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close this bookThe Courier N░ 127 May - June 1991- Dossier 'New' ACP Export Products - Country Reports Cape Verde - Namibia (EC Courier, 1991, 104 p.)
close this folderCountry reports
close this folderCape verde: A mudanša - change
View the document(introduction...)
View the documentAn interview with the President, Antonio Mascarenhas Monteiro
View the documentProfile
View the documentAn interview with Prime Minister Carlos Veiga
View the documentTourism - the engine of future growth
View the document‘...and not a drop to drink’
View the documentThe Cape Verdeans and America
View the documentCooperation with the EEC

Tourism - the engine of future growth

By early March’ Cape Verde has changed the soft covering of greenery left by the rains for the ochre dust of its volcanic soil and it is prey to the winds. That dry wind from the mainland, the dreaded lestada, blows relentlessly night and day. The islands’ plant life, starting with the glorious Prosopis Juliflora, the providence of these sere regions, has learned to adapt, bending to deflect the furious gusts. Yet the wind, never ending in its punishing of the fragile soil and its whipping away of its precious particles, may be on its way to becoming one of the stars of the country’s future development. For it is the wind which brings the dozens of wind surfers to spend hours at their favourite sport on the coast by the Morabeza and Belorizonte hotels on Sal island.

Cape Verde is one of the best places for wind surfing, which is very popular among western holiday-makers, and it is there, off Mindelo on Sao Vicente, in a narrow channel providing extra acceleration, that world speed records are set. The word has got round and more and more funboard fans are coming to the country’s beaches. New equipment is tested there every year and Wind Surf International is soon to sponsor a combination competition there. Conditions are ideal for surfing too, although this is not so well publicised for the moment. Ask Virgilio Mendon the deputy director of the Hotel Belorizonte, why tourists come to Cape Verde and the immediate answer will be ‘the wind in the winter and the beach in the summer and peace and quiet all the year round’. The islands already have 5000 tourists every year.

But it is early days for tourism. The main stumbling block is the difficulty of actually getting the tourists from their country of origin to Cape Verde and moving about between the islands is not always easy either. Although the Gulf crisis has pushed up the price of air tickets twice since the start of the tourist season, it had some positive spinoff too, as German tourists who used to go to Egypt came to Sal instead this year. Mr de Souza Lobo, the general manager of the Morabeza was delighted when these providential arrivals filled the hotel and no more rooms were vacant. The Morabeza has just improved its range of excursions by buying a fast trimaran that takes only an hour to get from Sal to the sandy beaches of Boa Vista, undeniably the finest in the country.

He and his colleague Mr Mendonagree that the government should boost Cape Verde’s tourist trade by cutting through the red tape that hinders tourist projects, making it easier for promoters to get credit and being flexible about the organisation of charter flights. There is no doubt that the new Minister of Industry Trade and Tourism, Gustavo Araujo, will be keen to hear what they have to say. Mr Araujo, a former expatriate recently back from Lisbon, where he ran a travel agency, is convinced that tourism will be the ‘driving force of the country’s new growth’ and that this is the sector to release resources to finance investments in other fields. He means to start by attracting the top end of the market, people who set trends and go to luxury hotels and are copied by the less well-off. Plans siting future tourist facilities and outlining types of promotion schemes, the requisite financial means and the extent of national staff involvement are on the drawing board.

A strategic sector

The new team has high hopes of another sector too, fisheries. ‘This is the only sector that can really be called strategic here in Cape Verde’, Rural Development and Fisheries Minister Antonio do Rosario says, ‘because the fishing potential of our Exclusive Economic Zone is considerable, because our geographical situation is such that we can develop fishing in other areas too and because of the possible links between fishing and industry - boats and processing, for example’.

The government is to have a complete overhaul of this sector, privatising Pechcaf, the State fishing firm at Mindelo, and reorganising the company which markets fish products abroad. It will also be helping private operators, emphasising research and training fishermen and other people working in this area. All Cape Verde’s islands have good potential when it comes to developing the fish industry, but Sao Vicente has the mote particular advantages of a natural deep-water port, refrigeration facilities and a shipyard, so this is where the fisheries development institute on Santiago is to be transferred.

