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This document is from the archive of the Africa Policy E-Journal, published by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived document may not work.

Mozambique: World Bank Strategy

Mozambique: World Bank Strategy
Date distributed (ymd): 971215
Document reposted by APIC

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Region: Southern Africa
Issue Areas: +economy/development+ +security/peace+
Summary Contents:
This posting contains a December 10 statement by the Mozambican Debt Group on the 1997 World Bank Country Assistance Strategy for Mozambique, as well as an introduction and excerpts from a background analysis on the debate over the strategy by Mozambique expert and World Bank critic Joseph Hanlon.

+++++++++++++++++end profile++++++++++++++++++++++++++++++

MOZAMBICAN CIVIL SOCIETY ATTACKS WORLD BANK OVER COUNTRY ASSISTANCE STRATEGY

Representatives of Mozambican civil society have strongly attacked the World Bank over its preparation of the Country Assistance Strategy (CAS) which goes to the Bank Board on 16 December.

The Mozambican Debt Group, one of the most active Mozambican civil society coalitions, issued a statement on 10 December in response to a campaign to defer consideration of the CAS. In particularly, it notes that "despite Bank claims to the contrary, there was absolutely no consultation with Mozambican 'civil society' on the 1997 CAS."

The Group goes on to complain that "the Bank used its discussions with local actors as evidence of a participatory consultation process, but ... the opinions of local actors were then largely ignored."

It also accuses the CAS of "misrepresentation" of civil society views and of the HIPC agreements with Mozambique, and of making what "could easily be interpreted as a thinly veiled threat" against those trying to delay the CAS.

The full text of the statement is reprinted below.

Joseph Hanlon


The Mozambican Debt Group
Maputo, 10 December 1997

The Mozambican Debt Group is a coalition of non-governmental organizations, church groups, unions, cooperative associations and individuals that are working together to promote discussion and advocate solutions to the problems associated with Mozambique's debt crisis and economic reform process.

With these goals in mind we would like to raise a number of questions related to the exclusion of Mozambican "civil society" from the consultative process of the World Bank's 1997 Country Assistance Strategy (CAS) for the Republic of Mozambique. This is particularly relevant given that one of the three principal aims of the 1997 CAS is to foster "partnerships for Mozambique's development", including the Bank's attempts to "forge stronger partnerships with civil society in Mozambique". This being one of the objectives of the work of the World Bank in Mozambique, we would like to stress the following points:

  1. Despite Bank claims to the contrary, there was absolutely no consultation with Mozambican "civil society" on the 1997 CAS, though some consultation did occur around the 1995 CAS. There is no point in arguing that local actors participated in, or were even consulted on the content of a document to which they were denied access. Furthermore, a vague point-form presentation of the 1997 CAS, which did occur, is not a substitute for gathering comments on the actual document.
  2. Representatives of foreign governments in Mozambique received advance copies of the 1997 CAS for comment but Mozambican non-governmental organizations and institutions were denied access. We trust that the World Bank can understand how this draws into question the sincerity of the Bank's claim to value consultation with Mozambican groups.
  3. While there was an attempt during 1997 to consult local organizations and institutions on the 1995 CAS, there was no systematic attempt to explain the ways in which that consultation was integrated into the formulation of the 1997 CAS or to highlight areas of divergence between the Bank's position and local feedback. There is a feeling among many organizations in Mozambique that the Bank used its discussions with local actors as evidence of a participatory consultation process, but that the opinions of local actors were then largely ignored and did not influence the decision-making process.
  4. Following calls in Mozambique to delay the adoption of the CAS, the World Bank suggested that a delay in the CAS could result in a delay in the implementation of the Heavily Indebted Poor Country (HIPC) Initiative. A letter written by World Bank staff and published in the Mozambican newsfax "Metical" on 20 November reads: "One of the reasons why we are going to present the CAS document to the administrators on 16 December is because the administrators asked that the CAS be discussed before they examine the final HIPC document...(we all) agree that debt alleviation is of fundamental importance to the future of Mozambique, it is in nobody's interest to delay the examination of the present CAS." This is a misrepresentation of the original HIPC agreement and could easily be interpreted as a thinly veiled threat that those who seek to delay the CAS do so at the expense of debt alleviation.

We feel that a broader discussion of the 1997 CAS could have improved the degree to which it is a reflection of actual conditions within the country. While this letter is not a critique of the CAS itself, one example is worth noting:

Section 34 of the 1997 CAS is a misrepresentation of the amount of local "opposition" to the World Bank's cashew nut policy. This policy was a "condition" of World Bank lending and not simply a staff recommendation. Furthermore, it met with opposition from various sectors and not just domestic cashew nut processors as suggested.

The Mozambican Debt Group realizes that the World Bank is making more of an effort to consult local actors but there still exists substantial room for improvement. We welcome the 1997 CAS's emphasis on working towards greater understanding, transparency and participation in the Bank's interaction with local actors.

