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Mozambique: Poverty and Inequality
AfricaFocus Bulletin
Sep 10, 2010 (100910)
(Reposted from sources cited below)
Editor's Note
"Donors need to believe in the Mozambique success story, so they do
not look at anything which would challenge their comfortable
picture and would force them to rethink their consensus development
policy. But inequalities are growing and are now the major area of
conflict in Mozambique." - Joseph Hanlon
Strikingly, in response to the recent violence in Maputo and
Matola, the Mozambican cabinet decided Tuesday to roll back
increases in the prices of bread and other essential goods, and to
freeze any salary increases for top government officials and
executives of any companies in which the government has controlling
shares. Although the freeze is temporary, and the fundamental
issues have not been resolved, this seems to indicate pressure not
only from the demonstrators but from many others in the society.
This AfricaFocus Bulletin contains two background documents, one
excerpted from a study earlier this year by Joseph Hanlon, and the
other an update from Alcino Moiana of the Christian Council of
Mozambique on the government decisions rolling back the price
increases and taking other measures to respond to the crisis.
Another AfricaFocus Bulletin released today, not sent out by e-mail
but available on the web (http://www.africafocus.org/docs10/moz1009b.php) gives a summary
of events and a report from the Center for Public Integrity on the
issues of police conduct in the demonstrations earlier this month.
Related links:
John S. Saul, Mozambique: Not Then but Now"
AfricaFiles AtIssue Ezine, July 2010
http://www.africafiles.org/atissueezine.asp#art3
Additional background documents from Joseph Hanlon
http://www.open.ac.uk/technology/mozambique/
http://www.sarpn.org.za/CountryPovertyPapers/cppMozambique.php
UNDP, Gender, Poverty, & Inequality in Mozambique
http://www.sarpn.org.za/documents/d0002811/index.php
Afrobarometer Briefing Paper No. 87 August 2010
Economic Conditions, Living Conditions and Poverty in Mozambique
http://www.afrobarometer.org/publications/afrobarometer-briefing-papers
For previous AfricaFocus Bulletins on Mozambique, visit
http://www.africafocus.org/country/mozambique.php
++++++++++++++++++++++end editor's note++++++++++++++++++++
Mozambique: The war ended 17 years ago, but we are still poor
Joseph Hanlon
Pambazuka News 470, February 18, 2010
[Brief excerpts only. For full text, including analysis of earlier
periods, footnotes to sources, and additional background, see
http://www.pambazuka.org/images/articles/470/mozambique.pdf
Note: This paper was published in the March issue of the academic
journal, Conflict, Security & Development 10:1 March 2010.
It is available free at
http://www.informaworld.com/smpp/content~content=a919764673~db=all~jumptype=rss]
*Dr Joseph Hanlon ia senior lecturer in development and conflict
resolution at the International Development Centre of the Open
University, Milton Keynes; a visiting fellow at the Crisis States Research
Centre, London School of Economics; and the editor of the Mozambique
Political Process Bulletin.
Introduction
A return to war in Mozambique is highly unlikely, but the widening
chasm between rich and poor and growing social exclusion are
creating a 'serious risk' of conflict. This was the warning issued
by the Peer Review Mechanism Forum in Mozambique's self-evaluation
report to the African Union Peer Review in February 2009.
Similarly, Mozambique's Institute for the Promotion of Peace--an
association of former fighters from both sides in the 1981-92 war--
remarked in March 2009 that Mozambique seems at peace, but growing
economic disparities and socio-economic injustice are weakening the
peaceful transition. Mozambique's peace has been
remarkable--without any truth commission or international courts,
the 1992 peace accord has held without retributions and with former
foes serving together in parliament and the army.
One result is that Mozambique has become a 'donor darling', with
relatively high levels of aid. In 2007 the World Bank talked of
Mozambique's 'blistering pace of economic growth', while the IMF
said 'Mozambique is a success story in Sub-Saharan Africa,
benefiting from sustained large foreign aid inflows, strong and
broad-based growth and deep poverty reduction'. ...
One million people died in Mozambique's 1981-92 war, and one third
of the population had to flee their homes. In the aftermath there
was an intense feeling of 'never again'--everything must be done to
avoid violence. But 17 years later, there has been a subtle mood
change. Those who fought gained nothing, while their leaders have
become comfortable and prosperous. Furthermore, there is now a new
generation of young people who do not remember the war. With a
basic primary education they are moving into towns and cities to
try to earn a living in the 'informal sector' on the margins of the
law. ...
