Abstract
Faced with a lack of natural resources Cape Verde has made good governance one of its most marketable products. Running parallel to the institutionalisation of democratic politics there has been an overhaul and growing sophistication in public administration, though certain weaknesses persist. This report argues that it is reform and improvement in this area in particular that has enabled this small island state to punch above its weight and achieve remarkable social, economic and political results. But will the successful formula of the past decade prove sufficient for the future? Poverty and unemployment have by no means been conquered. Much of the economic growth has been based in the tourist sector and the government is well aware of the dangers of over-reliance on a single industry. Cape Verde's midway location between South America and Europe and its increasing international transport connections will continue to offer advantages to drug traffickers. The next few years of the world financial crisis will show whether marketing good governance is enough and whether this is the model for small resource developing states.
The global economy favours those states with developed economies, preferably supported by large home markets and abundant natural resources. In the political arena, too, size still counts in terms of influence. Set against these criteria for success, Cape Verde has few natural advantages. It is a small archipelago of 10 islands, 300 miles off the coast of West Africa, has a population of just 530,000 people, has no natural resources, little drinking water and suffers frequent droughts. Yet this same state has seen over 7 per cent economic growth every year from 2005–8. Total foreign direct investment that was 400m Euros in 2005, is expected to be some 2,000m Euros in 2009. It is the only state in Africa, apart from Botswana, to have moved from Least Developed Country (LDC) status to Middle-Income Country (MIC) status. Further, it is the only country in Africa to have negotiated a special status with the EU (European Union) beyond the limited economic Cotonou Agreement between ACP (African, Caribbean and Pacific Group of States and the EU. On most indicators it outstrips sub-Saharan African (SSA) averages. Its life expectancy at birth is 71 (SSA average being 51); infant mortality per 1,000 live births is 25 (SSA: 94); literacy over 15 years is 81 per cent (SSA: 59); and gross primary enrolment is 106 per cent of school age population (SSA: 94).
In the 1990s, during the African wave of democratisation, Cape Verde was the first country to abandon one party rule and to hold multi-party elections. Many African “transitions” proved to be a false dawn, but Cape Verde has progressed steadily, so that it is now widely regarded as the best democratic state in sub-Saharan Africa, ahead of its nearest rivals, South Africa, Mauritius and São Tomé e Príncipe (Baker 2006). Freedom House gave it a 1 for political rights and 2 for civil liberties between 1993 and 2003; and since then has given it 1.1 (Freedom House 2008).
Upon independence in 1975 the African Party for the Independence of Cape Verde (Partido Africano da Independência do Cabo Verde, PAICV; then known as the African Party for the Independence and Union of Guinea and Cape Verde or PAIGC) took power and was constitutionally the sole legal political party from 1980. Despite its socialist rhetoric and loose alliance with the Soviet bloc, the PAIGC was in fact pragmatic in policy. From the mid-1980s the PAICV gradually embraced political liberalisation (Andrade 2002) realising that Cape Verde's survival could only be assured by maintaining an open international policy. The collapse of communism only confirmed the danger of having no more than one source of support and of the need to strengthen assistance from the Diaspora and European states by opening up politically (Meyns 2002). The PAICV moved rapidly to abandon the one party state and called legislative elections for January 1991 and a presidential election for February. The transition, therefore, was an elite negotiated transition settlement, rather than the outcome of popular pressure.
People were ready for change and the newly formed opposition party, the Movimento para a Democracia (MpD) won control of the legislature and the presidency, not just in 1991, but in the following legislative/presi-dential elections of 1995/6. In 2001, however, weakened by internal struggles, the MpD narrowly lost to a rejuvenated PAICV in the case of the presidential election, Pires of the PAICV winning by just 12 votes. The 2006 election repeated that result, President Pires this time winning by 2,856 votes. In the short period since 1990, therefore, there have been two transfers of political power to the opposition.
Running parallel to the institutionalisation of democratic politics there has been an overhaul and growing sophistication in public administration, though certain weaknesses persist. This report argues that it is reform and improvement in this area in particular that has enabled this small island state to punch above its weight and achieve such social, economic and political development. The report examines seven areas of governance. 1
This report is based on interviews conducted in late 2008 with some 30 key informants in central and local government executives and assemblies, business, civil servants, media, human rights groups, women's groups, trade unions and educationists. All quotes are from these interviews if not indicated otherwise. The author is very grateful to the British Academy for a grant towards the research. The research was conducted along with Professor Roy May of Coventry University, to whom the author is indebted for critical comments on the text.
