Oil wealth helping few of Angola's poor

Last in a series of occasional articles

LUANDA, Angola -- Here is Africa at its richest, visible from a hilltop balcony: 11 giant construction cranes swiveling in midair, a gawky ballet of steel and concrete, building skyscrapers story by story. On a street below, carpenters shoot wood through a power saw, quickly finishing an apartment building where three penthouses have just been rented for $26,000 a month each.

Here, too, is Africa at its poorest, just a mile away, as night falls outside the emergency room at Luanda Pediatric Hospital: 81 children and their parents waiting to see the lone doctor on duty. Some babies are softly crying, many are feverishly hot, and a few unlucky ones have waited more than 14 hours. Just a day before, 18 children died at this hospital, all from preventable diseases.

And here is a chance to narrow the extremes of Angola: Unprecedented billions of dollars in oil money are filling government coffers. The most pressing questions are whether the country can wisely spend and save this windfall.

Many doubt it. Because of wars, dictatorships, and thieves, Angola and other oil-rich African nations have failed so far to turn their natural wealth into better lives for their citizens.

Angola's history is particularly bleak. During a quarter-century of war, the national oil company acted as a national bank, disbursing millions to ministries and ministers. One nongovernmental group, London-based Global Witness, says $8.4 billion in public money from 1997 to 2001 remains unaccounted for.

But even skeptics believe that these countries rich in oil have great opportunities to build their economies, as the price of crude oil soars. The United States and other developed nations will depend even more on Africa's oil in the next decade; some predict that a quarter of US oil imports will come from Africa in the next decade, up from the current 15 percent.

Angola's situation, in particular, is ripe for change. Its relatively small population of 13 million means that the oil wealth per person is far greater than that of Nigeria, Africa's largest oil producer, which has more than 135 million people. Angola's infrastructure is in such bad shape from the war, which ended in 2002, that basic improvements will help win the hearts of many. And it will have the cash, reaping as much as $10 billion this year in oil revenues, which would be $4 billion above projections.

Almost overnight, Angola's capital, Luanda, has become a boomtown reminiscent of scenes from the television show ''Dallas," which reflected the historic oil boom that helped build gleaming towers of steel in several US cities. Just five years ago, Angola produced 700,000 barrels of oil a day. Today the figure is at 1.3 million barrels, and in two years it could be 2 million, thanks to a series of deep-water offshore discoveries.

The country's gross domestic product grew by 16 percent last year and is projected to grow by 25 percent this year.

In Luanda, hotel occupancy is pegged at 96 percent, but it may even be higher. A visitor last month could only find rooms that were let out by the hour, settling for a single that cost $40 an hour.

But such prosperity does not reach the majority of Angolans. Seventy percent of its population lives on less than $2 a day. Roads in the countryside are ruined. The railway system has collapsed, and the agricultural base is in tatters. The country imports almost all its sugar, after once being one of the world's largest exporters.

''It is rare to see a country that has so many challenges and also has so many possibilities of dealing with those challenges," Finance Minister José Pedro de Morais said, loosening his pink tie, during in a late-night interview in his office. ''The two extremes are here."

The questions for Angola echo in every African country with oil: Can it reform corrupt practices, expand the pool of wealth, and improve schools, health clinics, and roads? Can it grow from a highly dependent oil economy into one that also boosts agriculture and other industries, allowing a broad-based expansion to continue far into the future?

''It's like a household that wins the lottery," Charles P. McPherson, the World Bank's senior adviser in its Oil, Gas, Mining & Chemicals Department, said in an interview in Luanda. ''Do they spend the money right away and buy a luxury car? Or do they save it? They need to park part of it, so they can meet the day when they don't have the oil."

Asked whether other oil-rich countries in Africa have planned well for the future, McPherson replied, ''There are no good examples of this, although there are promising signs."

De Morais, the finance minister, compared his country to a four-wheel-drive vehicle with only the front two wheels doing the work. ''Ten years from now, we will have four-wheel-drive. People here need everything: housing, food, education, medicine. The challenges are immense."

President José Eduardo Dos Santos, who may next year call the country's first elections since 1992, is making almost all the decisions on rebuilding. Government outsiders, from the World Bank to activists in the country, are rarely listened to.

