24 January 2008
Maputo — The reduction in rural poverty in Mozambique "is one of the greatest success stories anywhere in the world", according to a new World Bank study.
A summary of the study, entitled "Beating the Odds: Sustaining Inclusion in Mozambique's Growing Economy", was unveiled in Maputo on Thursday, first at a two hour meeting with government officials, and then at a press conference. The entire report will be available on the World Bank website next week.
The study is remarkable in that is more effusive about the success of poverty reduction than the Mozambican government's own documents (even though drawing on much the same statistical basis, provided by the country's National Statistics Institute, INE).
It declares "The continuity in growth and in poverty reduction in Mozambique is one of the longest in low income countries". Usually, growth cycles in non-oil producing low income countries "exhaust themselves after about seven years", but Mozambique had avoided cyclical booms and busts.
"Through good policies, which have provided political and economic stability, Mozambique has so far managed to beat the odds in terms of sustained economic growth", the study declares.
The lead author of the study, Louise Fox, told reporters that the economic growth strategy followed by the government "has been very effective in reducing poverty, because it has supported both agriculture and a major growth in employment in urban areas".
The researchers had found that "the urban informal sector has been a major force in poverty reduction". The factors driving poverty reduction, Fox claimed were "household farms" in agriculture, and "household firms" in the towns.
There had also been significant growth in formal sector employment, particularly in privately owned enterprises. "Good jobs with good wages were created in industry and mining, as well as in the service sectors", said Fox.
She also praised the expansion of services, particularly schools, into the rural areas, and suggested that Mozambicans "perhaps underestimate the success the government has had in reaching rural people with public services since 1997".
The key achievement was in education. The number of first level primary schools (teaching grades one to five) in the countryside had doubled between 1996 and 2005, and the number of EP2 schools (sixth and seventh grades) had quintupled. Furthermore the government had "eliminated the gender gap" between numbers of girl and boy pupils in primary schools in the south of the country, and was advancing towards the same goal in the central and northern provinces.
Fox admitted that the number of teachers had not grown at the same pace, resulting in a deteriorating pupil-teacher ratio. However, she was sure that an overcrowded rural school was better than no school at all. Asked about the impact of spending ceilings on teachers' wages, Fox replied "We don't have a position on teachers' wages".
She noted that "other sectors were not as effective as education in reaching the poor. Other sectors should learn from the success of education".
The World Bank seems to have no institutional memory, for at one point the study declares that the government should "encourage exports from labour intensive industries instead of concentrating only on mega-projects that contribute little to employment and increased incomes". Fox echoed this, earnestly telling the reporters that there should be a strategy for "large, labour intensive manufacturing"
This is the same World Bank which, in the late 1990s, promoted the deliberate destruction of Mozambique's best known labour intensive export industry - the cashew processing industry. By promoting the processing of cashews rather than exporting them all raw to India, the Mozambican government offended the World Bank's free trade dogma of the time. It was threatened with dire punishment - either the trade in cashews was liberalized, or the country would lose 400 million dollars of World Bank loans
So the protection enjoyed by the cashew industry was drastically reduced, and one by one all the large cashew factories, which at their peak had employed around 10,000 people (mostly women), closed down. These unpleasant facts have been excised from the World Bank's version of Mozambican history, as effectively as the removal of Trotsky from photos of the Russian Revolution.
(The cashew industry has made something of a comeback in recent years, with the emergence of new, small processing plants. These too depend on forms of protection which the World Bank, its fingers badly burnt by the experience of the 1990s, prefers not to talk about).
As for issues of governance and accountability, Fox declared "the government strategy is excellent, but implementation is weak".
The World Bank team had found that most households are unaware of the rights they enjoy under Mozambican legislation. "We found that most rural households known nothing about the provisions of the Land Law", said Fox.
When it comes to recommendations, the Bank's study actually calls for increased public expenditure. Even though this comes with the proviso that spending should ensure "greater value for money", this is far removed indeed from the attempts, in the not so distant past, of the Bretton Woods institutions to cut state spending to the barest of minimums.
"To maximize the effects of public expenditure on the poor, the government needs to increase its expenditure on the infrastructure and services used by the poorest and most vulnerable", the study argues.
This includes continued expansion of the education and health networks, but the study also suggests direct monetary transfers to poor households, in order to ensure that they send their children to school.
The study also calls for ensuring that decentralization favours the poor, and that changes be made in the legal systems "so that justice may be accessible to the poor". This should go alongside campaigns to ensure that citizens known about their rights and responsibilities.
One problem with the study is that it relies heavily for its data on the INE's Household Survey of 2003, which means that much of the report could have been written four years ago. While it is true that the next Household Survey will only be published in 2009, there are other sources of official statistics that could have been used, notably the annual National Human Development Reports.
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