Public Scrutiny
Corruption in Cape Verde is deemed by most to be small. It is rated 3rd in Africa behind Botswana and Mauritius in the Corruption Perceptions Index 2008 (Transparency International). Yet corruption is not unknown. In 2007, for instance, the Minister of the Economy had to resign over accusations concerning a tourism contract with a Portuguese company. 2
The government cancelled the contract, but says it found no evidence of corruption.
The absence of gross corruption is due in part to an increasing level of public scrutiny. This should not be exaggerated, for news management is a well known tool for governments to shape the agenda and exert hegemonic control and Cape Verde is not immune to this. Senior figures in both the opposition press and the state-run television station, TCV (TV Nacional de Cabo Verde), tell of their junior journalists having to be encouraged to develop independent thought and be less dependent on reporting the activities of government officials and on official press releases. They were encouraging their organisations to investigate the serious issues of current popular concern and urging them not to allow fear of the government to dictate the subject matter of news reports. For the government-funded TCV, of course, subject matter is more problematic. As one editor put it: “I am allowed to think freely, but not allowed to have my free thinking financed!”; implying that where there was only an administrative budget and not a production budget, it could always be argued that no special resources could be found for programmes other than those deemed helpful to the governing party. It might be thought that the new private commercial television stations would be freer to tackle topics of public interest, however controversial, but the evidence is that financial constraints have led them to allow commercial companies to place news of their activities and products within “news and information” items.
The National Assembly is also responsible for public scrutiny, but tends to react to scandal rather than expose it through its own investigations. Thus the problems with the national airline, TACV (Transportes Aéreos de Cabo Verde, S.A.), were only examined by the government and the National Assembly after press criticism. Yet measuring the effectiveness of the National Assembly is open to different interpretations. Defenders can point to the summoning of ministers to the Assembly to answer criticism, lively debates and delays to bills when no cross-party consensus can be reached. On the other hand, as one ex-minister perceptively observed, much of the criticism in the National Assembly is criticism for criticism's sake and no more than political posturing. Few doubt that, had the National Assembly been more alert, the mistakes over the privatisation of public utilities like water and electricity in the early 1990s would not have been made. Uncritical acceptance of sales to Portuguese firms gave them private monopolies that did not serve consumers well.
Public scrutiny, therefore, has some way to go, but it is worth recording that the State is active in promoting political criticism through its financial support for all registered newspapers and opposition parties and to human rights groups. And, in the long term, the government's decision to insert human rights education into the school curriculum may be one of the most significant steps forward in terms of freedom of speech being embodied into the national culture and unimpeded by political agendas.
E-government
One of the biggest upheavals in public administration in recent years has been electronic government. Government data bases are being integrated and made available to the public and international bodies. It is already possible for citizens to print off copies of important documents like birth certificates, to access the government budget, to examine electoral rolls, to register companies and vehicles, and to visit an increasing number of ministry websites for information and enquiries. Beyond that, through integrating the financial income and expenditure of all government ministries, ministers and international financial institutions (IFIs) can track the current state of the finances by sector or as a whole, according to one single set of IFI required indicators. Within government there has not only been the widespread use of computers and internet services, but an intra-net that records and allows appropriate access to all important government documents and publications. According to one assessment, in Africa Cape Verde is second only to Botswana in the quality of its e-government (West 2008).
As an exercise in enhancing government management, government integration, government transparency, government access and government-public communication, this has been transformative. The commitment in terms of supportive infrastructure (not only computers and data bases, but the demanding system of electronically gathering statistics and tracking) has been expensive, but the outcome has enhanced citizen access to government; and, for the economy, has reduced transaction costs and improved global connectivity.
The State Transformation Agenda
Good governance is seen by the Cape Verde government as having market value. It is a resource that attracts outside investors, IMF (International Monetary Fund) loans and improved US security ratings. Hence there is a Minister of State Reform working in the Prime Minister's office with responsibility for the transformation agenda at the institutional level.
There had been widespread agreement amongst the political elite during the transition of 1990-1 that the state should withdraw from the economy through privatisation and adopt a lean administration. Yet the poor performance of the privatised electricity and water companies led to a review of the state regulatory function and agreement that the country must go beyond an “aid recycling” economy. The current government is now promoting a small “but still social' state. As Christina Fontes, the Minister of State Reform, articulates it: “we now want a state that creates wealth and not just one that is a good manager of aid”.
