Very often these exports could go nowhere else. Portuguese law requires Angola and Mozambique to buy out many Portuguese products before purchasing any competing products from other countries.

If there is an excess of textiles or fertilizers in Portugal, merchants in the colonies must buy them even if comparable foreign-made products are cheaper and better. This arrangement allows an inefficient factory in Portugal to function and even prospet. Without the captive colonial market, the products wouldn't be sold.

One incident which particularly piqued Angolan merchants stemmed from a shortage of powdered milk, important in Angola because there are no pasteurizing plants in the main cities. When the merchants found powdered milk hard to come by, they applied to the Overseas Ministry from permits to import foreign-made powdered milk.

The ministry denied the permits," because, it said, an oversupply of powered milk existed in Portugal. When the powdered milk finally arrived in Angola, the merchants discovered the oversupply in Portugal consisted of imports from Holland an Spain.

IN THESE ECONOMIC terms, the Portuguese approximate a classical colonial pattern. In other ways, they go directly against it.

The strongest example of this is the policy of multiracialism, a practice which the Portuguese are fond of correctly pointing out as unique in the history of European involvement in Africa.

The Portuguese are not racist in the way other European colonialists were in Africa. They follow nothing similar to the apartheid policies of South Africa and Rhodesia. No color bar exists in employment practices, property ownerhip, or social intermixture.

Black children and white children often attend the same schools. Blacks and whites live alongisde each other in rich districts and poor districts alike.

"In our laws, there are no differentiations." Rebocho Vaz, the Portuguese General of Angola, observed. "There are no blacks and no whites. We are all Portuguese."

Yet, even though there is no de jure racism in Angola, the situation remains one of de facto racism on nearly every level of life.

Over five million black people are ruled by a tiny group of white bureaucrats from Lisbon. Although many blacks hold lower echelon government posts, all of the decision-making power is in the hands of the whites.

The cause of this uneven distribution of power, most Portuguese explain, is the lack of education among the blacks. The black man who has acquired an education, they say, has nothing to prevent him from rising to the top.

Yet educated blacks, who have become completely assimilated into the Portuguese way of life, still face discrimination. A mulatto lawyer who works as legal counsel to a large foreign firm was turned away when he applied for an apartment in one of Luanda's high-class districts. Other educated blacks report their advancement frustrated by increasingly stiff barriers to promotion as they rise in the economic hierarchy.

The ruling Portuguese see a special, limited role for the blacks in the development of Angola. As Premier Caetano himself expressed it, "The African needs the aid of the men who created and practice the techniques without which collective life nowadays is unthinkable. But the African societies must be built up fraternally by white and black together, where some will provide their experience and their technology, others the valid elements of their culture."

The most pervasive racist practice, and the one the one that most blacks come in contact with and feel the most resentment about, is unequal pay scales for black and white workers. It is the exception, not the rule, to find a black man's pay equal to a white man's for doing the same work.