From: barnhart@ddsw1.MCS.COM (Mr. Aaron Barnhart)
Subject: IPS:MOZAMBIQUE: 'World's poorest country' has aid slashed by Sweden
Date: Thu, 31 Dec 1992 13:58:59 GMT
Organization: Evanston, Illinois, U.S.A.

Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Title: MOZAMBIQUE: 'World's poorest country' has aid slashed by Sweden


an inter press service feature

by greg mcivor

stockholm, dec 17 (ips) -- as mozambique struggles to its feet at
the end of devastating 17-year civil war, its major foreign aid
donor, sweden, is preparing plans for a deep cut in development
assistance.

the african country, which is the poorest and most aid dependent
in the world, according to the united nations, is a prime casualty
of a wide ranging rationalisation of swedish third world aid.

prime minister's carl bildt's recession-plagued government is
trimming all development asssistance by 10 percent or 1.5 billion
sekr (220 million dollars) for five years from 1993 in a bid to
reduce the ballooning deficit.

the extent of the aid cut to mozambique will be announced early
in january but indications are that it could be up to 80 million
sekr (12 million dollars).

this follows a similar cut last year which brought the annual
level of support down to 700 million sekr (103 million dollars),
still by far the biggest donation of any individual country.

in spite of the signing in october of a peace accord between the
government of the former portuguese colony and renamo rebel
freedom fighters, sweden is uneasy at continuing reports of
widespread corruption.

foreign aid minister alf svensson told ips that corruption in
mozambique was eroding the public's willingness to commit funds to
developing countries. swedes are currently the fourth most
generous aid donors in the world.

''the best way of getting a public backlash against aid is to
tell people that their money is not going to those who really need
it,'' said svensson. ''there is massive corruption in mozambique
and it goes up to the highest level, there is no doubt about
that.''

in a newly-published report on mozambique, the former swedish
central bank vice-chairman, hans lundstrom, calls for aid to be
maintained at present levels for three years despite what he
called ''significant'' corruption.

lundstrom said it was vital not to shock the fragile economy with
sudden cuts, although assistance could be reduced gradually after
three years to wean mozambique slowly off its foreign aid
dependency. (more/ips)

mozambique: 'world's poorest country' has aid slashed by sweden(2-e)

with 75 percent of mozambique's gross national income coming from
international aid, lundstrom fears an immediate cut will only
deepen the current economic crisis.

the report failed to sway aid minister svensson who wants
immediate reductions and money directed at projects less sensitive
to corruption.

this will mean more emphasis on infrastructure programmes and
perhaps fewer cash handouts for import support. auditing will be
stepped up in a bid to crack down on pilfering.

the mozambique authorities have reacted with dismay at the
prospects of cuts. ''this has come at a very unfortunate time for
our country,'' said antonio munaeia, second secretary at the
embassy in stockholm. ''we need all the help we can get to help
concentrate on reconstruction work.''

the civil war, in which one million people were killed and
another five million displaced, has decimated the economy. one
half of the 15 million population lives in ''absolute poverty'',
according to the world bank.

''we understand that sweden has its own problems but if there are
reductions in aid people in mozambique are going to suffer,'' said
munaeia.

visiting sweden this summer the foreign minister pascoal manuel
mocumbi claimed corruption had fallen in recent years and was
small compared with some other third world countries. it was being
used, he said, as a political smokescreen by donor governments for
future aid cuts.

the swedish international development authority (sida) which
distributes the majority of aid in mozambique, believes the level
of corruption has been overstated and there other countries with
worse records.

sida's annika magnusson said the aid need is so great that it is
hard to see where any cuts can be made. ''this is a very tricky
issue,'' she said. ''cuts are obviously going to hurt.''

programmes to build schools, improve rural farming and
reconstruct transport and telecommunications links are all
threatened. but magnusson is optimistic that the blow can be
cushioned by maintaining as many projects as possible and funding
them at a lower rate.

mozambique's foreign debt is currently some 4.9 billion dollars.
mozambican exports are only able to cover 12 percent of what the
country spends in imports and servicing its foreign debt and
finance minister eneas da conceicao has stated that demobilisation
of troops from both sides of the civil war would cost some 83
million dollars. (end/ips/cd/gm/mf/92)

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