The economy of this small poor West African island nation is almost entirely based on sustenance agriculture and fishing. The limited amount industrial activity is concentrated in the areas of light construction, textiles, soap making, brewing, and fish processing. Entrepreneurial activity is an entirely boot-strapped affair due to the lack of any structural means to invigorate the economic sector (the government is bankrupt and there is virtually no legal framework to protect individual and property rights). Successive coups (the most recent in July 2003) have further constrained the investment climate.

FDI is virtually non¬existent and capital investment is limited to international aid assistance programs. Nonetheless, there is potential for entrepreneurial ventures. Development of the tourism industry deserves special consideration due to the tropical ambiance of the islands. In addition, there is potential for economic activity in the oil industry if off-shore petroleum exploration pans out. Aquaculture also holds great economic potential due to the nutrient-rich deep water environment surrounding the islands. Finally, a construction boom is likely to occur in the next two to three years as the U.S. Department of Defense secures base-building rights on the islands.

It appears that Sao Tome & Principe is on its road to better economic prosperity. A project to commence a free trade zone, coupled with a newly elected female prime minister, demonstrate that this small African island country wants to show its newfound openness to new ideas. It seems the country is encouraged to conduct entrepreneurial activities, and the relation and attitude towards the U. S is a friendly one.

All this seems to indicate that there is an opportunity to conduct entrepreneurial activities in this country. From 1975-1990, the country was independent from Portugal but was under a Marxist regime. After 1990, country became democratic. Today, judged by the creation of a 100 squared km free trade zone, the country has signaled to all countries that it is a great time to invest.

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