1 May 2008
Maputo — The 19 donors and funding agencies who provide direct support to the Mozambican state budget have praised the "solid results" achieved by the government in macro-economic stability and the management of public finances, but remain concerned at the lack of progress in the fight against crime and corruption.
The 19 "Programme Aid Partners" (PAP) who give at least some of their support directly to the state budget include the World Bank, the African Development Bank, the European Union, most EU member states, Norway and Switzerland. Indeed the only major donors who do not provide budget support are the United States and Japan.
The annual joint review of progress by the government and this group of partners ended on Wednesday with the conclusions that of the 41 indicators and targets set for 2007, 23 had been achieved. The donors believed that this was a good enough basis for continuing to provide budget support.
At the closing ceremony of the Joint Review, outgoing PAP chairperson, Norwegian ambassador Thorbjorn Gaustadsaether, recognised the government's macro-economic achievements, but warned of the looming threats to stability posed by the sharp rises on the world market in the prices of both oil and basic foodstuffs. These price rises could have a serious effect on the poorest strata of the population.
He noted that while poverty in Mozambique has declined in overall terms, "there are also perceptions and clear indications of an ever growing gulf between the privileged and the poorest".
Gaustadsaether added that, because of factors such as unemployment, the poorest members of society have not benefited from Mozambican economic growth. The riots that broke out in Maputo on 5 February, in reaction to a hike in passenger transport fares "remind us of the need to create greater equity in society".
The ambassador said that, while recognizing the government's efforts to fight corruption, the donors "encourage the government to redouble those efforts". Although a national anti-corruption strategy exists, backed up by national and sector plans of action, "the desired degree of implementation of these instruments has not yet occurred".
He was concerned that the spirit of impunity for certain crimes still existed - particularly in relation to the looting and subsequent near collapse in 2001 of the privatized Austral Bank.
Austral was once the state-owned People's Development Bank (BPD). Under pressure from the World Bank and the IMF to withdraw the state from commercial banking, the government sold off 60 per cent of the BPD to a Malaysian-Mozambican consortium in 1997. The new owners changed the bank's name, closed rural branches - and set about a reckless policy of granting loans to people who never had any intention of repaying.
By April 2001, Austral was collapsing under a burden of non-performing loans. Rather than recapitalize the bank, the private shareholders handed their shares back to the government, and the Malaysians left the country in a hurry. The Bank of Mozambique stepped in to keep Austral afloat, and appointed its head of banking supervision, the young economist Antonio Siba-Siba Macuacua, as chairman of an interim Austral board. He set about a vigorous loan recovery programme - but on 11 August 2001, he was murdered and his body thrown down the stairwell at Austral headquarters.
Under donor pressure, the government ordered a forensic audit of Austral by an international law firm. Although that audit was completed in 2006, nothing has happened. The results of the audit have not been made public, and nobody has been arrested for fraud or malfeasance. Nor has anyone been arrested for the murder of Siba-Siba.
"The lack of progress in criminal proceedings following up the forensic audit of the Austral Bank is a recurrent concern", said Gaustadsaether. "In the fight against corruption, the partners wish to stress that lack of transparency not only creates the space for conflicts of interest between public office and commercial interest - but also spreads perceptions of corruption in Mozambican society".
The incoming PAP chairperson, Irish ambassador Frank Sheridan, declared that issues of governance "remain at the centre of concern for all the donors, and also for the country's citizens".
"I firmly believe it is in the interest of all of us to make greater progress in this area, and we shall work seriously with our counterparts to improve the situation this year", he pledged.
Sheridan thought there were "contradictory signs" about the effects of economic growth on the poor. "It seems to me that many of the poorest are struggling just to keep up their present standard of living, or are even falling back, while the most prosperous are benefiting disproportionately", he said.
He warned that failure to deal with problems of inequality could lead to "social tension and subsequent political failure".
Sheridan thus wanted to see "greater stress on economic growth that benefits the poorest strata", and he believed this included "far-sighted policies and strategies aimed at the development of the private sector, particularly small and medium companies".
He also called for "scrutiny of the mega-projects so that they can better realize their potential to contribute to employment and to broader economic growth".
Be the first to Write a Comment!
Copyright © 2008 Agencia de Informacao de Mocambique. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
