Waiting for oil in São Tomé. (Courtesy Creative Commons)
A two-island nation in the Gulf of Guinea, São Tomé and Príncipe is Africa's second-smallest country, with a total population of 187,000. It is a peaceful Creole society without ethnic, religious, or linguistic cleavages. Yet São Tomé and Príncipe is an impoverished country -- as of 2011, it possessed the world's third smallest national economy, and its GDP per capita was just $1,473.
São Tomé and Príncipe generates some income, primarily from cocoa production and tourism, but it remains heavily dependent on foreign aid. (Neighboring oil-rich countries and Western donors finance about 90 percent of the national budget, which is $150 million for 2013.) Since 1997, when the Environmental Remediation Holding Corporation, a small U.S.-based (and currently Nigerian-owned) company, was awarded the country's first offshore oil exploration contract, hopes have been high that the country would become a major oil producer. In the intervening years, however, that hope has not been fulfilled. Nevertheless, in anticipation of increases in oil production, Business Insider forecasts São Tomé and Príncipe as the world's fastest-growing economy over the next five years. Such optimism is unwarranted: there is no guarantee that the country will produce even one drop of oil during this period.
After transitioning from single-party socialist rule to multiparty democracy in 1991, São Tomé and Príncipe has been marked by continuous instability, resulting in 17 different governments in 22 years. The volatility has hampered socioeconomic development in a country already plagued by weak institutions. Clientelism, rent-seeking, and corruption permeate politics. The prominent local lawyer Filinto Costa Alegre has suggested that three V's -- viaturas, vivendas, and viagens (cars, villas, and traveling) -- make up the political elite's ideology...