Introduction
This article's primary focus is on key aspects of how the Mozambican sugar industry was rehabilitated after 1996 with and through foreign direct investments (FDIs). We argue that the rehabilitation of the sugar industry in Mozambique cannot be understood without including the active role played by the state and government or what Ouma and Whitfield (forthcoming, p. 1) call ‘the active processes of constructing industries’. The literature on Mozambique in the last decade has commonly argued that in Mozambique all policy decisions are enforced by the pressure of well-meaning donors and/or ignorant international financial institutions (IFIs) preparing the ground for large international corporations (see particularly Hanlon 1991, 1996, 2000; Castel-Branco 2002; and Hanlon and Smart 2008). Along the same lines, it is common to argue that in Mozambique international capital has been dealing with a weak African state enforcing neoliberal policies (e.g. Riddell 1992; Plank 1993; Saul 1993; Villalón and Huxtable 1998), because after the 1980s and 1990s, with Structural Adjustment Programmes (SAPs), privatisation and liberalisation, international capital had the upper hand with close to unlimited access to the natural riches of the country: land, labour and minerals/energy.1 There can be no doubt that donors in general, IFIs and international capital have had and continue to have considerable direct and/or indirect influence over economic and industrial policy in Mozambique in particular, and in Africa in general (Whitfield 2009). But externalist accounts of various persuasions have limitations, as we will illustrate here, and tend to present accounts of the Mozambican state and government solely as victims rather than active players.
The general literature on business and state relations has highlighted relationships between state and private sector (Maxfield and Schneider 1997; Taylor 2007) and the same perspective has forcefully suggested that for Mozambique privatisation was characterised by a ‘transformative preservation’ that not only ‘altered the roles of state institutions’ but also ‘produced new alliances’ as well as conflicts in society (Pitcher 2002, p. 6), outcomes that have consolidated the power of the ruling party Frelimo over society, the economy and the state. This article will draw on the approach and findings of the state–business literature as it challenges externalist positions.
Mozambique has, for good or bad, been ‘a donor darling’ and has had a sustained mean annual gross domestic product growth rate of around 8.6% (World Bank 2005; de Renzio and Hanlon 2009), leading to a doubling of gross domestic product per capita from 1994 to 2004 (Virtanen and Ehrenpreis 2007). The overall growth figures for Mozambique have been partly triggered by cashing in on the war-to-peace dividend (expected once-off economic rebound), and partly by very high and continued levels of foreign donor support, which today account for over 50% of the state budget (Clément 2008; Buur and Baloi 2009). While impressive, this growth level comes off a very low base. In reality, recent growth has returned to only pre-independence growth levels (Sousa and Sulemane 2007) and the most important growth trigger has been relatively high levels of FDI, attracted primarily to mega-projects in the energy, mineral and gas sectors (Bartholomew 2008, p. 12; Clément and Peiris 2008). Mega-projects account for most of the overall growth and specific gains in industrial manufacturing and export, especially those secured through the US$2 billion aluminium smelter, Mozal, on the outskirts of Maputo, which brings together British, Japanese and South African investors (BHP Billiton, Mitsubishi Corporation and the Industrial Development Corporation) as well as some Mozambican capital interests.
The Mozal smelter today accounts for roughly one-third of all industrial production in Mozambique, but it has been growth with little sustained formal employment creation. For example, the Mozal smelter employs just around 1200 workers and many of those, it is said, are floor sweepers kept in order to boost the employment figures. Furthermore, as argued by several studies, mega-project investments generally do not bring in tax revenues due to a 10-year tax exemption rule, although this has recently been cut to five years as ‘strong incentives are not necessary any longer’2 and there are strong indications that agreements will be renegotiated over the coming years. Nor do they create broad-based poverty reduction (see the critiques of investment patterns by Beaumont 2004; Bucuane and Mulder 2007; and Tvedten et al. 2006, 2009). But, in general, the FDI-driven mega-investments story in Mozambique suggests that it has formally ‘transformed’ the Mozambican economy, whose structure during the 1990s was dominated by agriculture and service provision, so that the agricultural share of gross national product declined from 40% in 1995 to 25% in 2008, whereas the industrial share – mainly catered for by the Mozal smelter and similar investments in energy and gas – rose from 15% in 1995 to around 33% of gross national product in 2008. But, as agriculture accounts for the livelihood of up to 70% of the population, the relatively meagre overall annual agricultural growth rate at the average of 6% has not been caused by an increase in productivity. Worryingly, there has been no increase in agricultural productivity since 1963 (Uaiene 2010).3
We will use the case of the rehabilitation of the sugar industry in Mozambique to illustrate how the state was not just a hopeless victim to FDI capital, but active for well over a decade in the formation of a qualified investment success story. A superficial glance over how the industry has evolved over the last decades would suggest that Mozambique has been a hapless victim of mega-project investments by international capital: major international sugar conglomerates invested in only four estates and industrial plants available; the industry is enforcing an enclave economy with few benefits for the Mozambican state and population; and, not least, industry has forced the Mozambican state and government to create and enforce internal market protection measures that ensure that already poor consumers pay for the rehabilitation of the industry.
The present form of support to the sugar sector took off in the mid 1990s when a policy and strategy for rehabilitation – Politica e estratégias para o desenvolvimento do sector açucareiro – was approved. However, in contrast to other sectors, state and government support has been pretty steady and has continued well into the new millennium, and the socio-economic effects and consequences of the sugar rehabilitation have been very different from the trajectory of other mega-investments: jobs have been created on a large scale, expansion into the small- and medium-based landholding base is taking place with irrigation and inputs raising productivity, social service delivery has been expanding, and training and skill development has been taking place with the industry being a net provider of mechanics, welders, fitters, electricians etc. But many problems exist, and as with productive investment cases they are messy and difficult to generalise from (Khan 2003). The next section considers the decline and recent results achieved by the sugar industry in Mozambique and functions as a background for the article.4 At the core of analysing key aspects of how the Mozambican sugar industry was rehabilitated after 1996 with and through FDIs is the underlying question of why state and government officials have supported the rehabilitation efforts. The third section summarises the main state, government and industry attributes of support related to why the Mozambican sugar industry was rehabilitated.5 The fourth section highlights three key aspects of how the sugar industry was rehabilitated. Combined, this aims to demonstrate the active role of the state and government in the relatively successful sugar rehabilitation process so far.
