A lost paradise marks the spot at the 'centre' of the world, the point at which Greenwich Mean Time meets the Equator. São Tomé and Príncipe is made up of beautiful islands that combine unspoilt rainforest and golden beaches with fading architectural splendour.

São Tomé and Príncipe is one of Africa's smallest nations. It lies 300 kilometres east of Gabon and its two main islands are 150 kilometres apart. The local culture has yet to be conquered by Coca-Cola, cigarettes or mass tourism and the islands stand out proudly in the ocean with a confidence born of separation from such global 'ills'.

Indeed, isolation shapes much of life here. The capital, São Tomé City, is becoming the main population centre. This has made areas in the south of the island without telephones or electricity feel comparatively isolated, with few connections and very poor roads. Travellers heading for the southernmost tip of the island will be asked by locals to take letters to distant loved ones.

Príncipe is even more remote: only 4.3 per cent of the total population live on the island, and problems with the boat service mean an expensive plane journey is the sole reliable connection. The cost of communications, the lack of a deep-water port and the few air connections all stand in the way of external links, even with neighbouring African states.

The islands were 'discovered' by the Portuguese in 1470 and remained under colonial rule until independence in 1975. In colonial days, São Tomé and Príncipe's existence revolved around a plantation-based economy that relied on the repression of workers, harsh living conditions and very low levels of education and healthcare. Independence was ill-prepared for. The 2,000 Portuguese residents simply fled, leaving behind a costly infrastructure, an economy reliant upon the precarious international cocoa market and a dearth of locals with technical or managerial training.

Despite this, the new government, led by President Pinto da Costa, initially delivered on its promises of improving the quality of life for Santomeans. Literacy levels rose from less than 20 per cent at independence to 57 per cent in 1981 and an impressive 73 per cent in 1991. There were also dramatic improvements in health and education.

Problems, however, were just around the corner. In the 1980s the cocoa price began to crash and serious borrowing was necessary to subsidize the quasi-Marxist government programme. The situation was unsustainable and the country moved towards democratic elections and a free-market economy. The first multi-party elections were held in 1991, and the transition to democracy was peaceful.

The country's foreign debt mounted fast in this period as export revenues fell and import needs remained high. Today, the country has the heaviest debt burden in the world relative to the size of its economy and to its foreign-exchange earnings. Per- capita income has plummeted from $714 in 1994 to $438 in 1997. The struggle now is to find a way of protecting the education and health achievements while steering the economy away from its long-standing and ultimately debilitating dependence on cocoa.

Agrarian reform in 1993 redistributed land to small-scale farmers. In a country that enjoys lush fertility, this has encouraged both food self-sufficiency and crop diversification. Plans to set up a Free Trade Zone are under way, and the Government is carefully trying to unpick its isolation and find a positive role for the islands in the new international order. Since 1998 it has curbed inflation, stabilized the exchange rate, and made real headway in balancing the country's budget. This will strengthen the Govern- ment's bid for international debt relief. There are also oil reserves which US and French companies are investigating.

What remains to be seen is how ordinary Santomeans might benefit from such opportunities - and be protected from the undoubted risks.

Zelda Fazaeli

AT A GLANCE

LEADER: President Miguel Trovoada; Prime Minister Dr Posser da Costa. ECONOMY: GNP per capita $438 (Gabon $3,950, Portugal $10,160). Monetary unit: Dobra (Db). Main exports: cocoa (88%), coffee, bananas. External debt: $267.3 million or $2,036 per person. The total external debt stood at 465% of GDP in 1997 and servicing that debt took up 72% of export earnings. PEOPLE: 132,678. HEALTH: Infant mortality 61 per 1,000 live births (Gabon 85, Portugal 7). Maternal mortality 131 per 100,000 births. Health conditions have deteriorated since the economic problems of the late 1980s. Environment Boasts the second most important primary rainforest in Africa. The main problem is construction workers taking sand from the beaches. CULTURE: The population comprises: Angolares, reportedly descended from survivors of a slave ship wrecked in the 1540s; Forros, descendants of the first Portuguese settlers and freed slaves; Serviçais, contract labourers from Cape Verde, Angola, Mozambique; and Tongas, descendants of Serviçais. Religion: Mainly Catholic though other churches and Islam now more prevalent. Traditional beliefs also still strong. Language: 99.8% of the population speak Portuguese and 73.5% speak lungwa Santomé, the main creole dialect. Sources United Nations System Common Country Assessment 1998; National Human Development Report 1998; The State of the World's Children 1999. Never previously profiled