Joseph Hanlon
PEACE has not brought prosperity to Mozambique. Four years after the end of the civil war, the poorest country in the world is growing poorer.
The reason is that the International Monetary Fund (IMF) has ruled that annual inflation must be brought below 15%t before there can be significant post-war reconstruction. This policy is called “stabilisation”, but the former finance minister, Magid Osman, warns: “Putting stabilisation first makes instability more likely.”
Delaying reconstruction is the opposite of the successful policies of Europe and Asia in the 1940s, after the World War II. But the IMF is taking a narrowly monetarist line, arguing that the already minimal level of demand must be further reduced to bring down inflation before investment can be allowed to increase supply.
Mozambique was a cold war battlefield: the decade-long conflict killed a million people and caused damage in excess of $25,3-billion. The war ended with a peace accord in 1992 and highly praised multi- party elections in October 1994.
Donors want to help Mozambique rebuild, but the IMF has insisted that donors spend
$190-million less this year than in 1994 on reconstruction, which it regards as inflationary.
Fears are growing that people will see no gains from peace and democracy. “If the government does not renegotiate its accord with the IMF, peace is threatened,” warns Pedro Chibala, an official of Sintract, the independent drivers’ union.
Last year there was good rainfall and a record maize crop. The 1,7-million returned refugees look forward to earning their first big cash surplus. But piles of maize remain unsold: thousands of tons will rot.
Roads remain closed because the IMF has forced the government, donor nations and the World Bank to cut back on road repairs.
The IMF policy has now been in force for more than five years, but is a manifest failure, even in the organisation’s own terms. In the late 1980s, at the height of the war, Mozambique imposed its own modified adjustment policy, which led to significant growth and falling inflation. By 1991, gross national product (GNP) per capita had risen to $115 and inflation had fallen to 21%.
That year the IMF imposed its stabilisation policy. Each year since then, GNP per capita has fallen. Mozambique now has a per capita GNP of $100, the lowest in the world, according to the United Nation’s 1996 Human Development Report. Industrial production rose in the late 1980s – during the war – but has fallen each year since stabilisation was imposed and is now half of the 1990 level.
The Catholic Bishop of Nampula, Dom Manuel Vieira Pinto, says that “the IMF must stop looking only at its computers and look at real people in Mozambique”. And he asks: “Will this all end violently?”