Chris Gordon
The in-your-face style of marketing practised in downtown Luanda, Angola, is a normal hazard of life on the dishevelled and risky streets of the capital.
Young men and children, mainly refugees from the provinces, sell anything from chewing gum to clothes, pushing it through car windows, following potential customers down the street, disbelieving that you might not want their goods – and desperate for the money.
There’s nothing unusual about street trading in Africa, but Luanda’s is not simply the scramble of the marginalised for a few million kwanzas; it is one of the city’s more sucessful business sectors and a major source of foreign exchange earnings for South Africa.
The South African Embassy in Luanda says it issues a thousand visas a week, mainly to traders in the informal sector. Angolans – and foreign visitors – can take up to $5 000 (R25 000) out of Angola without formalities and many of them do, to buy the goods that supply the street vendors, the squalid, fly-blown and crowded markets, and those fortunate enough to own small shops. The business is worth up to $20-million (R100-million) a month for South Africa alone.
This is a free market economy in action; the free market of the unskilled poor in a country where skilled people are in very short supply and illiteracy is almost as high as under the Portuguese dictatorships. Most people have no prospect of employment in the formal sector; their choices are trading in the cities or subsistence in the bush.
Angola adopted a “free market” economy in 1992 before the fatal elections whose results led the losers, Unita, to a further orgy of destruction. The laws were liberalised, allowing even members of the government to have their own business interests.
The stark contrast between the wealth of a small elite and the dire poverty of the population cannot be missed; it is as much a feature of life as the daily power cuts or the pervasive smell of sewage and rubbish.
The refurbished marble and steel office of the African Investment Bank in downtown Luanda sits next to a grim slum, seeping sewage into the street.
The decayed building, ironically, was once a centre for slave trading, Angola’s biggest business in the 19th century.
The emerging free market in Angola, a deregulated market operating independently of social needs, has not and cannot produce the education, the training, the health care, or any other form of social intervention that is needed to rebuild the country.
Instead it perpetuates a skewed economy, driven by the pursuit of money alone. It is a recipe for long- term instability, as the mass of the population realise they will never have better conditions, or jobs, without government intervention and investment.
The unregulated economic free-for-all feeds one of the major economic problems the International Monetary Fund expects the government to address – the inflation rate. On the parallel money market, fed by street trading, a million kwanzas is now worth just more than $2, and stable at this new low. The government is committed to devaluing the kwanza this year, but has so far not done so. Devaluation could cause major unrest.
Nor does the oppostion party, Unita, offer an alternative. Unita’s policy documents say it is committed to a free market economy, as every aspirant to power must say these days. Yet the evidence from the Luzamba region, where Unita carried out its major economic activity, diamond mining, is that it operates in practice a totally controlled and closed economy, for the benefit of Unita.
Angola’s free market is not, of course what the global financial institutions say they mean by a free market. Yet it conforms in most respects to the model; a weakened non-interventionist state, minimal regulation of economic life despite the labyrinthine system, little expenditure on social services.
Development is left to a market place which doesn’t deliver the goods.
It is hard, when in Angola, to escape the thought that this is the kind of economy that the apostles of globalisation expect in Africa.
It is an economy which has been prised open by the brute force of war and an enforced change in the political system. The dollar has won this war.