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Sao Tome and Principe

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Economy of Sao Tome and Principe

Since the 1800s, plantation agriculture has dominated the economy of Sao Tome and Principe. At the time of independence, Portuguese-owned plantations occupied 90% of the cultivated area. After independence, control of these plantations passed to various state-owned agricultural enterprises, which have since been privatized. The dominant crop on Sao Tome is cocoa, representing about 95% of exports. Other export crops include copra (a coconut product), palm kernels, and coffee.

With export crops the focus of agricultural production, domestic food-crops are inadequate to meet local consumption, resulting in the need for food imports. Foreign donors are financing projects to expand food production, which now includes bananas, beans, cinnamon, and pepper. Cultivated land amounts to 484 sq. kilometers of the country’s roughly 1,000 sq. kilometers, even though agriculture accounted for only 14% of GDP in 2009.

Other than agriculture, the main economic activities center on fishing and a small industrial sector engaged in light construction, processing local agricultural products, and producing a few basic consumer goods such as clothing, soap, beer, and palm oil. The scenic islands have potential for tourism, and the government is attempting to improve its rudimentary tourist industry infrastructure. The government sector accounts for about 11% of employment.

Following independence, the country had a centrally directed economy with most means of production owned and controlled by the state. The original constitution guaranteed a 'mixed economy' with privately owned cooperatives combined with publicly owned property and means of production. However, in the 1980s and 1990s, the economy of Sao Tome encountered major difficulties. Efforts to redistribute plantation land resulted in decreased cocoa production while at the same time the international price of cocoa slumped. Economic growth stagnated, and cocoa exports dropped in both value and volume creating large balance-of-payments deficits.

In response to the economic downturn, the government undertook a series of far-reaching economic reforms. In 1987, the government implemented an International Monetary Fund (IMF) structural adjustment program and invited greater private participation in management of the state corporations (parastatals), as well as in the agricultural, commercial, banking, and tourism sectors. The focus of economic reform since the early 1990s has been widespread privatization, especially of the state-run agricultural and industrial sectors.

The Sao Tomean Government has traditionally relied on foreign assistance from various donors, including the UN Development Program (UNDP), the World Bank, the European Union (EU), Portugal, Taiwan, and the African Development Bank (AFDB). Sao Tome qualified for debt relief when it reached decision point under the IMF's Heavily Indebted Poor Countries Initiative (HIPC) in December 2000, but it went off track on its poverty reduction program in early 2001. After 4 years and satisfactory performance on an interim staff-monitored program, the IMF approved a 3-year $4.3 million Poverty Reduction and Growth Facility (PRGF) program for Sao Tome in September 2005. The ambitious program aimed to reduce inflation to a single-digit number, address the country's macroeconomic imbalances, and substantially reduce poverty. Another 3-year PRGF arrangement was approved in March 2009.

In 2001, Sao Tome and Nigeria reached agreement on joint exploration for petroleum in waters claimed by the two countries. After a lengthy series of negotiations, in April 2003 the joint development zone (JDZ) was opened for bids by international oil firms. The JDZ was divided into 9 blocks; the winning bids for block one, Chevron, ExxonMobil, and the Norwegian firm Equity Energy, were announced in April 2004, with Sao Tome to take in 40% of the $123 million bid, and Nigeria the other 60%. Blocks 2 through 6 were allocated in June 2005. Nigeria and Sao Tome signed production sharing contracts with the winning bidders in November 2005. Chevron became the first firm to start exploratory drilling in January 2006.

Portugal remains one of Sao Tome's major trading partners, particularly as a source of imports. Food, manufactured articles, machinery, and transportation equipment are imported primarily from the EU via Portugal.

