MOZAMBIQUE

>> Regional Overview >> Mozambique Overview

Development Challenge Other Donors FY2001 Program / Activity & Budget Information Summary Tables Program Summary Work Force Data Program/Sector Summary USAID Search: Mozambique Previous Years' Activities 2000, 1999, 1998, 1997 16     Introduction Continued political stability and economic growth in Mozambique are important to U.S. national interests of peace, stability, and economic progress throughout southern Africa. Mozambique provides a growing market for U.S. exports, and continues to attract significant U.S. investment in agriculture, fisheries, minerals, and natural gas reserves. The country also is an increasingly important factor in U.S. commercial interests elsewhere in this region, as it provides ocean access for landlocked countries and is in close proximity to South Africa. All of USAID's program areas are key elements in the U.S. Embassy's Mission Performance Plan (MPP), which describes the United States' long-term interest in Mozambique as principally humanitarian: Helping Mozambique become a stable democracy, an interest in itself, not only contributes to our humanitarian interest by creating the mechanisms for peaceful resolution of disputes and by providing an environment to foster a thriving economy capable of uplifting the Mozambican people and avoiding humanitarian catastrophes, it also better enables Mozambique to play the constructive role in southern Africa, a region important to U.S. global interests, to which it is destined by geography. While still one of the world's poorest countries, Mozambique is the major success story in war-to-peace transition in sub-Saharan Africa. USAID was vital to the success of that 1992-95 process, and continues to provide essential leadership and support as Mozambique's remarkable democratization and stellar economic revival proceed. Under the watchful eyes of Mozambican and international observers, high turnout and peaceful balloting characterized the country's second round of multiparty national elections in December 1999. However, severe flooding in February and March 2000 will jeopardize some of the economic gains made by the country. The U.S. Government is working with other donors to address the immediate and longer term humanitarian needs of the many thousands of people affected by this disaster. The economy grew 10%-12% per year in 1997-1999, with low inflation; similar growth is expected in 2000. Per capita GDP rose from $179 in 1996 to $194 in 1998. Fundamental legal and regulatory reforms continued, making the country increasingly attractive to domestic and foreign investors. During 1999, significantly simplified procedures for business registration and operations, including imports, were effected, and a value-added tax was introduced to replace complex and outdated taxes. In addition, regulations for legalizing small informal rural businesses were streamlined, improving the broad-based employment and income benefits these businesses create. Business, civil society, and the media played an important role in these changes as broad public debate on major reforms continues to improve. In mid-1999, Mozambique's benefits under the World Bank's Heavily Indebted Poor Countries debt forgiveness program came into full force, and over the course of the year bilateral debt-relief agreements (most recently with the United Kingdom in December 1999) also were reached. The Development Challenge Mozambique still has far to go to eradicate poverty, reduce mortality, increase incomes, and establish democratic traditions. Seventy-one percent of the population is rural; two-thirds live in abject poverty; and 88% depend on agriculture and fisheries. Slash-and-burn agriculture and indiscriminate logging are leading to erosion and soil loss, sedimentation of waterways, and destruction of the marine ecosystem. Over 45% of Mozambicans are less than 15 years old, and the population growth rate, although reduced to 2.3% per annum, still is high enough to erode improvements in the standard of living. Health facilities have expanded, but 40% of the population still live without access to health services, and 50% of child deaths result from common treatable diseases. Only 23% of adult women are literate, and a meager 4% have attended secondary school. While 63% of children 7-10 years old are now in school, teachers and classrooms do not exist to meet projected increases. HIV infection is estimated at 10%-20% and growing, with frightening implications for social stability and economic development. Good policies are essential for both rapid economic growth and democratization, and USAID has influenced and supported Mozambique's reforms. The Government of the Republic of Mozambique (GRM) has achieved ambitious financial sector reforms and promoted privatization and decentralization; the economy averaged 8.9% growth annually during 1993-98 and achieved currency stability and declining inflation. However, Mozambique is vulnerable to debt problems, and domestic revenue increases achieved to date still are insufficient to make many needed development investments. Mozambique's transition to democracy is still fragile. The executive branch's sensitive relationship with an increasingly strong legislature will require patience and continued political commitment. Municipal governments created following the 1998 local elections are extremely frail. The 1999 presidential and legislative campaigns demonstrated the weak constituency outreach and analytical capabilities of most political parties; improvements will be essential to sustain the dynamic multiparty character of Mozambique. Effective and transparent implementation of important new laws in the areas of land tenure, business, and environmental management is needed to support the pace and sustainability of economic growth. Other Donors Overall development assistance to Mozambique totals about $800 million per year, excluding debt relief. The United States is the largest bilateral donor in Mozambique, providing over $74 million in grants and food aid in FY 1999. Other major contributors include the World Bank, the International Monetary Fund (IMF), the United Nations agencies, the European Union, the Netherlands, Sweden, Denmark, Switzerland, Italy, France, and Norway. Portugal, South Africa, and the United Kingdom are major investors in private enterprises in Mozambique. Country Background Information Resources   CIA Factbook Library of Congress National Geographic Country Maps State Dept. Country Information

:  :  :  :  :  :  :  :  :  :  What's New : FOIA Requests : Privacy Policy : Email This Page : Plug-ins : FAQs : Help Desk : Contact Us : Site Map Last Updated on: November 09, 2000