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Aid, Debt, and the End of Sovereignty: Mozambique and Its Donors

Published online by Cambridge University Press:  11 November 2008

David N. Plank
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By the World Bank's reckoning, Mozambique is the poorest country in the world, with a gross domestic product per capita of approximately $80 in 1990, as well as one of the most dependent on foreign assistance, which accounts for two-thirds of measured G.D.P. Indeed, aid receipts per capita amounted to approximately $60 in 1990, almost double the figure for sub-Saharan Africa, as may be seen from Table I.

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Articles
Information
The Journal of Modern African Studies , Volume 31 , Issue 3 , September 1993 , pp. 407 - 430
Copyright
Copyright © Cambridge University Press 1993

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References

1 See, for example, Hanlon, Joseph, Mozambique: who calls the shots? (London, 1991),Google Scholar and Bowen, Merle L., ‘Beyond Reform: adjustment and political power in contemporary Mozambique’, in The Journal of Modern African Studies (Cambridge), 30, 2, 06 1992, pp. 255–79.CrossRefGoogle Scholar

2 The term ‘donors’ is in many respects misleading, since the main multilateral agencies are lenders, while a lot of bilateral assistance stays for a relatively short time in the recipient country before returning to Europe or North America, notably in the from of ‘tied’ purchases of commodities, as well as salaries/allowances for consultants.Google Scholar

3 For analyses of the colonial economy, see Henriksen, Thomas H., Mozambique: a history (London, 1978);Google ScholarVail, Leroy and White, Landeg, Capitalism and Colonialism in Mozambique: a study of Quelimane district (London and Minneapolis, 1980);Google ScholarIsaacman, Allen and Isaacman, Barbara, Mozambique: from colonisation to revolution, 1900–1982 (Boulder, 1983);Google Scholar and Hanlon, Joseph, Mozambique: the revolution under fire (London, 1984).Google Scholar

4 Torp, Jens Erik, Denny, L. M., and Ray, Donald, Mozambique, São Tomé & Príncipe (London, 1989), p. 30; Henriksen, op. cit. p. 226Google Scholar; and Hanlon, , Mozambique: who calls the shots?, p. 10.Google Scholar

5 For discussions of the origins and tactics of Renamo, see Geffray, Christian, La Cause des armes au Mozambique: anthropologie d'une guerre civil (Paris, 1990);Google ScholarFinnegan, William, A Complicated War: the harrowing of Mozambique (Berkeley and Los Angeles, 1992);Google Scholar and Wilson, K. B., ‘Cults of Violence and Counter-Violence in Mozambique’, in Journal of Southern African Studies (Oxford), 18, 4, 1992, pp. 527–83.CrossRefGoogle Scholar

6 Torp et al. op. cit. pp. 33–6.

7 Mozambique, ‘Policy Framework Paper, 1991–1993’, Consultative Group, Paris, December 1991.

8 United Nations Development Programe/World Bank, African Development Indicators (Washington, DC, 1992), p. 159.Google Scholar

9 Bowen claims in loc. cit. p. 267, that the termination of a migrant-worker agreement with the former German Democratic Republic and the consequent return of 14,000 migrants will continue to cost the Government of Mozambique $30 million annually.Google Scholar

10 ‘Policy Framework Paper, 1992–1994’, p. 2. According to the Plano Económico e Social, 1992 (Maputo, 1992), p. 49, the slowdown in growth in 1990 and 1991 was caused to a great extent by delays in the disbursement of aid by major donors, including the World Bank, which constrained imports.Google Scholar

11 The World Bank did not disburse any funds to Mozambique from December 1990 to August 1992, and the European Community recently suspended its commodity import programme, pending an accounting of past counterpart funds. The Swedish Government also cut its 1992 bilateral assistance, partly because of Mozambique's failure to account for past aid revenuesGoogle Scholar. See Sharpley, Jennifer, ‘Macroeconomic Evaluation of Sweden's Import Support to Mozambique’, Food Studies Group/ International Development Centre, Oxford, 1991Google Scholar, and Mozambique, ‘Strategy and Programme for Economic and Social Development, 1992–1994’, Consultative Group, Paris, December, 1991, p. 21.Google Scholar

12 World Bank, World Development Report, 1991 (Washington, DC, 1991), pp. 250–1. The average debt burden for all countries in sub-Saharan Africa is approximately equal to annual G.N.P., and less than four times annual export earnings.Google Scholar

13 ‘Policy Framework Paper, 1991–1993’, p. 24, and Plano Económico e Social, 1992, p. 58.

14 Plano Económico e Social, 1992, pp. 59–60, and Sharpley, op. cit.Google Scholar

15 ‘Policy Framework Paper, 1991–1993’, p. 25, and U.N.D.P./World Bank, op. cit. p. 159.

