EXECUTIVE DIRECTOR’S COLUMN – January – April, 2006

During the January – April period, the US-Angola Chamber of Commerce held three meetings of the Working Group on Angola in Washington, DC. The Chamber would like to thank Goodworks International and BP for hosting these events. The first meeting on February 15 featured Alves da Rocha, a distinguished professor of economics at the Catholic University of Angola and Special Advisor to the Ministry of Planning. Rocha gave a comprehensive overview of the political and economic situation in Angola. He highlighted the priority that the government was giving to rehabilitating the country’s infrastructure through a massive increase in public expenditures and through the establishment of a Development Bank funded by proceeds from oil revenues. Despite the considerable achievements that the government had registered in promoting development and reform, Rocha expressed concern about the issue of corruption, which had become almost a way of life. The Angolan Ambassador, Josafina Pitra Diakite, responded that the government was very much aware of this issue and was taking steps to bring corruption under control.

The Chamber also took advantage of the visit to Washington by the Governor of Bie Province, Jose Amaro Tati, to host a working group meeting on April 20. Tati stated that Bie was about the size of Portugal and had abundant land and water to grow a diversity of crops because of the different climatic zones within the province. Bie had, however, been particularly hard hit by the war and needed a surge of private investment to stimulate the economy. The province also had large diamond resources, though as much as $10 million was lost a month due to mining by illegal persons. Land mines were also a problem but the province was moving cautiously to open up large areas for agricultural production. The immediate objective was to clear 350,000 hectares for this purpose. Tati spoke of the role of the Chinese, especially in rehabilitating the Benguela railroad, constructing a major housing project, and building agricultural institutes in three locations of the province. Tati concluded that it was time to think of a different Angola and take advantage of the many opportunities to invest there.

The Principal Deputy Assistant Secretary of State for African Affairs, Bobby Pittman, briefed the third working group meeting on April 26. While his remarks were off-the-record, Pittman did emphasize that the current state of relations between Angola and the United States were good and that the Administration wished to deepen its dialogue at all levels of Angolan government and society.

The Chamber decided to take advantage of the very successful working group format and introduce it to members resident in Angola. The first meeting was held at the new American Embassy office building in Luanda on March 13 and was moderated by the Chairman of the US-Angola Chamber of Commerce, Filippo Nardin. The speakers were the American Ambassador, Cynthia Efird, and the USAID Mission Director, Diana Swain. We intend to follow-up with further meetings in the future. The Chamber had also planned to host a lunch in Luanda in honor of the Assistant Secretary of State for African Affairs, Jendayi Frazer, in late March, but her visit was postponed. The Chamber hopes to reschedule the lunch when new dates are set for her visit to Angola.

The Chamber has also been busy planning a trade mssion/business symposium to Angola and co-hosting a major conference on Angola with the Center for Strategic and International Studies in Washington. The Chamber and the Center organized a similar event in 2001, which was well attended and favorably received. We would like to build upon the success of that earlier initiative.

Executive Director’s Column – July-October 2005

The US-Angola Chamber of Commerce organized two working group meetings in Washington focused on the evolving economic situation in Angola. Jon Shields (IMF) and Peter Nicolas (World Bank) met with the working group at the offices of BP on July 19. Shields pointed out that the April report of the IMF had presented a basically positive view of the macro-economic situation. Inflation rates were declining, the exchange rate was holding steady, and the combination of high oil prices and external sources of revenue were providing healthy cash reserves. The Fund was still waiting to hear from the Angolan authorities about what type of relationship it wished to pursue with the IMF. Peter Nicolas said that Angola had a better record of reintegration of former combatants than in most other post-conflict countries. He was particularly concerned about the effect on the exchange rate occasioned by high oil prices and its impact on domestic production. Unless the exchange rate was smoothed out, it could have the effect of making domestic production non-competitive with imports.

