Monday, July 11, 2011

Economic Issues Dominate German Chancellor's Visit to Angola


Economic issues dominate Merkel's visit to Angola

Der Spiegel

German economic interests play a key role during Angela Merkel's three-country trip to Africa. In oil-rich Angola improving business ties will be a major topic on the agenda for Chancellor Merkel.

Chancellor Angela Merkel will arrive in the Angolan capital Luanda for a two-day visit on Tuesday July 12, taking up an invitation by the country's president Jose Eduardo dos Santos. The Angolan leader had visited her in Berlin in 2009.

It is the first time that a German chancellor has made a state visit to Angola. And she is one of the few European leaders who have even been to Luanda at all in the past few years.

According to the parliamentary state secretary in the economics ministry Peter Hintze, the visit to oil-rich Angola fits well into Germany's new policy towards the African continent, presented last month.

"A close partnership, as well economic, energy and natural resource issues play a central role in our Africa concept," Hintze said. "We want to turn towards our neighboring continent even more this way. Our goal is a fair partnership."

Strengthening ties

Bildunterschrift: Gro├čansicht des Bildes mit der Bildunterschrift: Dos Santos invited Merkel to his country during his visit to Berlin

But Merkel doesn't have a lot of time for this partnership with Angola. A mere 24 hours are planned in Luanda. In addition to talks with dos Santos, she'll be attending a forum with German and Angolan businesspeople.

Despite its brevity, though, the visit is important to the German chancellor, said Ricardo Gerigk. He has headed the delegation of German business in Luanda since last year. It's a sort of "mini chamber of commerce," which is financed by the German economics ministry.

"Merkel is setting an example just by the fact that she's coming to Angola," Gerigk said. "It's not significant that's she's only staying 20 or 26 hours. What is important is that a memorandum of understanding is signed. That's why I'm very happy that Merkel is managing to come to Angola."

The memorandum addresses a strategic cooperation between the two countries. During her visit, Merkel is also supposed to sign a cultural agreement. Angola's ambassador to Germany, Alberto do Carmo Bento Ribeiro, said at the German-Angolan economics forum in Munich last month that economic ties were central to the relationship between both countries.

"The decisive step that can be taken is founding a common, bilateral economic commission," Bento Ribeiro said. "Then we can truly discuss major projects on a government level, which already exist with other European partners. Our relations to Europe will always be biased if we cannot manage to increase our economic exchange with Germany."

Much to learn

Bildunterschrift: Gro├čansicht des Bildes mit der Bildunterschrift: Angola's oil output rivals top producer Nigeria

After a record year in 2008, trade has suffered from the international financial crisis. The oil price fell, which created liquidity problems for Angola's government. For months, it was unable to pay its bills on time. Instead of the double-digit growth rates of 15 percent and more it was used to, the Angolan economy stagnated.

German exports to Angola dropped by a third from 2008 to 2010 from 388 million euros ($554 million) to 263 million euros. The Angolan exports to Germany fared even worse. They fell from 469 million euros to 228 million euros in this period.

However, since the beginning of this year, trade is developing positively - much to the pleasure of Angola's economics minister Abrahao Pio dos Santos Gourgel. He personally has good ties to Germany, having studied economics in East Berlin back in the German Democratic Republic. He said Angola could cooperate well with Germany.

"We believe that Angolan businesspeople can learn from partnerships and joint projects with German companies," Gourgel said. "The transfer of knowledge and the support of a powerful business culture are the strengths of the German economy."

Yet German companies have been unable to truly gain a foothold in Angola. The major construction contracts are given to Brazilian, Portuguese or Chinese firms. The oil licenses are awarded to US, French and Brazilian companies. German companies are most likely to cover niche sectors. They work in specialized engineering projects, plan water networks or deliver machines for mining natural resources.

More growth possible

According to Gerigk, there is much more potential for cooperation.

"Angola's oil production is close to two million barrels a day," he said. "That is a lot."

Angola is the second largest oil producer in Africa after Nigeria. But with a population of just 17 million, compared to Nigeria's 150 million people, there's more wealth, he said.

"A middle class is developing here which is no longer closely tied to the military and invests in production," Gerigk said.

Merkel is expected in Luanda on July 12. It isn't known whether she will also address human rights and democracy issues in addition to economic topics. Angola has significant shortcomings in these areas. Dos Santos is Africa's second-longest serving leader, after Libya's Moammar Gadhafi. In his over 31 years in power, he has never been democratically elected.

Chancellor Merkel's tour through Africa also takes her to Kenya and Nigeria.

Author: Johannes Beck / sac
Editor: Michael Knigge

No comments: