(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...

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 independence.

· Are there economic activities which your country could go in for other than what you have just mentioned, Prime Minister?

- 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 in 1992-1994.

· 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 Principe.

· 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 payments.

· 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 viability.

· 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 here.

· 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 TRAORE

says 'We could have the same policy with fewer social costs'

Carlos Gra now Secretary-General of Sao Tomamp; Principe's Liberation Movement and Social Democratic Party (MLSTP-PSD), was long an opponent of the regime of President Pinto da Costa and was forced into exile as a result. He took refuge in Gabon, where he practised medicine for 10 years and came home when democracy was announced in 1989, joining the Government as Foreign Minister. So it was a relatively new man who led the former single party, frayed after 15 years of rule, into the elections and managed to restrict the damage by obtaining 30.6% of the votes. It is as leader of the opposition that he answers The Courier's questions in this interview.

· Your party was behind the demonstrations which juts brought down the Government of the Second Republic, I believe...

- The demonstrations were not the essential thing here, I think. They did indeed push events along a bit, but there were two very big problems to begin with. First of all, there was a conflict between the President of the Republic and the Government over a difference of opinion as to how they should interpret what the Constitution said about the scope of the President's duties. The Government, from the PCD. the Democratic Convergence Party, made a lot of authoritarian moves. It tried to put down the old single party, for example, and it tried to weaken the powers which the President of the Republic has under our system of government. Ours is a semi-presidential regime, but one which gives the President considerable powers, especially over external policy and national defence and security, and the PCD, bolstered by its absolute majority, tried to take them away from him. He was unwilling to go along with this, however, hence the institutional conflict... and the President deciding to put down the Government. The second thing was popular discontent over rising prices, which was made worse by the fact that the members of this new party had based their election campaign on the idea that all Sao Tomamp; Principe's problems were due to bad management and corruption in the single party and that things would be bound to get better if the single party was out of the way.

· But don't you think that this austerity policy which caused all the discontent is the consequence of your own policy over the past 16 years ?

- No, I don't. Let me finish what I was saying. The problem is that they made people believe that a change of party was a good thing, so they expected things to get better. There was a euphoric speech. There were implicit promises and explicit promises and the people expected things to get better. But they didn't. They got worse. Purchasing power plummeted and the people weren't prepared for it. In a way, the Government paid for its rabble-rousing, because there were popular demonstrations, the first one spontaneous and the second organised by our party and the other opposition parties.

· But what would you do today if you were in power, with the structural adjustment programme to cope with ? Wouldn't you have to bring in the same sort of measures?

- Of course we would! But we told the truth during the election campaign. We said that we couldn't improve the situation overnight and that improvements would take years of hard work and sacrifice. If we had won the elections, we would have been in a different situation. The people could have coped with one or two sacrifices, but, with all the euphoria of the speeches they had heard, they were obviously not psychologically prepared for a decline in their standard of living. We also believe that we could have brought in these measures a little more gradually, perhaps, and that all the possibilities with the World Bank and the International Monetary Fund have not been exhausted. Sao Tomamp; Principe is in a special situation; that of a micro-State with no resources, and a slightly better job could have been made of negotiating the unavoidable rationalisation measures. It was the commodity price slump which made the debt so much worse and led almost all the African countries to accept these macro-economic adjustments. It's not a party problem, you see. It's a structural problem which we commodity-exporting countries have.

· How do you see Sao Tomamp; Principe's future?

- We are still optimistic about the medium and long term, because we have possibilities which probably haven't been exploited so far.

· What are you thinking of ?

- We have already done studies on this. The party currently in power is continuing what we did. It is inaugurating a lot of things at the moment, furthermore, projects which we actually got going. We have to get out of the cocoa trade, because there's no future there, that much is clear. We have to look to tourism. Seychelles is some sort of encouragement here, because they make $4000 per capita just with their tourist trade. They have the third or fourth biggest per capita income in Africa and they are only a small country and they only have tourism.

· But it's not an island on the equator like Sao Tome...

- Yes, but it's the same sort of exoticism - views and beaches and so on. We have assets for the tourist trade and we have assets when it comes to industrial fishing. We have very little land, but a great deal of sea, plenty of exclusive economic zone. And despite all the competition, we have also wondered about a free zone and off-shore banking and setting up industries here using the cheap labour to produce goods for the export markets in Nigeria, Cameroon and Gabon. Those are the three big sectors which should be good for the future - not forgetting agriculture. We have to make an effort to get out of the cocoa trade and promote other, more profitable crops. Pimentos are being studied and tested at the moment and we have to look for other, more profitable export products and try to develop food crops at the same time, because we import a lot of things, like beans, which we could actually grow ourselves.

