Transparency key to long-term stability, ICG

Any further delay in implementing meaningful political and economic reforms in Angola could undermine the country's long-term stability, the International Crisis Group (ICG) said on Tuesday. In its latest report, "Angola's Choice: Reform or Regress", the international think-tank warned that the government's failure to adequately address serious economic disparities among the population could threaten growth and spark localised violence. The report suggested it was in the government's interest to "move down the political reform path" by encouraging economic transparency, especially in the oil sector, and fostering the increased participation of civil society in its reconstruction efforts. "Political and economic reform ... would ensure more broad-based economic growth, allow a genuine private sector to develop, free up hundreds of millions of dollars for social investment through a more transparent budget process, transform the political system into a more pluralistic one that promotes human rights, and lay the groundwork for long-term stability." The ICG argued that the upcoming presidential elections, expected sometime between 2004 and 2006, could provide the ruling MPLA with an opportunity to improve the state's capacity to deliver goods and services to the vast majority of Angolans living in abject poverty. "It [MPLA] never previously had to rely on popular support for legitimacy, given the war-induced state of emergency ... now, in the context of open political competition, it must reach out to the civilian population to expand its support base," the report noted. The Brussels-based group added that the government had become increasingly sensitive about its international image, suggesting that its post-war re-emergence could create a "dynamic for domestic reform". However, the report also underscored several obstacles which could frustrate economic reform efforts. Of central concern was the personal interest many officials allegedly had in maintaining the status quo. A regional analyst was quoted as saying: "The system is based on patronage. Transparency would be counter-productive." The lack of a unified commitment to serious change among the senior leadership of the MPLA could also delay the implementation of reforms, the report alleged. Nevertheless, there were elements within the government and civil society that wanted to liberalise the political system and make the economy more transparent. ICG Africa Programme Co-director John Prendergast told IRIN: "There are strong voices within the government that want to pursue a more robust economic reform agenda. The incentive driving reform advocates is to access multilateral debt relief and lending that would reduce the country's onerous debt burden and decrease the cost of borrowing significantly, thus enhancing the ability of the government to underwrite important domestic investment initiatives." Prendergast added that economic diversification was imperative for reform. Oil accounts for 90 percent of exports and 80 percent of tax revenues in Angola. The ICG recommended that the agricultural sector be given a higher priority, not only for immediate recovery, but also for obtaining the longer-term benefits of diversification. The authorities should work with the US government to qualify for participation in the benefits of the African Growth and Opportunity Act (AGOA), tariff-free trade agreement. "Quiet engagement and partnership, especially by donors and oil companies, is the most effective way to influence government reform positively. The government's strong desire for a donor's conference in 2003 also offers a significant opportunity to engage and support the reform process," Prendergast said. But improved accountability was key to economic recovery, the report noted. "The central problem in Angola's management of [the] economy is that portion of oil wealth that goes unaccounted for." Transparency International ranked Angola third from last in its 2002 Corruption Perception Index. The International Monetary Fund (IMF) recently accused the government of siphoning off around US $1 billion in oil revenues in 2002, and over US $4 billion during the last five years. The ICG also highlighted the need for political pluralism, saying further support was needed to strengthen civil society groups. This would buttress their capacity to hold government accountable on public welfare, economic reform, human rights and democracy issues. "The support of peace by civil society organisations was substantial and effective. It holds a great deal of potential for doing the same on the political and economic reform agendas. To have a greater impact, however, will require greater coherence and organisation than exists presently. But the elements are there for this to happen," Prendergast said. The report recommended that donors fully fund an agricultural assistance programme in advance of the September 2003 planting season. Additionally, it encouraged donors to provide increased assistance for political party development. For the full report