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Economic and Social Development of Angola Due to Petroleum Exploration

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Economic and Social Development of Angola Due to Petroleum Exploration XVII INTERNATIONAL CONFERENCE ON INDUSTRIAL ENGINEERING AND OPERATIONS MANAGEMENT Technological Innovation and Intellectual Property: Production Engineering Challenges in Brazil Consolidation in the World Economic Scenario. Belo Horizonte, Brazil, 04 to 07 October – 2011 ECONOMIC AND SOCIAL DEVELOPMENT OF ANGOLA DUE TO PETROLEUM EXPLORATION DANIELLE FERNANDES DO CARMO (UFRJ) [email protected] The evaluation regarding the influence of petroleum production and exploration in a country is essential for a better usage of all the returns this commodity may generate. This article aims to explicit the current social and economic condittions of Angola in order to demonstrate if the country has improved its quality of life due to petroleum and gas exploration in the territory. The innumerable variables to be analyzed in this approach are: social and economic indices; and historic of the country’s development, which are divided into Human Development Index (HDI), Human Poverty Index (HPI), Child Mortality Rate, among others. Concerning the economic development of Angola, current economic indices will be applied, such as the Gross Domestic Product, daily production of oil and natural gas, oil and gas reserves which have been proved, among several others. This juxtaposition of social and economic indices will enable the evaluation of influences which Angola presents due to its insertion in the petroleum and gas production. It was concluded that petroleum and gas do not generate an even income distribution, however, they upgrade the country ratings in some social indicators (HDI, for example). Palavras-chaves: Petroleum and gas; Angola; quality of life; economic development. XVII INTERNATIONAL CONFERENCE ON INDUSTRIAL ENGINEERING AND OPERATIONS MANAGEMENT Technological Innovation and Intellectual Property: Production Engineering Challenges in Brazil Consolidation in the World Economic Scenario. Belo Horizonte, Brazil, 04 to 07 October – 2011 1. Introduction The Republic of Angola has approximately 1,246,700 km2 and is located on the west coast of Africa. The country is divided into 18 provinces and its capital city is Luanda. Angola has an extention of 4,837 km, its terrestrial borders are north on the Cabinda province with the Brazzaville Congo, north and east with the Democratic Republic of Congo (former Zaire), east with Zambia and south with Namibia. Angola is also gifted with a 1,650 km Atlantic Ocean seacoast. The country has an approximate population of 18,5 million inhabitants, of which, about 5 (five) million live in Luanda (Source: http://www.portalangop.co.ao/motix/pt_pt/portal/angola/index.html). In the historical context, Angola remained an enslavement country until mid 1876, continuing to be a typical exploited European colony. During that period it suffered foreign exploitation of the exportation of slaves and ivory until the abolishing of slavery. After 1876, the country lost a considerable portion of the market, particularly the international market, resulting from the end of the exportation of slaves. Thereafter, Angola directed its economy towards its internal interests, strengthening itself during the First World War and becoming less subject to the oscillations and dependencies of the international market. It was only a century later, in 1975, that the country obtained its independence. With the advent of its emancipation, the main focus of the country with the international market began to be petroleum, which until now represents one of the main sources of economic growth. After its independence the country underwent a civil war that lasted 27 years and affected 4 million people, generating immeasurable damage to their political and social institutions. The living conditions throughout the country, and especially in Luanda, reflect the collapse of its administrative infrastructure mainly caused by the conflict. Angola is still rebuilding its infrastructure destroyed during 27 years of civil war that ended in 2002. Despite the fact that the country is beginning to be recognized for its development and stability, the challenges persist, approximately 55 % of the population still survives on less than US$1,25 per day and the World Bank ranked Angola as one of the most difficult countries in the world to do business with due to its excessive bureaucracy, corruption and lack of transparency in public finances. Because of its severe economic situation, the Angolan government is limited in effective participation in its domestic social institutions. There are, however, many projects from the World Bank, UNDP (United Nations Developing Programme), and other organizations that anticipate a transformation in