Angola: African Kaleidoscope
Russia-Angola: Yesterday, Today, Tomorrow. In early March 2018, Russian Foreign Minister Sergei Lavrov visited Angola. In the capital of the republic — Luanda, the Minister recalled that the USSR recognized this country immediately after it gained its independence and confirmed the interest of Russian business in cooperation. How can the republic be of interest to Moscow today and tomorrow?
General information about the country
Angola is a state in the southwestern part of Africa.
It borders on the north with the Republic of the Congo, in the north and north-east — with the Democratic Republic of the Congo, in the east — with Zambia, in the south — with Namibia. In the west, the country's territory is washed by the waters of the Atlantic Ocean, the length of the coastline is 1600 km, the land boundaries — 5188 km.
Territory amounts for 1246.7 thousand square km, administratively divided into 18 provinces, including the capital, which has similar status.
The population is about 28 million people.
The capital is Luanda (about 6 million people).
Official language is Portuguese.
Religion — more than half of Angolans are Catholics, 35% are Protestants, and the rest adhere to traditional beliefs.
Time — Time zone UTC + 1. The time difference between Angola and Moscow is 2 hours.
The currency unit is kwanza ($ 1 approximately equals 171 kz).
The climate is tropical, in the north it is humid, in the central part of the country it is variable-humid, in the south — droughty. The rainy season is mainly during the winter of the Northern Hemisphere, dry — during the summer.
The state system is the presidential republic. The leader of the political party that won the parliamentary elections becomes the president for a period of 5 years. He is simultaneously the head of the executive branch and the commander-in-chief of the armed forces.
Economy. It is one of the richest countries in Africa in terms of mineral wealth. In Angola, there are deposits of oil, gas, diamonds, iron and copper ores, gold, silver, rare earth elements. The country has great hydropower resources.
According to the Russian Embassy in Angola
It is noteworthy
- The capital of Angola, the city of Luanda is the most expensive city in the world
- Islam Religion is prohibited by law in Angola.
- Almost half of Angolans live below the poverty line.
- Size of Angola approximately corresponds to the two states of Texas.
- Almost all the population of Angola speaks the state language, which is Portuguese.
- About one-tenth of the population of Angola is ethnic Chinese.
- Half of the population of Angola do not know how to read or write.
- The famous African baobabs grow throughout the whole territory of Angola.
- On Fridays, Angolans do not eat meat, sticking to fasting.
- Note for gourmets: there are no "Mcdonald's" in Angola.
- Brazilian music is extremely popular in Angola, in particular, samba.
- As in neighboring South Africa, a very high-quality wine is produced in Angola.
- Local cuisine is a mixture of Spanish and Portuguese, with little touches of local colour.
- Part of Angola is in the Namib desert, which is more than 80 million years old.
Russia — Angola: yesterday, today, tomorrow
In early March 2018, Russian Foreign Minister Sergei Lavrov visited Angola. In the capital of the republic — Luanda, the Minister recalled that the USSR recognized this country immediately after it gained its independence and confirmed the interest of Russian business in cooperation. How can the republic be of interest to Moscow today and tomorrow?
The interest is undeniably present. The President of Russia Vladimir Putin sent an invitation to Angolan President João Lourenço to visit Russia immediately after the election of his Angolan colleague for this post. The Angolan side confirmed its readiness to visit Moscow. This was stated, in particular, by Russian Foreign Minister Sergei Lavrov following talks with his Angolan counterpart Manuel Domingos Augusto. Terms of visit are being specified. And soon the head of the Angolan Foreign Ministry is going visit Moscow.
According to the Russian minister, the parties "noted the existence of an intensive political dialogue, specifically at the highest level," both in Luanda and Davos, where Angolan President J. Lourenço met Deputy Prime Minister Arkady Dvorkovich.
"We have converging and very close approaches to international affairs in the UN and other venues," Lavrov stressed. "We are developing our relations with African countries not only in bilateral formats, but also with the associations that exist on the continent: both with the African Union and with the Southern African Development Community (SADC) ... A good example, when Africans themselves provide useful initiatives, is the constructive role played by Angola in the settlement of conflicts in the DRC and Lesotho. Most recently, Angola has completed its four-year presidency of the International Conference of the Great Lakes Region. Admittedly, these were very successful four years, during which the situation wasn't destabilized, and which created the preconditions for a gradual but sustainable solution of all these problems".
