Angola’s Economic Growth: Dynamic Chaos

Via The Wall Street Journal, an article on Angola’s rapid economic growth.  As the report notes:

“…Nearly 35 years after winning independence from Portugal, Angola is being populated by its former colonizer once again — this time by professionals and scores of workers laid off amid the economic slump.

Luis Amaro, a sales manager for Lisbon-based software company LocalSoft, saw the opportunity in July when he went to Angola on a business trip.

“Things are happening here. I can build a new life,” Mr. Amaro remembered thinking. He plans to move to Luanda at the end of this year with his wife and teenage son.

Portugal’s former colony, meanwhile, has emerged in recent years as one of the world’s fastest-growing economies. Angola’s gross domestic product has grown well over 10% annually since 2004, and topped 20% in 2007, bolstered by oil production and mining. Even with the drop in oil prices in 2008, GDP grew 14.8% for the year.

Keen to rebuild infrastructure destroyed by more than four decades of war, Angola, with a population of 12.8 million, has experienced an explosion in civil-engineering and construction projects.

Neither country’s government keeps exact numbers, but economists say an estimated 60,000 to 100,000 Portuguese nationals like Mr. Amaro have entered Angola over the past five years, not counting trips of long-term residents or people staying on short-term work visas. Manual laborers, doctors, engineers and bankers have flocked to the country. Demand for visas is so high that the most desperate job-seekers camp out overnight to get at the front of the line at the Angolan consulate in Lisbon.

“In the last few years, Angola is the country that has received the most emigrants” from Portugal, said Rui Pena Pires, a sociology professor at the CIES, the Center for Sociology Studies and Research, in Lisbon. According to the Angolan consulate, some 17,000 Portuguese nationals moved to Angola on visas of at least one year in 2006. For both 2007 and 2008, that number surged to roughly 24,000. By the first three months of 2009, nearly 7,700 Portuguese had packed their bags for Angola.

[growth in angola]

“We don’t see it going down anytime soon,” said Mr. Pires.

That movement is striking in contrast to European countries’ efforts to tighten restrictions on immigration, including on people from their former colonies and territories.

Angola’s recent growth spurt comes after decades of damage and stagnation due to military conflict. After centuries as a colony and then as an overseas province of Portugal, Angola’s struggle for independence erupted in war in 1961. Angola declared independence on Nov. 11, 1975, but the country’s rival political groups launched into a bloody civil war that killed and displaced millions. A cease-fire was reached in 2002. Since then, Angola has been in the process of recovery.

Filomeno Vieira Lopes, an economist and member of the Angolan opposition party Front for Democracy, said three factors have contributed to economic growth. “First, there was the rise in petrol prices and the rise in production; second, the interest from China; and now, all the rebuilding after the war,” he said.

The need for infrastructure — roads, railways, pipelines and skyscrapers — created the most demand for labor. According to Portuguese government figures, Angola imported more than €2.27 billion ($3.34 billion) in goods from Portugal in 2008, up from €1.68 billion in 2007.

“There is not a single industry in Portugal that has not benefited from this,” said Daniel Bessa, a former Portuguese minister of economy. In March of this year, Angolan President José Eduardo dos Santos and his Portuguese counterpart, Aníbal Cavaco Silva, signed a deal to create a joint Portuguese-Angolan investment bank.

While Angola is luring unemployed and underemployed Portuguese, it has many internal problems, including an unemployment rate of its own that has reached 40%, increasing inflation and widespread poverty. This reality has created a “certain a level of animosity,” toward foreigners, who are seen as taking jobs from Angolans, said Mr. Vieira Lopes.

Angola has to be constructed,” said the professor. “Borders are disintegrating. They don’t make sense in this globalized world. We need qualified people — not just people with advanced school degrees, but people who are qualified in all senses of the word.”

Mr. Amaro got a sense of that need when he first arrived at Luanda’s Quatro de Fevereiro airport in Angola. “I left a country that was very calm, very organized and predictable,” he said. “I entered a country where an agenda isn’t possible. Traffic is chaotic. It’ll take you three hours to cross 12 kilometers.”

That disorder represented to him the frenzy of rebuilding.

João Carlos da Costa, an official at Jobfair Global Search, a Lisbon-based recruitment company, said he doesn’t even bother advertising jobs. “If we said that we were looking for Portuguese applicants, we would have thousands at our door within the hour,” he said.

One of the appeals of Angola’s job market is high salaries. For many of Mr. da Costa’s clients in Angola, a starting salary for an entry-level position in banking or civil engineering is between $2,000 and $5,000 a month. By comparison, a high starting rate in Portugal for a similar job is €1,000 a month.

The salary is what lured Domingos Da Rocha, a quarry worker, to Angola in late 2007, said Alice Silva, his wife who stayed behind in Boelhe, in northern Portugal.

Mr. Da Rocha was one of several dozen men from the small town who went off to Angola when local rock-quarry jobs began to dry up. Ms. Silva said her husband tried working in Switzerland, but “he didn’t earn enough and he missed us.”

Now, Mr. Da Rocha earns €2,000 a month working in a mine in Tulunga. There, he lives in a camp with other Portuguese and Angolan workers. He plans to return home in late September.

When Mr. Amaro goes to Luanda, Angola, to house-hunt in October, the software sales manager hopes to lead an expansion of his company, LocalSoft, throughout Angola and into neighboring countries.

“Anything can happen here,” said Mr. Amaro. “It’s chaotic — but in a dynamic way.”

This entry was posted on Monday, September 28th, 2009 at 9:21 am and is filed under Angola.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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