The Minister of Finance, Jose Pedro de Morais, met with the working group on September 26 at the offices of Chevron. He was accompanied by members of the Angolan delegation to the IMF/World Bank meeting, including the Vice Minister of Planning and the Governor of the Central Bank. The Minister described the macro-economic situation in similar terms to those of the IMF. The debt overhang still needed to be dealt with, but the Minister stated that Angola intended to pursue bilateral debt rescheduling outside of the IMF framework. Regarding the relationship with the IMF, the Minister said that Angola wanted to continue the dialogue with the IMF and receive IMF policy advice and monitoring. The precise instrument for establishing the relationship still needed to be discussed. The Minister was asked about the role of China and the $2 billion loan that had been extended to Angola. He believed the loan served the interests of both parties and would materially help to rehabilitate Angola’s devastated infrastructure. In this context, he also announced that the government would mount a major and very aggressive infrastructure development program in the 2006 budget totaling $4 billion. Roads, bridges, rail lines, hospitals, schools, and other target areas would be included in this program.

The US-Angola Chamber of Commerce hosted the American Ambassador to Angola, Cynthia Efird, at a lunch in Luanda on September 14. She also met with the working group in Washington on October 4 and made an off-the-record presentation that was informative and well received by the participants. The Chamber is grateful to her and her colleagues for their strong support of our programs and activities and look forward to continued cooperation.

Of particular note during this reporting period was the signing on September 27 of the agreement between TAAF and The Boeing Company for the sale of six planes. The Minister of Finance, the Deputy Secretary of Transportation, and other dignitaries attended the signing ceremony. The Boeing Company participated in the Chamber’s 2001 trade mission to Angola and recently became one of our newest members.

JULY - OCTOBER 2004

The Chairman of the Board of Directors, Filippo Nardin, and the Executive Director, Paul Hare, visited Angola in July. They met with the Angolan Chamber of Commerce and Industry and the Rector of the Catholic University of Angola to discuss the planned Business Symposium that the Chamber originally hoped to host this year in Luanda.  Because of scheduling conflicts, the symposium has been postponed until the first part of 2005. Members will be advised when the new dates are set. The Chamber also hosted a luncheon at the Hotel Presidente during their visit. The Chairman provided an update on Chamber activities and plans for the future and the Managing Directors of ChevronTexaco and ExxonMobil, Jim Blackwell and Terry McPhail respectively, provided overviews of their companies’ involvement in Angola. The new American Deputy Chief of Mission, James Knight, was also introduced to the luncheon assembly.

On August 3, the new American Ambassador to Angola, Cynthia Efird, was the guest of honor at a breakfast at the University Club in Washington just prior to her departure to assume her new assignment in Angola. During the course of her presentation, the new Ambassador emphasized the importance of the relationship between Angola and the United States and her determination to strengthen the ties between the two countries. She said that she looked forward to working closely with the Chamber during her tenure in Angola.

In September, Maria da Cruz, Deputy Director of the Chamber, made her first visit to Angola in her new capacity. Maria met with a number of members of the Chamber during her two-week stay in Luanda and had several press interviews. The visit provided a good opportunity to advance preparations for the Gala Dinner that the Chamber will host at Casa 70 on Friday, December 3. This will be a major fundraising event with the purpose of strengthening the Chamber’s activities in Angola. The arrangements for the Gala Dinner have been greatly facilitated by Wladimir Cunha, who was an intern at the Chamber in Washington during the past summer and now manages Casa 70 on behalf of his father. We are indebted to them for their help in organizing this inaugural event. I very much hope there will be a large turnout on this occasion.

The Deputy Prime Minister, Aguinaldo Jaime, addressed the Working Group on Angola at the offices of BP on October 4 during his visit to Washington to attend the annual World Bank/IMF meetings. This is the second time that Aguinaldo Jaime has met with the Working Group this year. The Deputy Prime Minister reviewed the state of play of the ongoing discussions between the Government of Angola and the IMF. He said the talks were moving ahead positively and that another IMF mission to Angola was expected in the near future. Jaime outlined the steps the government has taken to promote transparency, reduce the level of inflation, and stabilize the foreign exchange rate. With respect to high oil prices, the Minister said Angola had accrued $275 million in windfall profits during the first semester of 2004, which was being put in a Reserve Fund. He hoped that the government would reach an agreement with the IMF by the end of the year or beginning of next year.

Finally, I am pleased to report that the Chamber’s membership continues to expand. Five companies have joined the Chamber during the last three months. Two of the new members, A&A Consulting and Pegasus, participated in our trade mission in October 2003. A total of 14 companies and organizations have joined the Chamber since the beginning of the year. If members are aware of possible candidates for membership, please let us know and we will follow up.

