Angola's Dos Santos keeps succession open

By Shrikesh Laxmidas

LISBON | Mon Jan 2, 2012 6:39am EST

LISBON (Reuters) - Long-serving Angolan President Jose Eduardo dos Santos is keeping his country and the world guessing about whether he will bid for re-election in 2012 in Africa's No. 2 oil producer.

Apparently unfazed by unprecedented youth protests against his rule last year inspired by the Arab Spring uprisings, the soft-spoken 69-year-old leader has promised that elections due in September will be transparent and fair, while keeping his own options open.

Dos Santos' mild, inscrutable public demeanor belies his more than 32 years firmly at Angola's helm, a rule eclipsed in Africa only by Equatorial Guinea's President Teodoro Obiang Nguema Mbasogo.

Speculation over Dos Santos' intentions - under the country's new 2010 constitution he could remain in power until 2022 - has reached fever pitch among analysts, investors and oil companies watching one of Africa's fastest-growing economies.

"Dos Santos' succession is the single biggest question hanging over Angola," said Alex Vines, an Angola expert and analyst with UK-based think-tank Chatham House.

Fanning the succession debate, in September the Angolan weekly Novo Jornal cited sources in the ruling MPLA party to report that Dos Santos had selected Manuel Vicente, the 55-year-old head of state oil company Sonangol, as his successor to take over before or after the election.

But in December, Dos Santos himself appeared to quash this report by re-appointing Vicente for another term as Sonangol CEO, leading observers to conclude he may have had second thoughts about the succession plan, possibly swayed by resistance from within the MPLA.

"The handover of power to a career oil executive has the potential to anger loyalists in the upper ranks of the MPLA, many of whom have been patiently waiting in the wings to take another step up the ladder," analysts at IHS Global Insight said in a recent research note.

POWERFUL PRESIDENCY

Adding to the speculation, Dos Santos, a Moscow-trained oil engineer, signaled in November his apparent readiness to lead the party in a re-election bid by saying he was "as a long-serving party militant ... always available" for any mission the MPLA chose for him.

Angola's new constitution approved in 2010 abolished direct presidential elections, strengthening the role of the president in the country's government, politics and military. It established that the person heading the electoral list of the winning party in parliamentary elections becomes president.

"Dos Santos has never been elected president - in 1992 the second round (of presidential elections) never took place, the 2008 election was only for parliament and he postponed the presidential ballot before abolishing it altogether in 2010," Chatham House's Vines said.

"As matter of legitimacy, and even legacy, he will want to be elected president before retiring," Vines believed.

This would mean attention focusing on whoever Dos Santos appoints as his deputy, which could keep Sonangol's Vicente in the running for the Angolan leadership succession.

"The president retains the ability to pull him from that (Sonangol) post and place him as his deputy on the party list at any time," IHS Global Insight said.

Others who could be in line for that deputy post on the MPLA list, set to be announced in January, include current Vice-President Fernando da Piedade Dias dos Santos and several ministers.

"The No.2 position is important in terms of a potential successor, but it's like Kremlinology, speculation about who will take which seat, and maybe even Dos Santos has not yet decided on the plan," Chatham House's Vines said.

YOUTH PROTESTS TARGET GRAFT, MISMANAGEMENT

Dos Santos faced a challenge in 2011 from a burgeoning local youth protest movement. Inspired by uprisings in North Africa that toppled several leaders, it staged several street rallies urging him to resign.

The movement was not deterred by police crackdowns that resulted in violent clashes and arrests, which obliged Dos Santos to make a public call for dialogue and smooth change rather than radical upheaval.

But observers believe Angola's recent history in emerging from a bloody post-independence civil war, coupled with the existing power structure and government policies, will mitigate the impact of the protest movement.

"Swift police crackdowns, generous one-off subsidies and still fresh memories of the 27-year civil war mean that the protests are set to remain fairly muted in comparison to the Arab Spring uprisings," said Shilan Shah, Africa Analyst at risk analysis firm Business Monitor International.

The MPLA won the civil war against UNITA in 2002 and then crushed its rivals in an election in 2008, obtaining 82 percent of the votes to strengthen its control over Angolan society.

With UNITA seen as fragmented and embroiled in its own internal struggles, Dos Santos' MPLA is viewed as clear favorite to win the 2012 parliamentary election.

The youth protesters accuse the government of mismanaging oil revenues, avoiding scrutiny of its policies and doing far too little to fight graft and widespread enduring poverty - charges also flagged by global governance watchdogs.

An estimated two-thirds of Angola's 16.5 million people live on less than $2 per day, while a small political and economic elite displays conspicuous opulence.

MISSING FUNDS AMID RISING OIL OUTPUT

Human Rights Watch last month urged the government to account for $32 billion in missing government funds, thought to be linked to Sonangol, which were spent or transferred from 2007 through 2010.

It cited an IMF report revealing that the spending and transfers were not properly documented in the budget.

"Tens of billions of dollars could be used for the benefit of the Angolan people - instead the government can't account for them," said Arvind Ganesan, business and human rights director at Human Rights Watch.

"Angolans deserve a full public explanation for where those billions went," Ganesan added.

Despite requests for a reaction, Angola's government has not yet offered a public response to Human Rights Watch.

Nevertheless, Vicente's re-appointment at Sonangol has been welcomed by international oil firms, who see him as an ally as Angola starts exploring ultra-deepwater blocks which promise huge discoveries similar to those made off Brazil.

Angola depends on oil for over 90 percent of its export income. Rising output is set to boost the economy by 12.8 percent this year and will allow the country to vie with Nigeria as the continent's top crude producer.

"Strong interest in licensing rounds last month indicates oil firms seem undeterred from targeting ambitious long-term investment in Angola despite lingering regulatory and political uncertainty and concerns over alleged corrupt practices in Sonangol," BMI's Shah said.

(Reporting by Shrikesh Laxmidas; Editing by Pascal Fletcher)

Source: http://www.reuters.com/article/2012/01/02/us-angola-succession-idUSTRE80108120120102?feedType=RSS&feedName=worldNews

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