Sunday, October 14, 2012

Equitorial Guinea - Economy


Subsistence farming is the predominant occupation in Equatorial Guinea, although only 5% of the land is arable. Prior to independence, the money economy was based on the production of cocoa (mostly on Bioko) and coffee and timber (in Río Muni). Following severe deterioration of the rural economy, the government has made efforts to increase production of these products to preindependence levels. Other agricultural products include rice, yams, cassava, bananas, and palm oil. Livestock are raised and there is a fishing industry. There is food processing, sawmilling, and the manufacture of basic consumer items. The discovery and exploitation of large offshore oil and natural gas deposits increased economic growth beginning in the late 1990s, but the oil and gas revenue, largely lost to government corruption, has not significantly improved the standard of living in the generally improverished nation. The country also has unexploited deposits of titanium, iron ore, manganese, uranium, and gold. Both Río Muni and Bioko have substantial road networks; there are no railroads. Malabo is the main port.
The value of Equatorial Guinea's exports is considerably higher than the cost of its imports. The United States is the country's largest trading partner, followed by China, Spain, Italy, and France. The main exports are petroleum, methanol, timber, and cocoa; the chief imports are petroleum equpment and other machinery, foodstuffs, and beverages. Equatorial Guinea continues to depend heavily on foreign investment
Equatorial Guinea is a small country off West Africa which has recently struck oil and which is now being cited as a textbook case of the resource curse - or the paradox of plenty.

Since the mid 1990s the former Spanish colony has become one of sub-Sahara's biggest oil producers and in 2004 was said to have the world's fastest-growing economy.
However, few people have benefited from the oil riches and the country ranks near the bottom of the UN human development index. The UN says that less than half the population has access to clean drinking water and that 20 percent of children die before reaching five.
The country has exasperated a variety of rights organisations who have described the two post-independence leaders as among the worst abusers of human rights in Africa.
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According to Human Rights Watch, the ''dictatorship under President Obiang has used an oil boom to entrench and enrich itself further at the expense of the country's people''.The corruption watchdog Transparency International has put Equatorial Guinea in the top 12 of its list of most corrupt states. Resisting calls for more transparency, President Obiang has for long held that oil revenues are a state secret. In 2008 the country became a candidate of the Extractive Industries Transparency Initiative - an international project meant to promote openness about government oil revenues - but failed to qualify by an April 2010 deadline.
A 2004 US Senate investigation into the Washington-based Riggs Bank found that President Obiang's family had received huge payments from US oil companies such as Exxon Mobil and Amerada Hess.
Observers say the US finds it hard to criticise a country which is seen as an ally in a volatile, oil-rich region. In 2006, Secretary of State Condoleezza Rice hailed President Obiang as a "good friend" despite repeated criticism of his human rights and civil liberties record by her own department. More recently President Barack Obama posed for an official photograph with President Obiang at a New York reception.
The advocacy group Global Witness has been lobbying the United States to act against the President Obiang's son Teodor, a government minister. It says there is credible evidence that he spent millions buying a Malibu mansion and private jet using corruptly acquired funds - grounds for denying him a visa.
Equatorial Guinea hit the headlines in 2004 when a plane load of suspected mercenaries was intercepted in Zimbabwe while allegedly on the way to overthrow President Obiang