the leader of this MPLA was Jose Eduardo Dos Santos.
Now Dos Santos did have the support of the Soviet Union, but, interestingly, the country
that offered the most support was actually CUBA.
‘We are following our internationalist duty when we are helping the people of Angola’
Fidel Castro didn’t stop at selling weapons to Dos Santos.
He sent over 30,000 troops to the country.
But not only that - during the 1980s, the area that was under the MPLA control received
a lot of doctors and engineers from Havana.
This explains, partly, why Dos Santos won the conflict.
In fact, despite the war still being ongoing during the 1990s, this man had taken the control
of most of the country.
However,
that Cuban help was not as useful as you might think.
For example, the agriculture experts sent from Cuba tried to grow sugar cane on Angolan
soil...
But, apparently, those seeds were not good for the kind of soil that you find on Angola.
And this is why, in just a few years, most of the farming lands of the country became
totally infertile.
That meant starvation for Angolans and anger towards the Cuban “help”.
As if this was not enough, after the collapse of the Soviet Union, Eduardo Dos Santos realized
that it’s a good idea to befriend the capitalist countries.
At the end of the day, these were the countries which would but their oil.
On the other hand, America was not helping UNITA anymore.
So, what did this country need to do to become an ally of the so-called ‘free world’?
Well… there was only one thing to do and that was to remove the word ‘MARXIST’
from their vocabulary and swap it out for: (sarcastically) ‘FREE MARKET DEMOCRACY’.
And yes, I say that with a touch of sarcasm because Angolan capitalism…
well, it’s certainly one of a kind…
DEMOCRACY, ANGOLAN WAY
Now, the year 2002 was a turning point in Angolan history.
Eduardo Dos Santos signed a peace agreement with his adversaries.
Since then, UNITA became a political party, with a right to run for elections, and for
the first time in history, Angolans could enjoy democracy.
But not only that, in that very same year, another meaningful thing happened:
“BP makes first ultradeepwater oil discovery off Angola”
Suddenly, Angola became an oil juggernaut, selling tons of dinosaur juice to China and
United States.
In just 5 years, Angola multiplied its wealth by 4.
Companies like Exxon Mobile in US or BP in UK, invested heavily in Angola.
And, of course, they sent engineers and workers to live in the capital, Luanda.
And, of course, these people wanted good quality houses, cool bars, and the same kind of goods
they could buy back home.
But all those things are hard to find in a country that, years before, was having a big
old civil war.
In other words: the supply was small and, yet, the demand wouldn’t stop growing.
As a result, the prices for western goods, went sky high...
But wait a minute because there’s more!
Imagine we have a construction company in China and we want to build a housing block
in Luanda.
Well, the first thing we want to do is to register a company in Angola, right?
Well, that process can take over 6 months.
During that time, it’s perfectly normal that the government finds lots or problems...
They ask you for this paper, that registery, that other report that you probably don’t
have…
You know, the sort of report that a nice stack of cash, handed to a sweaty palm under a table
can fix...
Now, according to several reports made by organizations like TRANSPARENCY INTERNATIONAL,
almost every company who does business in Angola has had to do some bribery of a government
official.
But wait a minute because that is still not the end of it…
Those oil companies like Exxon Mobile or British Petroleum, who were willing to do businesses
in Angola still had to establish partnerships with the government or SONANGOL, an Angolan
state owned company.
And…
now have guess who is the current president of this company.
Oh, yes, that would be our friend Isabel Dos Santos, the daughter of the president of the
country.
This explains why Isabel Dos Santos became the wealthiest woman in Africa in so little
time.
Every major Angolan investment held by Dos Santos stems either from taking a chunk of
a company that wants to do business in the country or from a stroke of the president's
pen that cut her into the action.
For all this time, the government of Dos Santos, the father, restricted access to the country
for international journalists.
In fact, most of the corruption scandals we know about have been discovered by the governments
of the UK and the US.
Of course, with a political climate like this, no Angolan wanted to start a company.
At the end of the day, the reality was that you needed to be a millionaire in order to
pay those various bribes...
And even if we would put the cost of bribery aside, just with the bureaucracy, you would
need more than $1000 USD
to start a normal bar in Luanda.
In a country as poor as Angola, $1000 is a fortune.
But not only that!
Those international companies were not willing to invest in the country more than the minimum
required to extract the oil…
So now you might be wondering: What are the consequences of all of this?
Well, the outcome is that dinosaur juice is the only Angolan export.
In the last decade, the only business made in this country has
been the extraction plants for crude oil and the home for the company's workers...
By the year 2014, oil represented 97% of Angolan exports.
Does this sound familiar to you?
Well, if you’ve been subscribed to VisualPolitik for a while, you might
be thinking about a country with a very similar economic system.
Yes!
We are talking (again) about Venezuela.
Just like what happened on NICOLAS MADURO’s country, when the oil market price went down,
Angola went right down along with it.
And now, let’s get back to the example of the Chinese construction companies.
Many firms from China invested millions in building entire neighbourhoods for expat professionals
coming to the country.
But now there’s no more oil industry and… therefore, there are no more workers.
In summary, there is only one winner in this story.
And that person is JOSE EDUARDO DOS SANTOS and his daughter, ISABEL, who has already
invested those enormous profits overseas.
Most of the big Portuguese firms, from GALP to UNITEL, are now under the control of this
family.
If Portugal was a colonizer in the past, it has now become Angola’s money launderer.
Angolan elites have sent an estimated $190 billion dollars out of the country.
And, while entire country is having a crisis,
Isabel Dos Santos, who identifies herself as an “ENTREPRENEUR” on her twitter account,
goes out with celebrities like Kim Kardashian.
All of this being said, you might have guessed that Dos Santos family is not that popular
in Angola, right?
Well, not really.
In fact, their political party, the MPLA, keeps stealing the show election after
election, getting over 70% of the votes.
This last August (2017), Angola held an election and, despite the fact that Jose Eduardo Dos
Santos was not a candidate anymore, his party won again.
And why does this happen?
Well, I’m afraid we’re probably never going to know...
‘Angola rejects EU election observers’
And now the question becomes: Can Angola get rid of this corrupted ruling class one day?
Can they follow
the trend of those African lions like Ghana or Rwanda?
Well, let us know what you think in the comments below.
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