As the peer review self assessment stresses, the risk is not a
return to formal civil war, but rather the increased prevalence of
inchoate violence in communities. There was an unprecedented riot
in Maputo on 5 February 2008 and in early 2009 violent clashes
erupted between communities and the police. Most Mozambicans cannot
imagine a return to war, yet the poor and hungry may increasingly
resort to violence when they feel their lives and livelihoods are
threatened. ...
The third section [of this article] shows that economic
restrictions have eased but that the 'peace dividend' has been
modest. The article exposes the failure to reduce poverty and
highlights the growing gaps between the better off and the poor.
While Mozambique has been open to foreign investment and has
witnessed substantial GDP growth, the poor majority have not
benefited. ... Finally, the article draws the implications of the
bubbling popular discontent and disrespect for a system that has
not ended poverty or provided equitable opportunities to citizens.
It argues that Mozambique is not the success story that has been
painted by donors who have singularly failed to address looming
problems of increased poverty and jobless youth.
...
Rather than ethnic, language or regional divisions, the main
differences that could lead to violence are between rich and poor
and between urban and rural. Indeed, differences in economic and
social development within ethnic and language groups and within
provinces are much larger than average differences between groups
or provinces. Ethnic and language issues have not triggered
violence and seem unlikely to do so; rather very wide economic and
developmental differences have been, and will be, causes of
organised violence.
...
Twenty-first century--subservience and MDGs
After the turn of the century, concern began to grow about the
failures of the adjustment programme and that IMF limits on social
spending would prevent Mozambique meeting the Millennium
Development Goals (MDGs). Caps were eased. Then another, more
quiet, donor confrontation forced the IMF in 2006 to further lift
caps on aid spending in health and education. By the early 2000s
increasing numbers of donors were providing direct budget support,
and the Budget Support Group became the main donor policy forum. By
2007 there were 19 members and they signed an annual contract with
the government covering all policy areas, with donor
representatives at the heart of decision making processes within
government.
Mozambique truly is a 'donor darling' receiving US$ 65 per person
per year in aid, compared to Tanzania and Uganda (which have almost
the same GDP per capita as Mozambique and are often grouped with
Mozambique as IFI showcases of 'success') and Malawi (which is much
poorer than Mozambique), which each receive only US$ 42 per person
per year.
A joint donor-government study in early 2007 said 'Mozambique is
generally considered an aid success story', but that there is 'a
widespread perception that Government leadership and ownership of
the aid agenda has left donors in the driver seat'. A 2004 study
said 'high aid dependence means that the budget process essentially
involves only two actors, the executive and foreign donors.
Accountability to donors is much stronger than it is to Mozambican
society'.
...
'It's the economy, stupid'
Seventeen years after the end of the war, travelling through rural
Mozambique, one still sees destroyed shops and government
buildings. The Cold War may now be a dim memory in the US and
Western Europe, but its results are still a very real presence in
Mozambique. Two decades of structural adjustment and 17 years of
peace have not brought prosperity. There was real economic growth
after the war, as peasants reopened abandoned fields and the
rebuilding of roads and bridges increased rural trade. ...
The most severe constraint was that the IMF forced a steady
decrease in credit to the economy. An important policy shift was
that under BWI pressure the grain marketing board was closed,
ending storage facilities and guaranteed prices, and shifting all
of the risk onto peasants still recovering from war. ...
Agricultural technology and productivity levels remain low, and
there is little rural credit.
The central problem appears to be that too little money is going
into the rural economy and this is hindering economic development.
Total useable post-war aid has been US$ 12 billion--just over half
the cost of the 1981-92 Cold War proxy war. So the former 'West'
has not even given Mozambique enough to repair the damage it
caused. In addition to a simple lack of money, the BWI policy now
adopted by Mozambique is that the role of donors and the state is
to create human capital (through health and education) and build
infrastructure (roads and electricity), and on that basis, the
private sector will invest, develop Mozambique and end poverty.
...
