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Russia and Angola: Stuck Between Diplomatic Rhetoric and Business Reality

Kester Kenn Klomegah

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Russian President Vladimir Putin held talks at the Kremlin with President of Angola leader João Lourenço on strengthening cooperation in trade, the economy and culture, as well as current international and regional matters.

“Angola is a reliable and old partner. We need to consider what we need to do, without delay, to stimulate our trade and economic ties. There are interesting fields of activity, such as the diamond industry, fisheries and space exploration. There are also cultural spheres, such as education and the training of personnel,” Putin told the Angolan President at the meeting.

On his part, the Angolan leader João Lourenço added: “We have come to Russia on an official visit to strengthen our ties and cooperation and, if possible, to promote interaction between our countries. Russia is doing splendidly in the spheres of mineral resources, education, healthcare and defence. But we would like to know about Russia’s potential in other fields so we can promote cooperation in these areas of the Angolan economy.”

He informed further that his opening speech at the Angola-Russia Forum in Moscow was designed to attract the interest of Russian business people to investing in the Angolan economy, and finally added “many countries are doing this, and we are confident that Russia can help with economic diversification.”

Putin and Lourenço signed a joint communique after their consultations. The number of bilateral documents signed included the intergovernmental agreements on the peaceful exploration and use of space, and on fishery and aquaculture, as well as documents on cooperation in diamond mining and processing.

Consultations continue on draft agreements on cooperation in the peaceful use of outer space and nuclear energy, commercial shipping, mutual protection of classified information, simplified access to Angola’s ports for Russian warships, as well as agreements involving Russia’s Justice Ministry, Ministry of Industry and Trade and Communications Ministry, according to the Kremlin Press Service.

Before their final departure from the Kremlin, João Lourenço presented Vladimir Putin with a high Angolan award – the Order of Agostinho Neto, the first President of Angola – as a sign of gratitude for the years of support for the Republic of Angola.

Agostinho Neto Order is the highest distinction of the Angolan State with a single degree, granted to nationals and foreigners, in particular Heads of State and Government, political leaders and other heavyweight individuals.

Earlier at the Angolan-Russian Forum, the Angolan leader said that political and diplomatic relations with Russia were “excellent and privileged” but asked for more Russian private investment.

In his objective assessment about economic engagement by foreign players, only few Russian companies are comparatively operating in the Angolan market and limited solely to the exploration and production of diamonds, to the financial system and to the construction of hydroelectric dams.

“Angola wants to change that scenario through public-private partnerships or by creating Angolan-Russian companies with a focus on the manufacturing industry, agro-industry, fishing, energy, tourism, geology and mining, among other sectors,” he added.

Lourenço, however, recalled the long-lasting tradition of “friendship and solidarity” between the two countries, which have remained firm and strong despite the great changes the world has seen in the last decades. Angola counts with Russia’s solidarity and support at a time when it must guarantee economic cooperation and sustainable development, the president said.

Russia-Angolan interaction in the Kremlin has attracted attention of a former Russian diplomat. “Angola is a priority area of Russia’s cooperation in Africa. To begin with, that was the case since the time when Angola fought for its independence. Secondly, this is due to Angola’s huge economic potential,” explained Sergei Nenashev, who served as Russia’s Ambassador to Angola from 2007-2012.

“Now the country lives off oil, gas and, partially, diamonds. On the other hand, Angola has vast resources. Today, Russia and Angola maintain ties in all areas of interstate relations, including culture, education, personnel training, military-technical, financial and economic cooperation.” the former Ambassador told the Kommersant daily newspaper.

Russians like historical references. As expected, the local Russian media were awashed with articles highlighting Russia’s historical contributions to the independence of Angola, the development and strengthening of friendly relations with the country during the Soviet era. That Russia has promoted political dialogue, including the exchange of visits at the high levels, as well as trade and economic cooperation and cultural relations between the two countries.

Media reports offered a number of examples of many areas of cooperation. But Russian companies, at least over the past ten years, have made little results or impact on development of the country. Alrosa is involved in diamond mining in Angola’s largest Catoka deposit. Global Resources is involved in geological prospecting. Rosneft has won a tender for working in Angola. Russia and Angolan companies are cooperating on high technology.

Itar-Tass reported that Russian truck-maker Kamaz may organize assembly of trucks in Angola and Russian Railways may participate in upgrading the rail infrastructure in this country. Russian Railways (RZD) in restoring and upgrading the railroad infrastructure are among looking-forward cooperation projects.

But, Professors Vladimir Shubin and Alexandra Archangelskaya from the Russian Academy of Sciences’ Institute for African Studies, have argued that “both Russia and Angola still need to be more strategic in aligning their interests, and more proactive in carving out efficient bilateral instruments and mechanisms in order to promote economic exchanges and reap the benefits of a fully-fledged partnership.”

