Passive Hosts or Demanding Stakeholders? Understanding Mozambique’s Negotiating Power in the Face of China

Abstract

Recent debates on African agency in China–Africa relations highlight how China provides African governments with an alternative to traditional donors that should allow African policy-makers to experiment with policy approaches and play a more assertive role in negotiations. However, how this is translated into negotiations between China and individual African countries remains unclear. This article uses the negotiation of a Chinese-funded construction project in Mozambique as the basis to discuss the extent to which the Mozambican public administration involved in project negotiation manages to align such projects with broader development goals in the construction sector. The case illustrates a clear tension between macro-economic development goals and project-level practices, and the findings suggest that explanations can be summarised as follows: first, the structural conditions that have shaped Mozambique’s negotiating strategies in development cooperation are not really altered when cooperating with China. Second, the liberal policies promoted in Mozambique have not focused on specific industries, leaving the public administration with a weak policy backdrop for negotiating local content in the construction sector. Third, the China Export-Import Bank has clear requirements for how their funding should be used in project implementation, and fourth, small and medium construction companies in Mozambique are relatively insignificant to the political elite, giving the public administration few incentives to promote long-term capacity building in the construction sector.

Keywords:

• China
• Mozambique
• negotiation
• negotiating power
• development cooperation

Acknowledgements

I would like to thank my research assistant Sérgio António Cossa for crucial help with the data collection in Maputo. I am also grateful to Hege Merete Knutsen, Emma Mawdsley, Dan Banik, Desmond McNeill, Arve Hansen, SUM Research School, and the anonymous reviewers for valuable comments on earlier drafts.

Notes on contributor

Ulrikke Wethal is a Research Fellow at Centre for Development and the Environment, University of Oslo. She is a geographer by training and her current research project focuses on Chinese engagements in the Mozambican construction sector and China-Africa cooperation more broadly. Her latest publications include the co-edited book Emerging Economies and Challenges to Sustainability: Theories, strategies, local realities (Routledge 2015).

Notes

¹The data from 2014 to 2015 were collected by research assistant Sérgio António Cossa.

²The analysis in this article is part of a larger research project exploring the role of Chinese construction projects in Mozambique. The project investigates several Chinese construction projects and the empirical material consists of mainly interviews and observations.

³The project, the Chinese company name, and identity of informants are anonymized as requested by my informants.

⁴While both Mozambique and the ExIm Bank expected the loan to be concessional, it became non-concessional by a small margin as the discount rate applied in the concessionality calculations changed in the final negotiation phase (IMF, 2012; Interview, Ministry of Finance 29 August 2013).

⁵For an overview of the process of recipient government application for infrastructural loans with the China ExIm Bank, see Corkin, 2013, pp. 66–68.

⁶Interviews with Mozambican informants were conducted in Portuguese, while interviews with Chinese informants were conducted in English.

⁷As of 2016, what started with the disclosure of a hidden debt of 2.2 billion USD has to a certain extent shattered this image of Mozambique for many traditional donors (for a thorough analysis, see Hanlon, 2016). The effect of the debt scandal in relation to China is beyond the scope of this article.

⁸The Mozal aluminium smelter, established in 1998, became a showcase for future investments in various capital-intensive mega projects, placing Mozambique on the map for international investors. MOZAL still accounts for about one-third of exports and makes the economy highly dependent on volatile international prices. It should be noted that without MOZAL, manufacturing value added would be as low as it was in 1971 (Krause and Kaufmann, 2011).