Beyond that there is a concerted effort being made both to review state requirements and to ensure state integration. In the realm of security the government accepted that the new security threats were organised crime, particularly drug trafficking from South America en route to Europe, and also money laundering. Hence it transformed the state defence force into two main corps: the coastal guard and a national guard to support the police. It is also seeking to co-ordinate the response to the threats across the ministries of justice, defence, and internal administration. Thus tougher laws on money laundering (2002 and 2008) have accompanied proposed reforms to the police and criminal justice system and the strengthening of the coast guard in partnership with the EU. 3
The number of organised drug and money laundering cases rose from 19 in 2007 to 60 in 2008. In the last 4 years 12 accounts worth more than US$1 million have been frozen and since 2007 the government has seized US$1.6 million worth of land, homes and cars (IRIN 3 November 2008).
Another area of government integration has been external investment and the processes of validation and registration required by the government of those seeking to set up a business. The government claims an increase in business friendliness and that a “one day” registration of new businesses is available, though this is disputed by some. 4
The Doing Business data base claims that on average it still takes 12 steps to start up a business and 52 days; see: <http://www.doingbusiness.org/documents/subnational/DB2009_Small_Island_developing_states.pdf.>.
Human Resource Capacity
Public administration can only be effective as long as there is human capacity to deliver the policies. The government claim they are well aware of the need to match education skills with the economy, but the administration is struggling to meet those needs and teachers complain of an out of date education system. There are real problems in recruiting those with public administration skills at the highest level, despite some success in bringing back Cape Verdeans from abroad. One former minister identified capacity building as the biggest challenge to democracy, arguing that knowledge was the vital ingredient for decision making.
The country relies heavily on tourism, yet the Ministry of the Environment seems helpless to stop contractors stealing sand from the Santiago island beaches or of protecting the Malagueta National Park on the island from new building construction. In terms of planned development the Minister of Decentralisation, Housing and Urban Planning admits that she can do little to stop the illegal homes being built around Praia. 5 In the education sector, administrators in education report that there is very little control and inspection and quality assurance over the private universities. Meanwhile the Minister of Justice, faced with rising violent crimes, argues:
IRIN 6 November 2008.
“Crime is not only a problem of security; it is also about drugs, unemployment, port control, education, human rights, a growing income gap, police and security infrastructure. We need to reform it all to hit on the answer”. 6
IRIN 1 December 2008.
However the country's maritime ports are still not equipped to scan shipments for weapons. And the head of high-level crime investigations in the judicial police claims that, though they often know who the drug traffickers and money launderers are, they do not have the resources to catch them. For instance the crime laboratory has limited chemical analysis capabilities. 7 The Polícia de Ordem Pública have appeared to be so overwhelmed and ineffective in the face of this urban crime increase that the government brought in the military police in 2007 to do night patrols in Praia.
IRIN 3 November 2008.
In other areas of the economy there are also signs of skilled labour shortages. In the expanding tourist industry the government speaks of aiming for one million visitors by 2020, which will require large numbers to service it. Though it is reluctant to admit it, ultimately only migrant workers can provide the additional staff.
Gender Relations
Domestic relations have always been the most impervious to external governance. The constitution is clear on gender equality, but according to many, sexism still prevails. The beating of wives is widely regarded as normal; the exploitation of young teenage girls by “big daddies” is defended by some families as providing economic security rather than being a crime; and many women still accept violence with a resigned, “he could be worse”.
The workplace is also infused with discrimination and gender stereotyping of jobs. Thus in 2004 only 10 per cent of magistrates and 13 per cent of transport workers were women, but 64 per cent of domestic workers and 64 per cent of teachers. There is also labour exploitation of female workers, particularly those in the informal sector, although even in the formal sector women are often afraid to insist on their legal rights when the unemployment rate is at least 18 per cent.
Despite these persistent problems, there has been a concerted effort by the government to reduce inequality and there are signs of real progress.
The principal driver for change is the government agency, Instituto Caboverdiano para Igualdade e Equidade de Genero. It actively seeks equality for women in the government, the National Assembly, and the offices of municipal mayors and municipal assembly leaders. So successful has it been that there are now eight women as opposed to seven men in the cabinet (it was six in 2006); 21 per cent of the National Assembly are women (it was 11 per cent in 2001); there are now two women mayors; and 30 per cent of the municipal assemblies are women. There are also ongoing efforts to ensure that in two ministries directors of departments write gender into their agendas.
Although the law still only criminalises “bad treatment of a spouse”, the number of women reporting abuse to the police is rising. As an agent of change the agency has been forming local networks that offer victims a quicker, faster and more effective response. These networks consist of the police, hospital doctors, NGOs (Non-Governmental Organisations), public attorneys, the National Human Rights Directorate, and the National Institute of the Child and Adolescent. Journalists have also been targeted to reflect on how they transmit information about women and the agency makes full use of radio broadcasts. The trans-agency and public-private approach to promoting social change appears to maximise its effectiveness.
