Apr 14, 2007

The Success of Mozambique

by Laura Starita

The Southern African country of Mozambique is one of the poorest nations in the world. Yet it has also managed to nearly double its per capita GDP in the last 15 years, decrease rural and urban poverty rates by double-digit percentages, decrease child mortality and increase school enrollment. This turnaround makes the country one of Africa’s success stories, according to The Wall Street Journal.

How did the country achieve such success? In the wake of a 16-year Cold War-proxy conflict that left the country devastated, its neo-Marxist leaders decided its centralized economy would not allow for the kind of growth it needed to rebuild. So it opened itself to outside investment, cut subsidies for domestic firms, privatized state-owned enterprises and saw to it that the $1 billion in foreign aid received annually did more than sit in politicians’ Swiss bank accounts, all to positive effect.

Everyone would agree that there is still much work to be done in Mozambique. Basic road infrastructure is limited, 93 percent of the population still lacks access to electricity and clean water and HIV prevalence rates are high (16 percent) and climbing. Nonetheless, as the article states, “Experience here suggests that a commitment to economic opening ought to be the litmus test for aid recipients.”

Wall Street Journal: The Mozambique Miracle