This will be an extra asset for Sao Vicente and its port, Mindelo, which will one day have a vital part to play in developing the ‘country’s geo-strategic position’, as the time-honoured expression of Cape Verde’s situation half way between America, Europe and Africa goes. Mindelo was already a popular coal supply centre for ships going round the Cape of Good Hope in the last century and if projects on the drawing board for some time now were actually put into practice, they could bring back this lost importance.

One such scheme is a Brazilian plan to set up warehouses to store goods which would gradually be sold on markets in West Africa.

Shipping companies are also very keen on the idea of warehouses. They would mean that, instead of grouping their freight as they have to do at the moment and sending large ships to drop off small quantities at various ports in the region, where the goods can well be stuck for long periods, an expensive undertaking, they could unload the whole of their cargo at Mindelo in one go and send small boats to do the final deliveries.

The geographical situation could attract finance too, at least Cape Verde hopes so, since it is preparing to set up off-shore banks. ‘The decision will be coming soon’, Gustavo Araujo told me, ‘and it will mean we can find out how the international capital markets work, which will help the modernisation of our central bank’.

Another important side of the policy of capitalising on the geographical situation has to do with industrialisation. The Minister is convinced that his country’s low wages and skilled labour force will attract Spanish and Portuguese industries which cannot stand up to greater competition in the Single Market in 1993 and that these industries will bring in a knowledge of the markets which the Cape Verdeans do not have. This sort of transfer has already taken place in the footwear industry. A Mindelo footwear firm, which was doing very badly, was taken over by the Portuguese and has been doing well ever since, as the new organisers brought with them their list of American clients.

Industrial promoters could also be attracted by the fact that Cape Verde belongs to a number of regional organisations - ECOWAS, for example, whose treaties (on the free movement of goods especially) could open the door to the markets of 16 countries in the region. Gustavo Araujo believes that African solidarity will do a great deal for his country’s producers, as Cape Verde is small and, he hopes, ‘people won’t be wary about it’.

Agrarian reform

None of this means that agriculture will be neglected. In spite of the shortage of arable land (only 10% of the country’s 4033 km²) and very unreliable rainfall (Cape Verde is in the Sahel, let us not forget), farming is the dominant sector of the economy and provides jobs for a large part of the population. But these two major handicaps have given the islands a structural food deficit. Only in good years can the nation cover even a small percentage of its cereal requirements, so the new government is not aiming at self sufficiency, which is out of reach, but at ensuring that the peasants get as much from the land in terms of revenue as they can. Accordingly, it has no problem with the fact that a large part of the irrigated land on Santo Antao is given over to sugar cane, which is distilled to make aguardente, a much prized and very expensive alcohol. Nor that experienced vine-growers (grapes were introduced in the 19th century by a very prolific French Huguenot called Montron) working the land at the foot of the Fogo volcano, which last erupted in 1951, manage to produce thousands of litres of wine on a lunar landscape of volcanic ash and lava at various stages of decomposition. This year they produced 50000 litres of a highly alcoholic, syrupy beverage halfway between grape juice and traditional wine. One of the growers was proud to tell me that his vines bring him in an annual 350 000 to 400 000 escudos (a top civil servant only gets 25 000 a month) and that his son had emigrated to the USA but came back two years later because ‘he earned less and had to work harder for it’.

There is more talk of agrarian reform from the new government. But it will not behave like the old regime and go in for more land redistribution. It intends instead to modernise farming by bringing in new methods - greenhouses for example, and drip irrigation to maximise the water resources and double the current 3000 ha under irrigation. It will also promote new crops and develop livestock. Antonio Rosario, the Rural Development and Fisheries Minister, says that agrarian reform ‘is essentially a cultural problem of relating with the land, of changing outlooks and of encouraging people to look to the market. We have to set up an efficient rural extension service and give people who have no land the opportunity to develop other types of activity, herding and craft and cottage industry, for example, and the processing of agricultural produce such as pawpaws and coconuts and being involved in rural tourism’.