The decline and new momentum of the sugar industry
Sugar cane has been produced in Mozambique since the end of the nineteenth century. The Sena Sugar Estates Ltd, comprising two facilities, Luabo and Marromeo, became particularly important, and in many ways the company was the crown jewel of the sugar industry until about 1975, operating among other projects a rail spur connecting the sugar refineries to Beira's port. Until the 1950s, expansion of the sugar sector was based on British investments, after which Portuguese capital interests became prominent. Cane and sugar production expanded massively at the end of the 1950s and during the 1960s. In 1954, the Xinavane plant on the Incomati River was further enlarged as land concessions were increased (Gode 1997, pp. 16–17). Two new factories followed, first in 1969 with the Maragra plant in southern Mozambique, downriver from the older Xinavane estate on the Incomati River (Cardoso 1993), and in 1970 the Mafambisse plant in the Beira corridor in central Mozambique along the Pungue River.
With these industrial plants, the total sugarcane production capacity was brought up to 360,000 tonnes, with a production record reached in 1972 of 325,051 tonnes, which was close to maximum production, with 60% for export. The expansion of the sugar sector – culminating in 1972 – saw it become the third biggest export sector and the biggest formal labour employer, with the Sena Sugar Estates Ltd in the mid 1960s – the largest private firm in Mozambique – employing more than 10,000 people. The independence war in northern and central Mozambique, and from 1974 the emergence of the Frelimo-dominated transitional government, left investors feeling insecure, and were a direct cause of the ‘disinvestment strategies’ adopted in the transition to independence (Castel-Branco 2002, p. 83). Furthermore, up to and after independence in 1975, the flight of skilled labour of all types (government employees, state administrators, technicians, engineers, managers etc.) and capital added to the decline, just as global market prices made the sector less profitable. After independence the industry was considered a ‘strategic industry’ and became partly nationalised and partly ‘state intervened’ as the effects of disinvestment, lack of finance, human capital constraints and so forth took their toll on the industry. From 1972, the peak year with 325,051 tonnes of sugar, production declined to just over 200,000 tonnes in 1975 and thereafter fell slowly to about 175,000 tonnes in 1980. A steep decline after this saw production fall to well below 50,000 tonnes from 1982/83 onwards, after which it was almost wiped out (Instituto Nacional do Açúcar (INA) 2001, p. 4; Cardoso 1993). In 1992, at its lowest, the production was only 13,224 tonnes. The result was a steep increase in imports of sugar, making different regions of Mozambique dependent on official and contraband imports (from Swaziland, South Africa, Zimbabwe, Malawi, Zambia and Tanzania). For the labour force the decline in the sugar sector was a tragedy. At the beginning of the 1970s around 45,000 workers were formally employed (one-third of the standing labour force employed in South African mines at the same time; First 1983). As the civil war intensified after 1980, it affected the six sugar-producing entities so badly that by 1982 four were closed and two were operating at very low capacity. By 1999, only 17,000 workers were still formally employed by the six estates, but most of the workers were redundant and employed only on paper as production was so low.
Since the mid 1990s, the Mozambican sugar sector has been undergoing a steady process of rehabilitation, involving both partial privatisation and large-scale FDI, in both cane production and sugar processing and refining capacities. This has seen four out of six sugar estates with sugar producing factories becoming productive between 1998 and 2002. The areas under cultivation rose from 7266 ha in 1998 to just under 31,000 ha by 2008 and 35,000 ha in 2009, with a scheduled increase to 50,000 ha after 2011 (CEPAGRI 2009, p. 12; LMC 2006). From coming close to a total standstill with only around 16,000 tonnes produced in 1986 and around 13,224 tonnes during the 1991/92 campaign (INA 2001, p. 4), the sector had increased production to just over 200,000 tonnes of sugar, with close to half of this being exported by 2004 (INA 2004, pp. 4, 18). While by 2008 the productive gains were modest, peaking in 2005 at just 265,000 tonnes, this was caused by drought, poor rain distribution, delays at the start of the season and work stoppages caused by installing two new machines in a new expansion process with a concerted drive toward doubling production by 2010 to just around 500,000 tonnes (CEPAGRI 2009).6 By 2003 export had exceeded local consumption, with total export figures reaching 134,796 tonnes in 2008, even though the industry-owned Distribuidora Nacional de Açúcar (DNA) had managed to double national consumption.
It is estimated that around 32,000 direct jobs (combining permanent and temporary jobs) have been created at the four rehabilitated sugar estates (CEPAGRI 2009, p. 15; CEPAGRI 2010) besides jobs created in outsourced service functions in land preparation, planting, maintenance and transport, as well as jobs created by independent producers and down- and upstream jobs created along the value chain, making the industry once again the biggest non-state employer in Mozambique. Importantly, this is jobs created in the rural areas, where those taking up employment are a mix of local populations and rural migrant workers (mainly for cane cutting). Salary scales in the industry are generally well above what can be earned in rurally based agriculture industries. Social services such as health, education and housing are to a large degree catered for or strongly subsidised by all four factories, where districts and municipal administrations benefit from generous corporate social responsibility (CSR) budgets. It is generally acknowledged that social services and access to banks around the four rehabilitated estates and plants are well above what one normally encounters in rural areas (Locke 2009). The industry is ‘creating an income multiplier effect, with sugar workers having money to spend on other goods and services [and] the sector also creates the opportunities for other industries to develop, supplying goods and services to the sugar mills’ (LMC 2006, p. 7; also INA 2005b). But the re-emergence of the sugar industry in the rural areas has exposed the shallowness of the specialised service and supply industries as the backward linkages between the sugar industry and local Mozambican suppliers of services and goods have been problematic, just as it is for all other FDI mega-investments. For example, only about 23% of purchases by Maragra sugar estate in 2004 were locally produced, with the rest provided by foreign companies or their subsidiaries (LMC 2006, p. 8).
Furthermore, the European Union's €6 million Accompanying Measures Fund to mitigate the effects of changing the European sugar regime (CEPAGRI 2006) has stipulated the previously limited outsourcing of cane production. Where only 0.4% of cane was produced by independent Mozambican producers in 2005 (INA 2005a, p. 21), this figure had increased to 4% by 2008 (CEPAGRI 2009, p. 24) with around 15 associations, involving 1365 producers. The European Union fund also signals the first large-scale direct involvement of donor money as part of the rehabilitation process, which in itself is remarkable, considering the levels of aid dependence experienced by Mozambique over the past two decades.
Why was the sugar industry rehabilitated?