domestic policies, considering the economic development of the country. Regarding the constitutions, Angola had its first constitution elaborated in 2005, which dictated a semi-presidential system, in which the head of state was the one who had the power of the head of government. Currently, due to the elaboration of a new constitutional text in September of 2008, Angola presents a presidential system in which the President is the head of state. According to chapter II, article 56 of the Angolan constitution “The President of the Republic is the Head of State, symbolizing the national unity, representing the Nation in its domestic and international position, ensuring obedience to the Constitutional Law and is the Commander-in-chief of the Angolan Armed Forces.” A new constitution was approved in 2 XVII INTERNATIONAL CONFERENCE ON INDUSTRIAL ENGINEERING AND OPERATIONS MANAGEMENT Technological Innovation and Intellectual Property: Production Engineering Challenges in Brazil Consolidation in the World Economic Scenario. Belo Horizonte, Brazil, 04 to 07 October – 2011 January 2010, and following the restitution of the constitutional process, a new government was put in place. Under the new constitution, the president will not be elected by popular vote, but will instead be the head of the party with the most seats in parliament. The prime minister’s position was replaced by a vice-president who heads the government under direct presidential control. The new text also elaborates that the president shall be elected by universal suffrage with the majority of votes. This new text represented and still represents a great political and economic advance for Angola, since the country can be envisioned as a more stable nation due to its presidential system, attracting more external investments. Angola was characterized until the 1970´s as a predominantly agricultural country. Coffee was its main crop, followed by sugar cane, sisal, corn, coconut oil and peanuts. Among the commercial cultivations, cotton, tobacco and rubber stand out. The production of potato, rice, cocoa, and banana are also relatively important. Angola has an abundance of minerals, especially diamonds, petroleum and iron ore. Despite the fact that most of the population lives in poor conditions, Angola is the second largest petroleum producer and diamond exporter of Sub-Saharan Africa, only following Nigeria. For that reason, this article approaches a social and economic analysis of Angola, focusing on the influence of petroleum on the economy and quality of life of Angolans. In 1966 important deposits of petroleum were found which allowed the country to become one of the most important nations producing the commodity, with a consequent economic development made possible by such activity. The location of the diamond mines is around Dondo, a district of Luanda. The petroleum deposits, however, are located in Cabinda, proceeding from the coast to the capital. This article aims to show the current social and economic conditions of Angola in order to identify whether the country has improved its quality of life due to petroleum and gas exploration.. The article is divided into three sections. Section 1 will deal with the quality of life of Angola, bringing out data about its development, such as HDI (Human Development Index), HPI (Human Poverty Index), DGI (Gender Development Index), among others. Such indices represent several social, health, economic and life conditions, which in a succinct manner end up characterizing the living conditions of a region. Section 2 will discourse on the development of Angola in recent years, especially in the post-war period, citing the influence of petroleum in the region, as well as the improvements which came about from the commodity. The main objective of this section is to explicitly present the current economic characteristics of Angola through GDP, GDP per capita, among others, and the country’s development which has had an unexpected growth in recent years. Section 3, the last, will have the role of concluding the article, juxtaposing the social and economic indices, presented in the previous sections, in order to clarify the influences of petroleum and technology on the daily life of Angolan citizens. 2. Quality of Life in Angola Angola currently represents one of the largest economies of Sub-Saharan Africa. The country obtained a high economic development derived mainly from its mineral abundance. However, it still stands in the low human development group concerning HDI, with 68% of the population living below the poverty line and 15% who live in an extreme poverty situation 3 XVII INTERNATIONAL CONFERENCE ON INDUSTRIAL ENGINEERING AND OPERATIONS MANAGEMENT Technological Innovation and Intellectual Property: Production Engineering Challenges in Brazil Consolidation in the World Economic Scenario. Belo Horizonte,
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