Central-local and Inter-island Relations
Inter-island governance is universally prickly when it comes to the distribution of national wealth and development projects. Despite a government formula that takes into account land area and population size, those on islands other than Santiago, where Praia the capital is, feel overlooked. This is especially so if their representatives are members of the opposition MpD. Underneath the politicking, however, there is an issue of the nature of the centre-margin relationship. Municipalities on islands invariably take on the additional responsibility of representing the island before the national government and of representing the national government on the island in a way that confuses their prime municipal role of local service provider. The central government has tried to address the issue in its decentralisation policy, which asks island municipalities to undertake more tasks at the local level and to define their island vision for development. To this end it is distributing more of the national budget to them and more power to mobilise financial resources. Yet the policy is not totally successful, since the central government is also keen to represent itself, rather than have the municipalities do it. Hence it has recently been moving to reinforce its presence on each island with a combined ministry access point. Like most central governments, it does not find local autonomy and initiative an easy governance policy to adhere to.
Tourism
Getting macro-economic policies right is a key challenge for the government policy makers. Much of the economic growth has been based in the tourist sector, which accounts for 95 per cent of FDI (Foreign Direct Investment). Tourism has grown between 18–25 per cent over the last few years; four international airports have been built since 2005; and visitors are now at 300,000 per annum. The government is well aware of the dangers of over-reliance on a single industry, especially one as volatile as tourism in a highly competitive market and in the context of a global recession. Within the sector itself it is seeking to diversify its countries of origin of investment; its location beyond the islands of Sal, Boa Vista and Santiago; and its tourist products from sun and sand to rural and cultural, and from cheaper to more luxury products. This may benefit the tourist industry, but if the economy does not diversify beyond tourism, national economic growth will be fragile. Though some in the government speak of attracting one million visitors by 2020, it is hard to imagine a population of 530,000 being able to absorb such numbers without social, infrastructural and environmental problems, and without large scale migrant labour with its associated challenges. It would also require very large investment in the infrastructure.
With very real fears that further and persistent growth is not sustainable or even desirable, the government is looking at economic alternatives. The best hope may be to create a regional hub for transport, maritime, financial and IT (information technology) services. If it can attract trans-continental air traffic with its four international airports, maritime supply and repairs with new roll-on roll-off facilities and new Chinese money in ship building, the economy will have a much brighter future. Off-shore financial services are also being contemplated. Determined not to be a money laundering economy, the government is seeking a regulatory system that maximises the benefits and minimises the drawbacks.
The Motivation for Good Governance
What is apparent in this account is that, though good governance in terms of efficient and accountable and transparent public administration and services is difficult to impose on governments, it is achievable when there is a political will.
The evidence from Cape Verde suggests that external actors, whether donors or the New Partnership for Africa's Development (NEPAD), have correctly identified the fight against corruption, a key factor in development, but not yet the correct solution for the entire continent. Good governance does appear to be a significant contributory factor behind Cape Verde's success, but it is largely an endogenous process not an exogenous one. Though the degree of sincerity in the motives driving their governance agenda cannot be ascertained, at the very least it can be said that the political class have recognised that it is in Cape Verde's self-interest to promote it. Externally driven programmes will continue to be commonly undermined if the political commitment is absent; and aid “carrots” may not be enough. Persuasion in terms of self-interest and support for the willing may be a more profitable approach than cajoling the unwilling or unenthusiastic.
The Future
Faced with a lack of natural resources Cape Verde has made good governance one of its most marketable products. The government could have played the role of worthy beggars with nothing to feed themselves with; the victims of no resources, cruel slavery, negligent colonisation and isolated location. Instead they have chosen the path of offering what so few can offer in Africa – good public management and political stability.
It is good governance that has formed the basis of the special relationship with the EU. It is this that is the attraction to outside investors. It is this that won the approval of the IMF and with it access to new windows of credit. It is this that won from the World Bank a $10 million poverty reduction credit in 2007 to support good governance, develop human capital, and improve access to social services and $3 million in additional financing to support the implementation of the Cape Verde Growth and Competitiveness Programme. It is this that has attracted $110 million from the US Millennium Challenge Compact (MCC) for 2005–10. 8 As the MCC said:
For improving water management and soil conservation on the islands of Santo Antão, Fogo, and São Nicolau; improving transportation networks through road and bridge infrastructure on the islands of Santiago and Santo Antão; upgrading the Port of Praia; and reforming the financial sector. Cape Verde has embraced MCC principles. See: http://www.mcc.gov/countries/capeverde/index.php.
