Bank corruption becomes site of struggle in Mozambique

Abstract

Three people have been murdered for investigating corruption in the Mozambican banking system and the loss of more than $400 million. All countries use banks politically, and in Mozambique, the banks were first used to build socialism, then to keep the country running during the war, and finally in the new capitalist era to promote local entrepreneurs and keep the economy out of foreign hands. But the nature of socialist banking and the process of transition combined to create the conditions under which powerful individuals could use the banking system for accumulation. But this has been contested, and there is an ongoing struggle within the elite between those groups which back what Peter Evans calls the ‘predatory’ and ‘developmental’ states. The recent murders suggest this contest is becoming more acute. Finally, we note that a key role has been played by the international financial institutions, which in their doctrinaire opposition to any serious role for the state chose to back the predatory state faction.