Why was the sugar sector singled out by the Mozambican state and government for rehabilitation? The literature on the issue has argued that the rehabilitation strategy approved by the European Union Council of Ministers in 1996 came about ‘under the coordinated pressure of investors, three large international sugar corporations’ (Castel-Branco 2002, p. 179). In this optic, the sugar rehabilitation strategy from 1996 and the actual process of rehabilitating the industry was therefore more of a forced imposition than a joint effort between the state/government and the foreign corporations.7 Mozambique's emergence from a history of nationalisation and state intervention/administration of most parts of the industrial base after independence in 1975 seems to support such an argument, though there were forces within Frelimo and among its academic backers that in general – for ideological and nationalistic reasons – were against privatisation (Hall and Young 1997; Pitcher 2002; Macuane 2010). Let us briefly engage with the question of resistance and/or accommodation to reforms like privatisation of the industrial base.
The politics of privatisation
It is argued that as the reforms of then President Samora Machel took off, particularly after his death in 1986, one would for the first time see clearly demarcated ideological and systemic divisions materialise within the Frelimo post-independence set-up that both reflected and further ‘intensified fragmentation and dissension within the state’ and the party (Pitcher 2002, p. 116). It is common to depict this as the emergence of three blocs: the ‘hardliners’, the ‘softliners’ and a ‘neoliberal’ bloc (Pitcher 2002). The three camps emerged just when Frelimo attempted to reform the centralised state order and disengage the state from the party at the same time as the civil war was peaking and the economic crisis seemed irreversible.
‘Hardliners’ saw no need for substantial reform of the state project and they refer to at least two quite different, but intertwined positions. On the one hand, ‘ideological hardliners’ recognised the need for reform as this was considered part of the conflictual basis of Marxism, but they did not search for abandonment of the socialist principles nor of state intervention per se. If anything was needed it was adjustment and adaptation. On the other hand, ‘systemic hardliners’ saw no need for reform or even change. Here the administrative unity of party, state, political system and society is seen as absolutely natural and is implicitly taken for granted by many in the state and party apparatus at both national and provincial level.
‘Softliners’, in contrast, promoted reforms of the state sector and actively advanced the emergence of a private sector and free markets, but they did not want state involvement to be totally eradicated, only reformed (streamlined and restructured), so that the state could engage more efficiently with the private sector. Controlled private sector and market promotion was therefore the preferred modality for the privatisation of state assets after 1987. The ‘softliners’ bloc was quite diverse and differentiated internally, with stands-offs between shifting formations, ministries and personalities regarding the pace of reform, who the intended beneficiaries were and the specific content of reforms. But even though reforms were contested, ‘softliners’ saw reform as part of preserving Frelimo dominance (Pitcher 2002), such as the role of the party vis-à-vis the state and the role of the state in the economy and social sphere. It is therefore perhaps more correct to call them ‘soft hardliners’ or ‘pragmatic hardliners’, as they advocated adjustment that reproduced Frelimo dominance and did not challenge the administrative unity of party and state, or Frelimo control over the political system, society or economic/business system.
Studies of Mozambique dealing with the state and privatisation after 1987 and economic policy in relation to donor dependence have suggested that a third bloc was increasingly in the ascendance promoting unguarded and rampant neoliberal reforms (see, for example, the various writings of Hanlon mentioned in this article). The neoliberal bloc consisted of a mixture of Western donors and state and government officials from key ministries – such as finance, and trade and industry – that through the 1990s and after the new millennium were in charge of market and investment policy making and implementation. The small and scattered group of national private sector members supported this drive, which was further underpinned by the alleged merger or ‘marriage between the politician and businessman’ (Pitcher 2002, p. 118). Descriptions of the ‘neoliberal’ bloc clearly play on derogatory images of the exploitive capitalist ‘selling out’ sovereign state assets and appropriating such assets for own gain. It is doubtful that such a group can actually be empirically identified, at least within the Frelimo setup. In contrast it is possible to identify within the party protagonists for the different instantiations of the ‘hardliner’ and ‘softliner’ blocs. Rather the loosely organised blocs created a certain degree of fluidity, and capacity to shift location made the direction of the state project less clear, but it also allowed for considerable flexibility regarding policy, as suggested by Pitcher (2002).
We mention the three blocs here because the crux of the matter is that reforms have been appropriated by the Mozambican government, party and state to secure the survival of Frelimo as a dominant force. As the popular saying in Mozambique suggests, ‘in order to make sure everything remains the same some change has to take place’. In quite substantial cases, reforms were considered necessary rather than just an imposition, and they were appropriated and aligned to ongoing Mozambican concerns because their content and form were in line with long-term national policy preoccupations (like poverty alleviation and development) and the survival of the system, thus both allowing for ‘hardliners’ to see them as ‘national’ and for ‘softliners’ to find them acceptable as reforms over time found a controlled form. Here it was sometimes convenient to use radical critique and suggestions of imposition and government weakness as it allowed the government to carry out some of the more controversial policies as the ‘victim’ of the international aid system, the IFIs and so forth.
We argue in this article that the state, and the political leadership in charge of the state, supported the rehabilitation of the sugar industry in the context of five related issues that converged and created sufficient support at different times:
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Political and pragmatic concerns related to the General Peace Accord from 1992.
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Ideological attributes.
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The need to re-establish state bureaucratic control over territory and population.
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Government needs.
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The particular experience and drive of national industry actors, creating a bureaucracy that could mediate between FDI and state/government.
These five drivers shaped the various responses outlined above to reform and, we suggest, merged with FDI interests in Mozambique. As such, outlining the five aspects of support should demonstrate that the rehabilitation of the Mozambican sugar industry was not just an imposition by foreign interests. Furthermore, this also implies – as we have argued elsewhere – that the support was not uniform, nor can it be defined in simplistic and one-dimensional terms, but needs to be understood in terms of what we call attributes of support that emerged out of a post-independence fusion of a range of state and government officials' historical experiences of success and failure in the industry and pragmatic concerns at different levels, as well as longer-term ideological stances (Buur 2011a). We briefly summarise each of the five attributes of support.
Post-conflict and pragmatic attributes of support
The government of President Joaquin Chissano, which took over after President Samora Machel's death in 1986, singled out the sugar sector for special treatment. This was done long before the General Peace Accord in 1992 and based on post-independence strategies that referred to the potential of the sugar industry. But it is clear that as part of preparing for the end of the civil war, a specialised agricultural ‘task force’ was constituted by high-level members of government ministries and state institutions and tasked with identifying potential industries (sugar, cotton, tobacco, tea, cashew etc.) that could provide income opportunities besides crucial export revenues. Equally important was the sector's capacity to provide a certain degree of service provision, so the heavy influx of people to the cities could be stopped and demobilised soldiers would see a future in the rural areas. It is therefore no surprise that in the important March 1995 document Establishing the basis for economic and social development: key policies (Government of Mozambique 1995) – which was prepared for the Consultative Group Meeting for Mozambique in Paris, where donors were asked for money for the reconstruction of Mozambique – the sugar sector was identified as a core strategic industry due to its superior track record as an export commodity, as well as its capacity to monetise and industrialise the rural areas and its labour relations. This concern had a particular historical and ideological background.