The price of success

Clearly, the country has ideas to help it breathe fresh life into the economy. It intends mobilising its large emigrant population as it has never been mobilised before. There are apparently as many Cape Verdeans abroad as at home (some say twice as many) and, even when they have been in their host country for generations, they never completely cut the ties with their ancestral land, as the sumptuous villas with closed shutters and glittering motor bikes (especially on Fogo) are there to prove. Less visible proof, although there is no doubt more of it, is the money; the thousands of postal orders which the emigrants send to their families back home, $29 million in 1986 and $35 million in 1988, mainly from the USA and the Netherlands. This represents a vital contribution to the balance of payments.

More than ever before, the emigrant community is going to be the subject of government concern and the idea is for it to invest more in the priority sectors of tourism, fishing and industry. The fact that a number of the current ministers are themselves from the ranks of the emigrants may encourage the government here, but it will take more than that to make a success of the reforms. Cape Verde will have to go on counting on external aid and, traditionally, it receives a lot, that is certain. In 1987, the figure was $87 million, which is $256 per head, and the democratic process should logically result in an increase in this manna.

But paradoxically, the country is starting to be a victim of its own success. It is a major beneficiary of food aid from the USA and now it is going to have to pay the transport costs of about $1 million, because it is considered to be a medium-income country, with a per capita GNP of $758 (1988). Much of this is not the result of local production, but of food aid and postal orders from the emigrants’ as the authorities are quick to point out. However, if development country classification criteria continue to be based on this kind of gross figure, Cape Verde will find it more and more difficult to obtain the concessional resources which have enabled it to get on so well over the past 15 years.

Infant mortality, for example, has dropped sharply to 50 per thousand now as against 130 per thousand at the time of independence. There is now one doctor for every 5220 inhabitants, whereas the figure for 1976 was one for every 23 000. And the school attendance rate for children of seven to 10 is 100%. Terrible famine was frequent in the last century, but everyone now has plenty to eat, the average consumption of the staple pulses and cereals now being 207 kg per person as against 165 kg at independence. Life expectancy is good too, at 65 being a record for the region, and the people have the fourth best quality of life index in Africa, after Libya, Mauritius and Seychelles.

The Community and the Member States have been the biggest financers of Cape Verde’s development programmes. In 1985-87, for example, they supplied 56% of the country’s total aid between them. But the new authorities see the quality of aid as being every bit as important as the quantity. Cooperation State Secretary Jose Luis Monteiro is convinced that the conventional ways of managing external assistance programmes, with all the rigid machinery of project submission and control, do not give maximum returns in Cape Verde. ‘What we need is aid arrangements that are based on agreeing on the main objectives with our partners, who will then supply us with flexible financial means that can be apportioned on a decentralised basis as unforeseeable situations crop up’.

The ideal would be for all donors to follow the example of Swedish aid, which the Cape Verdeans are tireless in praising. There is a large amount of it, about $10 million-worth per annum, the extent to which it is tied has been reduced to a minimum and, most important, it all comes in cash, which Cape Verde is using to pay for two (goods and services) import programmes, justifying the expenditure afterwards. Sweden appears to be satisfied with Cape Verde’s performance and has just increased the period of aid programming from two to three years.

One Community country, the Netherlands, is following Sweden’s example. A dialogue between The Hague and Praia was set up several months ago and, even if it fails to lead to aid in hard cash, it could trigger a major decentralisation of Dutch aid, with the central government agreeing on the main lines and then delegating to its ambassador powers which cannot be left to the Cape Verdeans.

This quest for more and more flexible assistance will not be easy, although the country’s sound management and the transparency attendant on its alternation of political parties should help. And of course there is the sympathy and admiration generated by a brave people, shaped by the pitiless natural selection of the terrible famines which punctuate its history, ever unwilling to bow to fate. These are the people who decided to stop desertification by planting 3 million trees every year (be it happy coincidence or the first results of reafforestation, rainfall has returned to normal). These are the people who have shown great maturity in electing the leaders of their choice in a peaceful manner. So what can stop them from achieving their goals?

A.T