The historical logic of the mode of capital accumulation in Mozambique

ABSTRACT

This article critically analyses the political economy dynamics and trajectory of the mode of capital accumulation in post-independence Mozambique, focusing on the capitalist restructuring that followed the adoption of the Washington Consensus from the late 1980s. The article highlights the main structural characteristics, dynamics and tensions in the economy, the relationships and conflicts that explain why they reproduce and expand, what makes them change and the nature of the crises that emerge. The historical logic of the mode of capital accumulation is explored focusing on the historically built and class-structured conditions of capital accumulation, highlighting linkagency, which is the dynamic relationship between agents and linkages. The historically specific traits of the mode of accumulation in Mozambique are derived from the structures of accumulation and class struggle conditions, both domestic and international. The argument is that the recent trajectory of the Mozambican economy was not inevitable, and that it can be logically understood and derived from the existing historical conditions of accumulation. Understanding this historical logic enables us to articulate socially transformative actions which are drawn from the objective and concrete analysis of the mode of accumulation and its contradictions, countering idealistic perspectives in political economy.

RESUMO

Este artigo analisa criticamente a dinâmica da economia política e a trajetória do modo de acumulação de capital em Moçambique pós-independência, focando-se na reestruturação capitalista que se seguiu à adoção do Consenso de Washington a partir do final da década de 1980. O artigo destaca as principais características estruturais, dinâmicas e tensões da economia, as relações e conflitos que explicam porque se reproduzem e se expandem, o que os faz mudar e a natureza das crises que emergem. A lógica histórica do modo de acumulação de capital é explorada com foco nas condições historicamente construídas e estruturadas de classe de acumulação de capital, destacando a linkagency, que é a relação dinâmica entre agentes e ligações. Os traços historicamente específicos do modo de acumulação em Moçambique derivam das estruturas de acumulação e das condições de luta de classes, tanto domésticas como internacionais. O argumento é que a trajetória recente da economia moçambicana não foi inevitável, mas que pode ser logicamente compreendida e derivada das condições históricas de acumulação existentes. Compreender essa lógica histórica permite articular ações socialmente transformadoras a partir da análise objetiva e concreta do modo de acumulação e suas contradições, contrapondo-se a perspectivas idealistas da economia política.

KEYWORDS:

• linkagency
• capital accumulation
• financialisation
• political economy
• neoliberalism
• public debt
• Mozambique

PALAVRAS-CHAVE:

• linkagency
• acumulação de capital
• financeirização
• economia política
• neoliberalismo
• dívida pública
• Moçambique

Acknowledgements

I am grateful to all those who directly and indirectly contributed to the research process that produced the arguments articulated in this article. I would like to thank Elisa Greco, one of the co-editors of this special issue, and the two anonymous reviewers for their detailed, insightful and helpful comments and editorial revisions.

Disclosure statement

No potential conflict of interest was reported by the author.

Correction Statement

This article has been republished with minor changes. These changes do not affect the academic content of the article.

Notes

1 Generally, the literature refers to this as the socialist phase of Mozambique’s development. We prefer to call it the state-centred phase of development because of its emphasis on the state (property, planning, control, accumulation) rather than on the socialist transformation of the system of accumulation.

2 Note that the definitions of ‘endogenous’ and ‘exogenous’, as well as of the relationship between them, reflect a social theory. These are not socially neutral concepts. For example, environmental issues are affected by modes of accumulation in multiple ways – starting with the obvious conclusions that the value of nature for capital depends on the possibility of its commodification for profit (this also includes the utilisation of nature for leisure). The volatility of commodity markets depends on the social organisation and control of those markets as well as the social organisation and specialisation of production of individual economies. If these are considered, the ‘exogenous’ versus ‘endogenous’ divide in this analysis makes no sense.

3 The Program of Economic Rehabilitation, PRE, later changed to Program of Economic and Social Rehabilitation, PRES, was adopted in 1987 (GoM 1988, 1990).

4 For two decades, following the introduction of the structural adjustment and stabilisation programme with the World Bank and the IMF, the government of Mozambique was not authorised to incur commercial debt. During this period, GDP quadrupled, and sovereign debt was renegotiated several times, resulting in debt forgiveness (write-offs) and rescheduling. So, in 2006–2007, commercial debt was negligible, concessional debt was under control, and only the growth of domestic debt, all of which was commercial and accounted for all of Mozambique’s commercial debt, was a sign of potential problems to come. The debt space so created – the difference between the limits of fiscal and economic sustainability set by the international financial institutions and the real debt-to-GDP and debt-to-state budget ratios – was positive and large. This space was ‘mined’ to support private capital accumulation. For a discussion of debt sustainability ratios for Mozambique, see Ossemane (2010).

5 In 2008 and again in 2010 there were large street riots in Maputo and several other cities in Mozambique, mostly triggered by the increase in the prices of key wage goods and services, namely food, domestic fuel, public transport and utilities, like electricity and water. In each case, the violent riots erupted just after Mozambique’s economic performance was praised by the international finance world. In 2008, this was on the same day that the then president of the World Bank, Robert Zoellick, left Maputo following a two-day visit during which he declared the Mozambican economic performance as robust and an example for Africa; and, in 2010, a day after the Financial Times published an article in which Mozambique was elevated to the realm of the most attractive and darling economies for foreign capital. The government and the Bretton Woods establishment were sufficiently scared by these riots that, among other policies, they decided to finance the stability of the exchange rate, which had a great impact on the prices of wage goods and services. The IMF utilised its balance of payments support programme to finance external reserves, which were utilised by the Mozambique central bank, Banco de Moçambique, to protect the value of the metical.

6 BHP Billiton was also the main shareholder of the aluminium smelter Mozal, located in Beluluane, on the outskirts of the city of Maputo. In recent years, BHP Billiton has rebranded itself BHP; its spin-off mining and metals company, South32, now owns 72.1% of Mozal (South32 2021).

7 The Gini coefficient is a standard measure of equality/inequality of the distribution of nominal income by income groups. Its value falls within a range of 0 (perfect equality) and 1 (perfect inequality).

8 Millionaires, multimillionaires and centimillionaires are defined as people holding net assets worth US$1 million or more, US$10 million or more and US$100 million or more, respectively. For Mozambique, these data are only available for the period 2010 to 2015 (New World Wealth 2019).

9 The Council for Mutual Economic Assistance, COMECON (1949–1991), was an inter-state organisation through which members, mostly former socialist countries, attempted to coordinate economic activities of mutual interest and to develop multilateral economic, scientific and technical cooperation. The organisation included 10 full members: the Union of Soviet Socialist Republics (USSR), the German Democratic Republic (GDR), Bulgaria, Cuba, Czechoslovakia, Poland, Romania, Hungary, Mongolia and Vietnam. It had one associate member, Yugoslavia, and 12 members with observer status, one of which was Mozambique.

10 Between 2005 and 2015, Armando Guebuza was president of Frelimo and president of the Republic of Mozambique.

Additional information

Notes on contributors

Carlos Nuno Castel-Branco

Carlos Nuno Castel-Branco, a Mozambican political economist, holds a PhD in economics from the School of Oriental and African Studies (SOAS) of the University of London. He is a visiting professor at the Lisbon School of Economics and Management (ISEG), University of Lisbon, a researcher at the Centre for African and Development Studies (CEsA), and associate at the Institute for Social and Economic Studies (IESE) in Maputo. His research is focused on the political economy of economic crises and change in southern Africa, with emphasis on Mozambique.