Ideological attributes of support
The sugar industry was known for providing superior, quasi-urban social services in housing, education, health and water (INA 2000, p. 2). The transformative capacity of the sugar industry is what has been called ‘urbanising the rural’ and is an important marker of a softer version of the post-independence attempt at creating the idealised modern and rational ‘New Man’ (Homen novo) (Buur 2010). In order to fashion one united people in the areas that Frelimo controlled during the liberation war against the Portuguese, a myth was created that idealised the liberated zones: ‘Everything is directed towards liberating man, serving the people … there is nothing to divide us’ (Machel 1981, p. 43). After independence it was expected that, with access to education and health, political training, local governance, and so forth, the new society would produce the internal liberation of Man. After the end of what became a civil war in 1992, the transformation would also take place through and with capitalist relations.
Regaining ‘lost’ territory
All of the sugar plants and estates were situated in areas which by the end of the 1980s were controlled or strongly influenced by the opposition forces of Renamo. In some areas double administration was de facto the order of the day long after it was abolished de jure after the GPA and the Mozambican post-1994 democratic state had taken over. In some of these areas Frelimo, the governing party since independence, lost the 1994, 1999 and 2004 elections. The re-emergence of functioning production units in rural areas became a sign of the government's will and effort to secure greater legitimacy by providing jobs and securing investment in transport, communication and port facilities – and, not least, providing social services at a higher level than in many urban areas, as it was subsidised by CSR-induced social spending from foreign investors. The re-emergence of the sugar sector allowed for the gradual re-establishment of territorial integrity combined with political control in contested areas. Over a 15-year period the ruling party managed to secure enough support to win both national and local elections in all the areas where the sugar industry re-emerged.
Government needs
The government was confronted by a serious financial dilemma over state enterprises, including sugar estates and industrial plants. The post-independence state-intervened industry, running at a loss, was being funded by the banks and in the end by the national bank. The debt increased year after year. The state had to take over the debt as well as settle workers' claims and pensions, and even get rehabilitation started in order to attract investors. As a strategic industry the government wanted to prepare the ground well. This was based on an acknowledgement of failures to protect Mozambican government priorities when confronted with pressure from the Bretton Wood institutions. For example, top Chissano-era officials made no secret of the sugar sector's special status during the early phases of rehabilitation, where the sector was used to prove that a more considered form of privatisation, with state support, could be achieved without repeating past command-economy shortcomings.8 In particular, the International Monetary Fund (IMF) and World Bank treatment of other productive sectors like the cashew industry (Cramer 2006, pp. 266–268; Hanlon 2000; Hanlon and Smart 2008), where state protection had been withdrawn too sharply under heavy pressure by the IFIs and just after it was privatised, had dire consequences for the industry and those investing. Put simply, the government wanted to show that Mozambique could provide support to a productive sector without turning it into an ineffective sector. It would be ‘like in the past, with central planning and a command economy, but done in a sensitive, effective and competent manner’.9
A mediating bureaucracy
Finally, after independence state officials and industry people began to realise both their own limitations and some of the constraints of the capitalist world market economy. We have argued (Buur 2011a) that this particular set of experiences drove national industry actors and created a mediating bureaucracy that could intercede between FDI and state/government expectations and needs as they emerged or changed. An important characteristic of the sugar sector or all other sectors that have some recent success in Mozambique (chicken farming or the new momentum of the cashew industry) is that many of the state and sector leaders, including union leaders, have worked within the industry in both private and state capacities since the 1970s in different constellations. This group of actors knew what the sector earlier had achieved, they had experienced the total breakdown during the 1980s and felt it as tragic, as it could have been avoided with a mixed economy. This group of actors had a keen eye for the many aspects of private sector business interests and needs on the one hand and the diverse and contradictory mix of state/political imperatives outlined above on the other, as well as for new issues that would emerge. They knew it would be possible to get the flagship of modern rural industrialisation in Mozambique up and running again, but they also knew that besides political backing it required assistance from outside Mozambique. They had experienced that relying on export of sugar for revenue was problematic, as the free market generally was based on ‘dumping prices’ and that was the reason that all sugar-producing countries based their production on internal markets and trade agreements.
The general support from a very diverse group of direct actors – the state and government, the sugar union and industry players – does not imply that there was no critique or that the process of privatisation and rehabilitation did not create many uncertainties or tensions. Union leaders and ordinary members, for example, while generally positive – as they had seen the industry vanish and with it their jobs and power, also engaged in struggles to maintain jobs deemed redundant, and keep privileges and influence that had become institutionalised after independence. Questions related to land, which one could expect would feature prominently and potentially could create tough resistance, were nonetheless less prominent. This was partly because the land involved in the privatisation process and the initial rehabilitation phase was industry land developed during the colonial era. After independence, all land was formally taken over by the state, so privatisation of the estates meant transfer of buildings, production units, irrigation systems and so on, and creation of long-term leases or user-rights. Most sugar estates were dilapidated and in some instances (for example at Maragra; Cardoso 1983) the land had partly been used for food production and some resettlement of displaced people during the civil war. Privatisation and transfer to foreign investors of user-rights did initially create some tensions but never on a large scale as most peasant families could access other land, but more often found work at the sugar estate.
This contrasts sharply with conflicts emerging from the third wave of investments in cane-based ethanol production that was initiated in 2008 (Schut et al. 2010), where large tracts of new land are appropriated in processes that resemble large-scale land grabs as they often involve movement of family-based peasants. This drive towards cane-based ethanol production has involved the potential transfer of land on a far bigger scale than sugar production, where the four estates approach 50,000 ha in total even after a recent expansion drive based on independent small- and medium-scale cane production. In contrast, the now failed ProCana cane-based ethanol facility in Massingir in the south had laid claim to about 30,000 ha alone, while the Principle Energy project in Dombe in the central region envisaged producing cane on 18,000 ha during the first phase. In fact all of the projects have either failed or are struggling, mainly because they are based on volatile venture capital funding, as opposed to the state-guaranteed loans that initially financed the rehabilitation of the sugar sector.
