An interview with Prime Minister Norberto da Costa Alegre
'Our external debt is too big'
Sao Tomamp; Principe, a democracy in its infancy, had its
fiirst political crisis in April, three months after the country's first
completely free elections since independence in 1975. The cause ? A difference
of opinion over his powers, which prompted President of the Republic Miguel
Trovoada to remove Prime Minister Daniel Dalo, leader of the Democratic
Convergence Party (PCD) and winner of the legislative elections with 64% of the
votes and 32 of the 55 seats in the House. The PCD contested the decision
strongly to begin with and then accepted it when legal specialists from all the
political parties together with two eminent Portuguese constitutionalists
investigated the presidential powers closely and clarifed the situation.
President Trovoada chose a new Prime Minister from the ranks of the PCD -
Norberto da Costa Alegre, the Finance Minister from the previous Government, who
answers questions from The Courier in this interview.
· Sao Tomas just seen its new
institutions' first political crisis, hasn't it, Prime Minister ? How is it
possible to take over the job of Prime Minister from the leader of your own
party and what will be your policy ?
- Countries which already have democratic traditions may find it
a bit difficult to grasp, but we who are in a new phase and getting a democratic
rme going do not find it so. We are trying to find pragmatic solutions
without endangering the still very fragile institutions - that was the
background against which a new Prime Minister was appointed. But I have to say
that my Government is the natural continuation of its predecessor. Programmes
are being adapted, of course, but, basically, we shall be carrying on with what
was started before.
· But the previous Government
also fell because of popular discontent, backed up with demonstrations, and you
say you are going to carry on with that policy ?
- The popular discontent was due to the country's economic
problems. And, of course, the opposition parties exploited it. But everyone has
learnt a lesson from a crisis which, ultimately, was beneficial for the
institutions, because democracy has now been strengthened and it is clear to
everyone that crises don't help anyone.
· Your Government apparently has
only a tiny majority at the moment. Do you actually have the means of governing
- Yes, I am convinced that we do. We may have taken things
slowly so far, but that is not to say that we are not governing with the
requisite stringency and determination. All that has to be done is to try and
make a more thorough job of consulting and sounding out the existing political
forces, and the various social forces too, so a general framework can be
designed and we can move forward in a set-up everyone agrees on.
· Since independence, Sao Tomas been heavily dependent on external aid, which makes a lot of people think
that the country isn't viable - although they may only say so in private. What
do you have to say to them ?
- I should say that Sao Tomamp; Principe's difficulties are
not so very different from the difficulties facing the other countries of
Africa. We are running a balance of payments deficit and a budget deficit and we
are trying to do something about that. Our investments are not financed with
national savings, so we have to look abroad for financing and we have an
external debt out of all proportion to the country's domestic production. But
those are the problems of other African countries too. Our country is going
through what is currently a very difficult period, but we are convinced that
things will look up after 1994. At the round table of funders, we shall be
concentrating on discussing the debt and the balance of payments and this could
mean we can set up the country's development in 1994-2000 differently. So, to
sum it all up, the next couple of years will be very difficult, but with the
lightening of the debt, the programming of investments and the projected budget,
tax and monetary regulation, things will be different after 1994.
· The people who doubt the
country's viability point to its lack of exportable resources above all. They
say that Sao Tomas even fewer resources than the rest of Africa.
- It does and it doesn't. It does because currently we are 90%
dependent on cocoa and it doesn't because the country's potential is varied and
we could produce every food product except cereal.
· Although you do in fact
produce a little bit of maize...
- Yes, we do. We could diversify our farming and concentrate
more on livestock to make up what is currenctly a very big food deficit. We
could also look at producing exportable products which don't require a huge
amount of space - cinnamon, I mean, and pepper, the spices for which we were
once famous. This sort of diversification takes time, of course, but now we are
suffering from not having done it before. So it's not that there is no
potential. It's that there wasn't a structured enough development plan to
promote this sort of agricultural diversification before. When cocoa goes up,
everything is fine, but we also have to cater for the times when it goes down,
which means alternative products. That is what was missing in the early years of
· Are there economic activities
which your country could go in for other than what you have just mentioned,
- We are very well placed when it comes to developing the
services sector. Certainly, there is a whole set of infrastructure there which
has to be developed and improved. There is also the whole range of free zone
activities. We are particularly well placed there too when it comes to
developing exports to Africa and the other continents, because we are on the
route to Europe and America. But as I said, this is potential which can only be
realised if we develop the infrastructure and that will be one of our priorities
· Your relations with the
Bretton Woods Institutions have been frozen for the time being, haven't they?