Official reports about the meetings of the Russian minister are rather brief, but promising. "The talks confirmed the mutual desire to bring economic cooperation to a qualitatively new level," Sergei Lavrov stated. In his opinion, this will be facilitated by the first meeting of the intergovernmental commission on trade and economic cooperation between Russia and Angola, which will be held this year in Moscow. "It is comforting that a meeting of Russian and Angolan businessmen took place last autumn in the Chamber of Commerce and Industry of the Russian Federation," the minister said.
According to Sergey Lavrov, "the cooperation is developing in the sphere of mineral resources, also there are good prospects in the oil and gas sector, we have good plans to develop cooperation in high-tech areas, including space and the peaceful use of nuclear energy."
For business today and tomorrow there are political arguments from the recent past of cooperation between the two countries. As Sergey Lavrov noted that the conversation with President J. Lourenço and Foreign Minister Augusto imply that "we remember our combat brotherhood, which allowed achieving the liberation of Angola and gaining its independence."
At a ceremony at the memorial stone set at the Russian embassy in Luanda, in the presence of the Defense Minister, the Foreign Minister of the Republic of Angola and war veterans, Sergey Lavrov recalled that more than 100,000 of our citizens participated in the struggle for the independence of Angola. "80 citizens laid down their heads, hundreds were wounded ... Our help was not limited to the struggle for independence. It continued when Angola was engaged in the formation of its state ... This memorial stone is set in memory of those who fought for the independent Angola. I am convinced that this symbol ... will serve as a reminder to the younger generation for many years that these values are above all. When I see boys and girls who study at our school and came here for this ceremony, I am convinced that our cause is right and we will win".
For the president of Angola, João Lourenço, Russia can be considered if not the second homeland, then, in any case, as an alma mater. Colonel-General Laurence — a graduate of the V.I. Lenin Political-Military Academy.
The post of President of Angola was established in 1975 after gaining independence from Portugal. Agostinho Neto became the first president of the country. After his death in 1979, Foreign Minister Jose Eduardo dos Santos became chairman of the MPLA and the second president. In 2017, he decided not to be nominated for another term by the new procedure: the National Assembly approved a new constitution, according to which the leader of the party that received the majority of seats in the Assembly becomes president. The elections were held in August 2017. The Defense Minister and MPLA Vice-Chairman João Lourenço became the President.
João Manuel Gonçalves Lourenço was born on March 5, 1954 in Lobito, Portuguese West Africa. His political biography seemed to be written off from the textbook on the contemporary history of Angola. He is an active participant of the Angolan Civil War. In 1998-2003 — Secretary General of the MPLA. Since 2014 Lourenço is the Minister of Defense of Angola, since 2016 — vice-chairman of the MPLA. At the end of 2016, he was announced the successor to President dos Santos. In August 2017 Lourenço was elected as the President.
There are also some details. He participated in the civil war on the side of the MPLA. In 1975–1976 he fought in Cabinda against FNLA. And from 1978 to 1982 Lourenço was studying in the USSR, graduated from the V.I. Lenin Political-Military Academy.
After returning to Angola, in 1982–1983 he fought against the anti-communist insurgents of UNITA. In 1983–1986, he was the first secretary of the MPLA in the province of Moschico (one of UNITA's strongholds). In 1986–1989 he held a similar post in the province of Benguela. Lourenço held himself exclusively as a convinced communist.
However, some ideological reorientation occurred already in 1991, but totally in the spirit of the coming changes in the "world of socialism": from Marxism-Leninism to "democratic socialism" and "effective governance." Lourenço served as secretary for information and head of the parliamentary faction of the MPLA. For this period, such events as the resumption of the civil war, the signing of the Lusaka Protocol and a temporary reconciliation with UNITA took place.
In 1998–2003, Lourenço was the Secretary General of the MPLA. From 2003 to 2014 he served as the Deputy Chairman of the National Assembly of Angola. And on April 23, 2014 he was appointed Minister of Defense of the country. In this capacity, Lourenço visited Moscow in 2015 and negotiated with Sergei Shoigu. The Russian Defense Minister then called the armed forces of Angola "one of the guarantors of security in Central Africa" and promised further assistance "in preparing and improving the professional skills" of the Angolan military. Presumably, this made a very positive impression on the graduate of the Soviet military academy ...