Key features of the rehabilitation
In this section we will engage in some detail with three aspects of the state and government's role in coordinating the diverse political and commercial purposes and interests at play as the foreign corporate sugar sector bought into the national rehabilitation policy. The three aspects are: financing rehabilitation; limiting opportunities; and creating an internal market. The role of the state and government has been broader than this as it was also involved in organising and institutionalising the sector, monitoring implementation of the sugar strategy, and promoting small-scale cane producers, particularly after 2006 when the European Union accompanying measures came into force and so forth. (On the European Union accompanying measures, see Locke 2009.) But the aim here is not to provide a full narrative of the rehabilitation efforts. It is only to provide sufficient data for arguing that the Mozambican government and state was indeed very active in the relatively successful rehabilitation of the sugar industry, instead of solely seeing it as the victim of external forces of diverse kinds.
The three aspects dealt with here fall in many ways between what Peter Evans tried to capture with the terms ‘midwifery’ and ‘husbandry’ (Evans 1995, p. 12; 1997, p. 75). Midwifery emphasised the nurturing role of the state when prioritising between productive units and providing support for them. In Mozambique, nurturing was important so that the sugar industry could in the short to medium term operate in a manner where export earnings and internal revenues could be generated, allowing for servicing of loans taken in order to pay for the rehabilitation. These loans were facilitated by the state, as we describe in the following subsection. As the midwifery role succeeded, the role of the state changed and became more of a husbanding role. While the state and government continued to actively promote the industry, largely with the same people that initiated the process (at least until 2006, when the effects of the new Guebuza administration made several changes to the institutional state set-up), it also institutionalised and organised the industry as well as continuously evaluated the progress of efficiency and competiveness in order to ward off critiques of its protected internal market. This, in turn, presented possibilities to spur on expansion of cane production, as initially suggested by the policy/strategy of 1996, although this did not become economically important until the European Union market became available and the European Union Accompanying Measures Fund provided some funds for expansion through small and medium producers organised in associations.
Importantly, the three aspects dealt with here all relate in one way or another to rent creation within the sugar industry (on rents and rent-seeking as a process to foster development, see Khan and Jomo 2000). In economics rents are conventionally defined as an ‘excess return’ that is above ‘normal levels’ of profit made in a free market or enterprise competition, and usually becomes associated with a lack of competition in markets dominated by monopoly creation and maintenance. But there are, as Khan (2000a, 2000b) points out, many types of rents (transfers, regulatory pricing structures, targeted support etc.) and they can be absolutely necessary for economic growth and industrial development to take off, and for the productive sector to become consolidated and profitable. This is especially true in developing countries, as ‘institutional change almost always involves the creation or destruction of rents’ (Khan and Jomo 2000, p. 3). Rents can therefore be both necessary and problematic – something that cannot be asserted a priori. Various logic constellations can be presented but positive/negative implications are context-specific and related to a variety of internal/external factors. That there is a relationship between the ‘midwifery’ and ‘husbandry’ roles of the state and rents is no surprise as rents are essentially incomes created by political interventions (Khan 2000a, 2000b). Transfers, for instance, are often the basis for asset accumulation, for example primitive accumulation that caters for the emergence of new capitalist and middle class groups, producers etc. or creates possibilities like those of small and medium cane producers far later on in the process. Transfer mechanisms can include taxes, subsidies, conversion of public property into private property and so on and can also, as illustrated here, be used to involve FDI. So where Khan is primarily interested in rents related to concerns such as covert class and economic entrepreneur formation that can form part of a development strategy, the rent dynamics in the sugar rehabilitation process were somehow different, at least initially. In the sugar case rents aimed to assist the rehabilitation of a once-productive sector with and through FDI capital where the state played not just an active but a critical role in promoting investments, upgrading technology, acquiring skills, providing loans, creating protected internal markets, signing up for international high-yielding trade quotas and so on. There was no direct covert class and economic entrepreneur formation initially but rent creation definitely formed part of a post-conflict development strategy for highly contested territories where the Frelimo state had only a scant or contested presence. Rents as such compensated for initially uncompetitive cost structures while the industry got off the ground, paid back state guaranteed loans and generally learnt to operate in the risky post-conflict Mozambican business and political landscape.
Financing rehabilitation (or creation of rent opportunities)
Initially, one of the enigmas was why the state continued to have a large shareholding in the industry after it became privatised. If Mozambique had been solely a neoliberal victim, state involvement would have vanished or been derailed. If the old hardliner faction of Frelimo had been the driving force the state would have been basically running the actual operations. Instead, its role was to prepare for and finance the initial phase of rehabilitation. State shareholding was initially related to the ‘debt swap initiatives’ that formed part of the initial restructuring of ownership that took place before actual privatisation was effected and partly to accessing favourable loans for the actual process of rehabilitation. Debt swap dealt with old debt accumulated before 1975 and escalating afterwards, or new loans/credits necessary for paying out workers, pensions, use of land etc. which was swapped for shares by the Banco de Moçambique, which became a main owner of the sugar industry by swapping shares before foreign investments were made. But as Castel-Branco (2002, pp. 201–202) has correctly noted, ‘multilateral and commercial credit was made available’ to the four companies that were rehabilitated. How exactly this was done is a rather complicated issue but it holds the key to understanding the substantial participation of the state in the industry until recently. In Mozambique, the quality of the financial system was and still is poor, and interest rates, which today hover around 15–20%, were even higher before – if any capital at all was available immediately after the civil war for such long-term and intensive investments as the sugar industry demanded.
An illustrative example of how financing changed the formal composition of the sector is the shifting ownership structure of the Xinavane estate and industrial plant, the original name of which was Sociedade Agricola do Incomati (SARL). Xinavane was never nationalised or intervened in like the other companies were after independence, but stayed in the hands of the South African sugar company Tongaat-Hulett Ltd, the owner of which was the even larger multinational, Anglo American. The company was formally operational after the civil war but at a very low level – close to 8% of its capacity at the time of rehabilitation. Interestingly, Xinavane was not rehabilitated before the state took up substantial shares in the estate. In 1990 SARL was dismantled and a new company was set up, Açucareira de Xinavana, with the state as majority shareholder (51%) and Tongaat-Hulett at 49% with the right to acquire more shares at a later stage. The Mozambican state's involvement was financed by loans from the Banco Árabe de Desenvolvimento (Arabic Development Bank, BADEA), the Kuwait Fund and the OPEC Fund to the total value of US$45 million (Gode 1997, p. 6). These were the loans used to rehabilitate the estate and industrial plant.