Can you confirm that you will be returning to cooperation with the IMF and the
World Bank ?
- I am sorry to say that you are wrong there. Relations are not
frozen. We very fortunately started them up again early last year and, I have to
say, the results are good.
· But payment of the second
instalment of the structural adjustment monies was held up...
- No it wasn't. The second instalment will still be paid in
June. The Sao Tomamp; Principe programme was put before the Board of the IBRD
and the IMF on 10 June - and that was one of the conditions for the round table
of funders in Geneva in mid-July. Running the structural adjustment programme
with the World Bank and the Monetary Fund was one of the most important things
the first Government did and that is going to continue, because Sao Tomamp;
Principe's special situation demands it. As I told you, we have to have external
aid to meet our internal requirements, to finance our investments and make up
the deficit in our balance of payments. So the economic and financial
credibility which these institutions confer is very important to us.
· One of the bones of contention
with the IMF and the IBID was the administrative reform, wasn't it ? Will the
army be cut down too ?
- The army hasn't come into the programmes under discussion with
the IBRD and the IMF for the moment. We are talking about public administration
as such, but not about very specialised sectors like the army.
· They say that some Portuguese
former owners are trying to get back the property they abandoned on
independence. What are your Government's intentions here ?
- We have told the Portuguese authorities on a number of
occasions that Portuguese investors and promoters will be welcome in Sao Tomamp; Principe.
· That doesn't answer my
question. Will they be able to get their property back ?
- That's not it. It's more a question of them applying for
investments in farming or other sectors. There is no question of the State just
giving property back, unless it can be proven that there were irregularities.
There have been cases of irregular expropriation and there the courts decided
and the people involved, Sao Toms or foreigners, got their property back.
This is a problem for the courts, not the Government. But the Government has
told the Portuguese authorities that investors will be welcome in Sao Tome and
· You said just now that your
country had too big a debt for its meagre resources. What is your Government
going to try to do about this?
- That will be one of the big questions at the Geneva meeting in
mid-July. There are creditors with whom we have to discuss ways of lightening
the debt burden. There are many ways of going about it. With some of them, we
shall be talking about the possibility of turning these debts into direct
investment in Sao Tomamp; Principe. With others, we shall be negotiating a
rescheduling of what we owe. And then, of course, there is the whole system we
have to find with the donors of bridging the financing gap in our balance of
· By wiping debts out?
- The question is this. We are going to investigate rescheduling
the debt and wiping it out and converting it into direct investment with the
creditors, but there is more to it than that. There is the external deficit,
after all. There is infrastructure which is completely run down. There are
imports of goods and equipment to keep up with - which is why, in one and the
same framework, we have to discuss the macro-economic set-up for this period
with our creditors and with our funders so as to find the means of guaranteeing
· Some of these debts are
incomprehensible, Prime Minister, aren't they? What about the 21 million Swiss
francs spent on 120 low-grade houses or the cost of the airport - $S million to
begin with, but probably more than $15 million in the end ?
- I have to say that Sao Tomamp; Principe is not the only
place to have this type of problem, but unfortunately it is in the poorest
countries that these things stand out the most. I don't think that the
rehabilitation of the airport is the same sort of thing. There were delays which
caused the budget to overrun in this case. However, these prefabricated houses
are a sorry affair, but, as I said, that is the sort of problem which you don't
just see in Sao Tomamp; Principe. Unfortunately you see such things in other
parts of Africa too.
· Your country is hosting a very
rich foreign citizen, Mr Herringer, I think. What can he do for Sao Tomamp;
Principe's development ?
- You have just mentioned someone you claim to be a very rich
foreigner. Let me tell you that Sao Tomamp; Principe is host to other
foreigners too. I can't tell you how rich they are, but we welcome all
foreigners who want to take part in the development of Sao Tomamp; Principe.
This gentleman has already invested in some very specific sectors - civil
aviation and tourism - and the contacts he established suggested that he was
willing to continue his activity. So, as far as we are concerned, he is welcome
· One aspect of your policy, I
believe, is to boost regional cooperation, not just with the Portuguese speaking
nations but with your immediate neighbours too.
- Absolutely. We are convinced that a little country like ours
can only survive, in an increasingly regionalised world, if it is an integral
part of the sub-region. So all the efforts we are making now to get the economy
off the ground again are ultimately intended to enable our country to gain its
rightful place in Africa and the world and to make the most of any comparative
advantages to put its development on a firmer footing.
Interview by Amadou