In December 2016, the MPLA Central Committee introduced the name of João Lourenço as the first number on the list of candidates for the August 2017 election. In other words, he was declared the successor to President Dos Santos. Experts characterize Lourenço as a strong politician who "will not be the puppet of souls of Santos, but who will continue his course." He himself speaks about the "change of political cycle within the same political family," promises to overcome the economic recession caused by the drop in world oil prices and does not exclude the use of loans to the IMF and the World Bank.
The "family" issue should be noted specifically. One of the first decisions of the new head of state was the removal of the predecessor's daughter Isabel dos Santos from the post of president of the state oil company Sonangol. Major personnel changes were made in the power structures, prominent appointees of dos Santos — such as the chief of the national police and the head of the army security service — were removed from their posts. Lourenço reduced the number of his personal protection, he often travels around the country, communicates more with the population. The elite presidential guard is transferred to army subordination. Experts consider these changes as signs of planned reforms.
And in his general life everything is quite simple. He is married, has six children. Along with his native Portuguese he speaks Russian, English and Spanish. He plays football and is keen on karate — he will have something to talk about with his Russian colleague ...
According to the Russian Export Center, in 2016, Angola ranked 72nd in the ranking of partner countries of Russia in terms of turnover ($ 568 million). The potential is clearly not used up — this is recognized by business circles of both countries.
Plans. In October 2017, at the initiative of the Angolan side, a meeting of Russian and Angolan business circles was held at the Russian Chamber of Commerce and Industry. Prospective directions of bilateral interaction are determined. Within the PRODEM programme — the strategic multisectoral development of Angola — the government of the republic suggests changing the course of cooperation in the industrial and defense sectors, in the field of agriculture, fishing, tourism, energy, water supply, transport and mining, and banking.
Director of the Department for External Relations and Working with Business Councils Alexander Kopkov, while opening the event, noted that both Russian and Angolan businessmen do not know enough about each other's capabilities, as evidenced by low volumes of mutual trade. At the same time, mutual interest in cooperation is growing. The Chamber of Commerce and Industry of the Russian Federation is ready to use the existing potential for the development of economic relations by promoting business information, organizing business missions, participating in profile exhibitions and fairs.
In order to work in the African direction under the auspices of the RF CCI, the Coordination Committee for Economic Cooperation with Sub-Saharan Africa (AfroCom) has been established, uniting more than 140 Russian commercial, state and public structures keen on cooperation with the region. The issue of appointment of an honorable representative of the RF CCI in Angola is under consideration.
The interest of the Russian side in the development of joint long-term investment projects is confirmed in the Free Economic Society of Russia. Sergey Glazyev, Vice-President of VEO of Russia, expressed his confidence that meetings with representatives of the Angolan business community give new impetus to the further development of bilateral relations on a mutually beneficial and effective basis.
The Russian Foreign Ministry believes that Angola is one of Russia's close partners in Africa, but trade and economic relations do not yet meet the possible level. Director of the Africa Department of the Ministry of Foreign Affairs of Russia Andrey Kemarsky outlined the promising areas of bilateral cooperation: agriculture, fishing, transport, diamond mining, ore mining, hydrocarbon production, taking into account the availability of hydrocarbons in Angola and Russia's experience. The banking sphere also seems promising: VTB's subsidiary VTB-Africa, which operates both in Angola and the region as a whole, is the only such example on the continent. The parties also plan to develop an important for both countries project in the field of space broadcasting called "Angosat".
The corporation "Angola Visau" is engaged in the modernization and development of the economic structure of Angola together with the government of the country. Russia has become a strategic partner in the implementation of the programme "Angola Visau 2025–2050". President João Paulo Tomas promises that Russian business circles will have access to all the line ministries of Angola that are participating in the project. The goal is to change the course of Russian-Angolan cooperation in such areas as agriculture, defense, transport, market development, fishing, tourism, energy and water supply.