Cooperation between Angola and Russia date back to 1976, when the two countries signed a treaty of friendship and cooperation. But official figures are still staggering, trade between the two countries stood at US$500 million in 2016, 15 times higher than that of 2012 (US$25 million).

Angola has diamonds, oil, gold, copper and a rich wildlife, forest and fossil fuels. Since independence, oil and diamonds have been the most important economic resource. It’s a member of the Southern African Development Community, an inter-governmental organization that has made its goal to further socio-economic cooperation and integration as well as political and security cooperation among 16 Southern African States.

The Republic of Angola is a country in south-central Africa, the seventh largest by territorial size and bordered by Namibia to the south, Democratic Republic of Congo to the north and Zambia to the east, and on the west the South Atlantic Ocean.

Kester Kenn Klomegah is an independent researcher and writer on African affairs in the EurAsian region and former Soviet republics. He wrote previously for African Press Agency, African Executive and Inter Press Service. Earlier, he had worked for The Moscow Times, a reputable English newspaper. Klomegah taught part-time at the Moscow Institute of Modern Journalism. He studied international journalism and mass communication, and later spent a year at the Moscow State Institute of International Relations. He co-authored a book “AIDS/HIV and Men: Taking Risk or Taking Responsibility” published by the London-based Panos Institute. In 2004 and again in 2009, he won the Golden Word Prize for a series of analytical articles on Russia's economic cooperation with African countries.

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Africa

Impressions from South Africa’s election

Klaus Kotzé

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South Africa’s recent general election has bucked the international trend towards populism by consolidating its democracy at the political centre. The ruling African National Congress, led by the popular centrist, Cyril Ramaphosa, has maintained its outright majority by committing to the reform and cleaning up of the party and state.

South Africa went to the polls on May 8th to elect its sixth democratic government. Due to poor economic growth, extensive corruption and infighting in the governing African National Congress (ANC), this election had been billed to be the most consequential since the end of Apartheid, in 1994. Except for minor issues at polling stations and technical questions regarding the balloting system, South Africa’s peaceful and orderly ’s electoral process has ensured further democratic consolidation, proving itself as a bastion for free and fair elections on the continent.

With 57.5% of the national vote, the ANC has maintained its governing majority. The official opposition remains the liberal Democratic Alliance (DA), with 20.7%. Completing the Big Three is the leftwing Economic Freedom Fighters (EFF) who attained 10.8% of the vote. Eleven smaller parties captured enough votes to secure one or more seats in the sixth National Assembly. An assessment of the results illustrates several significant impressions.

The fringe fails to factor 

While democracies around the world have moved to the fringes, South Africa appears to be maturing towards the middle. Though the centre-left ANC and centre-right DA shed the same number of seats gained by the leftwing EFF and rightwing Freedom Front Plus (FF+), 19 and five respectively, the threat of further splintering to an array of radical fringe parties did not materialize. None of these parties, including Black First, Land First which rejects white membership and the National Front which advances a white secessionist state, achieved traction among the electorate. Neither received a singular seat in Parliament.

The FF+ and EFF may appear to be the election’s big winners, but this analysis is superficial. The FF+ has simply captured a quadrant of the persistently mobile white conservative vote. Unlike the DA which has failed to support this group, the FF+ has offered it an unabashed home. The EFF almost doubled the bounty of its first electoral outing in 2014. It did, however, fail to make the kind of inroads it hoped for and was expected to receive. The party which calls itself the government in waiting, whose leader is referred to as the commander in chief, which dominates local social media optics, and which attracts a significant sector of the young black vote, may fill a football stadium with jubilant supporters at a pre-election rally. It could however not perform on the day that mattered. The ambitious EFF was seeking to capture a greater chunk of the ANC’s vote, thereby taking South African politics and economics further toward the radical left. Its failure to secure more votes at a time that the ANC was particularly weak points to an electorate with little appetite for populist radicalism. The EFF, with its politically astute and ambitious leadership will now be compelled to tone down its agitation and provide practical policy alternatives. It will have to move towards the middle if its goal of power is to be realised.

The centre holds

The losses of both the ANC and DA will demand introspection and clear future strategies. The DA faces an inflection point. The party which has traditionally received the overwhelming support of minority groups has actively been seeking to break this threshold by courting the majority black support. Its poor performance suggests that not only did it fail to make inroads in this sector; its attempt to reach across the aisle resulted in its traditional support feeling alienated. Furthermore, it was unable to consolidate an approach to foil the popular Cyril Ramaphosa. The DA’s 6% growth in 2014, largely taken from the ANC, was received for its campaign to Stop Zuma! – a tactic to oppose disgraced and maligned presidential incumbent, Jacob Zuma. This time around there was no boogie man to blame, leaving the DA with more questions than answers as to its future political approach and ideology. As a traditional, Western liberal party, the DA appears out of touch with South Africa’s broader socio-economic reality. 2019 may very well be the last time that the DA emerges as the official opposition.

