Interesting article on how Mozambique and several other countries are trying to avoid the fate of the “resource curse” following discoveries of coal and gas within their territories. Will be very interesting to see if such self-conscious awareness of the potential for conflict can be addressed through early institutional planning. If so, will really give me faith in the enlightenment ideal that social analysis and self-conscious reflection can improve the human condition! That said, not yet clear what they will do, except that many will insist on greater government transparency in handling contracts.
NEWS ANALYSIS: Resource curse casts a shadow on Mozambique’s door (Business Day)
by Jinty Jackson, March 13 2013, 07:46
Mozambican first lady Graça Machel. Picture: SUNDAY TIMES
AS INVESTORS flock to Mozambique because of vast coal and gas discoveries, the impoverished country is poised to begin a journey many other resource-rich emerging nations have already taken: trying to harness its resource wealth for the benefit of future generations.
Many have failed trying. Mozambique is now the latest country facing the difficult question: how to avoid the “resource curse”, whereby economies in resource-rich countries grow more slowly than others, as unwanted side-effects of this wealth, such as corruption, take hold.
Trinidad and Tobago, Uganda, Angola, Sao Tome and Norway are among the countries that have come forward recently to advise Mozambique on how it might avoid some of the most obvious pitfalls when it comes to managing its hydrocarbon bonanza.
Another story (this one from AlJazeera) about rich Angolans buying up fancy properties and other luxury items in Lisbon. I’m not sure why this so captures my imagination? On the one hand, there is the clear tragedy that oil wealth is leaving the country to serve a privileged and politically-connected few, while most of the country remains deeply impoverished. On the other hand, such is the nature of oil wealth in so many places, and in this instance, one can’t help but be a little amused by the reversal of fortunes given the awful havoc Portuguese colonial rule wreaked upon Southern Africa.
While Portugal suffers from Euro-zone ailments, including an expected contraction in GDP, Angola has been rapidly increasing its presence in this European economy. Flush with cash from high oil prices, Angolan companies have been buying up shares on the Portuguese stock exchange. Meanwhile, Angolan President Eduardo Dos Santos is negotiating opportunities with his Portuguese counterpart, who grew up in colonial Angola (BBC). Some reports are understandably concerned with the notion that Angolan capital could be better spend on improving the situation for the country’s poor as well as with the lack of transparency in capital flows from Angola (News24). But the stark reversal of relative fortunes is worth noting.
The situation has become so extreme for some Portuguese businessmen, that they are contemplating leaving for the seemingly more prosperous Angolan shores.
Anyone who views capital flows as a nameless, faceless set of transactions should take heed of this case. Clearly, political legacies and cultural affinities are drawing these two together in ways that would not be otherwise likely: Sharing Portuguese as a language and a love-hate relationship based on a brutal past provide a unique connection for bilateral ties.