Therefore the reason for the shareholding change is that the rehabilitation was to a considerable extent financed through the Mozambican state, which took ‘cheap loans’ at various multilateral and commercial credit facilities like development banks, special funds and facilities providing such loans primarily to states at that time. (This, according to present actors, has partly changed.) In such a situation, loans negotiated for rehabilitation had a double function. They aimed at rehabilitating a particular entity, but they also sent a strong message to the international sugar industry: ‘We want to rebuild the industry; we are serious and are ready to take chances and assist.’10 As the sugar companies got export revenues in – initially from the few limited preferential trade agreements with the United States and European Union and less so from free market sales characterised by ‘dumping price setting’ (LMC 2004, 2006) – they paid off the ‘state debt’, so to speak.11
Here export revenues, due to foreign currency constraints, were crucial for external debt payment and paid for the actual loan-servicing besides also catering for the payment of a smaller fee to the state for the provision of access to finance.12 As debt was paid off, state shares diminished but the state's overall credit rating improved as it had been ‘punctual’ in servicing debt. The state's intervention in providing cheap finance was crucial for attracting foreign investments particularly to less attractive and politically difficult investment areas like the central regions of Mozambique.
| Company | Ownership | Shares (%) |
|---|---|---|
| Maragra Acucar, SARL | Maragra SARLb | 50 |
| Maragra Comercial, SARL | Illovo Sugar Ltd | 50 |
| Maragra SARL | 75 | |
| Others | 25 | |
| Xinavane | The state | 51 |
| Tongaat-Hulett Ltd | 49 | |
| Mafambisse | Tongaat-Hulett Ltd | 75 |
| The state | 25 | |
| Buzi | Banco de Moçambique | 67 |
| The state | 33 | |
| Marromeo | Sena Holding Co.c | 75 |
| The state | 25 | |
| Luabo | Sena Holding Co. | 75 |
| The state | 25 | |
| Source: Drawn from Instituto Nacional do Açúcar (INA) (2000), p. 11. Notes: aThis ownership structure has since changed in various ways, but primarily for Sena Company (Marromeo/Luabo) as new French–Brazilian capital has taken over. State shares have generally declined, which is related primarily to debt payment swaps as we have found no information related to any payments for state shares. bMaragra was the only company divided into sugar-producing and agricultural (cane) divisions. Maragra SARL had by 1999 an ownership structure that included the Petiz family (60%), Banco de Moçambique (17%), the state (17%) and others (6%). cThe company was privatised in 1998 and Sena Sugar Estate was owned primarily by Mauritian capital. This has since changed and Tereos, a French company, the world's fourth largest sugar producer, took a 50% share in Sena Holdings Ltd. In 2007, Tereos's sugar interests were concentrated in the Brazilian subsidiary Açúcar Guarani SA, the third biggest Brazilian sugar cane producer (Sena 2009, pp. 1–2). |
The point is that the Mozambican state (through Banco de Moçambique) was still a main player in the sugar sector after the first two waves of privatisation, with heavyweight South African and Mauritian capital interests (capital, management and knowledge, which for the latter was later taken over by large French–Brazilian capital interests) increasingly becoming directly involved.13 Besides big corporate international sugar interests, a few private investors, some of which were former sugar company owners like the Petiz family from Portugal (who managed to get control over the Maragra estate after the civil war and later bought Buzi with the aim of rebuilding the company), became involved after the restructuring and privatisation. The particular way in which access to finance was initially provided created further links between the FDI-driven sugar companies, the state bureaucracy and government. For each company the state/government appointed one or two representatives consisting of highly ranked personnel from either the party–state or state–business sector. For example the former director of the National Sugar Institute (INA), previously in charge of producing the rehabilitation strategy, was deployed to all the administrative boards but with special attention given to Tongaat-Hulett where he later became director, while the new INA director taking up the mantel after 1996 later served on the board of Marromeo until 2009. Others were high-level Frelimo or state officials.
For the state/government, the formal administrative linkages allowed it to follow the rehabilitation process closely, monitor that the politically important aspects of the rehabilitation plan were followed and assist when needed. In particular, it could make sure that political and pragmatic concerns related to the General Peace Accord from 1992, which had ideological underpinnings such as the social service dimensions (building and maintenance of school, health and housing facilities and water provision that also referred to an ideological project of transforming rural populations), were honoured as much as the economy at the different estates allowed. As a result of continuous pressure from state representatives the economic profile of the industry did become more inclusive, particularly when it came to small- and medium-scale cane production. It is no coincidence that Xinavane today has the most expansive small- and medium-scale cane producing scheme, as the state representative – the former INA director – got the company to test different models for such production early on in the process. State representatives on the boards also allowed the state to prevent defection and ensure that the companies honoured the finance deal, which ultimately had credit implications for the government.
This leads us to the second aspect of how rehabilitation was facilitated by the state and government. In the next section we discuss how four of the six available estates/industrial plants were selected for rehabilitation, and the political implications of the exclusions and inclusions.
Prioritising among estates (or selecting rent seekers)
That only four out of six estates were initially rehabilitated can be explained partly by the limits to the liabilities the state could expose itself to as the institution that de jure took out the loans. But beyond the economistic aspects other issues also need to be considered related to the political economy of the rehabilitation of the sugar industry. There can be no doubt that the government and state personnel initially wanted to rehabilitate all six facilities and investors had indeed been identified for five of them. There were five estates and industrial plants that were not operating and/or were severely dilapidated besides Mafambisse, which by then was already under rehabilitation but encountering serious management problems (Buur 2011b). Was it economically feasible to maintain all the companies? Was it politically desirable to rehabilitate all the estates and mills? If politically desirable but economically unfeasible, then based on what criteria should a mill and/or estate continue to be closed or reopened? The issue was both economic and at its core deeply political – and related in interesting ways to a set of issues connected to transfer of rights and sharing of rents generated by political intervention and, later, marketing coordination strategies (elimination of competition) besides state and government needs for re-establishing bureaucratic control over territory and population.
The four that were ‘prioritised for the implementation of the rehabilitation’ were Mafambisse, Xinavane, Maragra and Marromeo (INA 1996, p. 8). Maragra and Xinavane are in government strongholds in the south, Mafambisse is in politically contested central Mozambique and Marromeo to the centre/north. For state–industry people creating what we above called a mediating bureaucracy there were important strategic issues that needed to be addressed, considering how the regional and world markets for sugar were organised, besides the political aspects of prioritising. One of them was how to define the priorities for privatisation and rehabilitation so that excess productive capacity could be avoided in the short to medium term while the industry was given a chance to become productive and feasible. Another was how to align economic concerns with diverse political concerns related to the priorities of the state and government, particularly the issue of territorial and population control in former Renamo areas.