“The size and depth of the program is a recognition of Cape Verde's strong record of democratic governance, intolerance of corruption, commitment to supporting and promoting private sector activity, and effective use of limited resources to address the needs of its people in a sustainable way”. 9
It is good governance that has given them their top US rating for air security that permits airfreight to Boston direct. It is this, if anything, that will deter organised crime. Good governance is Cape Verde's most valuable product.
But success has a downside. At a World Bank meeting in October 2008 for eight sub-Saharan MICs, the bank noted MIC vulnerability to the international lending meltdown, which may make it harder for these countries to access credit. Also, because MICs are more closely tied to international markets than LDCs, the “risk of contagion” to the financial crisis is thought to be higher.
So, will the successful formula of the past decade prove sufficient for the future? As indicated above, Cape Verde has serious challenges from organised crime. Drugs and money laundering may be in the process of being curbed by better coastal protection and tougher laws, but no one thinks that the demand for drugs in Europe is going to cease or that drug money will not continue to be a powerful temptation. Cape Verde's midway location between South America and Europe and its increasing international transport connections will continue to offer advantages to drug traffickers. Rising urban crime may well be associated with drug trafficking, and the use of the military police shows the difficulties in trying to curb this trend. Organised crime, then, could yet contaminate the government, the economy, social harmony and people's health.
There is no country that is not experiencing the impact of the global recession. Is a small island state, dependent on the surplus wealth of Europeans and others, more vulnerable than most? Cape Verde faces a recession with the economy expected to grow by 0.5 percent in 2009 compared to the seven per cent growth of 2008, according to the Ministry of Finance. The gradual shift up-market of its tourist products may possibly confirm that “you can always sell luxury”. It is encouraging that the IMF, having examined the public finances, can conclude that the measures adopted by the government to confront the global financial crisis merited their “complete approval”. 10
A Semana online 10.6.2008, cf.: http://www.afrika.no/Detailed/17240.html, access: 21 December 2009.
Yet though good governance may put in place the best protective measures, there is no guarantee that they will be enough. Take for example remittances from the 510,000 Diaspora. They alone currently amount to more than 12–15 per cent of GDP (Gross Domestic Product), or US$137m in 2006. Will the scale of remittances continue through the turn-down and as successive generations weaken their ties with Cape Verde? The World Bank has said that remittance income in developing countries will decline by about 1 percent from 2008 to 2009 and possibly up to 6 percent. 11 Will that drop be replaced by international investment? The economy in Cape Verde has done very well in recent years, but imbalances persist in public accounts despite the tight fiscal policy. External accounts, for instance, are structurally in deficit, due to insufficiently diversified products. The import of capital goods as well as the purchase of oil and foodstuff remains high. Up until 2008 a major source of aid has been the International Finance Corporation (IFC), a lending organisation for poor countries. Since 2001, the IFC has given Cape Verde almost $100 million in low-interest loans to build roads and provide social services. But now that it has graduated to a MIC, the loans will not be available. With the ongoing global financial crisis this is not a good time to be selling off key international transport businesses like ENAPORT (the Port of Cape Verde Authority) and TACV (the national airline), as was planned. Nor is it a good time for expansion in the off-shore banking sector, which was part of the government's diversification programme.
IRIN 11 November 2008.
For all the evidence of the country's good governance, they have by no means conquered poverty and unemployment. The World Bank estimates that between 2004–07 the population living in absolute poverty declined from 49 per cent to 37 percent, but that still leaves at least 47,000 people in a country of 500,000. 12 About 10 per cent are severely malnourished and have less than US$0.65 a day to buy food, and about 25 per cent do not have regular access to safe drinking water, according to government re-ports. 13 The fact is that, despite good governance, the majority of jobs still do not pay a liveable wage, so that most workers with families rely on second jobs and extended family support.
IRIN 30 January 2009. The report used 2002 data.
Given the link between youth unemployment, that is fuelling crime, and drug selling, the fact that according to 2005 government data, 48 per cent of youth between the ages of 15–24 were unemployed, is a dangerously high level. It remains to be seen if the May 2008 government anti-poverty strategy that sought to address youth unemployment by, inter alia, giving companies tax incentives to hire youths, will make any difference. With the escape valve of migration abroad closing, it makes the challenge even harder.
The next few years of the world financial crisis will show whether marketing good governance is enough and whether this is the model for small resource developing states.