President Obama’s current trip to East Africa (Kenya and Ethiopia) and the recent extension of the African Growth & Opportunities Act (AGOA) are an opportunity to ponder the tenuous link that, without sound domestic policies, exists between trade and poverty reduction. A recent PBS report on Angola provides a stark illustration:
Angola is the second-largest oil producer in sub-Saharan Africa. However, about 36% of the population lives below the poverty line, reports the African Development Bank (AfDB). The country is reportedly flush with money from oil and diamonds; yet Angola ranks near the bottom of the U.N. Human Development Index (149th out of 187 countries).
Angola’s capital, Luanda, has been ranked as the world’s most expensive city for expatriates — beating out Tokyo, Hong Kong, and Moscow. Angola also bears the unwelcome distinction of being the country with the highest child mortality rate in the entire world. The World Bank reported in 2014 that 167 out of every 1,000 children born alive in Angola were likely to die before reaching the age of five. And the government just proposed to cut the health budget by 30%.
What apparently abounds in the country, and accounts for these discrepancies is corruption. Corruption, says Transparency International (TI), is “. . . the abuse of entrusted power for private gain”. Economically, TI continues, it depletes national wealth as corrupt politicians invest scarce public resources in projects that will benefit them rather than their communities. In Angola, judges drive jaguars and the President’s daughter is Africa’s youngest billionaire. Angola is one of the least transparent countries in the world and one of the most corrupt. It is ranked by Transparency International at 161 out of 175 countries and as fifth (5th) from the bottom in Sub-Saharan Africa.
Angola is not the only corrupt country in Africa; nor is corruption restricted to the African continent. Other countries share this scourge. However, the disparities between the wealth generated by the exports of this oil-rich country and the stark conditions in which one-third of its population lives help to shine a bright light on the criminal consequences of corrupt domestic policies.
Angola will, undoubtedly, continue to benefit from its ability to export its oil under AGOA. Trade alone, however, can only do so much.
As we continue to explore this topic, we will address some questions that occurred to us about the connections between corruption and the legacy of colonialism and the present role of the companies doing business in Africa.