This vision of development is popular with donors. ... But foreign
business people are not rushing in to invest in poverty reducing or
labour intensive production, so jobs are not being created. Most
foreign investment has been in mega-projects in the mineral-energy
sector--a US$ 1.5 billion aluminium smelter, a gas pipeline for
export to South Africa and titanium and coal mines. UNDP's
International Poverty Centre (IPC) issued a report on Mozambique in
September 2007 which argues that these mega-projects have created
few jobs and, because of tax exemptions, contribute little to
public revenue. ... The report concludes that the
donor/IFI-promoted 'mega-project based development strategy relying
on market opening has lost more jobs than it has created' and that
'its overall impact has arguably been to increase poverty'.
...
Increasing class differentiation and deepening poverty
GDP has grown at six to seven per cent per year for a decade.
Government claims that the number of people living below the
poverty line decreased dramatically from 69 per cent in 1997 to 54
per cent in 2003. These headline figures of high growth combined
with a dramatic fall in poverty are quoted by donors and government
as a mark of Mozambique's post-war success. But UNICEF points out
that children have poor nutrition in the overwhelming majority of
Mozambican households, and the rate of chronic child malnutrition
is actually rising. For both UNICEF and the World Bank this is a
'paradox'. In fact, it is not paradoxical at all, for two reasons.
Firstly, the decline in poverty has been exaggerated, and is based
on an effective change in the poverty line. If the line is not
moved, the government admits, poverty still falls, but only to 63
per cent. Because of population increases, the number of people in
poverty has increased from 11.2 million to 11.7 million. The
government contested my view that this second figure is more
accurate, but the African Peer Review Mechanism self-evaluation
report confirms that 'the most credible indicators show an increase
in absolute terms in the number of people below the minimum
subsistence line'. No other study shows a big fall in poverty.
For example, the UNDP Mozambique Human Development Report 2005
estimated that between 2000 and 2004 'real GDP per capita' fell
everywhere. Secondly, it is increasingly accepted that the gap
between rich and poor is widening with the poor becoming steadily
poorer and unable to properly feed their children. A series of
rural income surveys in 1995-96, 2001-02 and 2004-05 provide a much
more detailed picture. Officially, 70 per cent of the population is
classified as rural, so this also includes people in smaller towns.
These show a huge increase in differentiation. There was a general
increase in income between the first two surveys, but of the total
increase in rural income, 73 per cent went to the 20 per cent of
households with the highest incomes and less than three per cent
went to the poorest 20 per cent. For the next period,
differentiation accelerated, with the non-poor becoming better off,
but the poorer becoming poorer. ...
Finally, the surveys show that the position of people near the
poverty line is very precarious. Nationally, half of the rural
families considered 'not poor' in 2001-02 had fallen back into
poverty by 2004-05. Table II shows the high degree of insecurity;
in 2002, 30 per cent of rural families nationally were not poor,
but by 2005 half of them had fallen back into poverty, while 18 per
cent of the population had been able to rise above poverty. The
total change is small, just three per cent, but that hides a very
large movement up and down.
...
Interviews in rural areas frequently draw the response: 'the war
ended 17 years ago, but we are still poor'. The main conflict in
Mozambique is between classes, between the better off and worse
off, competing for the same resources. UNDP's International Poverty
Centre issued a damning report on Mozambique in September 2007
(http://www.sarpn.org.za/documents/d0002811/index.php). It said
that 'recent economic growth in Mozambique cannot be considered
pro-poor', and that instead benefits of economic growth are going
to 'a sharp rise in the consumption growth of the richest
households in the midst of a large impoverished population'.
Therefore, it called for 'a significant shift in the country's
development strategy'.
...
Inequality 'may jeopardise stability'
'Rising poverty and inequality in Maputo [ . . . ] may jeopardise
political stability', warned the Chr Michaelsen Institute (CMI) in
a study for the British Department for International Development
(DfID) in January 2008. 'In the bairros of Maputo, unemployment,
crime and high costs of food, housing and land inhibit the poor
from converting progress in education and health into increased
income and consumption. [ . . . ] The large number of educated but
unemployed and frustrated young men and women in the bairros, who
cannot manage to live up to ideals of urban modern life, may
jeopardise the current political stability'.