"We have a mutual desire to bring economic cooperation to a qualitatively new level. The Intergovernmental Commission on Trade and Economic Cooperation is actively working on this, the fifth meeting of which will be held this year in Moscow", said Sergey Lavrov. "Taking into account the plans of the government of Angola, we make a special emphasis on the gas sphere. We invited our Angolan friends to join the successfully functioning forum of oil-exporting countries".
Answering journalists' questions on the results of the visit to Luanda, the Russian minister also mentioned the need to expand contacts in the sphere of education: "There is a clear interest in this". He called the military-technical cooperation traditionally stable and actively developing sphere of cooperation: "The state of affairs in this sphere and the prospects for which we expect will be considered this year at the next meeting of the Russian-Angolan Intergovernmental Committee for Military-Technical Cooperation".
Asked which Russian companies intend to invest in the economy of Angola, the answer was quite extensive: "There are many such companies. It is "Alrosa", which has been working here for a long time, VTB Bank is operating here as well, there is interest shown during the meeting held by the RF CCI, attended by representatives of the management of such companies as "Rosneft", "Zarubezhneft", "Gazpromneft", "Uralvagonzavod", "Kamaz" and a number of others. Today we are convinced that along with large business associations, small companies are quite active and successful in Angola. We encourage this".
Russia's participation as a strategic partner in the implementation of the programme "Angola Visau 2025–2050" was an issue that attracted particular interest at the final press conference. "There are some moves, they are obvious," the minister said.
Money. On January 11, 2018, the president and chairman of the board of VTB Bank Andrey Kostin met the president of the republic during his working visit to Angola. Negotiations were dedicated to the further participation of the bank in the financial and infrastructure projects of Angola. According to the news agencies, the parties discussed the participation of VTB in the organization of international borrowings for this country, the issues of restructuring its current debt, as well as the prospects of bank's lending to the most important sectors of the Angolan economy. The President of Angola noted the important contribution of Banco VTB Africa SA and VTB Group in the development of the financial market and economy of the republic.
During the visit, Andrey Kostin also met the heads of the Ministry of Finance and the National Bank of Angola. The parties agreed that VTB employees will visit Angola to provide advice on the organization of financial market supervision and development of the banking sector.
According to Andrey Kostin, VTB Group has been operating on the Angolan market since 2006. The Bank has a significant portfolio of projects and deals in the segment of corporate investment business, actively contributes to attracting investment in the economy of Angola.
It is worth noting, that in January 2018, the National Bank of Angola announced the refusal of strict peg of the Angolan kwanza exchange rate to the US dollar, indicating as a reason the reduction of international reserves of the country in the face of the economic crisis, provoked by the decline in oil prices. As stated in the message of the Central Bank, a new price corridor has been set for the kwanza.
Thus, Angola gradually departs from the dollar after a number of other oil-producing countries, including Kazakhstan, Egypt, Nigeria, and Uzbekistan.
Mineral Wealth. Experts state that mining is the key branch of bilateral cooperation. The country is one of the richest in the continent in terms of oil, gas, diamonds, iron and copper ore, gold, silver, rare earth elements.
The engine of Russian-Angolan cooperation in this area is ALROSA, which is engaged in diamond mining within the Catoca mining company (it is the fourth largest diamond mining in the world). ALROSA, which controls the local diamond mining company Catoca together with Angolan Endiama Mining, is establishing a joint venture with the JV partner to develop a major Luaxe field.
Director General of the Antwerp World Diamond Center (AWDC), Ari Epstein summed up the 2017th diamond year and gave a forecast for the current year.
If the diamond trade in 2016 was characterized by a revival of the market, then 2017 led to the return of stability and predictability, especially in the trade in rough diamonds. This is an encouraging development for the industry as a whole. Problems remain, especially in the diamond sector. However, despite the fact that the total value of diamonds sold in 2016 slightly decreased from 48 billion to 46 billion dollars, we note a significant increase in the number of stones sold.
The fall in value was due to the growth in demand for smaller non-polished diamonds. This resulted in a lower average price per carat, resulting in a reduction in total cost. In any case, it is noted that the trade in diamonds is again stable.
