Soon after taking power, Obiang sought to reestablish relations with Spain, which had deteriorated during his predecessor's regime. As a measure of his success, Spain signed permanent agreements to provide economic and technical assistance.
Obiang also moved to develop relations with France. In 1985, Equatorial Guinea joined the African Financial Community, switching currencies to the fully convertible Communauté Financière Africaine franc (CFA franc). Soon afterward, he instituted a policy of compulsory study of the French language in the schools in an effort to make the country bilingual in Spanish and French. In 2001, the promise of financial aid from France inspired collaboration on two development projects designed to reduce poverty and refurbish infrastructure, including bridges and schools in rural districts. French technical advisors work in the finance and planning ministries on these and other projects.
Through the late 1980s, however, relations with others in the international community began to sour. Donors began linking development assistance to political and economic reform, a policy that Obiang viewed as a direct assault on his country's sovereignty. During both the 1993 and 1999 parliamentary elections, diplomatic relations with the West were severely strained or severed because of questions from outside the country about the progress of political reform.
Relations began to soften however, with the discovery of oil. In fall 2001, U.S. president George W. Bush authorized the opening of a new embassy in Malabo. In fact, the United States buys over two thirds of the 500 million barrels of oil that Equatorial Guinea produces. The influx of foreign oil investors was projected to contribute to a 34% growth in the economy in 2002.
Equatorial Guinea is a member of the Central African Economic and Monetary Union (CEMAC), which includes Cameroon, Central African Republic, Chad, Congo/Brazzaville, and Gabon. However, as of 2003, Equatorial Guinea was involved in a number of territorial disputes with its neighbors, including Nigeria, Cameroon, and Gabon, because of offshore oil fields.