It was a prescient comment: demonstrations in Maputo on 5 February
and then four other towns against the high cost of living shocked
Mozambique. At least five people were killed and more than 100
injured, many shot by the police. Hundreds of young people, mainly
unemployed or scraping a living from the informal sector,
co-ordinated by mobile telephone text messages and blocked all the
roads into Maputo and many streets inside the city, quickly closing
the capital. Frelimo dismissed the rioters as marginals and
vandals. But it became clear that the young demonstrators had the
tacit support of their elders, and the government-owned daily
newspaper Noticias published a series of more thoughtful articles.
Editor-in-chief Rogerio Sitoe led the way with a column arguing
that the root cause was 'the religious way we applaud and accept
the prescriptions of the World Bank and International Monetary
Fund', when these are really 'poison prescriptions'. ... A
subsequent letter to the editor was published saying the
demonstrations were not vandalism, but a strike by the people
demanding their rights.
...
'Mozambique's present development model, based on free individual
initiative and the principles of a economic liberalism', is seen as
creating unemployment and leaving many families with not even
enough to survive, especially in urban areas, said the
self-evaluation for the African Peer Review in February 2009.77 The
principal beneficiaries of growth have been a tiny group. This is
polarising society, and creating 'serious risks' of conflict.
Conclusion
...
Donors need to believe in the Mozambique success story, so they do
not look at anything which would challenge their comfortable
picture and would force them to rethink their consensus development
policy. But inequalities are growing and are now the major area of
conflict in Mozambique. As some prosper, allegedly because of party
or other connections, the lack of jobs and agricultural support for
the majority are becoming sources of grievance. The poor feel under
threat and fear for their lives; they implicitly understand that
they are subject to structural violence.
Few people who suffered in the wars would voluntarily return to
war. But half of Mozambique's population is too young to remember
them. Their experiences and expectations are very different from
those of their parents. Increasingly people in their late teens and
20s at least have some primary education and speak the national
language, Portuguese. They see themselves as better educated and
more 'modern' than their parents, and have more contact with a
wider world through mobile telephones, videos and more travel (even
if only to the nearest market town, with electricity and discos).
Many young people do not see themselves as hoe farmers like their
parents.
...
Preventing violent conflict requires giving the young and poor a
future and a stake in society--not a trickle down free market that
might, some day, perhaps, solve their problems, but active
intervention to tackle grievances and create jobs and agricultural
markets. Is the donor herd so mesmerised by a few good statistics
that they cannot see the growing poverty outside the capital?
Preventing violent conflict requires Mozambique to become an
activist, developmental state which intervenes in the economy, and
gives all Mozambicans a stake in the future.
Update from Alcino Moiana
Alcino Moiana
Country Program Manager/Gestor de Programa
Economic and Social Justice Desk
Conselho Cristao de Mocambique
1584 Agostinho Neto Ave
P.O.Box 108
Maputo - Mozambique
Tel. (+258) 21 325 103; Fax (+258) 21 492 702;
Mobile (+258) 82 3827 200
Email: alcinomoyana@gmail.com
website: http://www.ccm.co.mz
September 8, 2010
Dear Friends and Economic Justice activists
I must quote a very old popular adage which says : " After the
storm comes a calm", I am saying this due to the last happenings in
Mozambique, which most of you have been following related to the
current riots, which resulted in 15 human loss and more that 250
injured people, thousands of Meticals (local currency) in
prejudice. It is said that this was the first most violent protest
ever seen in the history of the country followed by the very first
one which took place on 5 February 2008, where the protesters
claimed the same issue related to the rise of price for basic
goods. The current one were more violent since the government did
not realise the impact of raising at the same time the price on
bread, electricity, petrol and water, which were going to have
their extensive impact on other goods such as public transport,
basic food products and other commodities. So through the power of
new technologies, I am talking about the SMSs the unknown face of
the riots spread the message all over the Mobile users and the
message was multiplied for many other calling for demonstrations of
1 September which were extended till 2 September and in very minor
proportion in some provinces for the subsequent days.