GDP (2009): $191 million.
Annual real GDP growth rate (2009): 4%.
Per capita GDP (2009): $1,174.
Inflation (2009): 17%.
Natural resources: Agricultural products, fish, petroleum (not yet exploited).
Services (71% of GDP, 2009): Primarily tourism.
Agriculture (14% of GDP, 2009): Products--cocoa, coconuts, copra, palm kernels, cinnamon, pepper, coffee, bananas, beans, vanilla, poultry. Cultivated land--484 sq. kilometers.
Industry (15% of GDP, 2009): Types--light construction, shirts, soap, beer, fisheries, shrimp processing, palm oil.
Trade: Exports (2009)--$14 million (f.o.b.): 95% cocoa, copra, palm kernels, coffee. Major markets--Portugal, Netherlands, Spain, Germany, China. Imports (2009)--$93 million (c.i.f.): food, fuel, machinery and electrical equipment. Major suppliers--Portugal (43%), France (16%), U.K. (14%).
Total external debt (2009): None.
Fiscal year: Calendar year.

Geography of Sao Tome and Principe

The islands of Sao Tome and Principe, situated in the equatorial Atlantic about 300 and 250 kilometers (200 and 150 miles), respectively, off the northerwest coast of Gabon, constitute one of Africa's smallest countries. Both are part of an extinct volcanic mountain range, which also includes the island of Bioko in Equatorial Guinea to the north and Mount Cameroon on the African west coast. Sao Tome is 48 kilometers (30 mi.) long and 32 kilometers (20 mi.) wide and the more mountainous of the two islands. Its peaks reach 2,024 meters (6,640 ft.). Principe is about 16 kilometers (10 mi.) long and 6 kilometers (4 mi.) wide. Both islands are crossed by swift streams radiating down the mountains through lush forest and cropland to the sea. At sea level, the climate is tropical--hot and humid with average yearly temperatures of about 27 degrees C (80 degrees F) and little daily variation. At the interior's higher altitudes, the average yearly temperature is 20 degrees C (68 degrees F), and nights are generally cool. Annual rainfall varies from 500 centimeters (200 in.) on the southwestern slopes to 100 centimeters (40 in.) in the northern lowlands. The rainy season runs from October to May. Official Name: Democratic Republic of Sao Tome and Principe Location: Western Africa; islands straddling the equator in the Gulf of Guinea west of Gabon. Area: 1,001 sq. km. (386 sq. mi.); about the size of metropolitan Indianapolis, or one-third the size of Rhode Island. Cities: Capital--Sao Tome. Other cities--Trindade, Santana, Porto Alegre, Santo Antonio. Terrain: Two small, volcanic islands. Climate: Tropical, with wet and dry seasons, influenced by the mountainous topography.

Government of Sao Tome and Principe

Following the promulgation of a new constitution in 1990, Sao Tome and Principe held multiparty elections for the first time since independence. Shortly after the constitution took effect, the National Assembly formally legalized opposition parties. Independent candidates also were permitted to participate. The 55-member National Assembly is the supreme organ of the state and the highest legislative body. Its members are elected for a 4-year term and meet semiannually.

The president of the republic is elected to a 5-year term through direct universal suffrage and a secret ballot and may hold office up to two consecutive terms. Candidates are chosen at their party's national conference or individuals may run independently. A presidential candidate must obtain an outright majority of the popular vote in either a first or second round of voting in order to be elected president. The party that wins a majority in the legislature names the prime minister, who must be approved by the president. The prime minister, in turn, names the members of the cabinet.

The Supreme Court administers justice at the highest level. The judiciary is independent under the current constitution.

Administratively, the country is divided into six municipal districts, five on Sao Tome and one comprising Principe. Governing councils in each district maintain a limited number of autonomous decision-making powers and are reelected every 3 years.

Principal Government Officials
President--Fradique Bandeira Melo de Menezes
Prime Minister--Patrice Emery Trovoada
Minister of Foreign Affairs and Cooperation--Manuel Salvador dos Ramos
Minister of Defense and Public Security--Carlos Olimpio Stock
Ambassador to the United States--Ovidio Manuel Barbosa Pequeno
Representative at the United Nations--Ovidio Manuel Barbosa Pequeno

The Sao Tomean Embassy to the United States is located at 1211 Connecticut Avenue, NW, Suite 300, Washington, DC 20036 (tel. 202-775-2075); Email: embstpusa@verizon.net.

For visa information, please contact Mr. Domingos Augusto Ferreira, Cell: 917-751-2742; Fax: 212-239-2272; Email: domingosferreira74@hotmail.com; or the Embassy in Washington.

