U. S. Trade with Angola and MozambiqueSource: Africa Today, Vol. 17, No. 4, Allies in Empire: The US & Portugal in Africa (Jul. -Aug., 1970), pp. 16-18Published by: Indiana University PressStable URL: http://www.jstor.org/stable/4185104 .

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U. S. Tmade with Angola and Mozombique The workings of the monetary system bind-

ing Portugal and its colonies ultimately channel foreign exchange earned by Angola and Mo- zambique into Portugal's coffers. Each territory has its own annual budget, tax system, currency, issuing bank and individual foreign exchange f and which acts as the central trustee for re- serves of gold and foreign exchange. The com- mon factor is the unit of exchange-the metro- politan escudo. The payments' system basically consists of a multilateral clearing operation among the various territories, backed by a mon- etary fund to facilitate it. The Bank of Portugal in Lisbon acts as agent of the system and of the fund.

Every month the Bank of Portugal registers the transactions of each territory with other members, striking a balance showing any debit or credit outstanding. Settlement has to be made in metropolitan escudos. A reserve account is kept by the bank in the name of ea,ch territorial exchange fund, into which go all the particular territory's metropolitan escudo holdings and its gold and foreign-exchange holdings. At the end of the m-nth any territory with a debit bal- ance settles up with the bank by drawing on the metropolitan escudos in its reserve account. Where these holdings are insufficient the terri- tory will settle by buying metropolitan escudos with its gold, or with foreign-exchange holdings. The adverse trade balances of Angola and Mo- zambique result in a constant payments' deficit. Through the working of the system outlined above their deficit is made up by foreign-ex- change, thus strengthening the reserve position of Portugal itself.

In 1968 the over-all balance of payments with foreign countries for the escudo zone showed a surplus of 4,115 million escudos. Of that total surplus Angola accounted for 1,268 million es- cudos, Mozambique for 1,072 million escudos, and Portugal itself, 1,820 million escudos.42

The U. S. is not the largest trading partner for either Angola or Mozambique, but it plays a very special role in relation to Angola. It buys more than 50 percent of Angola's biggest export, robusta coffee, which is used for the production of instant coffee.

Since 1946 coffee has been Angola's most important export, accounting for more than 50 percent of all exports in most years. In 1968 major customers were the U. S. (51 percent) and Holland (19.9 percent). Portugal took only 6.2 percent. The coffee crop earned $63 million in the U. S. alone in 1968, the value of total coffee exports reaching more than $124 million.43

COFFEE GROWING IN ANGOLA The largest coffee-growing region is in the

north, around Carmona; this area was the scene of the 1961 revolt, and there have been frequent confrontations between the Portuguese and lib- eration movement groups since then. Plantations maintain small private armies of security guards, homes are often ringed with barbed wire, search- lights and dogs add to the constant tension. Yet coffee production increased during the '60s from 2,675,800 bags in 1960 to a peak of 3,750,000 bags in 1967. Production is now stabilized by the gov- ernment which restricted new coffee plantings in 1966 after the harvest overshot the 2.25 mil- lion-bag International Coffee Agreement alloca- tion by 300,000 bags.44

Estimates vary on the exact acreage under crop and on the percentages grown by Africans and by Europeans; but while details vary the pattern that emerges is always similar.

In 1967 and 1968 African-grown coffee sold in the rural markets amounted to 74,000 tons and 68,000 tons respectively, averaging about 33 per- cent of total Angolan production.45 More than 70 percent of the coffee-producing land is in European hands and the bulk of the exported coffee crop comes from the European-owned plantations.46 There are very few small settler farms; most are medium or large plantations, owned either by individuals, small companies or a few large financial interests such as the Portu- guese corporation CADA which operates the largest coffee farm in the world, Fazenda Boa Entrada, on some 40,000 acres, and employs more than 10,000 workers.47 According to the Portuguese themselves, there are some 2,340 medium and large European-owned plantations while 58,000 African peasant farmers cultivate an average of 5 acres each.48

An estimated 180,000 to 200,000 people are engaged in coffee cultivation, some 50,000 to 60,000 peasant farmers and about 123,000 Afri- cans working on European-owned plantations. Wages and conditions of work on the plantations have always- been very poor. In recent years, the government, in an attempt to defuse the mili- tancy of the people, has laid down a scale of minimum wages ranging between 50 cents and $1 a day and has appointed labor inspectors to enforce the minimum. It is reported that many of the planters were so incensed at this that they accused the labor inspectors of "stirring up the workers and operating in league with the guerillas."49

Thus when the U. S. buys coffee from An- gola it is again helping to entrench colonialism,

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both by the direct income it creates for the white settler farmers and by the foreign ex- change which it pumps into the escudo zone.

In 1968, 6.9 percent of all coffee imported into the U. S. came from Portuguese Africa, which thus ranked third in the list of U. S. cof- fee suppliers, following Brazil (32.8 percent) and Columbia (12.0 percent). The coffee producers of the world, mainly undetrdeveloped countries, have for several years been faced with the constant threat of drastically falling prices caused by growing world production. In an attempt to coun- ter this price fall, the coffee-producing countries, including Angola, have become signatories of the International Coffee Agreement which allo- cates a yearly export quota to each producer. Countries just beginning to develop their coffee potential find it difficult to get allocations, or to break into new markets. It might well be ar- gued that the coffee in U. S. cups would taste better from the fields of the independent coun- tries of Africa than from those of the Portuguese colonialists.

