Mozambique tries a little capitalism on its economy

With the war in next-door Zimbabwe over, Mozambique is at last able to tackle the deep-rooted economic problems left behind by the Portuguese four years ago. In the process, it is surprising some Westerners by adopting a new pragmatism and departing from its earlier socialistic policies.

On the other hand, it is easy to exaggerate the long- term meaning of the recent changes, which scarcely signal that Mozambique is on the road back to capitalism.

Among the changes being cited are high-level contacts Mozambican leaders have had with Western investors, including a February conference in Maputo sponsored by Business International and a June meeting with American corporate leaders.

During the same period, Mozambique negotiated long- term loans with Britain, France, and Italy totaling more than $300 million and reached a major accord with Brazil. These represent the first important agreements with Western countries other than the Scandinavian nations.

The government's decision to dismantle the state-store system and encourage private merchants, including Mozambicans living abroad, to revitalize the retail sector is also seen as significant. In March when President Samora Machel announced this decision, he declared that "private enterprise has an important role to play in our country." As of September, the government had received and was processing applications from several hundred prospective merchants.

Finally, proponents of this thesis give particular importance to the removal of Marcelino dos Santos as minister of economic planning and Jorge Rebelo as minister of information. Both have been identified in the Western press as vigorous proponents of Marxism-Leninism who are closely linked to the Soviet Union.

The problem with such an analysis is that it fails to situate these events within the broader patterns of change occuring in Mozambique. As a result, the events assume greater importance than warranted, leading to erroneous conclusions.

Consider the implications of the recent economic agreements signed with the West. Although Mozambican officials acknowledge that they represent an important new opening, they also contend that they have been trying since independence to attract foreign capital. They attribute the recent shift in Western attitude to both peace in Zimbabwe (formerly Rhodesia) and a better understanding of Mozambique's policies -- an assessment shared by Western diplomats.

Moreover, new loans and the growing number of joint ventures with Western firms do not necessarily imply an ideological shift, as Eastern Europe clearly demonstrates.

What they suggest is Mozambique's pragamatism. Since the socialist countries are either unable or unwilling to provide capital on the scale needed by Mozambique to develop basic industries, Mozambique is casting its net as wide as possible.

Its 10-year plan, to be announced shortly, envisions expenditures for more than $1 billion in major projects including a steel mill, aluminum processing plant, paper and textile industries, and some major dams. Investments by Britain, France, Italy, Brazil, Iraq, and the Arab Development Bank, as well as by East Germany and Romania, will help to fuel the development effort.

The state's withdrawal from petty commerce and explicit emphasis on profitability and output should be similarly interpreted. It reflects a willingness to admit past errors and ineffective policies, rather than a radical departure from broad socialist policies.

It was obvious to us during our travels throughout the country that the state stores, run by inexperienced workers and petty bureaucrats without benefit of a reliable marketing and transportation network, were unable to provide such basic commodities as soap, cloth, and rice. Rural merchants, however, motivated by the profit incentive, maintained a regular supply of consumer goods.

Faced with this sobering fact and an acute shortage of skilled personnel, President Machel announced that "the state should devote itself to directing the economy and carrying out major development projects . . . and cannot be absorbed in managing small business."

State support for these merchants, as well as a large number of private farmers, is not perceived as backsliding by the country's leaders, but rather as a reaffirmation of the principle that the path to socialism must be firmly rooted in a "Mozambican reality."

Moreover, these decision are part of a major shift in economic policy aimed at ensuring profitability, increased authority for management, worker discipline , and bureaucratic efficiency and accountability. Several senior ministers emphasized to us that "it is no longer sufficient or acceptable to explain the low level of output and shortage of basic consumer goods by hiding behind the legacy of colonialism."

Over the past several months, many corrupt officials and factory employees, as well as incompetent of unqualified administrative and technical personnel, have been repalced. Included in this latter group were long-time party militants whose good political credentials had won them their jobs.

Finally, although the ministers of planning and information have been relieved from their government posts, both have kept their senior party positions, which assume greater significance in light of the Central Committee's decision in July to reinforce the position of the party as the leading force in societal change.

Only then, Mozambican officials explain, will the party be able to develop broad policies for the government to implement -- a role assigned to it by the Constitution. In light of this decision, other ministers can soon be expected to leave their government posts to assume party functions.

Thus, while the recent changes in Mozambique have far-reaching implications and do represent an important opening to the West, they should not be misinterpreted.