Monday, 21 November 2011

Distressed Portugal turns to ex-colony Angola for capital

The world-turned-upside-down of the European debt crisis reached a new extreme last week when Europe came pleading for lucre where it once only seized it: Africa.


Guanyu 道 said...

Distressed Portugal turns to ex-colony Angola for capital

Angola economy forecast to grow 12% next year while Portugal expected to shrink 3%

New York Times
20 November 2011

(DAKAR, Senegal) The world-turned-upside-down of the European debt crisis reached a new extreme last week when Europe came pleading for lucre where it once only seized it: Africa.

The hands-out visit on Thursday of Prime Minister Pedro Passos Coelho of Portugal to its former colony Angola - once a prime source of slaves, then a dumping ground for the mother country's human rejects and now swimming in oil wealth - was a milestone of sorts.

While Europe's financial distress has already revived bad historical memories (70 years after Nazi occupation, Greeks are grumbling about taking marching orders from German gauleiters) and reversed others (there was talk of a Chinese rescue for the continent that once humiliated it), the Angola-Portugal moment has had no equal in its upfront plaintiveness.

'Angolan capital is very welcome,' Mr Passos Coelho said in Luanda, the capital city.

That may be an understatement. The former colony's cash could be essential as Portugal is forced to sell off state-owned companies and shutter embassies after a US$105 billion International Monetary Fund (IMF) bailout this year.

'We should take advantage of this moment of financial and economic crisis to strengthen our bilateral relations,' he said gingerly, mindful that Angola's economy is predicted to grow 12 per cent next year while his own country's is expected to shrink almost 3 per cent.

The Angolan president, Jose Eduardo dos Santos, was gentle after his meeting with Mr Passos Coelho, using language that African leaders are more accustomed to hearing from their European counterparts.

'We're aware of the difficulties the Portuguese people have faced recently,' Mr dos Santos said. 'Angola is open and available to help Portugal face this crisis.'

Angola is rich in cash thanks to its huge oil reserves and its equally significant underinvestment in its own 18 million people. By the end of 2010, it was Africa's biggest oil exporter; and by the end of June, it had US$24 billion in international reserves, according to the US State Department. But it ranks only 148th on the United Nation's 187-nation Human Development Index; around two-thirds of the population lives on less than US$2 a day.

The Angolan state oil company already owns 12.4 per cent of Portugal's biggest private bank, Millennium BCP, and the president's daughter, Isabel, bought 10 per cent of a dominant Portuguese media company, Zon, in 2009.

In Portugal, it is not uncommon to hear citizens grumble that the only people who can now afford the luxury shops in Lisbon are Angolans, or to be seated next to businesspeople who are seeking their fortunes in Angola. Hundreds of Portuguese companies operate there, and every major Portuguese construction company and all the major banks have interests there.

Angola has come a long way since it won independence from Portugal in 1975, when the statues of the former colonial masters, explorers and governors were torn from their plinths in Luanda, and 90 per cent of the Portuguese settlers fled. A bloody, 27-year civil war followed.

The tables have turned, the Portuguese want to come back. The Portuguese or Portuguese-descended population in Angola increased to 91,900 in 2010 from 21,000 in 2003.

Portuguese commentators insisted that there were no hard feelings. A headline in the leading newspaper Diario de Noticias read simply: 'The power of Angolan oil'.

Portugal Properties said...

It is crazy that Angola a country where 40% live in poverty can afford to bail out Portugal. the government should invest at home before going overseas.

Guanyu 道 said...

Exactly. Better to use the money to build more schools and infrastructure in Angola.