TABLE VI Angola-External Trade, 1968 (1,000 esc. equals $35)

Imports Exports from: to:

Countries Million Percent- Million Percent- Esc. age of Esc. age of

total total Metropolitan Portugal 3,176.5 35.91 2,676.2 34.33 U. S. 1,040.2 11.76 1,851.9 23.75 West Germany 979.3 11.07 426.7 5.47 Britain 788.9 8.92 France 457.5 5.17 Holland 312.8 3.54 774.8 9.94 Japan 291.8 3.30 379.8 4.78 Belgium and Luxembourg 249.7 2.82 Spain 187.3 2.40 Canada 176.1 2.26 Mozambique 138.0 1.77 Total 8,844.8 100 7,796.4 100 $ Million 309 273

Source: Notes on the Economy of Angola.

The U. S. rise into second place as a source of imports is verv recent; Britain had held that place for some time, but was replaced by the U. S. and West Germany, largely owing to mas- sive purchases of equipment for Gulf Oil's Ca- binda development and the delivery of Krupp equipment for the Cassinga iron mine.50

Figures for the first half of 1969 indicated a drop in the value of U. S. participation in total Angolan exports to 14.33; this reflects some fall in the value of coffee exports.

Mozambique's trade with the United States is still small, but it is growing. The U. S. took 7.6 percent of all exports in 1967; by 1968 this figure was 11 percent.51

The major U. S. purchase in Mozambique is shelled cashew nuts; more than 80 percent of

the total available in 1968, worth $9.6 million, was sold to U. S. buyers.52 Cashew nuts, formerly gathered from uncultivated plantings, are in- creasingly becoming a plantation crop, but small African farmers still provide about 80 percent of the total supply. The government has fixed minimum prices to be paid to traders for cashews purchased from the traditional (i. e. African) sec- tor, but most of the traiding is in non-African hands and African income from the crop is very low. The Industrial Association of Mozambique, in a recent survey, found that the average in- come for the 800,000 persons who collected the 120,000 tons produced outside the plantation sector was only 375 escudos a year ($13.20).53

Mozambique's cashew production is the larg- est in the world, and output is growing. Until 1964 the unshelled nuts were exported to India for the labor-intensive process of decortication. The recent development of mechanized tech- niques has led to intensive investment by South African and other interests in decorticating fac- tories, and the export of nuts to India is falling while exports to consumer markets such as the United States rise.

The failure of all this new wealth to produce any significant benefit for the people of Mozam- bique is vividly illustrated by a recent interview between a New York Times reporter and a rep- resentative of one of the large new factories: There is "a new $5-million cashew plant in the Port of Nacala in Northern Mozambique, owned by C.U.F., a Portuguese consortium.

"The plant originally employed 3,000 work- ers, but an official explained that new machinery would soon cut the payroll by 1,000. Asked what those discharged would do, he replied 'Why, they will go back to the bush.' He was somewhat sur- prised at the question."54

GUIN EA-BISSAU Very little has been said in this article about

Guinea-Bissau, the country in which the fiercest war has been fought in the last few years. Here the PAIGC (African Party for the Independence of Guinea and Cape Verde), having rooted itself among the peasant population long before the day of the first armed attack on the Portuguese, has won tremendous victories. It now controls at least two-thirds of Guinea; the Portuguese are confined to armed camps and a few towns. The Portuguese seem to stay on because of their own version of the domino theory. Guinea-Bissau is small and poor; there has never been a large white settler population; there has been none of the intensive search for new wealth that charac- terizes Angola and Mozambique. ESSO has kept alive its off-shore oil concession, but there are no promises of instant profits for foreign in- vestors or for Portugal in Guinea-Bissau. Yet the Portuguese hang on doggedly, partly because of the potential strategic value of Cape Verde islands in the Atlantic arena, but primarily be-

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cause they recognize that to grant independence to one colony would be to sign their own death warrant in Africa.

CONCLUSION It is clear that U. S. economic connections

with Angola, Mozambique, and Portugal itself are rapidly becoming more dense and complex. When this happens the colonial power is strength- ened immediately. It gains not only new finances to fight its wars, but also the increasing assur- ance that once American economic interests are at stake, the United States will stand firmly on the side of stability and the government in power against the growing attacks of the liberation movements. New Vietnams are being built in Africa today.

FOOTNOTES 1. Eduardo Mondlane, The Struggle for Mozambique, (Balti-

more: Penguin African Library, 1968), pp. 117-18. 2. U.S./U.N. Press Release No. 160, November 14, 1969. State-

ment by Ambassador Seymour M. Finger before Committee IV (Decolonization) of the U. N. General Assembly.

