What's Ahead for Cape Verde After Graduating as a "Mid-Developed" Country?

By Miguel Vieira FORCV Columnist

Having recently been promoted to mid-development status by the United Nations, effective immediately, Cape Verde is no longer considered a poor country. The UN uses a tripartite category system; (1) Least developed, (2) Mid-developed or mid-income, and (3) Developed to asses the allocation of its funds. Countries designated “least developed” by the UN receive generous foreign aid. Since 1975, the year it gained its independence from Portugal, Cape Verde had been designated a “least developed nation” by the UN. With its new status as a “mid-income” nation, the generous foreign assistance that Cape Verde has relied on for several decades to help balance its annual budgets will significantly decrease.

This new reality has caused many citizens of Cape Verde, pundits and laymen alike, to have a palpable anxiety over the future. They fear that with Cape Verde’s new status as a “mid-income” nation, the inevitable decrease of foreign aid from the UN and from wealthy nations will adversely affect Cape Verde’s every core sector.

Cape Verde’s officials, however, are more optimistic. “We will ably face the challenges to come”, they attest.

However, Manuel Gomes, a convenience store owner in Assomada City, in the Santiago Island, remains a skeptic. In a phone interview with FORCV, Mr. Gomes categorically states in Kriolu that “Kabu Verdi ka sta na kondison di ser ilevadu pa kel nivel li”, Cape Verde is not in a position to be elevated to such a level. “Cape Verdeans” he further opined, “lack purchasing power that befits a mid-income nation”. Adding further, Mr. Gomes declared that “because of Cape Verde’s geographical insularity and vulnerability, it will always be in need of substantial foreign aid.”

Popular skepticism vs. Official optimism

Mr. Gomes’ gloomy view of the future contrasts with and challenges the optimism of Cape Verde’s officials.

In a recent interview with Asemana, a national CV newspaper, the Prime Minister of Cape Verde, Jose M. Neves, stated that “The economic, social, and public health indicators of Cape Verde validate its promotion to mid-development status”. The economic part of Mr. Neves’ remark refers to Cape Verde’s per capita income, which CIA world fact book says is $7.000US - well above the average in West Africa. Moreover, the social part of Mr. Neves’ comment doubtlessly refer to Cape Verde literacy rate, roughly 85%, a dramatic increase from 1975 when only 14% of the population could read and write. These figures have catapulted Cape Verde to a relatively high position in the UN human development index chart.

Furthermore, Cape Verde’s proven tract of effective management of resources, the officials point out, will allow the government to ably face any new challenges to come in the future including elevation to mid-income status by the UN. The forecasted decrease in foreign aid, they note, will not dramatically impact Cape Verde’s core sectors, insomuch as the other foreign aid that Cape Verde will still receive, albeit less, will be strictly managed.

Further buttressing their argument, the official literature of the government affirms that the fact that Cape Verde has been promoted to mid-income status, in spite of its naturally adverse conditions (perpetual drought, for example) points to the sheer resiliency of Cape Verdeans. This factually backed argument weakens, if only a little, Mr. Gomes’ and others’ stance that Cape Verde has more to lose than gain with its promotion to mid-income status.

Anxiety about the future

Yet in spite of Cape Verde’s indisputable progress, average CVs in Cape Verde have a dispirited outlook about their future under a UN mid-development designation. In their defense, skeptics in Cape Verde point that on any given year, Cape Verde’s internal resources could feed no more than 30% of its population.

Cape Verde government officials acknowledge the above noted reality, but in defense of their optimism, they say that it’s not by mere chance that Cape Verde’s overall human development indexes have exponentially advanced to a level that it no longer is considered a “least developed nation” by the UN. Exceptionally good management of scarce resources, CV officials assert, are the reasons for Cape Verde’s earned promotion. The same strict management of resources will continue under the new UN designation, they reassure the population.

So Mr. Gomes and others who share his skepticism, the government rhetoric proclaims, need not have any unfounded anxiety or skepticism about their country’s transition to mid-developed status. Cape Verde will succeed, the officials firmly vouch. Chabala Musambachine shares this optimistic stance. In encouraging mode, she says, “If we, a landlocked nation, could successfully deal with our UN promotion from ‘least developed” to ‘mid-income’ status, so can you” Cape Verdeans, she added, “are no less able than we”.

Ms. Musambachine, a current resident of Chicago, Illinois, is a native of Botswana, a landlocked and drought ridden southern African nation that was recently promoted to mid-development status by the United Nations.

Thank you Miguel for a well written and balanced article on a very interesting subject.

In fact, Cape Verde is only the second country in the world (after Botswana), who goes through this transition to formally become a mid-income country (the Maldives were in the course to do so as well a few years ago, before they were hit by the Tsunami and the process stalled for obvious reasons).

Being a temporary guest here in Cape Verde, I think this is a good thing, something to be proud of and something that brings positive prospects for the future of this country. It means that CV has developed, that the economy is growing, that the health situation has improved, that school attendance is up, that people live longer... And also, in essence, that the government's policy is working.

I therefore also think that the CV government makes the right call and has the right approach in this graduation process – despite some legitimate doubt whether one of the key criteria for graduating – namely vulnerability due to isolation and limited possibilities for self-reliance – is adequately fulfilled.

Some hard figures (there are many more) lying behind the graduation include:
- CV economic growth has averaged 5.6% in real terms during 2001-2006.
- Inflation is low
- The mortality rate has decreased from 43.6 per thousand in 1995 to 20.2 per thousand in 2005
- The mortality of under five-year-olds decreased from 56 per thousand in 1993 to 22.6 per thousand in 2005
- Access to drinking water rose from 42% in 1990 to 85% in 2006

These are figures reflect real progress, and they should be celebrated!

As mentioned above this has also resulted in a significant step up in the Human Development Index, now ranking as number 102 of 177 countries in (see

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One possible, or even likely, downside of the graduation, is no doubt that overseas aid levels might drop. But not even this is certain; some donors are in fact pulling out, but others, like Spain, have recently initated a new large development cooperation programme here. And besides that, it is hardly sustainable to rely on very high amounts of foreign aid indefinitely anyway. One day or the other, steps must be taken to break this dependency, and this opportunity is as good, or better, than any other.

On the flip-side, I believe that it is almost certain that investments in Cape Verde will increase (even more than they have recently) as a consequence of the graduation. Potential overseas investors look at many things before investing, and one of them is no doubt the general economic status of the country as a whole. The formal recognition as a middle income country signals economic progress and stability. The graduation might thus become a self-fulfilling prophecy; the job of the government is now to make sure that incoming investments are sustainable and will benefit the people at large (see e.g. my article on sustainable tourism in this context -

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Finally, one should see this in combination with another important UN process, where Cape Verde is also considered progressive: the country is one out of only 8 UN pilot countries in the world who commit to the so called Delivering as ONE UN. This has at least two major advantages: first of all, the United Nations will, if everything goes as planned, be able to give a more concerted, coordinated, and focused support to the government of Cape Verde, eg to make sure that the transition process to a mid income country goes as smooth as possible. Secondly, many donors are interested in making sure that the UN reform process makes progress, and are therefore likely to pitch in additional overseas funding during the transition phase.

cape-verde in 10 to 20 years will be richer than portugal (per capita of course).

Cape-verde will welcome millions of tourist every year, will manage toimplant industries and will be used as a hub for industrial products for the three continents and the cape-verdean financial market will be buyoant. High rise building will start to pop up, and artificial islands will be created to welcom tourists.