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afrol News, 13 April - The Cape Verdean Prime Minister recently announced the opening of several new departments of the Union of Labour Intensive Works (FAIMO). The announcement comes at the same time as the government is re-launching its plan to increase employment through investing in infrastructure development and national health care. Cape Verde, which in March elected a "socialist" government and president, experiences serious social problems, though economic growth has been tremendous over the last years. An estimated third of the population on the archipelago lives in extreme poverty, and the unemployment rate exceeds 25 percent of the active population. Announcing the new government employment plan, Prime Minister José Maria Neves stated Cape Verde could "not longer continue with the present level," referring to the rural development situation in the country. "We cannot spend half a million escudos without reaching real improvements on a regional or local level." At the same occasion, Neves also could comfort the FAIMO employees that their delayed salaries would be paid this week. According to a new report by the European Union (EU), Cape Verde at the moment is limited by certain important factors; the islands state possesses few natural resources and, situated in the Sahelian zone, is subjected to strong climatic variations. The services sector contributes to one third of GDP (though with airport activities being a major contributor). According to the EU report, the main reasons behind poverty on the archipelago are the low economic productivity, the uneven allocation of goods and the general lack of employment in the formal sector. Social and economic differences have grown over the last years, through the implementation of World Bank and IMF programmes, although total economic growth has been impressingly high. Still, economic activities of Cape Verdeans to a large degree depend on foreign aid, according to the EU study. An important factor are the economic transferences made by the large Cape Verdean diaspora, living in Europe and the US, which in total compensate for the otherwise large trade deficit. Export values actually only cover 5 percent of import values. Equally important is the aid of foreign donors, especially within alimentation. Although Cape Verde has experiences several years of good harvests, the dry climatic conditions have curbed the archipelago's aspirations of becoming self-sustained. Food imports and food aid have to cover a large food production deficit each year. The economic politics defined by the new government of José Maria Neves is meeting these challenges by a dual strategy. The government stays with the aim of economic transition and developing a more vital private sector (as defined by the World Bank). Neves' government however at the same time seems to give more weight to the fight against poverty, focusing on rural development and creating employment for the Cape Verdean masses.
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