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Gary Younge
City with a poetic edge

The World Bank regards Mozambique as a model supplicant. Foreign investment is pouring in, and for the past two years economic growth has stayed at around 10% and inflation has dropped more than 10-fold. What was the second poorest country in the world is now one of the first in line for debt "relief" from the wealthier nations.

The trouble with models is they never look as attractive close up as they do from a distance. Stand on the corner where Karl Marx avenue meets Ho Chi Minh street and the blemishes are obvious. Underneath an advert for cigarettes, women sell fish sandwiches in the shade, while a man who has lost the use of his legs shuffles on his hands and knees in search of change from passers-by. The street names themselves - there are also roads named after Lenin and Mao - may testify to an era of eastern bloc affiliations and socialist aspirations, but the enduring image is one of poverty and inequality.

Nowhere is this more evident than in the Museum of Revolution, where shafts of sunlight stream through the ripped curtains on to dusty exhibits of Soviet and Chinese-made artillery and huge murals of the anti-colonial leader Samora Machel striding among smiling crowds.

The Mozambican economy appears healthy on paper, but in reality life for most remains bleak. More than half the nation is illiterate and has access to neither drinking water nor health care.

"The kind of money we have coming in generates new restaurants," said Carlos Cardoso, a local journalist. "But it's foreign money, and when they have finished they take their profits abroad. What is really keeping the country going is the informal economy: the street sellers and market traders. They make up about 70% of the economy, but they never appear on the balance sheet."

Compared to 10 years ago, when the country was ravaged by civil war, the fact that it is still going at all is something of an achievement. During the day in Maputo, the Café Continental is filled with espresso drinkers carrying mobile phones; on a Saturday the night clubs fill the streets with the sound of west coast, rap, South African melodies and other music. The roads may be riddled with pot holes and electricity cuts may be frequent, but the aesthetic blend of southern Europe and southern Africa lends a calming, almost poetic edge to the city.

The country's recent history has been a microcosm of the continent's upheavals. Most of the ills that have been visited on Africa this century have, at one time or another, blighted Mozambique. During the first half of the century much of its economic and human wealth was siphoned off by its Portuguese colonisers. When they left in 1974 they did so in haste, engaging in widespread sabotage as they left.

Looking east

The infant country had little social or commercial capital, and the then Marxist-led Frelimo government turned to the eastern bloc for support and advice. The support for the most part was military, and the advice was poor, but Mozambique had nowhere else to turn. To its west was Ian Smith's Rhodesia, to the south apartheid South Africa. Despite its weak position, it complied with UN sanctions against the former and railed against the injustices of the latter. First Zimbabwe and then South Africa responded by sponsoring a civil war to destabilise the country, which continued for more than a decade. By 1983 there was drought and famine.

By 1990 the Frelimo government had ditched Marx for the market, but the mayhem of the previous years had left it with huge debts. But dwelling on the past, insist the country's multi-lateral financiers, will do little to improve the present. "In our meetings they keep telling us that we are looking at debt morally, and this is simply a financial issue," said Otilia Pacule, coordinator of the Mozambican debt group, which is campaigning for total cancellation of the debt.

The World Bank has pledged to reduce the debt by $1.4bn under the Heavily Indebted Poor Countries (HIPC) initiative which, unlike the street sellers, will do more for the balance sheets than it will for reality.

The debt write-off will make somewhere between no difference at all and a negligible improvement, since the debt being relieved was money that the Mozambican government simply could not pay anyway. Between 1995 and 1998 the country paid roughly $113m a year in debt services. After HIPC that figure will drop to around $100 million - almost as much as the Mozambican government spends on health and education combined.

But even from a financial standpoint, the conditions Mozambique had to satisfy to qualify for HIPC made little sense. Nowhere is this more evident than in the cashew nut industry, which until recently was one of the country's leading exports.

One of the stipulations was that it first privatise cashew nut production and then lower tariff protection, thus ending a system which in effect subsidised the industry from foreign competition. The results have been devastating. Thanks to competition from India, where the industry remains heavily subsidised, factories in Mozambique which once employed 6,000-10,000 now employ no more than 2,000. Most of those sacked are women.

It used to produce 150,000 tonnes of nuts; now it is down to 20,000 and falling. "Some of these factories survived colonialism and the war, and now they are being closed because of the World Bank," says Vincent Da Cruz of the Cashew Producers association.

At the Mocaju factory just outside Maputo, the workers are gathered in the forecourt while the machines inside stay idle. They have not worked since November and have turned up for an interim payment in the hope that things will soon pick up.

Ophelia Tembe, 36, a sheller in the factory, has been making do selling vegetables on the roadside. Her five children, aged between four and 16, have had to give up school.

Lourenco Silambo, 44, has been tilling small patch of land to feed his eight children. "I have no idea what I am going to do and only a small idea of why this is happening. It has something to do with the international banks, but I cannot understand how they will benefit if I am not working."

Mozambique Facts

Life Expectancy 45 years
Illiteracy Rate 60%
% Population with access to safe water 24%
% of GNP spent on debt 13.8 %
% of GNP spent on education 4.4 %
GNP per capita $131
Debt owed per capita $361
(Source: World Bank, Jubilee 2000, most recent available year)

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