This paper examines how war and peace affect the distribution of foreign aid in Mozambique, a developing country in a sub-Saharan, Southeast Africa. It focuses on the differences in foreign aid distribution in the times of war and peace and discusses the effects of the foreign aid from donor countries on reduction of poverty as well as incidence of warfare in Mozambique. The choice of the country as a case to discuss the effects of war and peace on distribution of foreign aid is explained by the fact that Mozambique is known to be among the most aid-dependent states across the globe, with aid’s proportion exceeding the half of the country’s GNP (Financial Times World Desk Reference, 2011). Besides, Mozambique is a developing country which has crossed the threshold of democracy (Van Hanen, 2004).
Foreign Aid Distribution: Overview
Mozambique has been a long-standing receiver of foreign aid. It started receiving foreign aid in 1984 when it joined the World Bank. At that time the country was in the middle of its third consecutive war; its economy was disrupted, its social infrastructure was broken, its life expectancy was 41 years, and its rate of literacy was just 7% (Landau, 1998). The country had gained its independence from Portugal nine years earlier, back in 1975. Since that time and for years to come (up the beginning of the 1990s), it faced numerous internal conflicts of diverse intensity and was de-facto in the state of civil war. Two major opposing forces were leftist, Marxist FRELIMO party, which had fought for around a decade for Mazambique’s independence with Portugal, and the Mozambique National Resistance movement (Renamo). The latter continued to destabilize the country since 1977 up to 1992 when a peace agreement was signed to consolidate peace efforts (Landau, 1992).
Since 1992, when the peace agreement was signed and following the first democratic presidential elections held in 1994, Mozambique has received “unparalleled amounts of foreign aid”, if to compare with the rest of the sub-Saharan states in Africa. Indeed, it has become known as “donors darling” (Quartapelle, 2011, p.2). This is the first evidence that war is negatively correlated with foreign aid distribution.
More evidence will be drawn from a sample case analysis of the amounts of Japan’s aid to Mozambique over years. Specifically, Japan ‘s foreign aid was weak after the 1960s up to the middle of 1980s. At that time, Mozambique along with Angola were socialist countries, which received aid from the Soviet Union, and the latter was in the state of Cold War with the United States and other Western countries, donors of aid. As Raposo (2013, p.152) observes Mozambique was transformed into the area of proxy wars that went on between the superpowers. This resulted in decline of western foreign aid, which was a consequence of the donors’ lack of strategic interest in the country and unresolved warfare. However, during the 1980s- early 1990s Mozambique was lucky to receive $82.7 million, in particularly due to signing an agreement with the United States Overseas Private Investment Corporation.
Further, since 1983, Japan stepped up the amount of aid to Mozambique as the country enhanced its cooperation with the Western states, in particular Japan’s long-term economic partner the United States. First aid came in the form of grants to the road and fishery sectors. In-between 1989 and 2000 the aid to Mozambique only from Japan equaled $414 million. Apart from this, the United Nations granted considerable aid for demobilization, disarmament, and reintegration of ex-soldiers ($3.3 million) in 1997-1998. As it was noted by the Mozambican ambassador to Japan, Daniel Antonio in 2009, the end of the civil war in 1992 in Mozambique “created the conditions for Japan to play a reconstruction and development role in the country beyond the relief aid assistance in the 1980s” (Raposo, 2013, p.154). The aid increased as the chances of civil war got fewer. Besides, peace favored establishment of diplomatic missions from many donor countries. This also propelled the increase of foreign aid to Mozambique. Interestingly, the fewer chances of war enabled Mozambique, with its non-intervention status, to receive considerably greater aid than, for example, neighboring Angola, which was involved in tensions with South Africa at the end of 1990s. Consequently, peace promoting and non-intrusive Mozambique became a priority nation in the region for the donor states, Japan one of them (Raposo, 2013).
In the 2000s, western countries increased their foreign aid to Mozambique further, also increasing trade with Mozambique. For example, by the end 2008, Japan’s exports to Mozambique amounted to $227 million. When asked why developed states grant more aid to Mozambique than other countries in the region, their representatives note, first of all, the end of the civil war in Mozambique earlier than in other countries (namely, Angola), its lower GDP per capita, and its stable relationships with international financial institutions (Raposo, 2013).
Since the country won independence in 1975, foreign aid has managed to generate some positive effects on the country’s economic, education, health care and other spheres. The success, however, depended on the war-peace balance and the country’s lack of infrastructure. For example, foreign aid abuse was fixed in 1988 when Marxist Frelimo government deprived certain areas of food aid sent by Western countries based on the fact they were Renamo-liberated zones (Frontline Fellowship, 1988). One of the spheres positively affected by the aid was agriculture. Another was healthcare, which almost fully depends on foreign aid. At the same time, foreign aid negative effects on poverty. Due to economic reforms, the prices of consumer goods have been on rise; rice has risen in price by 600% as a result of attracting the Western aid; social inequality chasm has widened; and no rise in employment has occurred. Besides, foreign aid has been thought to have a negative effect on development of the democratic state.
The true consequence of the foreign aid has been that it has had mixed effects on the economic growth, but de-facto did not produce the desired effects. Mozambique remains a low-income country (economically weaker than Algeria, Congo, Cameroon, etc) (Ekanayake & Chatrna, 2010 ). It also remains one of the world’s poorest states where 80% live below the poverty line. Yet, of to compare war and peace effects, war negatively influences the foreign aid distribution.
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