(introduction...)

Who has not seen or heard of well-documented analyses of the non-viability of African countries, the precariousness of their economies propped up by one or two raw materials, their tiny, split-up markets and the very poor standard of their labour forces? Sao Tomamp; Principe, a former Portuguese colony off the Gulf of Guinea, which has every one of those handicaps, is virtually a caricature of these pictures.

This little country - 964 km² in area, with a population of 120 000 - gets 90% of its revenue from just one export product, cocoa, which brought in $5.5 million last year to set off against imports of $24.5 million. So its increasingly heavy debt, relatively speaking one of the heaviest in the world, comes as no surprise. By the end of 1991, it owed $215 million, $83 million of it in arrears, which was four times its gross national product and more than 20 times the value of its exports. Without any writing-off or rescheduling, the servicing of this debt alone will account for 90% of export revenue this year. Economists, as we all know, tend to cry disaster when repayments reach 20% of exports, so what would they say to this? And Sao Tomamp; Principe has been running a structural adjustment programme since 1987!

After the main funders' mid-July Geneva meeting, the third of its kind, the country now has to negotiate the easing of its debt and new financing with each of its creditors. Even if a miracle happened and the clock was wound back to zero (and there will be no miracle, because the bulk of the money is owed to multilateral organisations which can neither reschedule nor write off), the country would not be out of the wood, for it is heavily dependent on imports of food and energy which a budget shortfall equal to half its GNP prevents it from financing.

With indicators of this sort, it would take boundless optimism indeed to dare predict economic recovery in the foreseeable future. One expert told me pointedly that the international community, which poured in something like $68 million in aid in 1990, would do better to put the money in the bank and pay every Sao Tom an annual allowance with the interest instead - a jest, no doubt (or was it?), but indicative of the state of mind which such apparently inextricable problems can produce.

Yet despite the disastrous economic record, what faces the foreign visitor to these islands is more paradise than apocalypse. There is wonderful scenery, incredible luxuriance rising to the highlands from which countless falls and mountain torrents flow down to never ending sandy beaches fringed with coconut palms and the infinite shades of blue of the crystal sea. Sao Tomnd Principe are two of the most beautiful islands in the tropics, of that there is no doubt, and relative isolation has enabled them to save most of their primitive vegetation. Some parts of Sao Tomre unexplored, even today, although the island was discovered more than five centuries ago.

It was on 21 December 1470, St Thomas' day (hence the name), that Portuguese mariners saw the island for the first time, but it was another 15 years before Captain Jose Paiva set up camp on the Ana de Chaves bay, on the site of the present capital, and opened the way for colonisation by Portuguese lords. They introduced sugar cane, to be grown by a servile labour force, and, for a few short years in the 16th century, Sao Tomven became the world's biggest sugar producer. The King of Portugal also used this distant land as a kind of penal colony and exiled prisoners to it. In 1493, he sent 2000 Jewish 2-10 year olds, only a few hundred of whom survived the tropical diseases and were still alive by the early 16th century.

But sugar output waned. In 1544, slaves escaping from Angola were shipwrecked off the Rolas Channel. Once ashore, they gathered in the hills of Sao Tomjoining up with more slaves in flight to launch murderous attacks on the plantations. Everything in their path was laid to waste including, in 1574, the capital. Terrified, most of the Portuguese colonials emigrated to Brazil, leaving the plantations in the hands of their mulatto children.

Anarchy reigned for two centuries, with internal fighting, Angolan slave attacks and visits from pillaging French and Dutch pirates, who occupied the island more than once. All this time, the colony was a crossroads for the slave trade and Principe especially became a gathering and victualling point for negro slave ships, so the capital was moved there for a century (1753-1852), only to return after the official ban on slave trading in 1836, by which time Sao Tomad become a prosperous centre for the coffee and cocoa trade.

