Angola continued to face a triple transition from war to peace, from devastation to reconstruction and from a state/elite patronage system to a transparent market economy. The first two advanced further, with concerns expressed over delays in the third and government's commitment to reform. Key questions, including the date of elections, remained largely unanswered in the year, although the movement into a post-conflict situation under government control continued. Little happened in terms of government's spreading growth beyond the capital-intensive oil sector to create the conditions for labour-intensive poverty-reducing growth and to allow a genuine private sector to develop. Despite rhetoric on increased transparency, accountability and democratisation, little was accomplished to overcome the gap between rulers and ruled. Nor was there much done to address the needs of, or instability in rural areas or shanty towns.
The government again used the Angolan political economy to consolidate its power. The presidency continued through its vast patronage network to ensure dominance, despite little improvement in the condition of the people. Angola's massive oil revenues, high oil prices, economic growth, access to Chinese and commercial loans, invulnerability to outside or internal pressure plus good relations with the US continued to afford it a good deal of autonomy. Inflation was the lowest in decades. Angola sought to improve its world standing and overcome its reputation for lack of transparency, corruption and military meddling in neighbouring countries. It sees itself as a regional player between Nigeria and Pretoria/Tshwane. Although Angola became China's biggest oil supplier, relations with Beijing cooled off somewhat.
There was little change in the year as the government consolidated its framework for the future, particularly its own continuation in power, and there was little sign of the promised decentralisation. Increasing elite confidence was shown in the cavalier stance on elections, now postponed until 2008 and 2009, six years after the end of the civil war.
Angola in its second full year of peace continued to face a triple transition: from war to peace, from central planning to a market economy and from devastation to reconstruction. War had precipitated urban flight and the collapse of agricultural systems and internal trade. The challenges remained a fragmented national economy, a history of financial embezzlement and misappropriation of funds, a lack of international confidence and donor coordination, poor administrative capacity, a large child population at risk from disease, and weak opposition and civil society that were unable to affect social and political developments.