While the ANC achieved its worst electoral result since 1994, shedding 5% from its 2014 showing, it nevertheless maintained its outright majority. It also maintained all the provinces where it governed previously. The ANC’s powerful mandate is largely thanks to President Ramaphosa’s clean image and his commitment to reform. Ramaphosa, whose popularity exceeds that of his party, replaced Zuma in a narrow victory at the party’s elective conference in late 2017. Ramaphosa, a trade unionist cum billionaire businessman who was Nelson Mandela’s preferred successor, has been the face of the ANC’s electoral drive. Contrary to the traditional advance of a manifesto, the ANC’s campaign has been centred on Ramaphosa. His accession to power indicates the commencement of reform and cleaning up, from the top.

While the ANC’s promise of renewal seems to have satisfied those deciding to cast their ballots, a significant sector of the 55 million population simply stayed away. More than nine million eligible voters did not register to vote. Another nine million registered voters did not make their cross, and more than a quarter of a million voters decided to spoil their vote. These numbers point to a frustrated populace that is tired of the cycle of politics wherein the ANC rules with impunity. Significantly, there was a clear division in voter turnout in urban and suburban districts compared to informal and rural dwellings. The former, the traditional terrain of the opposition, observed an enormous voter turnout (more than 90% of registered voters), the latter, the heartland of the ANC, experienced a considerable stay-away. While the failures of the state are collectively placed at the ANC’s door, so too are its successes. The millions of poor South Africans receiving state subsidies are clearly unwilling to trade what they have for the speculative promises of populism. Simply, 17 million subsidy beneficiaries see the ANC as the state and vice versa.

Going forward from the elections

The appearance that President Ramaphosa is now comfortably in power is, however, an illusion. Though he was able to mobilise the electorate and achieved a comfortable mandate, Ramaphosa’s greatest task was always going to commence once the elections are over. His challenges are internal to his party. He needs to effectively deal with a splintered party wherein a contingent of allies of the former president remain in senior positions. Ramaphosa will have to act swiftly to neutralise this powerful group and prove to the electorate and the markets that he can implement his promises. His first move will have to be to assemble a clean and competent cabinet that is able enact his reformist policies. Before the elections, Ramaphosa tactically delegated power to institutions that have laboured under poor and often corrupt leadership. He will have to lead from the front; he will have to act. He must capitalise on the positive sentiment across civil society and business to work together towards overcoming the perilous situation under Zuma.

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Governance reform could see African economies benefit to tune of £23bn

MD Staff

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The latest edition of PwC’s bimonthly Global Economy Watch has found that African economies could receive a windfall of £23bn if each economy applied similar governance reforms equivalent to those made by Cote d’Ivoire since 2013.

The continent-wide economic analysis modelled the performance of each country across six of the World Bank’s Worldwide Governance Indicators (2013-17), which covers aspects such as regulatory quality, rule of law and government effectiveness.

The analysis has found that if each African economy made an improvement to governance equivalent to that made by Côte d’Ivoire over the past four years, these gains would be worth around $23bn if realised across the continent.

The countries with the largest potential gains are those with a comparatively high GDP per head but a poor track record on governance. Accordingly, oil-rich Libya and Equatorial Guinea would see the greatest increase, with each person gaining an additional $400 and $200, respectively.

Those with lower GDP per capita, such as Niger and Malawi, would see a smaller improvement, despite their governance rank being below the average for the region. By contrast, economies like Rwanda, which have made similar improvements to Côte d’Ivoire, would also only realise a small benefit, with greater gains made through further diversification of their economies.

Regional differences are significant

The forecast also notes strong regional differences in economic growth across the continent. Economic growth has been particularly strong in East Africa (at around 3% a year since 2013). Central Africa, by contrast, saw annual real GDP per capita fall by an average of 1.3% over the period. North Africa and the Southern region experienced very sluggish growth (of 0.4% and 0.8% a year respectively), while West Africa saw faster growth of 1.9% a year.

Mike Jakeman, senior economist at PwC UK says,

‘Given that Africa contains more countries than any other land mass on earth, it is vital that we consider each economy in its own terms. Economic performance has varied wildly in recent years, but the correlation between strong economic growth and improvements in governance suggests a way for all of Africa to grow more quickly.

‘It is important to acknowledge the real benefits that governance reform can bring. Improved governance can also help countries identify other opportunities for growth. Although we should move away from a single narrative about the African economy, we can also acknowledge areas of mutual interest and benefit across regional economies.’

Manufacturing has driven the global slowdown

Looking at the recent performance of the global economy, the report also explores the causes of the slowdown since mid-2018. The weakness appears concentrated in the manufacturing sector, with purchasing managers indices for the US, China and the euro zone, in particular, declining.

