The Changing Face of Africa: Mozambique's Economic Transformation and its Implications for Aid Harmonisation

Abstract

Mozambique is undergoing a strong transformation in its economic structure. This mostly resource-led transformation has not only attracted 'new donors' such as China and Brazil; it has also impacted on efforts to make development assistance in Mozambique more effective by better harmonising Mozambique's aid system. For instance, an anticipated resource boom acts as a disincentive for the government to lead efforts to better streamline Mozambique's aid architecture, because it suggests that its aid dependency will decline in the coming years. On the other hand, traditional donors with stagnating or declining aid shares do not want to exit this (potentially) emerging economy, despite the argument that their transaction costs offset the potential development outcomes from their aid provision. Thus, the opportunities that economic transformation holds aside, it also holds challenges for co-operation between Mozambique and its development partners. Based on a desk review and field research, this paper assesses the effects of the economic transformation on attempts by the government and the donor community to overcome donor proliferation and aid fragmentation in Mozambique. It finds that despite 'pockets of effectiveness', efficiency gains through greater rationalisation remain untapped, as commercial and geo-strategic interests of the government and the current 36-plus donors present in Mozambique supplant development objectives. The paper recommends the 'smart management of the delivery of aid' at the sectoral level and advocates for the launch of an overdue discussion *This paper is partially the result of a research project on 'Development policy: questions for the future', funded by the German Federal Ministry for Economic Cooperation and Development. Among other things, the project encompasses analysis of concrete options for improving the implementation of the international aid effectiveness agenda. I am grateful to my interview partners in Mozambique as well as to Stephan Klingebiel, Stefan Leiderer, Mario Negre, Elena Pietschmann and Sebastian Ziaja (of the German Development Institute) for their comments on an earlier draft of this paper. The comments of two anonymous referees strengthened the paper substantially. Editorial assistance from Sarah Downey is greatly appreciated. The usual disclaimer applies. Author's e-mail: Frank.Vollmer@die-gdi.de Irish Studies in International Affairs, Vol. 24 (2013), 137-164. doi: 10.331 8/ISI A.20 1 3 .24.6 This content downloaded from 157.55.39.18 on Sun, 07 Aug 2016 06:08:54 UTC All use subject to http://about.jstor.org/terms 138 Irish Studies in International Affairs on a strategy to make aid truly 'catalytic' for other forms of development finance, such as private capital or foreign direct investment (FDI).