The very first day of the riots, most of the citizen expected the
President to have a saying on television which did not happen till
the end of the day when the sun was going down, but even though he
did not say much than sympathize with the bereaved families and
those injured or those who have seen their properties vandalised by
the riots, but maintain the speech that there is no point to knock
down or reduce the prices, he said it with arrogance and frustrated
a lot of citizen that were looking forward for the going back of
the government in its measurements of rising the prices. A day
after the president address in the television, the cabinet held an
extraordinary meeting (2nd of September), and during the briefing
the spokesperson of the Cabinet maintained the same speech as the
President. The ordinary citizens were patiently looking forward to
seen and reverse from the government and it took like 7 days to
happen, just yesterday during the public holiday when the country
was celebrating 36 years of Lusaka agreement with the Portuguese
colonialist, well known in Mozambique as the VICTORY'S DAY.
The government did not celebrate with other Mozambican since, I
think there was no reason to celebrate. Celebrate what???? exactly.
The cabinet met and came out with very interesting measurement,
which shows its yielding to social movement pressure exercised by
the people. It is interesting because the protests in Mozambique
did not have any face, the Trade Union which is well known as
FRELIMO's wing did not say a word till today, which made everyone
wonder about its muteness.
What we know is that the riots where convened by the people who
feel the pain of the prices rising. Following the Cabinet meeting
the announced measurement though are band-aid solution for they
will be reviewed on December to see their sustainability, but they
meet the expectation of most of those the government called them
bandits, vagabond, marginal, unemployed army and many other names,
now the same government admitted its mistake. the measurements are
as following;
- To remove the tariff on electricity for the consumer of social
level till 100 kwh;
- Reduce the announced tariff of electricity for the consumers of
domestic levels from the pre-paid system;
- to eliminate the double collection of the waste tax in the
electricity bill for the pre-paid consumers;
- Facilitate the new connections of electricity power for the
families of poor background living in the Outskirt of the cities,
paying a promotional amount of 875 mts that could be paid in form
of installment
- Reduce the tax for domiciliary water connection in 50% from
4.000,00 Mts to 2.000 mts with possibilities of paying in
installment;
- Maintain unchanged the water tariff of 150 Mts/Month for the
consumers till 5 cubic meters equivalent to 5 thousand litres;
- Maintain the previous price of bread through introduction of
subsidies;
- Maintain the fiscal measurements in force for potatoes,
tomatoes, eggs, onion, namely, setting up the price of reference
below the real ones for the collection of customs duties and VAT;
- To reduce the price of rice of 3rd quality in 7.5% delaying the
customs rights on this product;
- To suspend temporary surtax on the sugar imports;
- To freeze and salary increase and subsidies for the senior
government staff till the government conclude its assessment in
course;
- To freeze the increase of salaries and subsidies for the
members of the board of trustees of the Public companies and the
companies that government largely have shares, obliged to pay their
salaries in local currency;
- To negotiate commercialization limits for the products covered
by these measurements; The freezing of indicated increase of salaries aim to obtain
savings for further orientation for the necessary subsidies. Then
the fiscal measurements have a transitory power till December 2010,
having in account their unsustainibility at medium and long term,
conditioned by the international state of affair;
Macro-Economic Measurements
In order to secure the sustainability of the taken measurements,
the government decided, equally, to accelerate the implementation
of the action if the macroeconomic areas namely:
- To hold the public expenditures for the sake of savings for
further orientation and for the subsidy of the essential products,
through rationalization of the running costs, in particularly in
the budget lines on: Flight tickets (reduction of trips locally and abroad and
redefinition of the use of Executive class), perdiems, petrol,
lubricants and communications;
- Not deliverance of obligatory fund for the budget line of goods
and services;
- Not approval of supporting funds without compensation;
- Not establishment of new state bodies which result in additional
expenses to the state budget;
- Reinforce the measurement aiming to stabilize the local currency
Metical;
- Discipline the bank activities intensifying the oversight in the
financial institutions;
- Reinforce the monitoring mechanism of entry and exit of foreign
currencies;
- Reinforce the obligatory character of fixation, invoicing and
payment of expenses in local currency what contributes for the
preservation and valorization of Metical;
- Reinforce the oversight on the pricing of products within the
commercial shops;
- To privilege the consumer of low income in the review of
electricity and water tariff;
- Maintain and guarantee the subsidies for public urban transport;
- To analyse the structure of imported products to mind for incomes
of different social structures;
So this is a summary of the measurements announced by the
government Yesterday. However, there is a need to monitor and
advocate for more comprehensive social policies to avoid future
embarrassment.
A Luta Continua.
With Blessings
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
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