I.   Commercial Overview

 Cape Verde is a small nation consisting of ten islands with
 a very poor natural resource base, aggravated by sustained
 drought.  Lack of water serves as a major constraint to
 economic activity, as does a set of other infrastructural
 and human resource deficiencies. One result of the lack of
 resources is the total dependency on import. The fact is
 that the country has scarcely any exports and depends only
 on a small and weak internal market.

 Imports average twenty times the value of exports even
 without taking into account a significant volume of goods
 that enter the country unrecorded through informal
 channels. The value of total imports in 1993 was US$74
 million. Imports are made up of basic consumers goods,
 manufactured and industrial equipment, etc..

 Although official commercial contracts with American
 enterprises are not common, there is a great demand for
 American goods and services.  In 1993, the U.S. was the
 seventh most important trading partners with an official
 GOCV market share of 3.4%.  Portugal is by far the largest
 trading partner, accounting for 33.1% of imports in 1993,
 followed by other EC countries. The business community is
 very much aware of the superior quality of American
 products and its attitude towards the U.S. is very
 positive.  In addition, the GOCV is encouraging
 diversification of foreign trading partners.

 During the post-independence era, Cape Verde followed a
 pattern of inward-looking growth and development policies.
 This model led to high tariff and non-tariff trade barriers
 intended to protect domestic industries.  Such policies
 ultimately led to a declining economic performance and the
 emergence of internal and external imbalances in the late
 1980s.  In 1991, a new government started to reduce trade
 and investment barriers, recognizing the need to integrate
 the country into the global economy.  The new economic
 strategy is characterized by the liberalization of the
 economy, the development of private sector and the
 promotion of external investment.  A number of economic and
 administrative reforms are being implemented, contributing
 to a more conducive business environment. These include
 trade liberalization and removal of the state monopoly in
 commerce, greater private sector participation in the
 economy, price liberalization, legal, regulatory and
 administrative reforms.

 As to major roadblocks to doing business, lack of access to
 commercial credit is the universal sentiment of all private
 sector agents. In addition to that, there is a lack of
 private sector leadership and organization; and the
 domestic market is weak and small.