In simple terms, by selecting only four estates/industrial plants and transferring to the group of FDIs the right to the property and exploitation of the land, the state and government made it a limited contest among a closed group of companies, which could in the future make the most of the rent opportunities the Mozambican state offered through a protected internal market.14 Importantly, there would be no ‘excluded’ competitors as such, as none of the estates/industrial plants deselected was operational. There could be provincial authorities and union representatives that felt marginalised as investment was transferred elsewhere but no direct sugar competitors that needed to be negotiated with. Those estates and industrial plants that were not selected could potentially in the future be rehabilitated, but the time horizon would be rather long and require substantial investments.
The total cost of rehabilitating the six sugar facilities was estimated in 1996 at around US$395 million for the first phase, with the two facilities along the remote Zambezi River – Marromeo in Sofala province and Luabo in Zambezia province – the most expensive, at over US$200 million.
| Xinavane | Maragra | Buzi | Mafambisse | Marromeoa | Luabo | Total |
|---|---|---|---|---|---|---|
| 49.5 | 50 | 35 | 50 | 100 | 110 | 394.5 |
| Source: Extracted from Instituto Nacional do Açúcar (INA) (2000), p. 8. Note: aFor the Marromeo/Luabo sugar plant, the costs did not include the rehabilitation of the Sena railway line, on which the plant depended before, nor the installation of electricity from the Cahorra Bassa Dam. |
This meant that two companies were in the south (Xinavane and Maragra), with easy access to the industrial and technical expertise in South Africa and two (Mafambisse and Marromeo) were situated in the politically contested areas of Sofala province (generally considered opposition territory), with one of these on the border with the Zambezia province. The Luabo industrial plant had been totally destroyed, was surrounded by a relatively limited population and could be accessed only by boat along the Zambezi River. It was in the end not considered feasible to rehabilitate due to the massive financial input needed.15 Buzi, on the other hand, would have been the cheapest to rehabilitate and had easy access to the port of Beira. Although the Buzi River bed was changing – a threat to the industrial plant16 – the plains around the plant and the irrigation system were more or less intact and it would have made a favourable place to invest.17 But exactly because of these conditions Buzi also had the best other options available with rice, prawns, livestock and cotton as alternatives and natural gas for exploitation, as it turned out.
Prioritising was also intimately linked to making the future pricing policy effective, as capacity had first to be incrementally increased for the protected internal market before access to more lucrative export markets could be negotiated on a larger scale. Luabo, if reconstructed, would have been the largest estate and industrial sugar plant in Mozambique, as it was during the colonial era, and Buzi the smallest. But besides the more economistic considerations the selection of Marromeo instead of Buzi was at its core deeply political as party and state players believed this was the only way in which the state could establish a credible presence in the hardliner Renamo area of Marromeo and the Sofala side of the massive Zambezi river valley (based on information from provincial state and government officials and industry people). To wrest control from Renamo was difficult, but over time the Frelimo government did manage to win both national and local elections in Marromeo. This ultimate political success was directly linked to the rehabilitation of the sugar estate and industrial plant as jobs were created and crucial services delivered, showing – as it was put to us by provincial state and government officials – that ‘the Frelimo government could provide to those supporting it’.18
Therefore considering the combined weight of political and economic gains, the rehabilitation of the four estates/plants seems to balance fairly well the diverse political, pragmatic and economic needs of the involved stakeholders. What is clear is that Castel-Branco's argument that prioritising was done solely in order ‘to avoid excess capacity’ under pressure from ‘the three large international sugar corporations’ that ended up running the four sugar estates and mills (Castel-Branco 2002, p. 179) does not capture the intricate considerations that made the diverse attributes of support converge. For the Mozambican state and government there were good reasons that merged both political, state administrative and economic considerations. This was not a question of creating unfair opportunities for a group of external actors. It is easy to forget that while the 1996 rehabilitation strategy anticipated the creation of a protected internal market with sufficient profit margins to pay for the rehabilitation, this was all policy and not a concrete reality or something easily done. Around 90% of all sugar consumed (private and industry) in 1996 was unaccounted for, in other words provided through smuggling.19 Considerable state intervention would be needed in areas where its capacity was notoriously weak, and where it would be confronted with long-established trade groups connected to funding Frelimo and the military and security establishment, as well as the state and fiscal system and the political domain more broadly. The creation of an internal market, then, while easily stated on paper, was circumscribed by considerable risks.
Creating productive rent opportunities
The pricing policy that created a protected internal market was provided for in the Sugar Rehabilitation Strategy of 1996 and further work would be done over the following years by administrative staff, consultants, the industry and researchers fine-tuning, defending and legitimising its existence (e.g. Gode 1997; Food and Agriculture Organization of the United Nations (FAO) 2000; INA 2000, 2001; LMC and Global Sugar Consulting 2000; CEPAGRI 2007; LMC and Intellica 2010). From the outset the strategy gave nominal policy guarantees for investors even before the state had taken up all the loans on behalf of the industry. It came into effect in November 1997, long before the industry was up and running. The actual implementation of the price policy, with its flexible levy on sugar imports that catered for the creation and protection of an internal market, had to wait until the new millennium. When the policy therefore was approved it had little effect, because there was not enough sugar produced in Mozambique to protect – there was hardly enough to honour the few and limited preferential trade opportunities on offer to Mozambique from the United States and European Union. But, as the industry picked up production after the 2000 floods, and as the estates/industrial plants became operational (with Marromeo the last one in 2002), and cane production rose and productivity increased, it became an important political issue and created substantial public discussion, with the industry pressing for its implementation while different Frelimo and government groups either supported or resisted implementation (see below).
The objective for creating a protected internal market was formally to ‘Create a favourable milieu in order to stimulate new investments in the sugar industry, promote efficient production and minimise the obstacles for developing the sugar sector caused by the nature of the world market (extremely volatile and based on dumping prices), the fiscal policy (lack of stability) and high risk confronting investors’ (INA 1996, p. 10). This was necessary first of all because of the residual nature of the world market, where at that time 70% of sugar was traded in closed and protected markets and only 30% marketed openly – and this usually only surplus production, which most of the time was sold at price levels below actual production costs (INA 1996, pp. 20–26; FAO 2000, p. 8). Secondly, more implicit but still traceable in the policy is what is known as ‘the infant industry argument’, which suggests that in order to reach high levels of productivity based on an economy of scale, market protection was a sine qua non. A third reason was the Chissano government's commitment to the industry that had created jobs, provided social services and expanded infrastructure to rural populations in parts of the country where the state then had limited access or legitimacy. It was acknowledged that the economic costs were considerable and export markets could not yet provide sufficient revenue even to make the industry ‘break even’.