Based on all of the above considerations, the Mozambican Debt Group calls on the World Bank to demonstrate their good faith and commitment to consultation by taking the following measures:

  1. The World Bank should publicly clarify that there is no direct relationship between the acceptance of the CAS and the progression of the HIPC initiative.
  2. The various documents prepared by the Bretton Woods Institutions on the situation and policies to be implemented in Mozambique should be made public.
  3. The World Bank should publicly release the 1997 CAS in Portuguese, as well as distribute the Country Assistance Review in Portuguese as soon as it is completed.

The Mozambican Debt Group Maputo, 10 December 1997 Graham Saul, Advocacy Officer
Joint Oxfam Advocacy Program in Mozambique Tel: 258-1-304674 Fax: 420 799 Email: oxfamadv@zebra.uem.mz


WORLD BANK URGED TO DELAY DECISION ON
CONTROVERSIAL MOZAMBIQUE COUNTRY ASSISTANCE STRATEGY

Joseph Hanlon, November 21, 1997

Mozambican calls for a delay in the approval by the World Bank Board of Directors of the Country Assistance Strategy (CAS) have been met by World Bank threats to delay debt relief. The heavy-handed response underlines the difficult relationship between the World Bank and Mozambique, which the Bank often cites as one of its success stories, writes Joseph Hanlon. Mozambique has also been caught up in resistance to efforts by President James Wolfensohn to reform the Bank.

The CAS goes to the Board on 16 December 1997. The government-owned news agency, AIM, said on 11 November that the CAS was being "thrust down Mozambique's throat". The influential Maputo newsletter "Metical" on the same day urged the Bank directors to defer a decision on three grounds: + That the CAS was written by the country operations director in Washington, acting alone, just as happened in 1995, and that there was a "total failure to consult openly in Mozambique",
+ that the CAS is being considered too quickly after the receipt of a special Country Assistance Review, which should influence the new CAS and be subject to ample discussion by Mozambican civil society, and
+ that Bank policy has been violated by the refusal of a request by Mozambique to have country operations director resident in Mozambique.

The response was a letter from the Bank published in "Metical" on 20 November which contained an open threat to delay debt relief. Mozambique is one of the poorest and most highly indebted countries, and it should in December also reach its "decision point" on HIPC -- the initiative to relieve debt of the Highly Indebted Poor Countries. But the letter in "Metical" warned that the CAS must be discussed by the Board "before it examines the final HIPC document".

In fact, HIPC and CAS are totally separate procedures. HIPC should not be conditional on an agreed CAS, and to suggest otherwise is an attempt to blackmail Mozambique into accepting the CAS.

The draft CAS pays lip service to continuing problems in Mozambique, but without recognising that Bank policies had played a role in exacerbating those problems, and without spelling out how the Bank could help to resolve them.

The draft CAS recognises what it calls "tensions" and disagreements between the Bank and the government over a number of issues. Government opposes an unsustainable road building programme being pushed by the Bank. Government also objects to what it sees as a bias toward exports and wants the Bank to pay more attention to the rural poor; it sees a Bank preference for large foreign companies and wants more support for Mozambican businesses. Government still sees the Bank as arrogant and unaccountable; the draft CAS dismisses opposition to Bank policies as the actions of "powerful elites who oppose some reforms".

In a particularly damning indictment, the draft CAS admits that after a decade of World Bank programmes and five years after the end of a devastating apartheid-fuelled war, there is "a growing perception that the majority of the population have not yet reaped the benefits of peace", and that discontent could lead to violence. But the Bank refuses to accept its responsibility or suggest a way to reverse this trend.

Finance and Planning Minister Tomaz Salomao told World Bank officials recently that he was pleased they saw Mozambique as a "success", but that personally he would prefer "development". He wants improvement throughout the country, rather than statistical growth based only on the capital.

Bank staff claim that in writing the Mozambique CAS, they carried out one of the widest-ever consultations in Mozambique. This is rejected in Mozambique. Although Phyllis Pomerantz, country operations director and sole author of the draft CAS, made numerous presentations of what she planned to write, she also refused to distribute a draft and was widely criticised for not paying attention to what local people said.

After an angry meeting with the local business community, a former Prime Minister who now heads a Mozambican bank told Pomerantz: "I'm fed up. We came here because you said you wanted to listen. We have wasted two hours because you haven't heard a word we said."

Mozambican government sources say that Pomerantz and the Africa division are particularly resistant to the changes being pressed by the new World Bank president James Wolfensohn. In particular, Wolfensohn told the World Bank annual meeting in Hong Kong in September: "We have decentralised aggressively in the field. By the end of this month, 18 of 48 Country Directors with decision-making authority will be based in the countries they serve" in order to get the Bank "closer to our clients' real needs." Yet only two of those are in Africa. And in that same month, when Mozambique formally asked that the departing resident representative be replaced by a resident country director, in line with the new policy, this was rejected by the Bank's Africa division on grounds of "cost".

"We must listen to local stakeholders. Our partnerships must be inclusive -- involving ... labor organisations, NGOs, foundations and the private sector," James Wolfensohn told the Hong Kong meeting. The draft Mozambique CAS shows what happens when the Bank lectures its stakeholders but fails to listen.