16 World Bank, Restoring Rural Production and Trade Washington, D.C., 1990. cited in Sharpley, op. cit. pp. 13–15.Google Scholar

17 In Mozambique, growing reservations about the efficacy of the I.M.F.'s prescriptions have recently been expressed by the Nordic countries and some U.N. agencies.Google Scholar

18 For recent reviews of experience with structural adjustment policies, see Bourguignon, François and Morrison, Christian, Adjustment and Equity in Developing Countries: a new approach (Paris, 1992),Google Scholar and Corbo, Vittorio, Fischer, Stanley, and Webb, Steven B., Adjustment Lending Revisited: policies to restore growth (Washington, DC, 1992).Google Scholar

19 Economic Commission for Africa, African Alternative Framework to Structural Adjustment Programmes for Socio-Economic Recovery and Transformation (Addis Ababa, 1991)Google Scholar, and Ribe, Helena, Carvalho, Soniya, Liebenthal, Robert, Nicholas, Peter, and Zuckerman, Elaine, How Adjustment Programs Can Help the Poor (Washington, DC, 1990).Google Scholar

20 See Gloyd, Stephen, ‘Manipulation of Health Policy through Foreign Assistance: a case study from Mozambique’, Annual Meeting of the African Studies Association, Seattle, November 1992.Google Scholar

21 For a discussion of these problems, see Plank, David N., ‘Foreign Assistance and the State in Mozambique’, Annual Meeting of the African Studies Association, Seattle, November 1992.Google Scholar

22 Cf. Finnegan, op. cit. and Bowen, loc. cit.

23 For a statement by Mozambique's President regarding the influence exercised by the principal donors, see Saul, John S., ‘Mozambique: the failure of socialism?’, in Southern Africa Report (Toronto), 6, 1990, p. 21.Google Scholar

24 A related dilemma has been discussed in rather different terms by Bates, Robert H., ‘The Political Basis for Agricultural Policy Reform’, in Commins, Stephen K. (ed.), Africa's Development Challenges and the World Bank: hard questions, costly choices (Boulder, 1988), pp. 115–32.Google Scholar

25 ‘Policy Framework Paper, 1992–1994’, p. 13.

26 Sharpley, op. cit. and Bowen, loc. cit.

27 One representative of a bilateral agency interviewed in Maputo in July 1992 characterised the World Bank as a ‘door-mat’ because of the softness of the conditionalities imposed on recent loans to Mozambique.

28 ‘Policy Framework Paper, 1991–1993’, p. 13.

29 For a review of problems with policy-based assistance and structural adjustment, see Plank, op. cit.

30 For explications of the traditional justifications for aid, see Krueger, Anne O., Mischalopoulos, Constantine, and Ruttan, Vernon W., Aid and Development (Baltimore, 1989),Google Scholar and Ruttan, Vernon W., ‘Why Foreign Economic Assistance?’, in Economic Development and Cultural Change (Chicago), 37, 1989, pp. 411–24.Google Scholar For a critique, see Bauer, Peter T., Equality, the Third World, and Economic Delusion (London, 1981).Google Scholar

31 Nevertheless, the Swedish International Development Authority (Sida) has recently reduced its bilateral aid to Mozambique, ostensibly in response to a local diplomatic incident and the Government's insufficient display of remorse, but also because of deteriorating economic conditions in Sweden.Google Scholar

32 As one representative of a bilateral donor in Mozambique explained when interviewed in June 1991, ‘We provide aid on a government to government basis, and there is no government here. If we are to provide aid we need to increase the capacity of the government’.Google Scholar

33 See World Bank, The African Capacity Building Initiative: toward improved policy analysis and development management (Washington, DC, 1991), and World Development Report, 1992.Google Scholar

34 For example, in a discussion of the decline of Makerere University during the Idi Amin period, the World Bank asserts in The African Capacity Building Initiative, p. 11, that policy-analytic capacity must be maintained, ‘untidy domestic political situations notwithstanding’. Bates suggests in op. cit. p. 129, that a useful rôle for the Bank in Africal would be to encourage ‘economic literacy’ among policy-makers.Google Scholar

35 My colleague Rolland Paulston has suggested that a better response would be to reduce the compensation of international consultants by 90 per cent.Google Scholar

36 Corruption in Mozambique has to date been mainly restricted to the administration of specific activities, including the allocation of loans through state-controlled banks and the marketing of imported food.Google Scholar

37 As Nkinyangi, John A. has pointed out in ‘Student Protests in Sub-Saharan Africa’, in Higher Education (Amsterdam), 22, 1991, pp. 157–73, demonstrations against increased fees or reduced subsidies are often based on demands that the government eliminate official corruption and waste rather than cutting back social expenditures.Google Scholar

38 During the past year Kenya and Malawi have attempted to comply with their S.A.P.s and have had their aid cut off anyway, because of their disregard for human rights and electoral democracy.Google Scholar

39 The World Bank's recent insistence on the establishment of democratic institutions is notably unrealistic in the context of mandatory structural adjustment. Some of the policy reforms being demanded are virtually impossible for an elected government to implement, as continuing U.S. difficulties in reducing the federal deficit illustrate.Google Scholar

40 The recent extension of externally-imposed conditionalities to include progress towards electoral democracy and increased respect for individual rights (as in Kenya and Malawi) is to be welcomed on one level, but clearly marks a dramatic enlargement of the sphere in which donors will now exercise control over African governments.Google Scholar

41 Cf. Davidson, Basil, The Black Man's Burden: Africa and the curse of the nation-state (London and New York, 1992).Google Scholar