User:Loh Choong Yang, Kenneth

Background
The Republic of Angola is a nation of 18 million on the west coast of the African continent. A Portuguese colony from the 16th century to 1975, today it is a republic and one of the world’s major oil and mineral exporters. However, its living standards have been ranked as one of the world’s lowest. How did a nation blessed with abundant natural resources end up as one of the world’s poorest? There are myriad contributing factors, but we will focus on the lack of good institutions.

Institutions and Governance
Upon its independence from Portugal in 1975, a decades-long civil war followed and devastated Angola. Relative peace finally followed in 2002 after conflicting political factions came to a compromise.

However, we believe that poor institutions and governance in Angola have the strongest role to play in preventing meaningful economic growth that could trickle down to the masses and lift millions out of poverty. Thus a major development challenge that Angola needs to tackle is overcoming the negative impact of its poor-performing institutions.

Firstly, the political power of the president is overwhelming and there is an absence of checks and balances. The country’s 18 provinces are ruled by governors personally chosen by the president. This ensures that political and economic power remains concentrated in the hands of the ruling elite, and also implies social exclusion for most of Angola's citizens. To make things worse, in 2010 the country amended its constitution such that there will no longer be presidential elections. The roles of president and vice-president will be given to the top leaders of the parties winning the parliamentary elections. This prevents the devolvement of powers to subordinate authorities and tightens the state’s hold on ruling powers.

Consequently, the bountiful economic resources remain in the hands of the elite, enabling them to misuse political institutions to rule over the masses. Since economic outcomes are manipulated by political institutions, there is a tendency for these institutions to persist. With natural resource exports dominating government revenues (oil and diamonds make up 99.3% of exports), the elite have no incentive to introduce economic institutions promoting inclusive growth across the country. There are thus enormous disparities in regional growth rates, with approximately a third of economic activity concentrated in the capital, Luanda, and its neighbouring provinces. The upshot of all these is that appalling poverty rates and inequalities persist while the rulers steadily build up their wealth. In 2009 Angola had a reported Gini coefficient of 0.59, high even among developing countries, along with a HDI ranking of 146.

Conclusion
Several factors not discussed here are also responsible for the problems in Angola. But we believe that institutional ineffectiveness have prolonged and exacerbated complications resulting from the colonial era and civil war, which had robbed Angola of a promising growth story. Unless meaningful political or economic reforms are introduced, Angola's ordinary citizens might never have an opportunity to break free from the vicious cycle of poverty.