Moza and fear of the resource curse

Aberdeen – Mozambique's promised bonanza of mineral wealth has revived dormant tensions between the government and its former civil-war foe, raising the risk of fresh strife just as international companies prepare to pump in billions of dollars of investment, said the country's President, Armando Guebuza.
President Guebuza set out an ambitious five-year development schedule for huge gas discoveries off Mozambique's shore, as he led a delegation from his country to the home of the UK's offshore oil industry in Scotland.
Yet, even as he was courted by major oil companies such as Royal Dutch Shell PLC and France's Total SA, he voiced fears that his country could fall victim to the “resource curse” that has afflicted other parts of Africa.
“Countries, when they have this sort of resource, instead of being a source of social harmony, it becomes a source of problems, social convulsions,” President Guebuza said in an interview.
A series of hit-and-run raids this year by the ruling party's erstwhile foe and now main political rival, the Mozambican National Resistance, known as Renamo, left at least 15 dead and rekindled fears that Mozambique would return to conflict.
The country suffered through a brutal 16-year civil war, which ended in 1992, and it remains one of the world's poorest nations, dependent on foreign aid despite having averaged economic growth of more than seven percent in the past decade.
President Guebuza's Mozambique Liberation Front, or Frelimo, party has ruled Mozambique since 1977.
Large natural-gas discoveries off Mozambique's northeastern coast have significantly improved its economic prospects. Some experts estimate the area could hold reserves valued at as much as 30 to 40 times Mozambique's current gross domestic product – which came in last year just under US$15 billion – and turn the country into one of Africa's largest energy exporters.
The companies behind the discoveries, US-based Anadarko Petroleum Corp and Italy’s Eni SpA,  say they are eager to develop the gas, but a lack of infrastructure and skilled labour means the ambitious plans will take years to initiate and complete.
The government estimates developing a new gas industry would take total investment of some US$40b, with first exports possible in five years.
Renamo, a former guerrilla movement founded in the 1970s with help from white-minority ruled Rhodesia and South Africa, has been pressing for a share of the revenue from the country's natural resources, alongside other demands including changes to the electoral law and more representation in the military.
President Guebuza urged the group and its leader, Afonso Dhlakama, to use dialogue to resolve any lingering grievances.
The two sides have been in on-and-off talks since December 2012, which have continued despite escalating violence.
Attempts to reach Dhlakama and Renamo were unsuccessful.
President Guebuza said managing his people's expectations of how quickly the fruits of natural gas wealth will be delivered was a serious problem.
“But I do believe – like the majority of Mozambican people – that we can continue to show (Dhlakama) that the only way to deal with political issues is through dialogue,” said President Guebuza, a onetime Marxist who became a wealthy businessman after his predecessor, Joaquim Chissano, abandoned socialism in favor of privatisation and free-market policies.
The President said his government had a comprehensive strategy to use its resources wealth to push through a widespread programme of industrialisation, while higher tax revenue from energy production would be used to underwrite investments in social services and healthcare.
Analysts say it is unlikely Mozambique will backslide into civil war, but say that the rising tensions present President Guebuza with a problem ahead of Presidential elections next year.
The President is constitutionally prohibited from standing for a third term but has yet to indicate whom he favours as a successor.
“Ultimately, the President needs to rein in Frelimo's firebrands and find a formula to allow Dhlakama and his supporters to save face,” said Alex Vines, a Mozambique expert and head of the Africa programme at the UK's Chatham House think tank. – Wall Street Journal

August 2013
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