2018 has been a stellar year so far. Analysts expect a rise in prices for rough and polished diamonds, in which the industry is interested. At the moment it is difficult to say where consumer demand will shift in terms of the desired types of goods, but the level of consumer demand now looks promising, especially in China. Globally, consumer demand for diamonds should grow in 2018 due to the stable consumer environment in the US, strong financial markets and a positive macroeconomic trend in general.
From a production point of view, global diamond production is estimated to decline by approximately 4%, to 146 million carats in 2018, as new large productions are not expected to appear in the new year, and ALROSA, the industry leader, is predicted to slightly reduce production. However, recent political changes in Angola and Zimbabwe have added optimism to the industry, as miners expect promising investment opportunities. Global deliveries of rough diamonds are expected to grow by an average of 0% — 1% annually in the period between 2017 and 2030.
Luaxe deposit in Angola is probably the largest and most promising new diamond project in the world, with approximately 350 million carats and a potential lifetime estimated at 30 years. Angolans are fortunate that a company like ALROSA is working on the development of this field. It is expected that production will be launched there after 2020.
The ALROSA Director General Sergey Ivanov told that the reserves of the company amount for one billion carats, which will last for 25–30 years of production, even if no new deposits are discovered. And they are sure that there are large deposits in Yakutia that are yet to be discovered.
As for the demand for diamonds, in 2016 this segment saw a slight decline in Europe due to a decrease in the influx of tourists, but it was expected that the European jewelry market will return to growth in 2017. This happened, but not on the same level as predicted. Britain's exit from the European Union and the weakening of the national currency prompted British consumers to be cautious in their purchases. Only time will show what it is going to be like. Nevertheless, demand for diamonds coincides with the direction of the market of luxury goods, which grew slightly in 2017. Sales of high-end jewelry are closely related to the intentions of wealthy tourists, and future sales will depend on the return of the region's attractiveness to them. The good news is that tourism to Europe grew from 7% to 8% last year. We hope this trend to continue. In short, according to forecasts based on market research, a moderate but steady increase in demand for diamonds in Europe is expected.
Full version: http://www.rough-polished.com/ru/exclusive/109891.html
Risk and profit
Work migration. Jobs and Salary in Angola
Over the past 20 years, Angola has received billions of loans from international organizations and different countries, which has allowed it to partially restore infrastructure, start construction of new facilities and taken on the direction of long-term development as a whole. At the same time, volatile oil prices in recent years have somewhat slowed the economic growth of the state.
Today, more and more labour migrants from different countries, including Russians and Ukrainians, come to Angola for employment. Rich in natural resources and one of the largest oil-producing states in Africa, it is extremely interested in attracting qualified personnel from abroad who are able to fill numerous gaps in the local labour market.
First of all, we are talking about technical specialists — engineers, builders, programmers, geodesists, environmental scientists. Sometimes there are vacancies for medical workers. It is worth noting that immigrants are most often sent to a large metropolis — Luanda, where the cost of living is considered one of the most expensive in the world. In addition, the country has not completely resolved security problems, and the quality of medicine is still quite poor.
According to the local Ministry of Labour and Social Security, the average salary in Angola in 2018 varies from 10,000 to 3 million Angolan kz per month. It means that, depending on the scope of activities and the region, local workers earn from 60 to 18 000 US dollars. The gap is huge, but work for foreigners in Angola is usually available in large oil-related companies, where salaries are quite high.
For legal employment in Angola, it is necessary to find an employer in advance, sign a contract and obtain a work visa. By analogy with most countries in the world, vacancies are given to foreigners, if this is in the interest of the local economy and there are no candidates among Angolans. The visa is issued for 12 months or for the duration of the contract with the right of extension. The responsibility for issuing a work permit to a foreigner and preparing documents for local authorities is held by the employer.
The overwhelming majority of applicants, including Russians, find work in Angola in state or international companies operating in this country, whose activities are related to oil or diamonds. As a rule, experienced specialists with technical education and a high level of qualification are in demand. For successful job search, it is very important to have a good command of English or Portuguese. An obligatory requirement is the availability of an identity document.
By the way, as the Russian embassy in Angola warns, violation of the road code (traffic rules) is punished in the country by high fines ($ 500 for driving without a seat belt, $ 600 for parking on sidewalks), as well as detention before clarifying the circumstances. Be careful.