· You won't be surprised if I tell you that the Prime Minister says exactly the same thing...

- There is no difference between the parties. They all have the same answers. Fukuyama called it the end of history - no more ideological debate. We have the same answers, all of us, we have the same way of looking at the problems, but our different groups struggle. There is even a problem of families here...

· Families ?

- Yes. We have a big family in power here, the Prime Minister's family. But we have no tribal problems, fortunately. I am forever saying that rivalry of that sort is irrational. Why all the hatred of the ex-single party which was completely open in the three years of transition and freed all the prisoners and let all the exiles, me included, come home? And then there was a party which said a lot about democracy but gained power and began a witch-hunt... You have to see the single party in its historical context. All these people were members of the single party. One or two of them were Ministers, even. Take Trovoada and Daio and so on. They bear some of the responsibility.

· So how do you think you can get into power if you are offering the same policy as the present Government?

- The others ran a rabble-rousing campaign and we had been in power for too long. People naturally wanted a change after 15 years. They were 54% for the new party and 30.5% for us - not a bad result given the conditions in which we went to the hustings, with a disastrous economic situation and 15 years of single-party rule behind us. The people who expected to see their standard of living improve are now saying that they were misled. But we are still telling the truth, just as we told it during the election campaign. Our adversaries are coming round to what we say, but it's too late. If there were elections now, we would be bound to win them to run the same policy with perhaps a little more experience and maturity. We could have the same policy at smaller social cost. They said themselves that they haven't been able to promote the social side of the structural adjustment plan yet. Ultimately, when they talked to the opposition parties - the little ones, that is, not us, we haven't met yet - they also admitted that they had been wrong not to have some more dialogue with the MLSTP-PSD. I maintain that it wasn't just a lack of dialogue. It was a veritable witch-hunt as far as we were concerned. We were pushed out of our headquarters, all our smaller district headquarters were taken, we lost our cars and our former Prime Minister was sent to court over a prefabricated housing affair - which was in fact a purely political issue.

· Your experience didn't stop you from coming up with white elephants then...

- It wasn't a white elephant since we didn't think we would be paying for it. When we had the offer, we telephoned Manual Dos Santos, Guinea Bissau's Minister of the Economy, to ask for details because they had the same offer there. And Manuel Dos Santos said: 'No problems. Officially, there is a price which is far more than the houses are worth, but you don't pay anything. You sign and a year later you tell the Italian Government that you can't pay'. The Italian Government, which is already in contact with the Italian firms which build these houses, is intervening. It is paying half in the form of development aid and the other half is to be paid over 10 years. The debt will be rescheduled in a year or two and then written off altogether. But, since the new party failed to stick to the agreed procedure after the elections, it may have to pay up in the end, because the case had to be monitored in Italy for the Italian Government to take over these debts. They blocked the case because they wanted to make a political case out of it and I don't know whether they will be able to set the procedure in motion again after all this time.

STomamp; Principe

Interview by Amadou TRAORE

Cooperation with the EEC

by Neil CRUMBIE

The Democratic Republic of Sao Tomnd Principe joined the Lom Convention in 1978, two years after its accession to independence. There have therefore been almost 15 years of cooperation with the Community. An Off´ce of the EEC was opened in Sao Tomn 1979, from where a Resident Adviser reports to the Delegation of the Commission in Libreville and acts as a link with the Government.

The National Indicative Programme of the LomV Convention was signed in December 1990 by the Minister of Foreign Affairs and Cooperation and the National Authorising Officer of the Democratic Republic of Sao Tomnd Principe, Mr Guilherme Posser, and by Mr Jean Delorme on behalf of the Commission of the European Economic Community. The details of this programme are explained later in this article.

Member States accredited to Sao Tomnd Principe are Belgium, Italy, France, Luxembourg, Germany, Netherlands, Spain and the United Kingdom. Portugal, of course, is represented by an Ambassador who exercises the Presidency 'itre permanent' for the Community, being the only Member State Ambassador resident in Sao TomThe others exercise their accreditation either from Luanda in Angola or Libreville in Gabon.

Sao Tomnd Principe has benefited principally from Community aid in the form of interventions under the National Indicative Programmes of Lom, II and III and now under the LomV Programme which is starting in 1992. To this must also be added transfers made under the system of Stabex as compensation for loss of receipts following the export of basic products, cacao in the case of Sao Tomnd Principe, when prices fell below those that had been forecast. The total amount of Stabex transfers was more than ECU 9 million between 1981 and 1991.

