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Mozambique under threat from resource exploitation
27th September 2013
As investors flock to the resource-rich but still poverty-stricken African nation of Mozambique, Thembi Mutch warns that - as usual - it won't be the Mozambiquans who reap the multi billion dollar rewards of an economic boom in what remains the world's second poorest country......
The future of Mozambique’s resources are being hotly contested on the global stage
The Rich & The Poor
AnnaLiza totters through the lobby of ‘La Polana' hotel in platform heels and drag-queen layers of makeup, air kissing friends and followed by wires and cameramen. She's Maputo's Naomi Cambpell. Feling Capella, poet, social commentator, scowls. "She's exactly what I hate about the new Maputo - a tiny minority that is obsessed with twitter, MTV, meaningless chit chat, and pretending we're American, or European. Drinking whiskey and gin, enjoying this boom time. She's a model because she's got the right family name, and looks the part."
Feling Capella is a young journalist on the state newspaper, poet by night, performing in the beautiful and crumbling art deco cinemas and clubs such as Gil Vicente and Nucleo Centro. In his poems he implores his country folk to wake up to the wonder of Mozambique, before they sell their very souls off to outsiders.
Foreign Investors Are Queuing up
This boom time is very evident in Maputo, Mozambique's capital where contradictions are the name of the game. Skyscrapers and snazzy restaurants are shooting up apace but there are deposits of human faeces just yards away from one of the smartest five star hotels in Africa. Dom Perignon champagne at $320 a bottle. One hundred yards away people are living on refuse scraps. Mozambique is one of the poorest countries in the world(1).
In 2012, consolidated statistical figures pointed to approval of 384 investment and building projects worth a total of US$5 billion. Over the next three years Mozambique expects to receive investments totaling around US$10 billion according to the assistant director of the Ministry of Information, Godinho Alves.
Capella's feelings are shared, and Mozambiquans are in no way passive: the future of Mozambique's resources- natural gas, oil, coal, marine areas, land- are being hotly contested on the global stage. Academics, artists, activists, the international NGO community are united around a common goal of navigating a course through these choppy waters. Earlier this year a coalition of human rights lawyers, Media activists, journalists, practitioners and academics from Mozambique's Eduardo Mondlane University, members of a diverse range of NGO's and musicians banded together. Their combined skills cover geography, offshore deep-water mining, marine life, road building, social change, mining impacts and community development. They hope to provide a ‘fourth estate' that can both critique the government, and offer suggestions of how to approach land degradation, and community consultation(2).
In November 2012 Care and WWF created a coastal marine reserve in the Primeiras and Segundas Archipelago that will cover more than 4,020 square miles. This area contains abundant coral and turtle species, mangroves, deep-water marine life, and rare corals. The creation of this conservation park, (the second in two years) will potentially also make it harder for oil and gas companies to ride roughshod through communities.
The Eyes on the Horizon project - which involved the creation of the largest marine dugong monitoring and preservations, plus large-scale beach clean ups - is, as Florêncio Marerua, WWF-Mozambique´s Country Director says: "A particularly exciting project, because both the government authorities and local communities recognise the benefits of conserving these resources."
On land, it's proving harder to monitor what is happening. Mozambique is resource-rich: coal exploration and mining has been going on in Tete province since the end of the civil war in 1993. However efforts to safeguard the land, and people living on it, are less obvious. And there have been notable outcries at the ‘relocation' and land transference that have occurred this year alone.
In May 2013 Human Rights Watch published a damning report that revealed that forced relocations, shoddily managed housing and sanitation projects and broken promises of work have resulted in thousands of people living in conditions causing illness, malnutrition and death. More recently, in August 2013, US oil giant Anadarko was accused of not consulting several thousand families in Cabo Delgado over the Liquid Natural Gas refraction plant and Terra Viva (a land rights organization) Executive Director Alda Salamao was detained at 6am for police questioning(3).
Salamao asserts that thousands have been forcibly relocated in a total of 72,000 HA of Mozambiquan land, and says relocations are going on right now, near Pemba, north Mozambique. She says, "As I am talking to you, right now, in Palma, a community has lost its rights and is not aware of it. The land rights were transferred to Anadarko in a package that totalled 7,000 hA of land, plus offshore rights".