It was the Governor of the time who brought coffee to Sao Tomn 1800, while cocoa was introduced, initially as a decorative plan, in 1822. For decades, the two crops were grown side by side, although coffee dominated until slavery was abolished in 1875. The slaves were freed and they left the plantations before the harvest, thus completing the planters' ruin. Following advice from the Portuguese bank which invested in the plantations, emphasis was now placed on cocoa and the Government authorised employers to go to Angola to recruit workers on terms very similar to those of the slaves, for they could not go home until their contracts expired. According to the May 1946 issue of the National Geographic Magazine, cocoa planters in Trinidad & Tobago were still being offered Sao Tomlantations complete with buildings and slaves at the beginning of the 20th century.

In 1889, cocoa outstripped coffee for the first time and, in 1913, Sao Tomas the world's biggest producer, with 36 500 t of high quality cocoa much sought after on the London market, the main outlet.

The country, its plantation economy on the wane, ticked over gently between the two World Wars and went slowly on until 1953, when bloody repression of a popular uprising triggered the nationalist awakening, as the Portuguese army massacred a thousand Sao Toms demonstrating against attempts to force them to work on the plantations. The Sao Tomamp; Principe Liberation Movement (MLSTP), the direct result of this, was set up in Libreville and it worked mainly through diplomatic channels. In 1973, internal discussions led its historic leader Miguel Trovoada to make way for Manuel Pinto de Costa, who became President when the country, along with other Portuguese territories, became independent two years later, in the wake of Portugal's spring revolution.

The new President went for a Marxist-Leninist rme, brought the whole of the islands under State ownership, with compensation-free nationalisation of all plantations of more than 200 ha and all businesses, and opened a series of 'people's stores'. But the decline in cocoa output combined with poor management of State firms rapidly created economic crisis, forcing the Government to switch directions. The economic liberalisation of 1985 went hand in hand with a more open political climate, leading to the adoption of a multi-party system in 1989, a decision ratified by referendum in August 1990. In January 1991, the former single party, despite a face-lift by Carlos Gra the former opposition leader-in-exile (in Gabon) and now leader, was defeated at the legislative elections by the Party of Democratic Convergence-Think Tank (PDC-GR) and Daniel Daio, its leader, became Prime Minister. This lasted until a difference of opinion over the presidential powers brought him into conflict with Miguel Trovoada (elected to the Presidency, unopposed, in March 1991) and the former was replaced by his Finance Minister, Norberto da Costa Alegre.

Land of ro

Ro the Portuguese word for 'plantation', is soon familiar to the visitor and reasonably enough too, for the whole country's history hinges on them, sugar first, coffee next and cocoa after that. Some even talk about the whole country as a plantation, because the ro occupy 90% of the arable land, almost all that can be used. During the colonial period, there were 45 medium-sised and large plantations, which the Government has since combined to make 15 State plantations. The biggest of all is the impressive Empresa Agricola Agostinho Neto, 6000 ha of northern Sao Tomnd once known as Rio do Ouro after the river which runs through it. There is lovely Agua Iz5000 ha of cocoa bushes on the west coast, and there is Monte Cafthose 1800 ha of highlands in the interior, which, despite a serious decline in output over the past 20 years (150 t down to only 15 t), can still produce some of the finest coffee in the world.

The rosystem is far more than a way of growing things. It is a whole way of life and work which has long shaped the society and the landscape of these islands. The ro, which were designed for the production and export of cocoa, provided the workers with all they needed to live, in exchange for their work. There were houses for them and their families, usually also employed somewhere on the plantation. There was (mostly imported) food such as rice and meat. There was a school for the children and there was medical treatment, for every big plantation had a decently-equipped hospital to cater for the main diseases - in some cases, a highly impressive edifice such as in Agostinho Neto, where there are wide verandas and red tile roofs. The best buildings, of course, richly furnished houses in impeccably-tended gardens, were for the bosses and some of their furniture and paintings from the 1920s, perfectly preserved, can still be seen at Agua Iz

When William Smyser wrote about life on the plantations and the delightfully welcoming hospitality of the planters in the May 1946 National Geographic, he said he felt he had been back in time to the charm and romance of the American deep south.

