By African standards, any election that doesn't feature tanks rolling through the streets and citizens being shot can be considered a success. In fact, even holding an election probably puts Angola miles ahead of many countries in that part of the world.
A quick look down the list of other OPEC countries (Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela) and you can see that democracy and oil traditionally don't exactly go together like birds of a feather.
After 27 years of civil war, it will probably take a generation or more for real democracy to arrive in Angola. If MS really has the interests of Angolans at heart, and I believe he may well have, he will be suggesting to influential people (dare I say prominent people) that in the long run you can't have your people only making two bucks a day (as every visiting journalist parrot keeps telling us).
If most of your citizens are dirt poor you can't tax them, so to make money you have to rent out your country's resources to foreigners, who invariably take the lion's share and palm some off to the local elite.
With the fortuitous combination of major new oil discoveries and a peaceful election that at least gives the citizens a taste of democracy, 2008 is almost certainly the start of a period of great improvements for Angola. There is a place in this future for companies that nurture that potential, that treat the Angolans with a bit of respect, and that put in the hard yards.
The days of "wham bam thank you ma'm" exploitation of African resources are numbered. Smyth knows this, and he has been hinting at it all along. There is more to Pensador than just financing; there is the ground work for a long term relationship that will be fruitful for both CVI and Angola. Once that concept is understood and confirmed in signed agreements, and hammered home through a series of unambiguous announcements to the ASX, the CVI share price will reflect the real value of the company's relationship with Angola, rather than just reflecting the fears and understandable concerns of the share holders.
And what do you reckon that partnership with Angola is really worth? Thirty cents? Forty three cents? I don't think so. It's worth plenty more than that, and over the next few weeks we should start to find out.
CVI Price at posting:
8.9¢ Sentiment: Buy Disclosure: Held
