Maputo — London-based author and journalist Joseph Hanlon has hit back at "wrong or distorted data and wilfully misinterpreting statements" contained in a memo sent by officials of donor countries to heads of mission in Mozambique.
Hanlon is the author of several books on Mozambique, and has established himself as an authority on the country. He is highly critical of donor policy, and a paper he presented earlier this month to a conference in Britain accused donors of promoting corruption in Mozambique.
Stung into responding, donor offices sent out an internal memorandum accusing Hanlon of spreading "erroneous statements and wrong information" in his paper, and replied with a barrage of statistics, seeking to prove that donor policies are promoting growth and poverty alleviation in Mozambique.
Hanlon's reply to the memo points out that it does not challenge his paper's key point - that donors are rewarding the supposedly "good performance" of Mozambique "by allowing, and thus effectively encouraging, corruption and state capture" (that is, the capture of the state by organised criminal networks).
As for the statistics showing a sharp rise in GDP in the 1990s, Hanlon concedes they exist, but asks what they mean. He cites Robert Wade, a respected economist at the London School of Economics, who pointed out last weekend "that IMF and World Bank statistics are suspect. There are different methods for determining poverty and inequality and the answers you get depend on the technique you use".
Wade has recently argued "that, globally, only one method of calculating statistics shows global poverty declining, while all others showed a neutral or negative trend".
Hanlon cites the UNDP's National Human Development Report for Mozambique, a document which the authors of the memorandum do not appear to have read. The UNDP accepts the advice of the World Bank itself and gives per capita income in Purchasing Power Parity (PPP) figures.
That is, it looks at how much money is needed in Mozambique to buy the same representative basket of goods and services that dollars would buy in the United States. Real GDP per capita in PPP dollars is the per capita GDP of a country converted into dollars on the basis of the purchasing power of the country's currency.
This method looks at the comparative price of goods and services, and eliminates all problems with fluctuating exchange rates.
The National Human Development Report for 2000 breaks per capita GDP down by province over the 1996-99 period. Hanlon notes "Both the north and centre have a lower real GDP per capita in 1999 than in 1998 or 1997", and the reported decline in the key central province of Zambezia is stark - a fall from 103 dollars in 1996 to 96 dollars in 1999.
1998 and 1999 were years of macro-economic boom, with large jumps in what Hanlon calls "headline GDP". But with per capita GDP on the decline in much of the country, this shows that macro- economic improvements do not automatically translate into poverty alleviation.
Much of Mozambique's growth has occurred in and around Maputo. Taking the Human Development Report figures, Hanlon comments "However one measures it, and no matter which starting point you use, the gap between Maputo city and Zambezia has widened. By this measure, the poor are getting poorer, and the memorandum writer is wrong to say the gap decreased between 1997 and 1999".
The memorandum denies Hanlon's claim that "growth is concentrated in Maputo and in mineral-energy enclaves". But even the IMF accepts this point - Hanlon notes that recent IMF papers, readily available on the Internet "show a concern with Mozambique's growth being dominated by mega-projects", and these are overwhelmingly of a mineral or energy nature.
The agricultural growth that the IMF expects is in just two crops, sugar and tobacco. The Mauritian investment in sugar in the Zambezi valley is one of the few exceptions to the rule that growth occurs near Maputo.
Remarkably, the donor memorandum denies that structural adjustment measures involved slashing public sector wages. "The argument that fiscal adjustment in the early to mid-1990s was achieved through cuts in the wage bill is incorrect", the memorandum declares - thus forgetting that the World Bank itself admitted that this squeeze on wages was wrong.
Hanlon remarks that getting the data on wages wrong is an indication of "lack of institutional memory" among the donors.
The memo misrepresents Hanlon when it claims he said that "there are not more teachers being hired".
What he did say was that the teacher training budget is being kept constant, although the need for teachers will rise due to the spread of AIDS and expansion of the system.
AIDS is predicted to cut a swathe through the education and health services and the police force. This implies very substantial extra costs on recruitment and training, just to keep the numbers as they are, let alone expand them. The memorandum writers shy away from the implications of the AIDS epidemic for public expenditure.
Hanlon also accuses them of straightforward incompetence.
"The memo writer provides a table to show "the proportion of teachers to students has been increasing or is at least constant over the last 3 years", while the table shows the opposite - that there are more pupils per teacher in 2002 than in 2000".
As for the memorandum's claim that Hanlon's figure of 400 million US dollars lost from the privatised banks (BCM and Austral) has no factual basis, Hanlon points out that the figure is not new.
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He first published it in his "Metical" articles a year ago.
The figure breaks down into "100 million dollars of cash injections to BCM during 1992-96, 162 million dollars BCM bad debt provisions, 2000 and 2001, and 150 million dollars needed for Austral Bank recapitalisation".
The "Metical" articles gave sources for these figures. They are now out of date, since the bill for rescuing the banks has been steadily rising.
"The memo writer stresses the donor desire to clean up the mess (in the banks) without disrupting poverty spending and, implicitly, without rocking too many boats", writes Hanlon. "But this ignores the key point of my article, which is that donors created the conditions which allowed the frauds to occur, and are now conniving with a government desire for impunity for those who are guilty".
The government's loan recovery plan may claw back some of the stolen money - but it says nothing about prosecuting those who ruined the banks, and those who murdered Austral's interim chairman, Antonio Siba-Siba Macuacua in August 2001.
From this internal donor memorandum Hanlon concludes "that the view in the original paper - that donors are rewarding what they see as "good performance" by allowing, and thus effectively encouraging, corruption and state capture - remains true".
