Renowned economist Jeffrey Sachs on Thursday in Maputo argued that the Mozambican government should renegotiate for a better sharing of the benefits from the country’s mega-projects.
Lately there have been many critics arguing that the government should renegotiate the mega-projects’ contracts because they allow for excessive (overdrevne/umådeholdne) tax benefits. However, the government has not yet taken a clear public position in relation to this issue.
In total the Mozambican authorities have approved nine investments considered to be mega-projects, which have mobilised about 9,82 billion US dollar. Among the projects are the Mozal aluminium smelter, the Sasol exploitation of natural gas in Inhambane, and the Kenmare heavy mineral sands project in Nampula.
Speaking during a lecture on the theme “Mozambique and the Global Economy”, Sachs stressed the need to renegotiate the mega-projects to benefit both investors and Mozambicans.
– We need to change the rules of the game to ensure that there are mutual gains and this should be done based on the principles of transparency and honesty, said Sachs, who is an advisor to the United Nations Secretary General on the Millennium Development Goals (2015 Målene).
ISRAEL SOM eksempel
In his lecture, Professor Sachs gave the example of the case of a natural gas exploration company in Israel, where only a quarter of the income reverted (gik) to the State, with the great majority of the income going to the investor.
– The Israelis ask why only 25 per cent of income is for our country when the resources are ours, he said, stressing the need to share fairly the gains.
– Nothing is perfect in life, and it is necessary to renegotiate what was not well negotiated at the start, he argued, stating that “all the parties must understand the necessity of this. I am not against mega-projects, but there is a need to have mutual benefits”.
According to Sachs, the poor Southern African country needs these resources for the construction of schools, hospitals and other infrastructure for development.
Sachs said that Mozambique has many things that the world needs, such as coal and the huge potential for agriculture and energy. But these resources cannot be offered to the world at zero cost.
However, he stressed the need for the country to invest in construction and to improve the network of roads and railways as well as in sources of energy.
For him, these infrastructures are necessary to guarantee the exploita-tion of the former Portuguese colonys existing resources. He said that the existence of these infrastructures will be an important factor for attracting foreign investment.
During the lecture, a Mozambican economist asked Sachs if the growing number of mega-projects posed a risk to the country of lowering the competitiveness of other products, a phenomenon known at the “Dutch Disease”.
Sachs said that in his opinion there is no risk of overvaluing coal, for example, to the detriment of (skade for) other products, particularly agriculture. He said that it is possible to triple coal production and ALSO triple agricultural production, so that the country has the conditions to export the same quantity of both products.
STØTTE TIL LANDBRUGET er alfa og omega
Indeed, it was agriculture on which Sachs centred his approach to the policies of economic development, particularly in the rural areas.
He argued that the government should create the conditions for development in rural communities by guaranteeing access to fertilisers, subsidies for agriculture, infrastructures and a network of markets.
With such a system, not only would there be success in agriculture, but also better food security, education, health, and other factors connected to community development.
Sachs said that he believed that Mozambique would be successful in the coming decade taking into account the current state of the Mozambican economy, the strategic location of the country and its position in the context of the global economy.
Kilde: Mozambique News Agency (AIM) – gengivet i Afrika Kontakts seneste elektroniske nyhedsbrev fredag.
