Privatization and Economic Strategy in Mozambique

Abstract

This chapter assesses Mozambique's privatization programme. It begins by outlining why the state intervened in the economy, highlighting both ‘defensive’ and ‘offensive’ motives. It then examines the first phase of privatization in the 1980s and describes the difficulties of the implementation and the gradual erosion of the state's strategic vision of privatization into a process by which assets were sold off almost indiscriminately. It also discusses the interaction of domestic and donor pressures to accelerate privatization in the 1990s. The impact of privatization and the role of economic strategy are also examined. The chapter concludes by emphasizing the relevance of the Eastern Europe and former Soviet Union (EE-FSU) transition experiences and the crucial need to invest in regulatory capacity to protect the public interest and to reintegrate privatization into a strategic vision of the economy's future.