World Bank (WB) President Robert Zoellick said on Monday that
the bank is willing to assist the Mozambican government to avoid
the problems of a dual economy.
Speaking to reporters immediately prior to leaving Mozambique at
the end of a three day visit, Zoellick stressed the importance of
the Extractive Industries Transparency Initiative (EITI), which
demands that companies developing national resources, and the
governments, publish details of all the money involved and where it
goes, AIM reported.
Mozambique has not yet joined EITI, but Zoellick claimed the
Mozambican government is moving towards it, and that the Mozambican
government is fully aware of the dangers of a dual economy.
Mozambique's known mineral resources include natural gas, coal
and titanium-bearing heavy sands, while there also strong hopes
that oil may be discovered in the Rovuma Basin, and possibly in the
Zambezi basin.
Zoellick said the polarization of a dual economy can be avoided
by investing the income from resources into social development, and
also by encouraging small and medium enterprises.
He said the WB's private sector funding arm, the International
Finance Corporation (IFC) was already doing this through the
linkages program whereby small companies are encouraged to provide
goods and services for the country's largest factory, the MOZAL
aluminium smelter on the outskirts of Maputo.
Dual economies are particularly vulnerable to corruption, warned
Zoellick. This is a challenge for all countries that are developing
natural resources and have major infrastructure projects, stressed
Zoellick.
Commenting on the increased Chinese investment in Africa,
Zoellick said he was sure that the Chinese could bring important
experience, particularly in agriculture, to sub-Saharan Africa.
During his visit, Zoellick had flown over the Zambezi Valley to
observe the flooding in central Mozambique. Zoellick said he had
been shocked by the devastation he had witnessed, and believed that
a long term solution would involve building further dams that could
ensure flood control.
Summarising the World Bank's relationship with Mozambique over
the past 20 years, Zoellick said the bank's soft loans affiliate,
the International Development Association (IDA) had lent Mozambique
3.5 billion US dollars. The WB had handled a further 700 million
dollars through trust funds for other donors.
The IFC had invested around 200 million dollars, and another
part of the WB group, the Multilateral Investment Guarantee Agency
(MIGA) had provided guarantees of 267 million dollars. This was
MIGA's largest exposure in sub-Saharan Africa and its fourth
highest in the world.
Currently the bank is funding 17 projects in Mozambique, over 50
percent of them on infrastructure, and is also among the 19 donors
and funding agencies that provide direct support for the Mozambican
state budget. Budget support from the bank for this year is 60
million dollars.
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(Xinhua News Agency February 5, 2008)
