Santomean Oil – and the Coming of the Resource Curse?

This is São Tomé – a tropical island largely unexplored and unexploited by tourism. All of this is about to change. There are large unexploited oil deposits discovered near the island. There’s a BBC Program which explores, though rather superficially, issues around oil in African countries. Including Sao Tome. The program does however include an interesting interview with Santomean President Fradique de Menes.

The Chinese Government says São Tomé is on their radar. International relations revolve around the discovery of large oil deposits in the Gulf of Guinea. Sao tome is on the cusp of change.

Does this mean more wealth, liberty, and democracy for all the people? Or will it lead to the benefit of the few in the governing class leaving the have-nots behind?The question is: where will the Petrodollars go? Will the Island have the same fate as it’s neighbours in mailand Africa?

Alex Perry from Time magazine reports on Santomean oil.

The following is a report by the Portuguese RTP Africa from 2007 reporting on the research of Pedro Vicente who concluded that oil may be bad for the development of the Santomean society.
httpvhd://www.youtube.com/watch?v=U8bMfNWJv78

Sao Tome receives aid from the European Union, Taiwan, Brazil, India, and the USA. By volume and income, the largest export is cocoa. The other export product is coffee.

There’s locally produced soap, textiles, bricks, beer (Creola, Rosema) and soft drinks. Over 54 percent of total land area is farmland. Copra (dried coconut pulp), palm kernels, corn, bananas, pineapples, melons are also produced.

http://diariodaafrica.blogspot.com/2009/10/algumas-informacoes-soltas-genericas-e.html

http://en.wikipedia.org/wiki/Economy_of_São_Tomé_and_Príncipe

Spencer Swartz on the Wall Street Journal Environment blog has a negative view of the developments.

The Angolan newspaper O Pais reports on the strategical agreements between São Tomé and Príncipe, Angola, and Portugal in order to construct a ‘new São Tomé’ with the oil revenues.

The local currency Dobra was pegged to the Euro January 1st, 2010 with Portugal providing backup. A similar deal was done with Cabo Verde 10 years earlier (before the Euro).