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The Mozambique Experience Dr Pascoal Mocumbi

The Mozambique Experience Dr Pascoal Mocumbi. CAR Leadership Seminar, Bangui, December 12-13 2005. Outline. Context: from a war-torn country – the end of a dream – to a “success story” Post-war reconstruction and reforms Implementing change and reforms. Context: from a worn-torn country….

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The Mozambique Experience Dr Pascoal Mocumbi

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  1. The Mozambique ExperienceDr Pascoal Mocumbi CAR Leadership Seminar, Bangui, December 12-13 2005

  2. Outline • Context: from a war-torn country – the end of a dream – to a “success story” • Post-war reconstruction and reforms • Implementing change and reforms

  3. Context: from a worn-torn country… • 1975: Euphoria of independence • International solidarity movement – racism & apartheid • 1980-1987: destabilisation increases • End 1980s: war spreads to entire country, Mozambique becomes one of the world’s poorest countries

  4. Context: from a worn-torn contd... • 1987: Economic and Social Rehabilitation Program (ESRP), to address the fundamental causes of economic crisis • October 4, 1992: peace agreement signed – triggered by realization that without war, the financial situation of Mozambique would be considerably better (like CAR – a rich country)

  5. …to a “success story” • One of fastest growing economies of the world • Peace and stability maintained since 1992 • 3 cycles of general elections (Presidential and parliamentary) • Decentralization and community participation

  6. Transition under UN supervision • National reconstruction and resettlement program adopted • Clearance of landmines • Reintegration of demobilised soldiers • Preparation of elections

  7. Post-war reconstruction • Following 1994 elections: 5-year program centred on poverty reduction adopted, focusing on reconciliation, national reconstruction and economic recovery • Priorities: - Maintaining peace and political stability - Sound macroeconomic framework - Recovery of major roads

  8. Post-war reconstruction (contd.) • Adjustment of State institutions • Public sector reform - professionalism of public administration - combat corruption - increase budget revenues (introduction of VAT, customs reform) • Improvement of communication channels and accountability between gvt. and society

  9. Implementing change and reforms • Poverty reduction through focus on increasing agricultural production • Promotion of reconciliation through effective management of potential conflicts • Trade reforms opening up the economy internationally – substantial increase in foreign investment • Mobilising assistance from international community and accountability

  10. Lessons learned: Crucial factors • Strong political commitment and leadership • Clear vision and strategy responding to challenges identified – staying the course • Prioritisation – addressing most urgent needs first • Ability of leadership to build consensus in decision-making process – involvement of different groups of opinion • Appropriate interface between policy makers and implementers • Strengthening state capacity for revenue collection

  11. Constraints and challenges • Very weak human capital base • Inadequate infrastructure • Tightening macroeconomic constraints • Structural reforms take time

  12. Solutions • Initiate change while managing emergency • Consultation on “what to change and what for?” to build consensus on principles and “rules of the game” • Lead by example – showing what is accepted behavior

  13. Mozambique Customs Reform • Why Reforms? - evidence of internal weakness capacity to collect revenues and control trade into and out of the country - civil society criticism on lack of gvt transparence in customs operations, poor management - domestic industry complained that could not compete with smuggles on domestic market

  14. Customs reforms - Objectives • Combat corruption and smuggling: smuggling rings were firmly entrenched and it would be difficult to break out from within • Increase budget revenue: customs revenues were on a downward trend since 1992 and accelerated in 1994 • Modernize customs services • Facilitate legitimate trade

  15. Strategy – create a technical unit • Main components: - Human resources - Legislation and procedures - Organizational profile - Infrastructures and equipments

  16. Outcomes to Date • Efficiency of collection improved • Expressive growth of fiscal revenues • Trade facilitation: clearance times reduced • Modern institutions managed by nationals • A new customs Code issued in 1998 on the customs e-network and answers to frequently asked questions from importers and exporters.

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