Jun 17, 2012
Center for Democracy and Civil Society

Compliments from the IMF

The IMF just released a new assessment of the Mozambican economy this past Friday in which it lays extensive compliments to the government’s fiscal and monetary policies. At the same time, the report also recognizes that the poverty level is stagnant and urges a reorientation of growth policies towards more inclusiveness, as discussed previously in this blog.

According to the IMF, growth policies in Mozambique have not been as pro-poor as in other countries with similar growth levels, and seem to become even less pro-poor with time. “The slow poverty reduction reflects structural rigidities and the narrow productive base of the economy, the low production and productivity in the agricultural sector where three-fourths of the population earns its livelihood, and the slow progress in reforming the business environment to induce private sector activity; (…) Finally, there has been little spillover of the megaprojects to the rest of the economy and to job creation.”

The report approves of the government plan for poverty reduction, based on three pillars: 1) production and productivity on the agricultural sector, 2) promoting employment and 3) human and social development.

Those sound all right. We may have a discussion about focusing on agriculture, but in the case of Mozambique that is important because the sector employs 80% of the non-idle work force and is a big component of both exports and GDP. It would be nonetheless crucial to see how exactly these three pillars are being addressed and what results have been achieved.

Finally, they stress some important challenges going forward, such as with respect to the necessary inter-ministerial coordination and the development of bold sectoral strategies. Nonetheless, the first steps taken in implementing the PARP are encouraging, including in particular the fast-track measures to improve the business environment and the progress made in getting a revamped social protection system off the ground.”

It still sounds like the “stellar” economic growth overshadows concerns with poverty in formal analysis of the Mozambican economy. But at least there is concern with trying to create more opportunities for the poor.

Other

2 Comments

  • Sounds like a typical IMF analysis – no politics. Rapid growth with little poverty reduction means all the benefits of economic development are flowing outside the country (i.e., to foreign investors) and/or to a narrow economic elite. Who is benefitting from the status quo in Mozambique? Do they have any incentive to change the system? What’s the relationship between powerful economic interests and Frelimo?

  • [...] few which leaves the vast majority even poorer as it pushes the cost of living up. And even though the IMF congratulates Mozambique for keeping the inflation under control, it is getting undeniably more and more [...]

Leave a comment

Founded in 2004, Democracy and Society is a biannual print journal published by the Center for Democracy and Civil Society at Georgetown University. The D&S Blog provides web-only content, including special reports and investigative series, on issues relating to democracy and development.

Email Subscription to D&S and Blog

* indicates required

Posts by Region

Posts by Topic

Switch to our mobile site