Sao Tomnd Principe has also benefited from regional programmes in the Gulf of Guinea as well as aid financed by the European Investment Bank.

Over the last few years, therefore, the EEC has been one of the principal sources of development aid for Sao Tomnd Principe together with Portugal, France, Italy, Sweden, Angola, the World Bank and the United Nations.

Development aid under Lom, II and III has been allocated in support of the development aims of Sao Tomnd Principe.

The development of agriculture and fishing

A project including the planting of a 600 hectare palm plantation to supply a palm oil factory which was financed by risk capital managed by the European Investment Bank was completed and is now in operation. The aim of this project was to provide a capacity for import substitution ensuring a regular supply to the local market while at the same time providing for savings m foreign exchange.

A refrigeration project consisting of four cold storage units was also financed to provide commercial support and a distribution facility to the fishing industry, an important element in the day-today life of the Saotomense people. In time these were supported by two ice-making units.

Finally Sao Tomill benefit from a regional project designed to develop small fishing in the Gulf of Guinea. This will be located at Neves and will involve the rehabilitation of the boatyard.

Social infrastructure

Projects to provide urban water supplies to Trinidade and Agolares have both been completed as has the structural rehabilitator of the hospital on the island of Principe, which was completed in conjunction with the Portuguese NGO AMI in late 1991.

Other current activities include the construction of a blood bank in conjunction with French and Portuguese aid, in the capital of Sao Tome.

Development of international transport links

A major project has been the rehabilitation of the Port of Sao Tomofinanced with German aid (KFW), who have provided a powertug and two of the four barges, and the United Nations Equipment Programme, which has provided cranes. The Community rehabilitated the quays, and provided for lift trucks and technical assistance.

As part of a regional programme the Community funded the provision of a 200-tonne merchant vessel now named 'Pague' which trades in the Gulf of Guinea between the islands of Sao Tomnd Principe and Cameroun, Equatorial Guinea and Gabon. This vessel cost ECU 430 000.

Import programme

This programme was in support of the balance of payments programme of Sao Tomnd Principe and included the supply of basic products such as soap, caustic soda, powdered and condensed milk and sugar.

A 1000 KVA generator and 8000 meters were also provided to support the islands" infrastructure and facilitate cost recovery.

The 1000 KVA generator, provided by ABC in Brussels, Belgium, still continues to make a very significant contribution to the supply of energy in Sao Tom

Food aid

Community food aid principally involved the supply of wheat, corn and rice which Sao Tomnd Principe needed as they were unable to produce sufficient quantities of basic foodstuffs for the national diet. The principle involved is that the sale of food and other supplies to the population builds up counterpart funds which are then managed jointly by the Government and the Commission to finance labour-intensive projects in the programme to achieve food security, improve health, education, sanitation and provide for the construction of schools. One such school will shortly be opening in Sao Joao dos Angolares.

Fishing agreement

The Fishing Agreement between the Community and Sao Tomnd Principe permits fishing licences principally for tuna to be given to Member States' fishing boats. Currently, 30 licences are in operation, for which the Government receives the sum of ECU 1.65 million over a three-year period that started on I June 1990, ECU 150 000 for scientific and technical programmes and ECU 375 000 for commitments to more general fishing and maritime activities.

Emergency aid

Of all the health threats to Sao Tomnd Principe, that of malaria remains the greatest and this is now subject to World Bank interventions. During the period of Lom11, the Community provided emergency aid in the fight against malaria amounting to ECU 465 000.

LomV

The LomV Convention entered into being in September 1991 and consists of two main sectors which are:

1. The consolidation of the palm oil project in Ribeira Peixe by the rehabilitation of the road between Ribeira Peixe and Sao Joao dos Angolares for an estimated ECU 1.3 million. The African Development Bank, as part of its programme, is financing the rehabilitation of the road between Sao Tomnd Sao Joao dos Angolares.

2. A major project to improve the water supply, drainage and sewage systems in the capital Sao Tomtself for an estimated ECU 3.9 million.

The technical studies for both these major projects have been completed and invitations to tender will be published later in 1992 with works starting in late 1992 and early 1993.

Further funding amounting to ECU 1.3 million will also be made available for agricultural diversification, assistance to small and medium-sized enterprises and the provision of technical assistance.

Finally, discussions are under way concerning the ECU 1.5 million available to Sao Tomnd Principe under the programme for structural adjustment and the ECU 1.5 million available as risk capital from the European Investment Bank.

N.C.