Outgoing ambassador urges greater transparency and donor patience

As short-term priorities Angola should cement a sound relationship with the International Monetary Fund (IMF) and embrace the UK Extractive Industries Transparency Initiative (EITI), to inspire confidence and attract funds from donors and investors. That is the view of outgoing British Ambassador to Angola, John Thompson, who believes that improving Angola's reputation is key to helping it shift its post-war development up a gear. "It is essentially a question of building up the trust, and that trust will then hopefully transmit itself to the donor community but, more significantly, the investor community," Ambassador Thompson, who is retiring at the end of March, told IRIN. Angola, which signed a peace deal in April 2002 after 27 years of civil conflict, is rich in oil and diamonds but poor in almost everything else. Much of its health and education services and vast chunks of its infrastructure were destroyed during the war, and most of its 13 million people continue to live in dire poverty. Some observers allege that corruption and mismanagement prevent the majority from benefiting from the country's natural resources - hence the focus of both the IMF and the EITI on transparency. Ambassador Thompson argued that while Angola had taken "major steps forward" in the last three years to improve its transparency record, it could go further. Local teams are working with the IMF to implement a Staff Monitored Programme (SMP) that would encourage the country to open up its books to scrutiny, helping it meet the standards demanded by global institutions and allowing it access to cheaper credit on more favourable terms than the expensive oil-backed loans it has favoured in the past. "I attach special importance to Angola getting a good, solid relationship with the IMF," Thompson said. "An SMP would enable the IMF, on behalf of the world, to monitor that Angola is doing what it says it is doing; that will do more than anything else to help reduce the negative perception of Angola. "If Angola can negotiate with the IMF, and develop a good working relationship, then that should free up concessional finance. It could also lead to an agreement with the Paris Club in rescheduling official debt ... it should be the start of a virtuous cycle," he explained, adding that an IMF mission was due in the country very shortly. Thompson expressed disappointment that no Angolan government representative attended the EITI conference in London this month, as it had been designed to help countries and companies increase the transparency of revenue and payment records, and enhance the governance of resource windfalls. "I think it really was a missed opportunity," he said, noting that delegates from the state oil company, Sonangol, and Angolan civil society had gone to London. "Angola could have taken the opportunity of telling the world what it has done. It could have also learned from other countries who were present - African and non-African countries - the steps that they have taken, how remarkably painless these steps have been, and what a positive impact it has had, not least on the reputation of the countries. Angola's reputation needs all the help it can get." However, the country has expressed willingness to sign the EITI, and was "about 80 percent towards full participation". "Angola just needs a little bit more of an impetus. I think and hope that it will sign, because I can't think of a good reason why it should not - there is nothing that EITI requires that Angola could not readily do," he observed. Thompson has been a consistent advocate of the UK initiative during his three years as ambassador, and stressed that closer ties with the IMF and EITI backing were not mutually exclusive. "I have argued - unsuccessfully - that signing up to the EITI would help Angola's relationship with the Fund and is not an alternative to it: it's an integral part of the whole process of moving towards greater transparency. It's an easy win, frankly, and the sooner they do it, the better," he said. Angola has had a rocky relationship with the international community and has often taken umbrage at the constant demands for greater openness. But bringing on board both these initiatives would soothe donor fears and help to lure private capital. Despite several UK trade missions and Angola's "very exciting prospects", UK investors, turned off by the country's poor reputation, were not yet striking concrete deals. "Getting a deal with the IMF and embracing fully the EITI are part of the whole process of improving the image of the country; do these more or less simultaneously and Angola has a double whammy in its favour," Thompson said. He dismissed the view that Angola's considerable natural resources - the country pumps more than a million barrels of oil per day - precluded it from international support. "The tasks facing Angola are far too big for any one country. Angola is resource-rich, but not particularly cash-rich," he said, noting that much of the oil money was used to pay off oil-backed loans or reimbursing substantial investments by oil companies. "It's going to be towards the end of the decade before Angola is actually earning the large sums of cash that people assume it is now earning," he added. Highlighting increased British aid to the country of around £9 million (US $16.8 million), the Ambassador also rejected the idea that donors were losing patience with Angola. With the UK-led Commission for Africa report calling for developed countries to double their aid to the continent, Britain would not reduce its assistance to Angola, he said. Instead, there would be a shift away from emergency aid, such as food and medical supplies, towards more developmental projects. "As far as the UK is concerned, there is no loss of interest," Thompson emphasised. "We are, however, switching to other priorities," he said, citing a project to prepare civil society for participation in the national elections, due in 2006; a US $30 million programme over six years to combat urban poverty around Luanda; and a partnership to promote HIV/AIDS awareness via radio programmes. Ambassador Thompson, who was number two at the British Embassy in Angola between 1979 and 1981, said he was leaving with mixed emotions, but believed that the future of the country "can be, should be and probably will be, bright". His latest stint had been particularly intriguing, as he witnessed the country's transition from war to peace, from Marxism to democracy, and from a command to a market economy. "Those three transitions are happening, inevitably, at slightly different speeds; speeds which, for many here, are far too fast and, for many outside observers, are far too slow," he said. He urged the international community to have patience and help Angola as it moved through these transitions, in what he described as a "frustrating but extremely rewarding" period of change.