POLITICAL CONDITIONS
Sao Tome and Principe has made great strides toward developing its democratic institutions and further guaranteeing the civil and human rights of its citizens. Sao Tomeans have freely changed their government through peaceful and transparent elections on several occasions. While there have been disagreements and political conflicts within the branches of government and the National Assembly, the debates have been carried out and resolved in an open, democratic, and legal manner, in accordance with the provisions of Sao Tomean law. A number of political parties actively participate in government and openly express their views. Overall, the government's respect for human rights is strong. Freedom of the press is respected, and there are several independent newspapers in addition to the government bulletin. Further, the government does not engage in repressive measures against its citizens, and respect for individuals' rights to due process and protection from government abuses is widely honored. Freedom of expression is accepted, and the government has taken no repressive measures to silence critics.

Type: Republic.
Independence: July 12, 1975 (from Portugal).
Constitution: November 5, 1975; revised September 1990, following a national referendum, revised again January 2003.
Branches: Executive--president and prime minister. Legislative--National Assembly. Judicial--Supreme Court.
Administrative subdivisions: Seven districts, six on Sao Tome and one on Principe.
Political parties: Movement for the Liberation of Sao Tome and Principe (MLSTP), Party of Democratic Convergence (PCD), Independent Democratic Action (ADI), Democratic Movement Force of Change (MDFM), Christian Democratic Front-Socialist Union Party (FDC-PSU), Santomean Workers Party (PTS); Popular Party of Progress (PPP), National Union for Democracy and Progress (UNDP), and Democratic Coalition of the Opposition (CODO).
Suffrage: Universal adult (18 years old).

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History of Sao Tome and Principe

The islands were first discovered by Portuguese navigators between 1469 and 1472. The first successful settlement of Sao Tome was established in 1493 by Alvaro Caminha, who received the land as a grant from the Portuguese crown. Principe was settled in 1500 under a similar arrangement. By the mid-1500s, with the help of slave labor, the Portuguese settlers had turned the islands into Africa's foremost exporter of sugar. Sao Tome and Principe were taken over and administered by the Portuguese crown in 1522 and 1573, respectively. Sugar cultivation declined over the next 100 years, and by the mid-1600s, Sao Tome was little more than a port of call for bunkering ships. In the early 1800s, two new cash crops, coffee and cocoa, were introduced. The rich volcanic soils proved well suited to the new cash crop industry, and soon extensive plantations (rocas), owned by Portuguese companies or absentee landlords, occupied almost all of the good farmland. By 1908, Sao Tome had become the world's largest producer of cocoa, still the country's most important crop. The rocas system, which gave the plantation managers a high degree of authority, led to abuses against the African farm workers. Although Portugal officially abolished slavery in 1876, the practice of forced paid labor continued. In the early 1900s, an internationally publicized controversy arose over charges that Angolan contract workers were being subjected to forced labor and unsatisfactory working conditions. Sporadic labor unrest and dissatisfaction continued well into the 20th century, culminating in an outbreak of riots in 1953 in which several hundred African laborers were killed in a clash with their Portuguese rulers. This "Batepa Massacre" remains a major event in the colonial history of the islands, and the government officially observes its anniversary. By the late 1950s, when other emerging nations across the African Continent were demanding independence, a small group of Sao Tomeans had formed the Movement for the Liberation of Sao Tome and Principe (MLSTP), which eventually established its base in nearby Gabon. Picking up momentum in the 1960s, events moved quickly after the overthrow of the Salazar and Caetano dictatorship in Portugal in April 1974. The new Portuguese regime was committed to the dissolution of its overseas colonies; in November 1974, their representatives met with the MLSTP in Algiers and worked out an agreement for the transfer of sovereignty. After a period of transitional government, Sao Tome and Principe achieved independence on July 12, 1975, choosing as its first President the MLSTP Secretary General, Manuel Pinto da Costa. In 1990, Sao Tome became one of the first African countries to embrace democratic reform. Changes to the constitution, including the legalization of opposition political parties, led to nonviolent, free, and transparent elections in 1991. Miguel Trovoada, a former Prime Minister who had been in exile since 1986, returned as an independent candidate and was elected President. Trovoada was re-elected in Sao Tome's second multiparty presidential election in 1996. The Party of Democratic Convergence (PCD) toppled the MLSTP to take a majority of seats in the National Assembly, with the MLSTP becoming an important and vocal minority party. Municipal elections followed in late 1992, in which the MLSTP came back to win a majority of seats on five of seven regional councils. In early legislative elections in October 1994, the MLSTP won a plurality of seats in the Assembly. It regained an outright majority of seats in the November 1998 elections. The Government of Sao Tome fully functions under a multiparty system. Presidential elections were held in July 2001. The candidate backed by the Independent Democratic Action Party, Fradique de Menezes, was elected in the first round and inaugurated on September 3. Parliamentary elections held in March 2002 led to a coalition government after no party gained a majority of seats. An attempted coup d'etat in July 2003 by a few members of the military and the Christian Democratic Front (mostly representative of former Sao Tomean volunteers from the apartheid-era Republic of South African Army) was reversed by international, including American, mediation without bloodshed. In September 2004, President de Menezes dismissed the Prime Minister and appointed a new cabinet, which was accepted by the majority party. In June 2005, following public discontent with oil exploration licenses granted in the Joint Development Zone (JDZ) with Nigeria, the MLSTP, the party with the largest number of seats in the National Assembly, and its coalition partners threatened to resign from government and force early parliamentary elections. After several days of negotiations, the President and the MLSTP agreed to form a new government and to avoid early elections. The new government included Maria Silveira, the well-respected head of the Central Bank, who served concurrently as Prime Minister and Finance Minister. The March 2006 legislative elections went forward without a hitch, with President Menezes' party, the Movement for the Democratic Force of Change (MDFM), winning 23 seats and taking an unexpected lead ahead of MLSTP. MLSTP came in second with 19 seats, and the Independent Democratic Alliance (ADI) came in third with 12 seats. Amidst negotiations to form a new coalition government, President Menezes nominated a new prime minister and cabinet. July 30, 2006 marked Sao Tome and Principe's fourth democratic, multiparty presidential elections. The elections were regarded by both local, and international observers as being free and fair and Incumbent Fradique de Menezes was announced the winner with approximately 60 % of the vote. Voter turnout was relatively high with 63% of the 91, 000 registered voters casting ballots. In November 2007, President de Menezes dismissed and replaced several ministers in his government following significant public criticism of souring economic conditions and the government’s handling of recurring mutinies by dissident police officers. The changes took place peacefully and without incident.

