For a small string of barren islands that have no natural resources, suffer chronic droughts and are perched far off Africa’s west coast, Cape Verde punches well above its weight.
Unscathed by conflict or political instability, the country has quietly become a middle-income nation and looks set to be one of few in Africa to meet any of the Millennium Development Goals set for measuring progress in improving livelihoods.
Yet it has loftier ambitions.
PHOTO: REUTERS
In return for special deals on economic and political cooperation with Europe, it increasingly plays a trouble-fixing role on the mainland some 400km away.
It hopes to turn its location to its advantage by becoming a springboard for business in West Africa. It also thinks tourist numbers could soon match the country’s population.
“The fact that we don’t have resources has made us be creative,” Cape Verdean Minister for Tourism, Industry and Energy, Fatima Fialho said.
“We are an economy in transformation — moving from one of [aid] to one of production,” she said, detailing plans for a service-based economy focusing on shipping and fisheries, providing a hub for technology and finance, and tourism.
Cape Verde’s response to the financial crisis has been to boost public investment, delivering an impressive upgrade of infrastructure, but increasing debt levels.
Fitch ratings said in May a fiscal deficit of 12 percent of GDP this year and next, and central government debt at 78 percent of GDP by the end of next year, should ensure long-term growth, but will increase pressure for sound management.
After other African nations with similarly small populations but far higher revenues, mainly from oil, used vast sums of money to benefit an elite, the nation is being heralded as a non-resource success story.
In April, the African Development Bank (AfDB) called Cape Verde the first African case of “policy induced graduation.”
“Here is evidence that no matter how bad the initial conditions, with good governance, solid institutions, and a peaceful political and social climate, take-off is possible,” AfDB group president Donald Kaberuka said.
Ahead of elections next year, Jorge Santos, deputy head of the MpD opposition party, is quick to express confidence in the political system, saying there is no comparison in the region.
Donor aid has played a key role in its success.
So too have payments from its diaspora. Even after taking a hit from the global crisis, remittances amounted to 132 million euros (US$172 million) last year, having averaged 12.3 percent of GDP between 1999 and 2008, according to the AfDB.
Fialho said that tourism has just overtaken remittances as the biggest contributor to the economy at about 20 percent of GDP: “This is an important shift.”
Charter flights from around Europe jet in to a number of gleaming new airports, ferrying most of the 330,000 tourists last year to all-inclusive hotels.
Some in the industry grumble that vast hotels, like a 4,500-bed all inclusive resort being built for Spanish firm Riu on Boa Vista, are wrecking the charm of the islands.
“This is not very good for local communities — they only stay in the hotels. They don’t learn about our cultures ... we must not move too fast,” said Lindorfo Olivio Marques Ortet, who owns a hotel for walkers in mist-shrouded hills above Praia.
Fialho argues that mass tourism was essential to get the country on the map and the focus is now on improving services.
The country’s population is a mix of Portuguese settlers and former slaves, a combination that means tribalism is not an issue.
Yet many speak of Africa as a separate continent and have more links with Europe or the Americas. The national airline, for example, flies directly to Brazil, the US and a number of European airports, but just one in Africa.
The islands, however, are becoming an increasingly important strategic partner for the African mainland, but also for outsiders looking to strengthen their African links.
“What Cape Verde can bring to the region is a bridge,” Foreign Minister Jose Brito said.
A visit by Brazilian President Luiz Inacio Lula da Silva last month highlighted the role Cape Verde could play as a springboard into West Africa, but Europeans and the US also see the country as a barrier against the flow of drugs and people.
Cape Verde was the first West African nation used to transit cocaine headed to Europe and has since been widely praised for improving law enforcement.
The country is also increasingly active in seeking to resolve African conflicts.
In return, Praia has secured a special partnership with Europe and is the first country to be made eligible for a second round of funding from US Millennium Challenge Corp.
Brito said it was in Europe’s interests to have a special relationship with Cape Verde and the country would seek to meet EU standards, but was not looking to join the institution.
“We are an African country ... Cape Verde cannot be alone, separate from what is happening in [the region],” he said.
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