JUNE - JULY 2004

I would like to take a moment to reflect upon where the Chamber should be heading in the months ahead. Looking at the overall situation in Angola, one can see that the country is slowly emerging from the years of conflict and rebuilding for the future.  It is encouraging that there is more transparency and accountability of government finances and the signs seems positive that an agreement will be reached with the IMF. This is important for a number of reasons, including debt relief at the Paris Club and creating a better environment to attract substantial international assistance for the rehabilitation of the country’s devastated infrastructure.  The Chamber will continue to monitor and encourage progress in this area because of its vital importance to the country’s economic development and growth of the private sector.  Angola is also taking steps to make the country more investor friendly. The passage of the Private Investment Law is an important step in this direction, as is the establishment of the Guiche Unico.

If these two initiatives are properly implemented, they will remove major barriers to new investments. This is another area that the Chamber will monitor closely. As Angola moves forward, so must the Chamber.  While we have had a very busy new year in Washington, I believe we must focus much more on developing information, holding workshops on subjects of interest, such as AGOA, helping establish partnerships, and hosting events with key Angolan and American officials in Angola. To do all of these things, we will need to establish a full time point of contact in Luanda. This will require additional financing, but it must be done.  

We must also preserve what we have done well in the past. We will continue to have the highly successful Working Group on Angola meetings with officials in Washington.  We must also continue to provide our best and most objective analysis of the situation in Angola to prospective investors and traders. The image of Angola remains largely negative in the United States.  Some do not fully realize that the war has ended and that the country is now experiencing better than expected stability. Others read of corruption, of billions of dollars uncounted for, of secret overseas bank accounts, and of bureaucratic red tape and ineptitude; most are largely unaware of the steps that are being taken to improve government performance and accountability. While it is important not to gloss over the problems that one can encounter in Angola, we can play a role in demonstrating that the country is not sliding backwards or standing still; that, in fact, it is moving ahead. 

Finally, I take the greatest pride in the role that the Chamber has played in promoting the public private partnership to combat HIV/AIDS in Angola. Over the last three years, the Chamber, in collaboration with the Government of Angola and USAID, has raised over $1 million USD to support Population Services International (PSI) awareness and prevention programs..  Our support has been significant in getting PSI’s programs off the ground. On the Chamber’s website (www.us-angola.org), you can find a presentation that PSI made recently on its programs and suggested ways that members can support specific activities. We all know how important it is to curb the prevalence of HIV/ AIDS in Angola before it spirals out of control.  I hope that members will respond to this challenge. Please contact me directly if you want to help.

MARCH – MAY 2004

This has been a busy period for the Chamber.  The Chamber and the Corporate Council on Africa hosted the 11^th meeting of the Working Group on Angola with the Minister of Finance, Pedro de Morais, on March 29.  At the Minister’s request, no report was prepared on the meeting, but he did reinforce the comments made at the previous working group meeting in February by the Deputy Prime Minister, Aguinaldo Jaime, on the importance of reaching an agreement with the IMF in the near term.  (An IMF team subsequently visited Angola in April and issued a statement that is on the Chamber’s website. Another IMF mission is scheduled to go to Angola in June.  The purpose is to conduct Article IV Consultations and to negotiate a Staff Monitoring Program.)  The Minister was in Washington to attend a conference organized by the Center of Strategic and International Studies on the “Rising Energy Stakes in Africa.”

The 12^th Working Group met on April 22 to focus on HIV/AIDS in Angola.  The speakers included representatives of Population Services International (PSI) and Victor Barnes, director of the Corporate Council on Africa’s HIV/AIDS Initiative.  During the last three years, the Chamber has raised over $1 million in a public/private partnership to support PSI’s awareness and prevention programs in Angola.  The program has been successful and the Chamber would like to continue to support the effort to curb the pandemic.  A report on this meeting is posted on the Chamber’s website, including the full presentation by PSI.

The Chamber and the Council also organized a Working Group meeting with the Minister of Public Works, Higino Carneiro, during the official visit of President dos Santos to Washington, DC, May 11-14.  Accompanying the Minister were the Minister of Transportation, Governor of the Central Bank, and the Angolan Ambassador to the United Nations.  The forum offered a good opportunity for a frank and lively exchange of views on the reconstruction challenges facing Angola and opportunities for investment in the country.