In Maputo, The Human Rights League is taking the government to court with several cases over resettlement and relocation in areas where minerals or natural gas exploration is happening. Director Dr Alice Mabota is steely, and resolute. She explains the problem thus: "People really do not know there rights in these areas, they are never adequately consulted, nor do they know their rights, nor the real value of the land, and what lies beneath it. They are not aware that the oil, natural gas and other minerals that they farm over, every day, is potentially worth millions, but that they will see none of it"
Confidence in Mozambique's Economy
Since 2011 ‘PROMAPUTO', a huge World Bank and IMF package designed to address legislation, tax and auditing systems, signals the death knell of the most revolutionary of the Marxist/Leninist visions. As two private investors told me (one Brazilian venture capitalist, the other an Australian mining CEO) the underwriting of the Mozambiquan economy by the World Bank is effectively a massive vote of confidence, and a guarantee, a cushion if you like, for prospective private partnerships. They're flocking in: Bosch, Siemens, industrial plant distributors, the large banks ... Maputo must be the only city where the trendiest street also has a serious hardware shop in pride of place.
However none of the World Bank or IMF initiatives tackle the land resettlement, or land development issues associated with oil and natural gas.
Mozambique is only expected to gain around only $20bn (£13bn) during the lifetime of the 100 trillion cubic feet (2.8 trillion cubic metres) of gas discovered, because of the enormous capital investment of external partners.
It is still very early days: foreign investment could build the much needed thousands of miles of Mozambique roads, railways and water and sanitation. But the various commercial international players (mining operations, logistics) will need to work with the various UN departments. And they will need to listen to the local voices that are growing stronger, who ask, "Where do the Chinese and Asian markets fit in"?
These have replaced the UAE as the biggest investor in Mozambique. So far they have reinvigorated their loans and commitment to Mozambique, and account for a third of all exports.
In May 2013 a US$500 million Beira Special Economic Zone (ZEE) created by a the Chinese firm Dinsheng (source Economist Intelligence Unit) and the Mozambique government together will strengthen railroads and boost the mining sector to join other special economic zones such as Tete, the Nacala Corridor and the Beluluane Industrial Park, in Matola, on the outskirts of Maputo.
Perhaps most importantly, as the independent (and free) national newspaper Los Verdades (The Truth) stresses, who will monitor the environmental and social dynamics and transgressions with all this development? Planning gains (a system whereby companies ‘compensate' for resources destroyed or taken) don't exist. Earlier this year the construction company Somague, signed the contracts that awarded it two construction projects in Mozambique for Brazilian mining group Vale to the value of US$228 million, both projects are to provide rail links to remove coal and other minerals from the Tete province. This project too lacked any ‘social responsibility' or environmental angle, no schools, hospitals or community provisions for the villagers and people that live there already. Compensation has not been offered either.
The Resource Curse?
In November 2012 Graca Machel - the iconic widow of Mozambique's Revolution hero Samora Machel - accompanied the president of Brazil ‘Lula' on a mission around the country. She commented on the growing rich/poor divide in Mozambique. No figures exist on the wealth disparity: Mozambique is a jumble of statistical contradictions: amongst the highest GDP growth rate in the world. Yet also ranking 184 and out of 187 on the Human Development Index making it the second poorest country in the world, with over 55% of the population officially below the poverty line.
Graca Machel is right, even though she is undoubtedly deeply embedded in the Frelimo old guard who happily dish out both jobs and access to themselves, their daughters, sons, nieces and grandkids.
The international hotels in Maputo are booked to 95% capacity in the week with business men from everywhere - Australia, America, UAE, Norway, Brazil and China, the majority here for oil and natural gas. Radio Mozambique and BBC correspondent Jose Tembe says: "The key problems are nepotism and corruption. If people are not corrupt, they make sure the investors abide by the rules. But if the government man is given money to keep his mouth shut, he won't check up on the investors. This impacts on our environment, and on social inequality - the two are linked".
Feling Capella agrees: "We must tackle corruption: we have both the will and skill to manage our environment, our democracy. But first we must put the spotlight on those who don't want to share, or be accountable".
Thembi Mutch is a freelance journalist.
(1) 2013 global Human Development Report published March 2013 by the United Nations Development Programme (UNDP). The Human Development Index (HDI) is a composite measure, which considers what the UNDP regards as the three fundamental dimensions of human development - life expectancy, educational attainment and a decent standard of living. Each of these is given a weighting of a third in calculating the index. A country's score can range, in theory from zero to one. Some developed countries come close to one - at the top of the index is Norway, with a score of 0.955. Mozambique's score this year is 0.327. But this is rather higher than last year's score of 0.322, and much higher than either the 2000 figure of 0.247, or the 1980 score of 0.217. The UNDP representative in Maputo, Jennifer Topping, said that Mozambique's HDI has grown at an average of 2.37 per cent since 2000, and shows an accumulated growth of 51 per cent since 1980. The two countries that score lowest on the HDI index are DRC and Niger, in joint bottom.
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