The CAS should be deferred and rewritten through a genuine Wolfensohn-style partnership and open debate in Mozambique. The Board should allow more time for discussion of the Country Assistance Review and also ask why the Bank went against its own policy and refused to make the Country Director resident.


BACKGROUND NOTE TO MOZAMBIQUE CAS DISCUSSION

The 1997 Country Assistance Strategy (CAS) is a rerun of the story of the 1995 CAS. That 1995 document was written entirely in Washington by Phyllis Pomerantz, then country operations manager for Mozambique. Even the World Bank's own resident representative and local office played no part in drafting the 1995 CAS. This was so blatant and so widely known that when he was in Maputo in November 1996, the Vice President for Africa, Callisto Madavo, specifically promised that this would not happen again. But it has.

Dr Pomerantz has been promoted to be operations director for Mozambique and Zambia, and she has again drafted the CAS on her own in Washington, with almost no discussion with the Maputo World Bank office. Although it goes to the board on 16 December and a draft is in circulation in Washington, no draft was sent to the Bank office in Maputo, and no comments were sought in Maputo. (This is officially denied by the Bank, but the denial is not credible.)

The Bank says that it has had a broad "consultation" with civil society in Mozambique -- but that consultation was a sham. Dr Pomerantz did go to Maputo and made extensive presentations on the CAS. The 1997 draft CAS says that comments from non-government organisations were "used in the preparation of this CAS", but there is little evidence of this. Indeed, requests from civil society for a draft of the 1997 CAS to comment on have been refused.

Lecturing is very different from listening, and the input from non-government organisations (NGOs) and the private sector was ignored. In, particular, the private business sector raised concerns about poverty and the growing gap between the capital, Maputo, and the rest of the country, which it considered "unsustainable". Businessmen present at the meeting said that, in response, Pomerantz lectured the private sector on what she saw as their wrong attitudes.

The draft 1997 CAS does contain some shifts. Although the emphasis remains on exports and liberalisation as the way to end poverty, there is finally an acceptance of the need to direct more resources to rural areas. But this rhetoric was in the 1995 CAS as well as earlier World Bank documents, and has never been backed up.

In its final paragraph, the draft CAS admits the central issue: "The growing public debate over economic policies and a growing perception that the majority of the population have not yet reaped the benefits of peace could threaten the continuity and pace of reform efforts or even, at its extreme, shatter the peace."

There is increasing evidence, gathered for example by the UN War Torn Societies Project and the Oxford Refugee Studies Centre report on demobilised soldiers, that people in rural areas are on average poorer now that they were at the end of the war in 1992, and that there is a danger of instability in rural zones. Bank programmes have accelerated this trend because of a defacto Maputo bias. The 1997 CAS fails to confront this.

A CAS which involved genuine input from local stakeholders would be a very different document, and would tackle these concerns directly, rather than tacking them on as an afterthought in the final paragraph.

THE POWER OF AN INDIVIDUAL

A central problem in recent relations has been the unchecked power of one individual, Phyllis Pomerantz, and her efforts to impose on Mozambique what is her sincerely held view of the best way forward. This has led over the past three years to a total break between Washington and the Maputo office of the World Bank, which is now simply bypassed and ignored by Washington-based officials. In the most extreme case -- the roads programme -- the resident representative Roberto Chavez was forced to write articles in the local press because he had no channel to make his criticisms known to Washington. Washington-based officials have also caused divisions within government, by dealing only with those in Maputo who agreed with them. This has helped to create the "tension" which the draft 1997 CAS admits exists.

Two particular issues promoted forcefully by Dr Pomerantz -- cashew nuts and roads -- have been the source of particular controversy, and are discussed below.

It is also important to note that Mozambique appears to have become a battlefield in the struggle between James Wolfensohn and old-line Bank staff over reforms.

THE CASE FOR DEFERRAL

The World Bank directors should on 16 December defer a decision on the Mozambique Country Assistance Strategy on the following grounds: 1) That there has been a total failure to consult openly in Mozambique. This is in complete violation to promises by Madavo and by Wolfensohn's statement in Hong Kong that "we must listen to the stakeholders." 2) That CAS is being considered too quickly after the receipt of the Country Assistance Review, without time for consultation with stakeholders. 3) That the refusal to follow Bank policy to put the country director in the field when this has been requested by Mozambique must raise some questions about relations between the Bank and Mozambique which need to be resolved, and resolved through public discussion.

Directors should: 1) discuss CAS on 16 December and then defer approval, 2) order the publication of the draft CAS and of the full Country Assistance Review, to allow discussion by all stakeholders in Mozambique, and 3) approve the HIPC document.

FOR MORE INFORMATION:

Joseph Hanlon
7 Ormonde Mansions 100a Southampton Row
London WC1B 4BJ, England
Tel: +44 171 405 12 53 Fax: +44 171 813 78 84
j.hanlon@open.ac.uk

21 November 1997


This material is being reposted for wider distribution by the Africa Policy Information Center (APIC), the educational affiliate of the Washington Office on Africa. APIC's primary objective is to widen the policy debate in the United States around African issues and the U.S. role in Africa, by concentrating on providing accessible policy-relevant information and analysis usable by a wide range of groups and individuals.


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