People of Sao Tome and Principe

Roughly 160,000 people live on Sao Tome and about 7,000 on Principe. All are descended from various ethnic groups that have migrated to the islands since 1485. Six groups are identifiable: * Mestico, or mixed-blood, descendants of African slaves brought to the islands during the early years of settlement from Benin, Gabon, Congo, and Angola (these people also are known as filhos da terra or "sons of the land"; * Angolares, reputedly descendants of Angolan slaves who survived a 1540 shipwreck and now earn their livelihood fishing; * Forros, descendants of freed slaves when slavery was abolished; * Servicais, contract laborers from Angola, Mozambique, and Cape Verde, living temporarily on the islands; * Tongas, children of servicais born on the islands; and * Europeans, primarily Portuguese. A common Luso-African culture dominates the islands, uniting the groups. Almost everyone belongs to Roman Catholic, Evangelical Protestant, or Seventh-day Adventist Churches, which in turn retain close ties with churches in Portugal. Nationality: Noun and adjective --Sao Tomean(s). Population (2010 est.): 167,000. Annual population growth rate (2010 est.): 2.4%. Ethnic groups: Mestico, Angolares, Forros, Servicais/Tongas, European. Religions: Christian (Roman Catholic, Evangelical Protestant, Seventh-day Adventist) 90%. Language: Portuguese (official). Education: Literacy (2009)--87.9%. Years compulsory --to secondary level. Health: Life expectancy (2009)--66 yrs. Infant mortality rate (2009 est.)--37.12/1,000. Work force (by household, 2000 UN Development Program est.): Agriculture --15.3%; industry, commerce, services --36.5%; government --11.5%.
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