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Angola

Economics

Most would assume that the discovery of large natural resources inside a poor nation would help raise the living standards for the majority of its citizens. But Angola presents an example of how instability, social inequality, and corruption can all flow into a struggling nation even as its oil flows out, a phenomenon known as the "resource curse."

Photo of refineries
These refineries reflect the impact of oil on Angola.
Over the last decade, Angola has emerged as a key player in the U.S.'s strategy to diversify its oil sources as well as a political ally. But this wasn't always the case. After gaining its independence from Portugal in 1975, Angola began a protracted, 27-year long civil war that pitted its Marxist state against the National Union for the Total Independence of Angola (UNITA), a CIA-backed rebel group. Angola's oil flowed without interruption during the war, and oil profits helped fuel the bloody conflict. Though the fighting finally came to an end in 2002, the conflict destroyed much of Angola's infrastructure and displaced millions of its citizens.

Today, Angola is the second-largest oil producer in sub-Saharan Africa, and its economy is booming thanks to increased output from its large oil reserves. Fueled by an increase in oil exports, the IMF estimates Angola's economy will expand by nearly 13 percent during 2004. Yet in the past the people of Angola have seen few benefits from the influx of petrodollars into their country. As much as 68 percent of Angola's population lives in poverty, and Angola rates near the bottom of the U.N.'s Human Development Index. Over the years the oil industry has created few jobs for Angolans, and oil profits have helped solidify government corruption and class inequality.

As David Gordon, head of the CIA's Office of Transnational Issues put it, "Global oil is a mixed picture, predominantly negative, and African oil is the most negative of all stories." However, lately there have been a few hopeful signs that, with the aid of the international community, Angola may be able to transform its oil curse into more of a blessing for its people.

Go to Angola: Politics
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