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Mozambique Now Free-Market Example

November 30, 1997

MAPUTO, Mozambique (AP) _ Free-market democracy seems a strange fit for this scrapheap of Marxist dreams, crippled by civil war. But to its own surprise, Mozambique is suddenly an example for Africa.

In this Mediterranean-flavored capital, bankers in suits weave among construction crews on Mao Tse-tung and Ho Chi Minh streets. At night, neon bounces gaily off flaking pastel walls.

On rich rural land that for years produced only famine, farmers are harvesting again. Spectacular deserted beaches are sprouting tourist hotels.

Though still poor as countries come, needing a billion dollars a year in life support, Mozambique has shown how quickly a no-hope African basket case can turn itself around.

And if Mozambique can save itself with only shrimp and cashews and the promise of things to come, what about places like Angola and Congo with vast mineral wealth just waiting to be collected?

It is too early to declare success, but the mood is clearly upbeat.

``Things are working wonderfully,″ said Aldo Ajello, the former U.N. envoy who brokered peace in Mozambique’s civil war in 1992, back on a visit. ``People who used to kill each other are now debating in parliament.″

Nearly all of Mozambique’s 1.7 million refugees have since come home.

Jose Luis Cabaco, the party ideologist in the old socialist state and now a filmmaker with nothing against amassing money, explained it simply: Mozambicans, sick of war, want a working society.

``We’ll make it,″ he said. ``We’ve had three good rainfalls. We have demonstrated that we can get along and build together. There is no turning back.″

With Cambodia in turmoil again, Mozambique is the United Nations’ success story of choice. Peacemakers stayed until 1994 and dragged the two foes into fair elections.

The World Bank prescribed bitter economic medicine. Foreign investors and Mozambicans bought moribund state enterprises. Inflation plummeted to a single digit. Growth is 7 percent and rising.

Billion-dollar projects to produce aluminum and to pipe out natural gas _ as yet unexploited resources _ could trim the need for aid. South Africa is developing a road-rail corridor from Maputo to Johannesburg.

Even McDonald’s is looking around for a place to erect its golden arches.

On a recent Saturday at the soccer stadium, a single wild kick made the optimists’ point. The ball rocketed past Malawi’s goalkeeper, and set off the emotional equivalent of a nuclear explosion.

``Eeeeeeeeee,″ shrieked Anita Manjate, but the sound was lost in the din. A vegetable market vendor, she gyrated in salsa-samba steps and chanted: ``Mo-zam-bique! Mo-zam-bique!″

The national team had humbled an old foe to enter playoffs for the Africa Cup. More, the rejoicing reflected a civic spirit in a society no longer at odds with itself. Pride was back.

Watching the swirl of green and red flags, Roberto Lora, an Italian aid volunteer, observed: ``This is a country that has won more than a soccer game.″

Veteran diplomats share the optimism but add a note of caution.

``If you look backward, this is a tremendous success story,″ said Dutch ambassador Roeland van de Geer. ``If you look forward, you wonder how in the world they’re ever going to make it.″

The new mood is reflected across the skyline of Maputo, a once-lovely city that is coming back from ruin, and up along the country’s 2,500 miles of tropical-paradise coastline.

``I just drove the entire length of the country,″ exulted Arne Anderson, a Swedish contractor, as though describing a voyage to Saturn. A few years ago, only armed convoys ventured out of Maputo.

Export earnings increased by 30 percent to $225 million this year, and are likely to grow as activity picks up in remote areas.

The Portuguese, the former colonial overlords who were driven out in 1975 and left ships scuttled in the harbor just for spite, are welcomed back with little apparent rancor.

South Africans, who financed the right-wing rebels who fought Mozambique’s socialist regime, now spend heavily to develop tourism. The Maputo corridor could attract $3 billion to $5 billion in investment. Enron is among American companies eager to exploit natural gas deposits.

Maputo offers hot jazz clubs, posh hotels, restaurants with Paris prices, banks with automatic tellers, and a jewel of a wrought-iron colonial railway station.

In a converted theater now labeled Assembly of the Republic, two parties that waged war for 15 years now fight with only insults.

The Mozambican Liberation Front, which renounced Marxism in 1989, holds 56 percent of the seats. The Mozambican Resistance Movement has the rest. Elections soon will decide who runs local governments.

``It is amazing to watch,″ said Ajello, now with the European Union. He said Mozambique proves that other nations divided by war could shift to peaceful prosperity.

``Something is happening in Africa, a renaissance of African competence and ownership,″ he said, insisting that war in a few places did not disprove him. ``Nothing important happens without contradiction.″

There is contradiction in Mozambique.

Despite efforts to cut red tape, it still takes 145 steps to start a business. Corporations might wait six months and pay $50,000 for permission to open an office in Maputo.

Potential investors often must pay bribes for favors, and other corruption dampens some enthusiasm.

Crime is also a problem. Carjackings and muggings are common in Maputo, if less prevalent than in Johannesburg or Nairobi.

Pressed by aid donors, authorities have taken action against corruption and crime. Customs is run by Crown Agents, a private British company, which has increased receipts sharply. Many importers now find it cheaper to pay duty than buy from smugglers.

If Mozambique is unlikely to eliminate bribery _ common in much of the world _ many economists predict it will diminish when civil servants earn a living wage.

Compared to some places, corruption is fairly relaxed, they say. Policemen who round off meager salaries by shaking down people in the streets, for example, often seem timid about it.

Recently, two uniformed officers stopped an American visitor and rifled his pockets. When one seized a sheaf of bills, the American grabbed them back. The officers retreated in confusion.

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