Angola’s Dos Santos Heads for Vote Win as Economy Expands

Angolan President Jose Eduardo dos Santos is set to extend his 32-year rule tomorrow, bolstered by an economic boom fueled by Africa’s second-biggest oil industry and a divided opposition.

In the second vote since the end of a 27-year civil war in 2002, Dos Santos’s Popular Movement for the Liberation of Angola will easily win the most seats in the 220-member legislature and earn the right to name the president, according to analysts at Chatham House and Global Insight. Four years ago, the MPLA won 82 percent.

The MPLA, under the slogan “Angola, growing more and distributing better,” pledged to maintain the stability it credits for spurring an economy that may expand 6.8 percent this year, according to the International Monetary Fund, and promised to ease some of the world’s most severe poverty levels. A major election debate centered on Dos Santos’s choice of Manuel Domingos Vicente, former chairman of the national oil company, Sonangol EP, as his running mate over more senior MPLA members.

“The real challenge is within the party and not with the opposition parties,” Markus Weimer, coordinator of the Angola Forum at Chatham House, a London-based research group, said Aug. 27 by phone. “It’s more about the internal party dynamics.”

Oil producers operating in Angola, including Chevron Corp. (CVX), BP Plc (BP/) and Total SA (FP), probably won’t be affected by the vote. Angola pumps about 1.8 million barrels of crude a day, supplying 2.9 percent of U.S. imported oil in May and 16 percent of China’s as of July, according to data compiled by Bloomberg.

“The election is not going to have any impact on all our operational activities,” said Fernando Pegado, a Luanda-based spokesman for Exxonmobil Corp. (XOM)

Street Protests

Public discontent with the rule of Dos Santos, who turned 70 two days ago, spilled onto the streets of Luanda, the capital, this year as mainly young protesters push for democracy and an end to corruption.

More than half the population of about 19 million is under 18, while 54 percent of the country lived on less than $1.25 in 2009, according to United Nations Children’s Fund. Transparency International ranked Angola at 168 of 182 countries in its 2011 corruption index.

“The government has responded to those protests -– despite their relatively small scale -– with excessive use of force, arbitrary arrests, unfair trials, obstruction and intimidation of journalists and other observers,” New York-based Human Rights Watch said in a report last month. “Increasingly the security forces have used unnecessary lethal force against protesters and organizers.”

Housing Projects

While Kundi Paihama, the Minister of War Veterans, threatened to “wipe out” those who don’t vote for the MPLA, party members and government officials have taken a softer line, rolling out new housing projects and a dam to increase electricity production in recent weeks.

“We don’t hide the problems the country is facing,” Dos Santos told thousands of supporters at a rally yesterday in Luanda. “The MPLA studies problems, chooses the way to solve them and explains that to the people.”

The biggest opposition party, the former rebel Union for the Total Independence of Angola, has been campaigning about the failure of Angola’s oil wealth, which increased foreign reserves to a record $30.2 billion in June, to cut poverty and unemployment.

Unita’s ability to get that message out has suffered from the defection of Abel Chivukuvuku, a former leader who formed a rival group, Casa-Ce, and is seeking the youth vote.

Offshore Economy

“Angola is very much a two-tiered system where you have, on the one hand, the offshore economy with oil revenue coming in and financial services in a sort of boom town, and on the other side there’s poverty,” Weimer said. “It’s obvious there’s a massive difference between rich and poor.”

The wealth gap is evident in Luanda, the world’s second- most expensive city for expatriates, according to the Mercer LCC Cost of Living Index. The city has about five million residents, many living in slums of concrete blocks, dirt floors and open sewage drains. Angola’s life expectancy is 47 years, according to the World Bank. The under-5 mortality rate is the world’s eighth highest at 161 deaths per 1,000 children, according to Unicef.

Unemployment is estimated around 26 percent, with the oil sector employing about 1 percent of Angolans, according to the African Development Bank. While the capital bristles with construction cranes and the government has re-opened the China- repaired Benguela railway that runs through the central highlands, many Angolans struggle to get an education and find work.

‘Increasing Restrictions’

“Jobs are for the favorites of the family of Jose Eduardo dos Santos,” Carduso Flores, 20, who’s studying to be an electrician, said at an Aug. 26 Unita rally in Luanda. “If you aren’t close to the family, you might as well not be Angolan.”

Human Rights Watch described the atmosphere around the vote as “one of increasing restrictions on the rights to freedom of expression, association, and assembly and media freedom.”

Angola’s oil wealth ensures that the government isn’t too concerned about international criticism of its rights record, said Sebastian Boe, an analyst at IHS Global Insight in London.

“The government is comfortable in the calculation that Angolan oil production precludes significant reprisals or sanctions,” Boe said in an e-mail.

Observer Status

The African Union, the Southern Africa Development Community and the Community of Portuguese Language Countries are the only international groups with election monitors, Elias Isaac, country director for the Open Society Initiative of Southern Africa, a pro-democracy group funded by George Soros, said by phone in Luanda.

“It’s not enough, it’s just a drop in the ocean,” he said.

Groups such as Human Rights Watch and Open Society haven’t been allowed to send monitors, Isaac said, while accreditation for several embassies has been delayed.

“Some foreign missions submitted requests later than the deadline or had insufficient documents,” Julia Ferreira, a spokeswoman for the commission, said by telephone yesterday. The organizing process has had “imperfections here and there,” Andre da Silva Neto, the commission chairman, told Radio Ecclesia in Luanda.

Dos Santos is Africa’s longest-serving ruler after Equatorial Guinea’s president, Teodoro Obiang Nguema Mbasogo. Both came to power in 1979. Offshore oil discoveries began to heat up for Angola in the 1990s, fueling its coffers and shielding Dos Santos from outside scrutiny as he shifted the former Marxist state to a stable investment partner.

“All the external powers investing in Angola seem to want and really value is stability and that has been provided by one person for the last three decades,” Weimer said. “The oil drives the boom and everyone wants to be part of that, so they’re not going to criticize you too much.”

To contact the reporter on this story: Colin McClelland in Luanda via Johannesburg at cmcclelland1@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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