The 1996 strategy presented the principles for calculating the flexible sobre taxa or surcharge that would follow international price developments (INA 1996, pp. 76–77). When the price falls below a certain historically determined reference price calculated through a fixed formula over a three-year period and based on various sources, a levy or import tax comes into effect (INA 2000, p. 14; LMC and Global Sugar Consulting 2000, pp. 1–3).20 The surcharge would be calculated month by month and made public in the press.
In important ways the surcharge would become the single most controversial aspect of the whole rehabilitation strategy, and in fact it became the litmus test for state and government commitment to the sector as it involved a number of ministries and regional coordination of state and government entities for enforcement, besides the key authorities in harbour and border control. Furthermore, it came to embrace reforms of complex state institutions like border controls, customs and tax/value added tax (VAT) and immigration authorities, as well as impacting on investment policies already in effect and curbing of family trade houses like Delta Trading (Aga Khan-owned) and Sasseka/AFRICOM, which earned well on importing sugar mostly informally (informality was the rule as the formal system was weak). Since its creation in 1995 AFRICOM, for example, had become the premiere commodities supplier in Mozambique, importing products like sugar, rice, wheat flour, maize flour, cooking oil, spaghetti, biscuits, soap and batteries. Challenging such family trade monopolies, which often spanned several continents and had strong economic holding power and internal cohesion besides paying generously for protection to the Frelimo party and individuals, in the name of an FDI-based national industry was not easy. Challenging trade houses importing sugar required considerable political investment and continual liaison internally in the governing party Frelimo, as well as in the various trade houses financing considerable parts of the political settlement at the end of the 1990s and early part of the new millennium (something these family-based trade houses still do, which to some extent explains why productive sector development in Mozambique seldom takes off).
Furthermore, the surcharge initially included only raw cane sugar and not differential charges for raw and refined (white) sugar as all other surcharges worldwide did. When the National Sugar Institute, on behalf of the industry and the government, added a special charge for refined sugar, it met spirited resistance. The development of a differentiated surcharge tax that protected the upcoming industry also thereby hindered free price-setting and made the market imperfect – responding to already imperfect market conditions as sugar from Swaziland and South Africa, while cheaper, continued to benefit from protection measures. Resistance to the surcharge came mainly from two camps: first, upstream industries like the beverage industry (particularly Coca-Cola and the South African Breweries-owned local beer companies), which had come in with substantial investments after 1990, as they were the biggest formal users of refined sugar; and secondly the IMF and World Bank, which became nervous as the surcharge imposed at the end of 1999 (but not effective until after the floods in 2000) raised the ghost of the state-imposed price-setting system of the 1970s and 1980s. As such it was related to the creation of a monopoly-like situation which was considered unfair for market competition in general. However, the pricing system was implemented after a compromise was brokered with the sugar user industries, and after a long and fierce battle with the IMF/World Bank led by then deputy minister for finance and planning Luisa Diogo and including all the top Mozambican journalists, President Chissano, then Frelimo general secretary Manuel Tome and other top government figures, as well as many other bank and emerging business dignitaries (for example AIM No. 170, 1 December 1999).21
The controversy surrounding the establishment of the pricing policy and the internal market epitomised one of the most important aspects of the rehabilitation process: the capacity to mobilise diverse societal, economic and political groups at different times. The Mozambican government made sure that the sugar sector got able and coordinated support from the intellectual critical left, the political and administrative nomenclature, the newly constructed private sector and the union movement.22 While the struggle over the pricing policy has been used to argue that corporate ‘investors’ pressure forced the IMF to withdraw its demand for the liberalisation of the industry' (Castel-Branco 2002, p. 201) it seems clear that the state and government indeed were key players and coordinated actions were taken. To see investment priorities and pricing policy as driven unilaterally by the interests of large international sugar corporations neglects the active role of government and state as well as the diverse motivations underpinning their interests.
Conclusions
In this article we have argued that the Mozambican state and government is not just a ‘hapless victim’ of IFIs and other donors, but has at least a degree of autonomy and capacity to shape economic development according to its own priorities. We have used the case of the rehabilitation of the sugar industry in Mozambique after the economic collapse following independence (and the subsequent destabilisation war that became a civil war) to argue that state and government involvement in the partial divestment of Mozambique's large sugar estates has been greater than commonly acknowledged by ‘externalist’ perspectives. We have illustrated this by outlining the main reasons that the industry was rehabilitated as presented by state and government officials, besides presenting three cases of how the state and government was actively involved in the rehabilitation process. While economistic reasons were plenty and usually well argued, there were in each case also clear post-conflict pragmatic, ideological, and political reasons for the state and government's active involvement.
The support the sugar industry has received epitomises an important comparative entry point for understanding the mixed results of productive agricultural sectors in Mozambique like cashew, chicken, cotton and tobacco. Comparatively the support for the sugar sector may also be important when relating it to the more recent venture capital investments in cane-based biofuel, which seems to have lost state and government support. The fact is that the sugar sector got able and coordinated support from the intellectual critical left, the political and administrative nomenclature and the union movement at crucial moments. Other sectors also attempted to bring investment to rural areas where the state and government was weak and lacked legitimacy, but few were able to combine large-scale formal job creation with social service provision on a continual basis. While a sector like cotton has provided economic income opportunities for rural populations, the cost has been multiple local conflicts over inputs, sales organisation, and pricing policies that often required complicated and contested state and government intervention. We know little about these comparative aspects, but they seem crucial to explore as Mozambique presently stands at a crucial juncture with mega-project investments in oil, gas, energy and minerals that create economic growth with little broad-based economic development. There is in this context an increased need to understand why productive sector investment in agriculture has had so little success in the past. One starting point could be to look at relative successes like the sugar rehabilitation sector and systematically explore the differences and similarities with other sectors – something we hope to be able to do in the future.
Notes on contributors
Lars Buur is a Senior Researcher at the Danish Institute for International Studies and Research Associate at the Wits Institute for Social and Economic Research, Johannesburg, and at the Center for the Studies of Democracy and Development, Maputo. He has co-edited State Recognition and Democratization in Sub-Saharan Africa (2007) and The security–Development Nexus (2007).
Carlota Mondlane is a Master's student at the University of Eduardo Mondlane and a research associate at the Center for the Studies of Democracy and Development in Maputo.
Obede Baloi is a lecturer in sociology at the University of Eduardo Mondlane and a Senior Researcher at the Center for the Studies of Democracy and Development, Maputo.