IN 1988 OBSERVERS OFTEN mentioned Angola's need to rehabilitate and revive its economy. Since independence in 1975, most economic production had deteriorated, and the country had become almost totally dependent on the export of oil for revenues. In the wake of the war for independence, the flight of trained personnel and foreign capital had left the country without the means to continue production. Furthermore, the prolonged insurgency, which still affected much of the country in late 1988, had undermined those enterprises that were still functioning. Although the political and military situation undoubtedly contributed to these economic problems, the Angolan economy had never been very strong, and most economic successes were of recent and precarious origins.
By the late 1980s, the economic potential of Angola had not been reached. Existing transportation networks, including railroads, roads, and ports, serviced only a fraction of the traffic they were built to accommodate. Likewise, manufacturing industries, such as textiles, cement, vehicle assembly, and food processing, all operated well below their productive capacities. Moreover, vast areas that had been cultivated for both cash and subsistence crops lay idle, and Angola was forced to import food. Indeed, even the local labor force, which had worked on the large agricultural estates, was unemployed and subsisted in displacement camps or in the cities on foreign aid. The only exceptions to the general regression in productivity were in the oil, electric power, telecommunications, and air transportation industries. While these sectors were expanding, most of Angola's economic production was shrinking.
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