3. John Marcum, The Angolan Revolution, Vol. I, (Cambridge: M. I. T. Press, 1969), p. 2.

4. D. M. Abshire and M. A. Samuels. (eds.), Portuguese Af- rica-A Handbook, (New York: Praeger, 1969), p. 168.

5. Ibid., p. 348. 6. Vida Mundial, (Lisbon), November 7, 1968. 7. Seara Nova, (Lisbon), October, 1969. 8. Mark B. MacGuigan, Toronto Globe and Mail, February 28,

1967. 9. Area Handbook for Mozambique, (Washington: U. S. Gov-

ernment Printing Office, February 1969), p. 313. 10. Portuguese Africa, p. 185. 11. United Nations, General Assembly. Special Committee on

the Situation with regard to the Implementation of the Declaration on the Granting of Independence to Colonial Countries and Peoples. Territories Under Portuguese Ad- ministration. A/AC. 109/L. 625/ Add. 1, May 8, 1970, Para. 34.

12. Ibid., Add 2, May 12, 1970, Para. 34. 13. Area Handbook for Mozambique, p. 266. 14. United Nations, A/7200/Add. 3, October 17, 1968, paras. 168-

173. 15. Portuguese Africa, p. 212. 16. Financial Times, (London), April 10. 1970. 17. Le Monde, May 17-18, 1970. 18. O.E.C.D., National Account Statistics, 1956-65. 19. Portuguese Africa, pp. 349-350. 20. U. S., Hearing before the Subcommittee on Africa of the

Committee on Foreign Affairs, "'Report on Portuguese Guinea and the Liberation Movement;" House of Repre- sentatives, 91st Congress, February 26, 1970, p. 22.

21. United Nations, A/AC. 109/L. 625/Add. 1, May 8, 1970, para. 62.

22. New York Times, February 1, 1970. 23. FRELIMO spokesman, New York, 1970.

24. Amilcar Cabral, Congressional Hearing, February 26, 1970. p. 16.

25. New York Times, August 6, 1969. 26. Financial Times, July 23, 1969. 27. Portugal, Department of Economic Affairs, Province of

Angola, Notes on the Economy of i ngola, 1969, p. 13. 28. United Nations, General Assembly. Report of the Special

Committee on the Situation with regard to the Implemen- tation of the Declaration on the Granting of Independence to Colonial Countries and Peoples. A/7752/ Add. 1, Novem- ber 25, 1969, p. 43.

29. United Nations, General Assembly. Report of the Special Committee on the Situation with regard to the Implemen- tation of the Declaration on the Granting of Independence to Colonial Countries and Peoples. A/6300/ Rev. 1, 1966, p. 313.

30. Diario de Lisboa, January 6, 1970. 31. United Nations, A/AC. 109/ L. 625/Add. 2, (Part 1), May 12,

1970. Contract reported by a U. N. official. 32. All figures for the section on the Third Development Plan

from: i Banco National Ultramarino, Boletim Trimestral, No. 7',

1968. ii Notes on the Economy of Angola.

iii Journal of Commerce, (New York), January 15, 1969. There are some discrepancies in the figures given by these three sources, but the general pattern is consistent.

33. The information in this section on specific U. S. corporate investment in Angola and Mozambique is drawn from a a study prepared for the Africa Fund (164 Madison Av- enue, New York) and published in May 1970. See chart.

34. United Nations, A/AC 109/L. 625/Add. 1, May 8, 1970, Para. 94.

35. Compiled from Notes on the Economy of Angola and United Nations, A/AC. 109/L. 625/Add. 1.

36. Africa Report, November, 1967, p. 28. 37. United Nations, A/AC. 109/L. 625/Add. 2, (Part II), May 15,

1970, para. 86. 'S. Ibid., para. 121. 39. Standard Bank Review, "Supplement on Mozambique," 1968,

pp. 8-9. 39a. Statistics issued by even ostensibly responsible sources

such as the banks tend to be unreliable, reflecting the lack of systematization within the economic data gathering and processing departments of the government itself. Thus the Barclay's Overseas Review, March, 1970 gives the gross value of industrial production in Mozambique as esc. 6,900 m. in 1967 and esc. 7,500 m. in 1968. Even this higher figure reveals the poverty of the economy: esc. 7,500 mil- million is only $262 million.

40. United Nations, A/7623/Add. 1, September 25, 1969. 41. Financial Times, July 23, 1969. 42. Bank of Portugal, Report of the Board of Directors-1968,

(Lisbon, 1969), pp. 134, 136, 141. 43. Notes on the Economy of Angola, p. 27. 44. Portuguese Africa, p. 258. 45. United Nations, A/AC. 109/L. 625/Add. 1, para. 106. 46. World Coffee and Tea Survey, June, 1969. 47. Financial Times, July 23, 1969. 48. Notes on the Economy of Angola, pp. 22-27. 49. New York Times, August 8, 1969. 50. Financial Mail, (South Africa), August 15, 1969. 51. Standard Bank Review, 1968, and

Barclay's Bank Overseas Review, December 1969. 52. United Nations, A/AC. 109/L. 625/Add. 2, (Part II), para.

101. 53. Ibid., para. 90. 54. New York Times, August, 1969.

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