Angola - peace opens up new prospect for investment

Article Abstract:

The short-term possibility of economic recovery in Angola in light of the ceasefire between the nation's two hostile forces, the Movimento Popular de Libertacao de Angola (MPLA) and the Uniao Nacional para a Independencia Total de Angola (UNITA), calls for continued financial and legal planning. Angola's proposed economic development is limited by its capacity to handle capital inflows on a large scale, its shortage of technical and managerial professionals, and the lack of modern institutions that may make the best use of these technical skills. Angola's distribution and communication system is also in a state of collapse due to a scarce supply of trucks and spare parts. The ceasefire agreement specifies that representatives of the MPLA and UNITA, along with those from the US, USSR, and Portugal, form a commission that monitors and coordinates the ceasefire and proposed multiparty elections for 1992.

Economic aspects, Economic development, Angola, Armistices

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World oil markets anticipate the peace

Article Abstract:

The Economist Intelligence Unit (EIU) created alternative scenarios for the affect of Allied armed intervention in the Iraq-Kuwait conflict on the price of oil on world markets at the beginning of the crisis. In the EIU's containment scenario, in which the crisis was adjudicated without bloodshed, the price of oil moved to $25 a barrel. In the conflict scenario, in which force was used, the price of oil peaked at $40 a barrel and averaged $34 a barrel in 1991. When the Allies attacked Iraqi forces in Kuwait, it became apparent that the conflict would be short, and the price of oil dropped to less than $20 a barrel. The EIU's base scenario for after the crisis forecasts a volatile market and oil prices at around $25 a barrel for 1991. Prospects for oil price stability depend on Saudi Arabia's willingness to continue as a swing producer and the likelihood of an international oil agreement.

Petroleum, Spot market, Iraq-Kuwait Crisis, 1990-1991, The Economist (Periodical)

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The future of commodity agreements

Article Abstract:

The International Coffee Agreement failed in 1989 due to lack of political support by the commodity importing countries, including the US, which were angered by non-member countries profiting at their expense. Cartels are difficult to control, and the success of a cartel leads to surpluses and cheating, ultimately undermining the efforts to support stable commodity prices. Surpluses result when agreements set and maintain prices at levels too high in relation to the opportunity costs and the price that would be dictated by supply and demand. It is apparent that commodity agreements are not appropriate for dealing with the problem of the low opportunity costs of commodities. In addition, commodity agreements are increasingly becoming obsolete in a world economy increasingly characterized by open markets.

Management, International aspects, Coffee industry, Commodities, Commodity agreements, International Coffee Agreement, Coffee growers

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