Cautious optimism for 2005

Ask any humanitarian worker, government official or Angola-watcher about priorities and key events to look out for in 2005 and there will be as many answers as there are respondents. As the country slowly rebuilds after 27 years of civil war, the list of issues to be tackled is immense, and further complicated by the fact that Angola is in a pre-election year, preparing for its first ballot in more than a decade. But the common theme as the country moves into its third year of peace is that both the government and humanitarian organisations working in the country will, by and large, switch their activities away from immediate aid to longer-term development strategies. "2005 marks the first year that Angola is breaking away from a humanitarian response to a development response," said Douglas Steinberg, country director at CARE. The New Year has begun with guarded optimism, but with a clear realisation that much remains to be done. 2005 could potentially provide some key developments in Angola's rehabilitation: the last of the refugees who fled the brutal conflict could return home; there is still a chance to quell the spread of HIV/AIDS; and the government appears committed to reducing poverty. A donor conference and an International Monetary Fund (IMF) agreement are also real possibilities, while continued high oil prices and a hefty credit line from China spell good news on the economic and reconstruction front. STILL VULNERABLE But these prospects have been tempered by the fact that in many areas, particularly rural parts of the country where access to services is difficult, people remain extremely vulnerable. According to the World Food Programme's Vulnerability Assessment for 2004-05, around 1.5 million people are exposed to food insecurity - a figure the Angolan government believes is underestimated. On top of that, basic social services, such as health care, clean water and education, are still inadequate or missing entirely, particularly in areas receiving returnees. And despite peace and tremendous oil wealth, the vast majority of Angola's 13 million people still live in dire poverty. "Although the situation in much of Angola has shifted out of a humanitarian emergency, populations now face a critical socioeconomic situation," the United Nations said in its Angola 2005 Humanitarian Framework. According to UN estimates, 45 percent of Angolan children suffer from chronic malnutrition, only 35 percent have access to primary health care, and 38 percent do not have access to potable water. "The feeling is that this country has taken the path to recovery - of that there is no doubt - and I don't think there is a danger of slipping again into conflict," said Philippe Lazzarini, head of the UN's Office for the Coordination of Humanitarian Affairs (OCHA). "But you have to pay attention to the real situation of the civilian population, who are expecting a drastic improvement in basic social services, which has not been the case so far," he added. RICH AND POOR GAP Many argue that the hefty disparity between rich and poor is in fact deepening, with Angola's huge oil wealth - the country pumps more than one million barrels per day and is sub-Saharan Africa's second biggest crude producer - failing to trickle down to the bulk of the population. They fear the country is developing a two- or even three-tier society: the capital, Luanda, and the coastal regions - which benefit most from the hydrocarbon industry - are beginning to pick up, but considerable areas of the hinterland are still struggling. The government has budgeted for economic growth of 16 percent in 2005, making Angola one of the world's fastest-growing economies, but whether ordinary Angolans will actually see the benefit remains to be seen. "In 2005 Angola will grow, but the real question is if it will be a growth only of gross national product (GDP), or if the real incomes of people will grow," said independent economist Jose Cerqueira. "Real wages are diminishing each year - it is not sustainable to have growth in the economy, but people getting poorer; it creates misery and the prospect of social problems," he added. In an effort to tackle this poverty problem, and address reconstruction and development needs, the Angolan government last year started work on its Poverty Reduction Strategy Paper (PRSP). A long-term project, it deals with water, sanitation, education and health infrastructures, and aims to have a positive impact on livelihoods and employment. But it has received a lukewarm reception from civil society, which was only consulted very recently, and which sees the paper more as a "shopping list" of proposals rather than a concrete plan of action. FOCUS ON DEVELOPMENT Almost all humanitarian efforts in 2005 will centre on economic and social development, coupled with some emergency-type assistance, such as food aid. The United Nations will focus on providing basic social services for returning populations and continuing the repatriation of Angolan refugees. It has also highlighted the fight against HIV/AIDS, noting that the window of opportunity to curb the spread of the disease should be seized without delay. But all organisations may find it tough to find financial backing for their projects as the country shifts into a development phase. "Funding for development is much less generous that it was for the humanitarian response phase. We have to be more cost-effective, more focused, but, at the same time, build staff skills and project approaches," said CARE's Steinberg. Certain sources of funding could potentially kick in this year. One government source said an agreement with the IMF, which will open the door to other mechanisms of cheaper borrowing for Angola, was still on track for 2005, albeit towards the end of the year. Observers are also more upbeat about the prospect of a donor conference. A hot topic of conversation for years, donors have been reluctant to give their support until Angola published its poverty reduction strategy and improved its murky transparency record. "A donor conference is likely this year," said Allan Cain, director of the NGO, Development Workshop. "Donors will find it difficult to put it off any longer. 2006 is the year of elections - a donor conference would be too politicised. The only opportunity is now." CHINA STEPS IN One source of funding that is certain to become more visible is the $2 billion credit line from China, already being used to rebuild many of Angola's roads, railways and bridges destroyed during the war. Reconstructing Angola's shattered infrastructure is a top priority for the government, which believes that such links are vital to spur the non-oil economy. "We have to make a big effort in rebuilding the infrastructure: if you do not rebuild infrastructure, there cannot be any viable economic activity," Deputy Prime Minister Aguinaldo Jaime said recently. While a massive reconstruction project should be good news for Angola, the terms of the Chinese deal have come in for sharp criticism. "It is a huge amount of money, but it creates some internal problems because, behind the loan, Chinese firms get work in Angola without competition," said economist Cerqueira. "There is a condition in the loan that 30 percent will be sub-contracted to Angolan firms, but that still leaves 70 percent which will not." "Angolan businessmen are very worried about this, because they don't get the business, and the construction sector is one in which Angolans hope they can find work, helping to build schools and roads," he explained. Although the Angolan government was applauded in 2004 for its strides in opening up its books to scrutiny, the China credit line has once again muddied the waters and sparked fears of patronage and favouritism. "I'm concerned about the Angolan component of these projects," said one international aid worker. "Will this 30 percent benefit Angolan workers, or just some Angolan businesspeople with political influence? I would hope this 30 percent would go to capacity building of Angolan tradespeople." SETTING PRIORITIES There are a host of other issues which should be included in Angola's seemingly endless 'To Do' list: issuing the population with identity documents, completing the electoral register ahead of next year's poll, clearing landmines, implementing a new land law, decentralising decision-making and improving communication in the provinces, not to mention fighting the health scourges of malaria, tuberculosis and sleeping sickness. Perhaps the biggest challenge of all is deciding what to do first.