Kinsukulu Landu Kama, the coordinator of an organization that promotes openness in the government, held up a draft of a letter to a senior government official, demanding a meeting.

''They won't meet with us," Kama said. ''We want full disclosure of the oil money. We are trying to find out how the money is being used, but they won't tell us anything."

But in Luanda's swanky hotels, bits and pieces of information are passed over coffee and cocktails to those with the right connections. The lobbies are full of South Africans, Brazilians, Portuguese, and a smattering of Americans, all looking for Angolan partners to strike deals.

At Tropico Hotel one night recently, Isaac F. Maria dos Anjos, a former minister of agriculture and ambassador to South Africa and now a member of Parliament, couldn't string together three sentences without being interrupted by friends and acquaintances: oil executives, diamond explorers, and government officials.

''I've been traveling around the country for the last three months, and I couldn't believe what I saw," said dos Anjos, putting down his espresso and raising his hands in excitement. ''There are the Chinese building roads, bridges, houses. Former generals in the army are actively looking for farms. Everyone is looking for farms!"

He stood to hug a friend. ''Do you know who that is?" he whispered, sitting down. It was an Angolan oilman. ''BP," he said, referring to the man's affiliation with the oil giant. ''They're doing great."

Dos Anjos, though, was more interested in his own plan. He hopes to start a 345,000-acre eucalyptus timber plantation in the interior highlands.

''I will sell them for power-line posts or timber for homes," he said. ''I can get a long-term concession for the land; the government gives it free of charge for 50 years! And in five, seven, or 10 years, the roads and railways will be rebuilt. It's perfect!"

But Dos Anjos became defensive when the discussion turned to the country's overall economic prospects and, in particular, the fruitless negotiations between the government and the International Monetary Fund. The government wants an IMF seal of approval that the country's economics are sound so that it can attract investors, while the IMF wants more openness in the country's oil business.

''Even if we have a lot of corruption in this country, we pay back all the loans we get from overseas, so give us a chance," Dos Anjos said. ''If the IMF closes the doors on us, other guys will open the doors."

The others already are. Last year, the Chinese export bank extended a $2 billion line of credit, in exchange for 10,000 barrels of oil a day. Angolan officials are now wrapping up a $2.25 billion loan from a French bank that will allow the country to restructure debt payments with lower interest.

The Chinese loan is funding projects around the country, including housing developments, roads, railways, and hospitals.

But Luis Bernardino, director of the Luanda Pediatric Hospital, said that while the country needs hospitals, it needs small health clinics even more.

Around his hospital, there are no small clinics that offer free care. As a result, parents often do not obtain basic prevention for their children, such as childhood immunizations, and they seek medical care for the young at the hospital only when they are severely sick.

In the crowded emergency room later that day, a single doctor faced a crowd of patients. ''Can't you see I am doing triage?" she snapped, waving a visitor out of her room.

Outside, several mothers despaired at their children's illnesses and the long wait. Julianna Dominguos, 37, said she had arrived with her 19-month-old daughter, Cacia, at 4 a.m., or 13 hours before, and had finally seen the doctor. But the doctor said she couldn't do much for the child, who has had heart problems.

The doctor said a cardiologist must see the child, ''so I made an appointment," Dominguos said, pulling out a piece of paper. ''They said come next year. Look, it says Sept. 12, 10 months from now! In this country, we are nothing."

Next to her, another mother, Phillippa Maito, 25, joined in. ''We can't ask for anything in this country," she said, clutching her child, Luzned, 18 months. ''We have no money, and this country is full of money. Why is that?"

She turned toward the doctor's examination room, pleading softly: ''Call me. Call me, please."

Outside the Luanda Pediatric Hospital, BMWs, Hummers, and Toyota Land Cruisers bounce along potholed streets, carrying the moneymen, engineers, and nouveaux riches of modern Angola.

In an energy-hungry world, oil resources are Africa's great hope for breaking out of endemic poverty. Maito and millions like her can only quietly pray that one day the oil boom will make their lives better, too.

Previous articles in this series appeared Oct. 3 and Nov. 25. John Donnelly can be reached at donnelly@globe.com.