ANGOLA

Foreign investment is very large in the oil sector and significant in many other areas of the economy. A new investment code, devised under the GPRA's 1987 economic recovery plan, permits mixed companies, joint companies, joint ventures and private companies, the latter able to be wholly-owned by foreign capital. The code provides certain guarantees and incentives, and simplifies the process of negotiation, but still prohibits foreign investment in a number of areas, such as defense, banking, posts and public telecommunications, public services, the media and air and long-distance maritime transport.

No export subsidy schemes currently exist, although among the measures proposed (but not yet implemented) in the PRA's economic reform package was a foreign exchange retention scheme as an incentive for non-oil export industries.

7. Protection of U.S. Intellectual Property

Angola joined the World Intellectual Property Organization (WIPO) in 1985, but has not adhered to any of the principal conventions on intellectual property. There is no known domestic legislation on intellectual property rights. U.S. industry has not flagged any specific problems regarding intellectual property.

Until 1991, the sole, legally-recognized trade union organization in the GPRA was the National Union of Angolan Workers (UNTA), which was formed in the late 1950's as an appendage of the Popular Movement for the Liberation of Angola (MPLA) and became the ruling party's official labor wing after Angolan independence in 1975.

The revised Constitution contains a provision recognizing the right of Angolans to form trade unions and to participate in trade union activities. A second provision recognizes the right to strike. Law No 23/91 of June 15, 1991 provides the detailed legal framework for that provision.

Despite the changes in the law, to date there has been no formation of independent labor unions per se. However, free labor activity has increased as individual factories and offices have formed their own workers' committees. Numerous strikes have taken place without interference from the government of the PRA.

b. The Right to Organize and Bargain Collectively

In 1991, the revised GPRA Constitution gave Angolan workers the right to bargain collectively. Legislation is reportedly in preparation to address the specifics of this provision, as well as to regulate the formation of independent

ANGOLA

trade union activities. The Ministry of Labor and Social Security still controls the process of setting wages and benefits. Several significant wage raises were granted in 1991 as a result of negotiation following work stoppages.

C. Prohibition of Forced or Compulsory Labor

Previous GPRA legislation authorized compulsory labor for breaches of labor discipline and participation in strikes. On the basis of this legislation, the PRA was first cited by the ILO in 1984 for being in violation of ILO Convention 105, on the abolition of forced labor. It is not known whether labor legislation now in preparation specifically addresses the issue of forced labor or other issues mentioned below.

d. Minimum Age for Employment of Children

There is no information available on this subject apart from the fact that in 1976 the GPRA ratified ILO Convention 6 governing night work of young persons and Convention 7 regarding the minimum age for employment at sea.

e. Acceptable Conditions of Work

According to a decree issued in 1982, the normal workweek is limited to 44 hours. The workweek is limited to 34 hours and 6 days a week for persons aged 14 to 16, and to 38 hours and 7 days a week for persons aged 16 to 18. Minimum wage

legislation exists but no recent information is available on the extent of its application. No information is available on the existence or adequacy of occupational health and safety

standards.

f. Rights in Sectors with U.S. Investment

U.S. investment in Angola is located in the petroleum industry. There is no specific information available regarding the conditions for workers in this sector.

(D)-Suppressed to avoid disclosing data of individual companies

Source: U.S. Department of Commerce (unpublished)

Bureau of Economic Analysis, August 1991

1/ Those figures reported for 1991 are necessarily estimates, drawn in most cases from Central Bank/IMF data. "N/A" indicates that no official estimate is available.

2/ The Government of Gabon stopped publishing price indexes in June 1989. Estimates compiled by private sector consultants indicate rates of approximately 10 percent in 1989 and 1990. The Embassy does not believe that conditions in 1991 have been significantly different.

3/ The Government of Gabon has only serviced its debt very selectively since the middle of 1989, and virtually discontinued debt service starting in 1990. IMF estimates

GABON

indicate that $304 million in arrears were accumulated in 1989 and 1990; the stand-by arrangement signed on September 30, 1991 calls for a total of $307.7 million in arrears to be paid by end 1991.

1. General Policy Framework

The Gabonese economy is dominated by mining and petroleum production, which together contribute nearly 40 percent of gross domestic product (GDP). Oil is the key variable, as the petroleum industry generates 80 percent of Gabon's export earnings and nearly half of government revenues. There is very little manufacturing activity in Gabon, and most finished goods are imported. The limited manufacturing which exists is concentrated in initial transformation of Gabon's raw materials; e.g. the uranium "yellowcake" plant located adjacent to the uranium mine at Mounana, in southeastern Gabon, and the petroleum refinery located at Port Gentil. the other hand, like many developing economies, there is an important services sector, comprising the civil service, which accounts for over 10 percent of GDP by itself, and a wide range of tertiary activities ranging from banking to legal and accounting services to business consulting.

On

Since oil prices weakened sharply in 1986, the Gabonese government has been in fiscal crisis. The large deficits since then they hit a high of over 14 percent of GDP in 1987, dipped to under 5 percent in 1990, and have since climbed again past 6 percent forced Gabon to turn to foreign creditors for financing, drawing on its International Monetary Fund (IMF) allotment and then seeking project finance from the World Bank and the African Development Bank (ADB). Commercial banks, which had financed a number of large projects in Gabon in the seventies and early eighties, lost their enthusiasm when Gabon turned to the London Club in 1987 for a rescheduling.

The

Gabon's persistent budget deficits are rooted primarily in the government's inability to manage its expenditures. employment rolls at government agencies and parastatal corporations have never been fully purged of deceased, fired and otherwise separated employees, who continue to draw salaries. Public outcries have thwarted several attempts to institute layoffs or even hiring freezes. By the same token, the government has been unable to control expenditures on travel, telephone and utility bills and housing, and only recently has succeeded in imposing central control over government agency purchasing. On the revenue side, tax evasion, especially of customs duties, is rampant and the government is only now beginning to bring this problem under control.

Monetary policy is exercised through adjustments in the central bank discount rate and through adjustments in bank reserve requirements. Under the Franc Zone mechanism (see below), however, the French Treasury exercises tight control over the monetary policies of the member states, who must observe money supply growth targets set in consultation with the French authorities. Given the constraints of the Franc Zone, monetary policy is not used as a tool for sectoral