'Authorities know what they want' - donors

Good, transparent government is distinguishing Mozambique from its Southern African neighbours and endearing it to donors, who are pouring millions of dollars worth of development aid into government coffers. Donors told IRIN on Tuesday that legal and regulatory reforms, determination to rebuild a country devastated by war and natural disasters, and a good relationship with funders, helped secure aid for the country while its neighbours struggled to attract pledges. Recent boosts to the country's recovery include US $30 million from the United States this month to help combat malaria and HIV/AIDS, and about US $ 6,7 million from Belgium in December for health care reconstruction. The World Bank said in October 2001 that international donors had pledged more than US $700 million to Mozambique. The country was also selected by the International Monetary Fund and the World Bank as one of the world’s few countries eligible for the Enhanced Heavily Indebted Poor Countries Initiative, and a reduction in debt repayment. (For the IRIN news report see http://www.reliefweb.int/w/rwb.nsf/s/220D86B74A51A61A85256AF8005F4426). "The attraction is basically of their own making. Throughout, and in spite of the war, Mozambique has continued with development plans even though they couldn't always put them in practise because of the war. After the war one can feel that the authorities know what they want," said Guido van Hecken, Belgium's Chief of Cabinet for the State Secretary for Development Co-operation. "It is possible to work with Mozambican authorities and civil societies. Mozambique has plans and they know what they want with their development, which makes it easier to enter into partnerships. They know how to work with the donor community, which is helpful, and their priorities correspond with our own. "Corruption, though not non-existent, is not institutionalised and the possibility for controlling funds earmarked for Mozambique is easy and transparent." "Mozambique has a series of trusted and long lasting donors making it possible to know the situation on the ground relatively well making it possible to 'jump onto the rolling train in the right direction'," Van Hecken told IRIN. An article by Reliefweb explained that the form in which the Belgian aid was being provided was significant as it went straight into the federal budget, instead of setting up and financing individual projects. "With budgetary support, or 'aid via the budget', a financial donation is sold in the form of foreign exchange on the internal money market of the partner country. The equivalent value of this foreign exchange in local currency is allocated to public expenditures in the recipient partner country," Reliefweb said. "An increasing number of aid donors are changing over to this form of assistance for developing countries that have reasonable forms of government and policies that are aimed at fighting poverty, as is the case with Mozambique." Isabel Soarez, United Nations Development Programme national economist in Mozambique, said: "Mozambique is a success story after the civil war - it has stability. We have agreements with the Ministry of Finance on disbursements through the budget, and to have the use of the funds reported quarterly." A report prepared for presentation to the United States Congress by the United States Agency for International Development (USAID) said: "While still one of the world’s poorest countries, Mozambique is a major democratic success story in sub-Saharan Africa." The report, which motivates for funding, cited fundamental legal and regulatory reforms, refined procedures for business registration and operations, including imports, and a "red tape reform" agenda as positive factors in Mozambique's growth. "The Government of the Republic of Mozambique (GRM) has achieved ambitious financial sector reforms and promoted privatisation and decentralisation; the economy averaged 8,7 percent growth annually during 1993-99, and achieved currency stability and low inflation. "However, Mozambique is still vulnerable to debt problems, and domestic revenue increases achieved to date still are insufficient to finance urgent public sector investments," it said. The report noted that Mozambique's transition to democracy was still fragile, with the "difficult" relationship between the government and main opposition party, the National Resistance for Mozambique (Renamo), having a detrimental effect on the functioning of parliament. It said the government and Renamo were engaged in an expanded dialogue aimed at reducing tensions which were a by-product of the 1999 elections. The USAID report said the country still needed improvements to the constitutional outreach of political parties and new laws on constitutional, judicial and financial sector reform. (For USAID's full presentation to Congress see http://www.usaid.gov/country/afr/mz/index.html). On Monday, visiting US lawmaker Jim Kolbe of Arizona praised an innovation in US disaster assistance to Mozambique after devastating flooding of the Limpopo River two years ago. Instead of goods, they gave cash "to the wives, to the mothers, the heads of households in the families, because we believed they could spend it more wisely". Speaking on a conference call in South Africa, he said: "We've had that programme audited and it was - it's hard to say this - but it was to all practical purposes, perfect. There was no evidence of any theft, no evidence of any loss and these families spent it on exactly what they should ..."