Angola 'Failed' yet 'Successful' - FRIDE

7Integration in trade andinvestmentBy 1985, ten years into the post-colonial period,Angola faced increasing disorder: more war, furtherdeterioration of basic utilities and infrastructure, arural economy in collapse and volatility of oil revenues.By 1986 these had shattered the dreams of Luanda’scentral planners about economic self-reliance,including the substitution of imports with home-madegoods. Once a major exporter of food, Angola by 1990was importing more than half its food needs, as well asmany other basic goods.As illustrated in this chart, foreign direct investmentexploded, with profits and other outflows nowsurpassing inflows in net terms. 22Consumer desires and consumer culture have sincemushroomed, fed by rapidly-growing publicity andmarketing industries in which Brazilian andPortuguese firms dominate. Advertising and consumerimages saturate national print and electronic media,whose content is largely imported from Brazil, the USand Portugal. Wants, needs and aspirations are undercontinual upward pressure as images of Westernlifestyles spread and intensify.Trade in imported goods became a key source of profitfor rich people and of informal employment for therest. Licenses to import provided access to hardcurrency credit; they thus became patronage plums,with military commanders among the first to get thefruit. Informal commerce with Zaire and South Africaflourished. Thousands of Angolans became longdistancetraders, importing consumer goods by airfrom Brazil, Portugal and the Far East.Chinese trade and investment have radically shifted thepace and direction of Angola’s integration. Total tradevolume has grown explosively, reaching US$ 25.3billion in 2008, roughly 14 times what it had been in2000. Angola is now China’s number one tradingpartner in sub-Saharan Africa. 23 Chinese businesspresence is expanding, driven largely by national loansand lines of credit tied to its national firms andlubricated by elite interchange via trade fairs and semi-15,00010,000AngolaInward Foreign Direct Investment1974-2007in millions of US dollars5,000source: UNCTAD 20090-5,00019741979 1984 1989 1994 1999 2004FlowStock22 UNCTAD 2009, FDI Statistics, Interactive Database,http://www.unctad.org/23 In 2008, China’s trade with Brazil, whose GDP is about 25times larger than Angola’s, was only twice as large as its trade withAngola.Angola: ‘Failed’ yet ‘Successful’David Sogge