The visit of President dos Santos to the United States was considered a success by both governments.  The President met with President Bush, Vice President Cheney, Secretary of State Powell, Secretary of Energy Abraham, Secretary of Treasury Snow, and the Administrator of USAID. The President also saw the World Bank and IMF and members of the Congress, and held a press conference at VOA and an interview with CNN.  The main themes that President dos Santos emphasized were Angola’s economic reform efforts and steps taken to engage the International Financial Institutions; the importance of attracting investment in Angola now that peace has been achieved; the enormous reconstruction challenges facing Angola and the necessity for donor assistance to help meet those needs through an international donor conference; the importance of having properly prepared the groundwork for the holding of elections which the President anticipated would take place in 2005 or 2006; and securing resources to combat the scourge of HIV/AIDS in the country.

Among the noteworthy steps that Angola has taken to improve transparency of financial transactions involving the oil sector were the release of the full oil diagnostic study during the week of the President’s visit to the United States and the disclosure of bonus payments in the amount of $300 million when the Bloc 0 extension agreement was signed on May 14 at the Angolan Embassy by ChevronTexaco and Sonangol.  This is the first time that bonus payments were publicly disclosed.

During this reporting period, a joint CCA-USACC task force met to discuss the business symposium that is being planned in Luanda during the week of October 4.  The concept is to bring together the private sectors of the two countries for an intensive dialogue of the business environment in Angola and to provide opportunities for networking with government and private sector representatives.  The symposium would be held at the Center for Economic Studies at the Catholic University of Angola. As planning proceeds, members will receive additional information on this exciting initiative.

The White House announced on May 20 the nomination of Cynthia G. Efird to be Ambassador to the Republic of Angola. She is currently the Director of Public Diplomacy and Public Affairs in the African Bureau of the State Department.  Her nomination is subject to the consent and approval of the Senate of the United States.  Efird will replace Ambassador Dell, who has been nominated to be Ambassador to the Republic of Zimbabwe.

On a final note, Maria da Cruz has gotten off to a splendid start in her new role of acting deputy director.  Members will notice our newly designed website, which was a result of her initiative.  By separate notice, members are advised how to advertise space on the website at minimal cost.  Maria has also cut costs by changing our payroll managers at the suggestion of one of the board members.  Finally, we have recruited six new members since the beginning of the year and more are anticipated in the near future.  The complete listing of organizations and information about them will be included in our next newsletter.

JANUARY-FEBRUARY 2004

I regret to inform our members that Dan McGarry, Deputy Director, is resigning effective at the end of February to join Halliburton. Dan’s accomplishments at the Chamber over the last nine years have been too numerous to elaborate here. Suffice it to say that in a very real sense, he has been the heart and soul of the organization, totally dedicated, loyal, and industrious and always ready to go the extra mile to respond to requests from our members and the public at large. We shall miss him very much but take some satisfaction in knowing that he will remain in the Washington area and in touch with us. We also want to wish him every success in his new career path. The Board of Directors is organizing a farewell party for Dan on March 3.

The good news is that Maria da Cruz is replacing Dan on an acting basis. Maria graduated from the University of Old Dominion where she majored in international business and communications. She interned at the Chamber during two summers and joined the Chamber last September on a part time basis to assist with the organization of the trade mission. I am sure that you will find her to be helpful and responsive to your requests. For your information, her email address is mdacruz@us-angola.org. All inquiries formerly directed to Dan should now be sent to Maria.

While the Chamber has been heavily focused on the transition during the last several weeks, the Working Group on Angola met on February 11 at the ChevronTexaco office to discuss the implications of Angola being declared eligible under the African Growth and Opportunity Act (AGOA). The two discussants were Florie Liser, Assistant U.S. Trade Representative at USTR, and Lorenzo Bellamy, a member of the Board and a key player in promoting the AGOA legislation. The two key points made by the speakers were the importance of the Angolan government organizing a ministerial committee to examine the opportunities under the act and to identify three or four products that could be developed for export to American markets. An American team is going to Luanda in March to discuss with the Angolan government what might be done to take advantage of Angola’s eligibility under AGOA.

