ECONOMIC POTENTIAL AND PERFORMANCE
Angola has large economic potential. The country is rich in natural resources, including oil and gas; it has vast areas of fertile agricultural land, some of the richest fishing waters in the world, and a favorable geographical location in relation to regional and other international markets. As the following chapter will show, however, the dominant theme in postindependence developments has been the discrepancy between this potential and actual performance. All sectors, with the exception of the detached oil sector, produce well below capacity, and all macroeconomic indicators reveal serious structural problems in the economy.
Again, the continuous war situation has been a major cause of the economic deterioration. The infrastructure has been destroyed, large parts of Angola's income have been diverted to purchases of military equipment and food imports, and agriculture and other primary production sectors have been hindered by the security situation in rural areas. The political position of Angola has also had negative repercussions for foreign trade and investment.
It is equally clear, however, that the government itself has been responsible for the developments that have taken place. The economic policies pursued have been out of touch with reality and have worsened the economic crisis. And toplevel mismanagement has had negative repercussions for production and performance. For the Angolan people, the continuous economic crisis has meant additional hardships, with the parallel informal economy (candonga) being their only means of survival.
These economic developments are analyzed in this chapter, first during the period of the centralized economy from 1975 to the end of the 1980s and then dur-