10 April 2003
U.S. To Partner Oil Firms in Investment Fund for Angola
(W. Kansteiner describes innovative State Dept program) (670)
By Jim Fisher-Thompson
Washington File Staff Writer
Washington -- The U.S. Government is putting its money where its mouth
is by helping partner a special investment fund for Angola meant to
spur the nation's fledgling private sector, a prime goal of Angolan
President Jose dos Santos, says Assistant Secretary of State for
African Affairs Walter Kansteiner.
Kansteiner, a former businessman himself, appeared on an April 8 panel
assessing Angola's first year of peace, sponsored by the Woodrow
Wilson International Center for Scholars. Former Chairman of the House
Africa Subcommittee Howard Wolpe moderated the discussion that
included, among others, former U.S. Ambassador to Angola Paul Hare and
former Deputy Assistant Secretary of State for African Affairs Witney
Schneidman.
In order to spur internal investment in Angola, Kansteiner announced,
"We have decided to hit up some of our American private-sector
friends, and we have now developed a program with some of the oil
companies where the U.S. State Department and some of those companies
pool money together -- capitalize -- a small lending institution, a
bank."
Kansteiner said that, in Angola, "there is a tremendous sign and good
indicator that the new economic team that is in place is serious." One
"roadmark" of economic progress he pointed to is the new investment
code that was recently passed by Parliament. "It is a sound code and
we are looking for implementation, but it has all the hallmarks of a
serious effort to bring in and attract foreign direct investment," he
added.
"These are all signs of positive, potential development" in Angola,
the official said, and the U.S. Government is pursuing a broad policy
of political and economic engagement "to assist if we can." The
reason, he stressed, is because "we want to see Angola succeed. We
want to see Angola become a private sector-driven economy that uses
its incredible natural resources wisely. We also want them to build a
democratic tradition with political institutions that reflect the will
of the people."
During a recent a meeting he attended in Luanda with President Jose
dos Santos and visiting Secretary of State Colin Powell, Kansteiner
said the Angolan told them: "You know I'm trying to move this country
from a centrally-planned, government-owned, regulated economy into one
that is an open, free market economy. That is my big challenge. But
the part of the puzzle I don't have...is the private sector. I've got
a few entrepreneurs... and the big oil companies...[but] I don't have
a middle-class cadre of businesspeople that will ultimately drive my
economy. That's what I need."
Shortly after that meeting, Kansteiner said he dined at a restaurant
in Luanda whose owner mentioned he wanted to expand his business and
open two other eateries in town. The Angolan went to commercial banks
for a loan and discovered they were charging about 29% interest. "Now,
that's pretty tough to build a business plan when you've got to pay
29% interest," Kansteiner said. "How do you start building financial
services in capital markets that enable entrepreneurs to borrow money
that can then be used to build businesses that can be competitive?"
One answer he said officials at the State Department hit upon was to
contribute to a private sector initiative that would lend money at
reasonable rates to enterprising Angolans. The new bank partnership,
he explained, will make loans to small- and medium-sized corporations
in Luanda. "It's going to be small, our initial capitalization is
probably only going to be $50 million. But, if that money is lent
properly to the private sector of Angola it will be repaid. In fact,
they will be able to profit on it and that means more money will be
lent and we're building capital markets.
"It's a first step," Kansteiner said, but "that bank will be up and
running by the third or fourth quarter of this year. So we're very
excited."
(The Washington File is a product of the Office of International
Information Programs, U.S. Department of State. Web site:
http://usinfo.state.gov)
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