In America and Sao Tomlike, this way of life was closely linked to the exploitation of a labour force made up of slaves or - not much different - the contract workers whom employers 'forgot' to repatriate when their time was up. In America, it failed to survive the abolition of slavery and the war of secession and, in Sao Tomit went with the end of colonisation and the breakdown of special relations with the former metropolis.

Independence did not just trigger the mass departure of thousands of planters and their staff. It was also the end of safe outlets at guaranteed prices in Portugal. Overnight, everything became more complicated, starting with transport. The Portuguese ships which had stopped so often at Sao Tomo pick up the cocoa harvest on their way to and from Angola now rarely came. The country's output, down to 4640 t p.a. after independence from the 11 586 t of 1973, was of no interest to the big ship-owners (whose vessels could not in any case put into Sao Tomecause there was no deep-water port), when, Cd'Ivoire, say, produced an average of 600 000 t p.a. And, with high humidity, any delay in shifting production lowered both the quality of the cocoa and the income to be derived from it.

Norberto da Costa Alegre put his finger on the problem when he spoke to the third funders' conference in Geneva in mid-July. 'We thought', he said, 'that we could take over our cocoa heritage from the colonial era and that it would bring us in all the foreign exchange we needed. We were wrong on two counts. First of all, with supply increasing and demand falling off, agricultural commodities are fetching less and less on the world market. Second, the cocoa on our plantations was produced under duress. The labour relations brought in after independence, combined with a critical financial situation in the cocoa sector which precluded proper worker motivation, led to demobilisation, followed by a decline in both the productive and the social infrastructure'.

Production today is stagnant at around 4000-5000 t. Yields, at 0.32 t per ha, are very low in comparison with the 2 t per ha of modern plantations in other countries and the bushes themselves are old, 30 years on average, which bodes ill for the future.

Restore the plantations

What can a small, poor, isolated place like Sao Tomamp; Principe do when it loses its only source of income? If the answer is not 'deciding that the country is not economically viable and shutting up shop just as if you were in business', an idea rejected out of hand by the leaders, particularly Arlindo Afonso Carvalho, the Minister of Economic and Financial Affairs, then it has to be trying to save what can be saved and looking for other resources - which is exactly what the Government has been doing since 1987. In that year, it took the country into a structural adjustment programme backed by two loans from the IBRD and three-year financing from the IMF's structural adjustment facility. With help from various funders, including the World Bank, the Caisse Centrale de Cooption, the African Development

Bank and others, it is launching a plan to upgrade six of the 15 State ro, totalling 10000ha, or 40% of the land under cocoa. Management and rehabilitation contracts are being signed with foreign (Portuguese, Belgian and French) firms, but the Government does not seem satisfied with the results so far, because the plantations are still running at a loss - which it has to cover. So it is trying to renegotiate the present contracts. Under the new leases, the management companies will have to finance their investments with their own funds, maintain the value of State assets and pay a rent reflecting the production potential. Alongside this, it is hoping to sign management contracts for the State's other nine plantations and distribute the rest of the land to small producers. But, with prices dwindling on a world cocoa market oversupplied for years, will it find any takers on these new terms? Possibly not...

The other big event in the country's agricultural policy is diversification. On independence, let us not forget, Sao Tomamp; Principe inherited structures dedicated to cocoa production, in which the workers had neither the right nor therefore the means of growing anything else, and the country was and still is heavily dependent on imported food. The only exceptions are bananas, which are everywhere, quite literally, and tubers such as taro, which is common and traded on a small scale with Gabon. Market gardening began in 1985 and there is now a drive to sell cabbages, carrots, tomatoes and beans to Gabon, although Agriculture and Rural Development Minister Josuis Mendes says that this is only an experiment to get to grips with the Gabonese market. As he sees it, the only way out is regional integration. That is what will enable the islands to sell more abroad. Meanwhile, he is hoping to strike a balance between food production and food aid by encouraging the development of such crops as beans and maize.