On February 23, the Chamber had the honor of organizing a meeting with the Angolan Deputy Prime Minister, Aguinaldo Jaime, at the BP office in Washington. The primary purpose of his visit was to meet with the officials at the IMF. At the Chamber meeting, Jaime said he was pleased to announce that the negotiations had gone very well and he anticipated the signing of a formal agreement with the IMF in the near future. He also outlined the steps that the government had taken to increase transparency, lower the inflation rate, and stabilize Angola’s exchange rate. The Deputy Prime Minister hoped that these actions would pave the way for a donors’ conference, which was needed to meet the formidable reconstruction challenges facing the country.

The Angolan Embassy’s press release on the Deputy Prime Minister’s visit is posted on the Chamber’s website – www.us-angola.org. I would like to encourage members to use the website for updates on issues of current interest. In particular, I would note a new item that provides legal news summaries of laws and regulations enacted by the Angolan government. The Portuguese law firm Miranda, Correia, Amendoeia & Associados, a long time member of the Chamber, provides this service. Two news summaries have already been posted on the website.

On a final note, the US-Angola Chamber of Commerce and the Corporate Council on Africa are planning a mission in the fall of this year. It would involve a major conference in Angola. We will keep members apprized of developments.

SEPTEMBER-DECEMBER 2003

2003 has been a productive year for the US-Angola Chamber of Commerce. Chamber representatives in Angola were briefed in February by the new Minister of Finance, Pedro de Morais, who discussed the economic objectives and policies that were being pursued by the government. This subject continued to be of intense interest during the remainder of the year, especially as it concerns Angola’s ongoing dialogue with the IMF. During the first half of the year, the Working Group on Angola met three times and, subsequently, the Executive Director moderated a panel of speakers who had participated in the Working Group during the CCA Business Summit in Washington. At the end of June, the Board of Directors elected a new slate of officers headed by the chairman, Filippo Nardin of Citizens Energy. Citizens Energy was one of the co-founders of the US-Angola Chamber of Commerce.

The Working Group continued to meet in the second half of 2003. On September 16, Gonzalo Pastor of the IMF and Jorge Araujo of the World Bank updated the group on their consultations with the Government of Angola. Pastor outlined the steps that the government had taken to promote greater transparency over financial transactions, but put particular emphasis upon the imperative to bring Angola’s high inflation rate, estimated at about 100%, under control. This would require firm discipline on government spending. He also highlighted the importance of addressing the external debt and the dangers of continued borrowing against future oil production. Araujo outlined the components of the World Bank’s post-conflict transitional strategy, which included support for the reintegration of former combatants, technical assistance to the financial ministries, and support for the social action fund.

The Chairman and Executive Director, assisted by Board Member Lorenzo Bellamy and Deputy Director Dan McGarry, briefed the working group on the results of the trade mission on November 20. A written report is included in this newsletter and is also posted on the Chamber’s website with some photographs of the trade mission. Joe Brand of Patton & Boggs provided the background and evolution of the Heads of Agreement that has been negotiated between the Government of Angola and the Soros Foundations Network. He explained that the agreement was originally scheduled to be signed in Washington on November 13, but the Minister of Finance was unable to come because he had to remain in Luanda to present the budget to the National Assembly. The agreement covers the areas of human rights, budget reform, and transparency. (As of this writing, the Agreement has still not been signed).

The ninth working group meeting convened on December 9. Ambassador Christopher Dell briefed the group on the political, economic and business climate in Angola, based on his experiences of the last two and a half years. Dell said that the political system has opened up during the last two years and should receive an added impulse once a date for elections is announced. Most observers believe that the elections will be held in 2005 and, while no decision has been made, President dos Santos may run again. Dell said the economic team has managed to bring the inflation rate down and is making an effort to promote economic reform, though the verdict is still out whether an agreement will be reached with the IMF. A major problem is Angola’s external debt. The government has taken steps to promote a better climate for foreign investment by passing the new investment code and establishing a one-stop window, though, these measures need to be implemented if they are to have any practical impact. The ambassador stated that the relationship between the governments of Angola and the United States has never been better.

In concluding, I would like to thank all of the members of the Chamber for their support during the past year and look forward to an even better year in 2004. We intend to continue the very successful series of the Working Group on Angola, organize more events in Luanda, and plan for another mission to Angola in the New Year.