Mozambique: World Bank warns of risk of economy based on exploration of natural resources

6 February 2008

Maputo, Mozambique, 6 Feb – The president of the World Bank, Robert Zoellick Monday offered the bank’s assistance to Maputo to help Mozambique prevent the consequences of focusing its economic development on natural resources.

“We have to prevent the problems that we have seen in other parts related to a dual economy (in which exploration of natural resources is carried out in detriment of the rest of the economy),” Zoellick said in a press conference at the end of his three-day visit to Mozambique.

He also noted the importance of the “Initiative for Transparency of the Mining Industries” (EITI), which forces governments and companies that explore natural resources to publish details of their revenues from that activity.

Mozambique has not yet joined this initiative, but, according to Zoellick, the country “is going in that direction,” with the government aware of the dangers of the “dual economy.”

In the understanding of the president of the World Bank, the disparity in economic development can be resolved by channelling revenues from exploration of natural resources into social development and strengthening of small and medium enterprises.

“Dual economies are especially vulnerable to corruption,” Zoellick warned, noting that Mozambique’s president, Armando Guebuza was aware of that danger.

“States often offer concessions that can be the result of bribes. And, therefore, it is useful to adopt transparency in order that citizens can know that money is being paid,” Zoellick said. “This is a challenge for all countries that explore natural resources and have large infrastructure projects,” he said.

Zoellick arrived in the Mozambican capital at the end of a tour that also took him to Ethiopia, Mauritania and Liberia.

The Millennium Development Goals, agriculture and the impact of food prices on the poorest parts of the population were the issues under discussion in the meetings the World Bank president had with the other African countries he visited.

Over the last four years (2003-2007), the World Bank’s financing programs have transferred US$2.5 billion to Mozambique. (macauhub)