Another attempt at diversification is the EEC-financed 600 ha Ribeira Peixe oil palm plantation and the palm oil processing plant floated with an EIB loan. This could meet local demand, thus saving on the precious foreign exchange currently spent on imported table oil. That, at least, was the intention, but the oil from Ribeira Peixe is unprocessed, whereas the locals are used to having theirs refined, so there is competition from the imported product and a problem of making extra investments in refining. The plant has already been forced to slow down its machinery because of existing stocks and, on top of that, with the main generator broken down since February 1991, it is now relying on a single back-up generator and mortgaging its future in the process. A technician who actually went out to Sao Tomamp; Principe in December 1991 could not work out what was wrong and the parts he took back with him to Europe still have not been returned.

Diversifying also means developing fisheries. There are currently 3000 artisanal fishermen, but numbers are declining because structural adjustment has pushed up fuel costs. Demand is an estimated 5000 t p.a., but the fishermen are increasingly unable to meet this. In fact, the annual catch has fallen from 3500 t to 2000 t following the fuel price increase, according to Trade, Industry, Tourism and Fisheries Minister Arsemiro Ribeira da Costa dos Prazeres. There is some semi-industrial fishing too, landing 900 t p.a. Two of the six vessels involved here are trawlers belonging to the State, which is anxious to sell them to private owners, but, for the moment, they represent its part in joint ventures with French companies. The other big scheme in this field is the Bight of Benin marine resources assessment operation, an EDF-financed regional project which should, the Minister maintains, lay scientific foundations on which to renegotiate the fisheries agreement with the EEC and improve on the previous terms.

However, the big ambition of the country's leaders on the economic diversification front is to make it a major tourist attraction. They see Seychelles, with $4000 per capita p.a. from the tourist trade, as the shining example and are forever singing the praises of their own country's potential, with its rare flora and fauna, its views and its beaches. And they feel they are right, because investors are already talking about developing the tourist trade on the islands. One French group hopes to open a holiday centre of 15 or so bungalows soon, the main target being a wealthy clientele in the oil companies in Gabon and Congo. Then there is Christian Herringer, the enigmatic businessman of German and South African origins, whose Filippino employees are putting the finishing touches to a top-flight complex for very wealthy holidaymakers on Principe. Her ringer has many interests in Sao Tomamp; Principe. Not only is there his imposing sea-front property. He was also associated with the State in Equatorial, the airline which flew between Gabon and Sao Tomamp; Principe several times a week. With Equatorial in liquidation, the country will have an acute communications problem once more, particularly as the regular line to the outside world, the weekly TAP flight to Lisbon, is nearly empty and likely to be withdrawn if the plan to privatise this Portuguese airline is carried out.

Yet the country has just built a new airport at vast expense - it came to nearly $20 million in the end, three times the original quotation - and the new terminal is one of the cornerstones of the Government's tourist strategy. Another essential is the campaign to control malaria, the country's biggest cause of death, for there is no point in developing tourist activity if the disease cannot be eradicated. With this in mind, a fact-finding mission is due to visit Seychelles in a couple of months to see how far Sao Tomamp; Principe can do what Seychelles did.

Will the cocoa country be the next place the international jet set turns to in its quest for exclusiveness? That is what the leaders seem to be counting on in hoping that the tourist trade will create enough jobs for the islands' increasing numbers of young people. In Sao Tomamp; Principe, the average woman has seven children, Health Mini Minister Dulce Gomes told me. The population is expanding at the rate of 2.9 % p.a. and, outside the country's natural beauty, as the Tourist Minister so baldly puts it, the only real employment alternative is emigration. There are already 10 000 nationals living abroad in Angola and regularisation of the situation would be a relief. But is this a matter for State policy?

One thing is certain. Everyone in Sao Tomamp; Principe, majority and opposition alike, is convinced that there is no future in cocoa. All they need is a viable alternative...