Zimbabwe and Mozambique: unrealized potential. War stagnates promising Mozambican economy

The conveyor belts that once hauled up tons of coal from the deep, dark shafts here are silent now. Workers mill around, awaiting their next turn to guard Mozambique's biggest coal mine against attacks by South African-backed guerrillas. The Moatize coal mine, about 12 miles from the northwestern provincial capital of Tete, has been effectively shut down, like most of the economy, by the insurgent Mozambique National Resistance (Renamo). ``We are totally paralyzed,'' says the mine's deputy director general, Herculano Gosta. But workers at the state-run company have not been laid off. Instead, they formed an armed militia to patrol the grounds.

Though Renamo has failed to destroy the Moatize mine complex, it has done the next best thing by cutting the sole railroad that once carried the coal to the Indian Ocean port of Beira. Until the line is reopened - and no one will venture to guess when that might be - the mine's estimated 20 million tons of coal will stay in the ground.

Moatize could produce 600,000 tons of coal per year, says Mr. Gosta, earning at least $24 million annually, or one-quarter of the country's total export revenue. But the mine is symbolic of the rest of the country's economy: stagnation amid great potential.

After independence in 1975, Mozambique's already very poor economy was undermined by the mass flight of Portuguese skilled workers. ``One of Mozambique's fundamental problems is a shortage of skilled people,'' says Erick de Mur, deputy representative of the United Nations Development Program in the capital, Maputo.

In addition, South Africa, which has long maintained economic clout with Maputo by providing jobs, foreign exchange, and manufactured goods, began to squeeze Mozambique's economy. Pretoria has reduced its use of Mozambique's railways and ports, and lowered the number of Mozambicans working in its mines, from more than 100,000 before 1975 to 60,000 in recent years.

The $50 million the miners send back annually account for nearly one-third of Mozambique's total foreign exchange earnings. Another 150,000 Mozambicans work in South Africa, mainly as field hands and domestics. In October 1985, South Africa said it would no longer renew the contracts of Mozambican workers and would offer no more contracts for prospective workers.

From the beginning, the ``Marxist'' government of the Mozambique Liberation Front (Frelimo) compounded its economic woes by investing scarce resources into inefficient nationalized farms and factories and keeping food prices so low that small farmers had little incentive.

The government says it has reversed its centralized policies. In Maputo and the few rural areas free from war, private enterprise is gaining strength. But the war against the rebels, who recently intensified their attacks, has undermined the impact of economic reforms that United States and British experts have praised.

During the decade since its establishment in 1976, Renamo has sabotaged two of the country's three strategic transport routes to the sea which could serve all southern Africa. Hundreds of schools and health centers have been wrecked, roads cut, and crops stolen or burned, under attacks by Renamo or as war casualties.

The government continues to channel scarce resources into the military. This year it is spending 42 percent of its $624 million budget on the war. The 10-year war has cost $5 billion and 100,000 lives. Export earnings have fallen from more than $220 million in 1982 to $85 million this year. Together with $30 million from railway and port revenue, and $50 million from workers in South Africa, Mozambique earns $185 million in foreign exchange. That is enough to pay about one-third of the nation's import bill. Government borrowing abroad has pushed the foreign debt to $2.8 billion.

In 1984, Mozambique joined the World Bank and the International Monetary Fund. Financial sources say Maputo and the IMF are close to signing a loan package worth several hundred million dollars. But the IMF is reportedly demanding a massive cut in the 27 percent budget deficit. It is also calling for a devaluation of the currency by at least 1,000 percent. The government has introduced some austerity measures and launched a policy to return firms to the private sector.

``We have begun the process of handing over to the private sector companies which we don't think are under the competence of the state,'' Finance Minister Abdul Magid Osman says.

Mozambique could be a rich land. Its 303,769 sq. miles - bigger than California - sit on vast deposits of natural gas and minerals. Billions of dollars worth of titanium and tantalum deposits lie in Zambezia Province, Manica Province has gold and bauxite, and Inhambane has 60 billion cubic meters of natural gas, say Western economic experts. But some 80 percent of Mozambique's 14 million people reside in rural areas and live mostly by subsistence farming. Only now, after inefficient state farms have resulted in years of wasted resources, is the government beginning to say that its first priority is the peasant sector. But efforts to help peasants will be largely ineffective in areas where Renamo operates.

At least 4 million people face serious food shortages this year, says the State Natural Disasters Office. There are an estimated half to one million displaced persons. Next year could be even worse, say relief officials in Maputo. ``People aren't planting in the South because there has been no significant rain for a year. In the North, people cannot tend their crops because of the war,'' says Roberto Christien, a UN official.

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