Mike Jakeman says, ‘There are two interrelated stories here. The first is the effect of the US-China trade conflict, which is causing disruptions to supply chains suppressing appetite for trade. This is bad news for Europe, especially, which is a big exporter to both the US and China.

‘The second is the Chinese government’s attempt to deleverage its highly indebted corporate sector, which is likely to have exerted downward pressure on its own manufacturing output and those of its main suppliers. However, the cooling effect of the trade war on the economy has led the government to prioritise its GDP target of 6-6.5% over its deleveraging programme.

‘This short-term relaxation of policy, especially if combined with an armistice on trade, could be enough to re-inject some momentum into the global economy in the remainder of 2019.’

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Africa: A Rich Continent and Poor Policies

Mohamad Zreik

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Africa, the land of good, peace and natural wealth that is unparalleled, but under the circumstances, this continent have been under the yoke of foreign colonialism for long and bitter years, suffering from the problems of poverty and deprivation and being classified as “third world.” The situation is even worse with the epidemics and serious diseases that have plagued this continent, in addition to the endless wars, related to religious, political and societal divisions. This bad situation, which is unacceptable in the 21st century, urges the world to take responsibility.

The African continent has been a source of wealth for many who are “not African.” The African continent has been used for many years to build nations outside the African borders and serve the world’s people. In addition to the external hand that dominated and took over the resources of African land, the only thing that is incredible “rich land and a poor and hungry people.”

Africa is rich in gold, diamonds, chromium, cobalt, platinum and uranium. Some African countries such as Algeria, Angola, Congo Brazzaville, Gabon, Libya and Nigeria, for example, rely on the export of crude oil for about 70-95% of foreign exchange. Botswana relies on exporting diamonds for 80% of foreign exchange, as well as Zambia, which relies on copper exports for 80% of foreign exchange. Niger relies on uranium, which accounts for 96% of foreign exchange. But there is another problem: the inevitability of dependence on the outside because of the link between the economy of these countries with import and export, specifically its connection with Europe and America. Talk of full African independence will not be realistic because of the economic ties of the Great Powers.

Africa is also dependent on many foreign countries for its undeniable debt, aid and donations. Africa is not yet ready to pursue a policy of giving up foreign aid and talking about Africa, self-sustaining and not in need of other countries. The debt problem in many countries of the African continent has reached high rates. The average ratio of debt to GDP in sub-Saharan Africa increased from 51% to about 100% during 1982 and 1992.It is therefore necessary to develop an economic strategy for the African continent that makes it a fully sovereign geographical area. Since sustainable development begins with economic growth, all the problems of the continent will be resolved if a viable economic policy is pursued. A large proportion of Africa’s debt comes from the colonial powers themselves, such as France and Britain.

The endless wars in many African countries are a source of constant tension, making the African continent classified as politically and security unstable area, which threatens the tourism sector and the pace of economic growth and makes the investor prefer to invest in other areas more secure and stable. African countries are required to pursue a strict security policy that works to root out extremism and rein in terrorist and subversive groups that have brought destruction, devastation and economic decline to the country.

The extreme poverty that afflicts the African continent is due to unfair policies that do not take into account the criteria of community development in many cases, and most importantly, the accumulated external debt that hinders the process of social and economic development. As the African continent, as mentioned earlier, is a region rich in natural resources, it is therefore important to make use of these resources, and not to leave them to foreign countries, in other words, not to allow the African continent to be an open and unregulated territory.

The most serious diseases in the world today are rampant and widespread in the African region, such as malaria, kidney disease and AIDS, which plague African people. International organizations and bodies such as the World Health Organization are now required to work, move and intensify efforts to reduce the prevalence of these diseases.

The illiteracy rate is very high on the African continent and this is unacceptable nowadays. As there is no way to progress and develop except in education and the dissemination of the culture of science, International educational institutions should focus on the poor and educate them and increase the proportion of schools and universities in bilateral and collective cooperation.

This miserable situation in the African continent has long led many to think of emigration or resort to other countries. But most of them live in difficult conditions in foreign countries, and the phenomenon of asylum and intensive migration leads to the abundance of cheap labor in foreign countries and provides them with difficult jobs that are not easy for the countryman to carry out.

The African continent is rich in natural resources and has surplus labor, which is sufficient to achieve self-sufficiency if accompanied by a sound economic and social policy. Therefore, African governments and the African Union must take unified decisions and not follow the policy of dependency because such a policy will only increase the African continent deficit and economic and social decline.

The governments of the African countries should make their relations with the countries of the world friendly regardless of the financial or military power of the other side so that the African countries will not remain in the position of the weak. All this indicates that African countries are capable and need only to unite and work on sound policy. Poverty in African countries can be solved if natural resources are exploited well and in the interest of African countries and not of other countries.

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