A government committed to a free market economy was elected in 1991 and reelected in 1995. Then, in 2001, the more socialist party, PAICV, regained power. Currently investments continue to rely both on overseas aid revenue and tourist development, but the situation may change with the next elections, due in February 2008.

For the last decade the country has bad legislation designed to encourage foreign investment, particularly in fishing, light industry and tourism. It has promoted Cape Verde's advantages as the following: a strategic position close to Europe, west Africa and the Americas; a young and motivated unskilled workforce which is 70% literate, a professional workforce whose members general NT have degrees from foreign universities; a stable political system with good human rights record and low crime rate, and a moderate tropical climate.

The fishing industry needs substantial investment but is said to have huge potential. Cape Verde has an exclusive economic zone of 180 times its land area, or 734,000km and is therefore one of the last significantly under-used fishing zones in the world. The estimated annual sustainable catch is 45000 tonnes, of which 6,000 is caught at present, mainly by artisanal fishermen. There is potential for large catches of tuna, lobster, shark and molluscs.

Over the last few years there has been substantial investment in ports, including wharves, warehousing, cold storage and repair facilities. A business park has been built in Praia.

Various regions have been earmarked for beach tourism development, zones on Sal, Boavista, Maio, Santiago and Sao Vicente - the last two in small areas. Other regions have been targeted for adventure tourism, in particular Santo Antoa and Sao Nicolau and there is also believed to he scope for cultural tourism in Santiago, Sao Vicente and Sao Nicolau.

Investors must provide their own, desalinated water and meet various architectural standards, amongst other requirements. In return there are tax exemptions mentioned below.

Cape Verde has unfulfilled quotas for products sent to the USA through the most favoured nation status and the generalised System of preferences. It has preferential access to European markets through the Lome Convention; and to west African markets through the Economic Community of West African States (ECOWAS).

The lack of adequate infrastructure, in particular inter-island transport, sanitation and water, has put a significant brake on tourism development. Many ports have been modernised, including Porto Grande at Sao Vicente and Porto Vale de Cavaleiros a fogo, and the harbours on Boa Vista and Maio.