Diplomacy

The Needs of the Many

South-South Relations

Mozambique is becoming active on the global stage in building relationships with other developing and emerging economies.

Mozambique, as with many former colonial nations around the world, is today looking to cement bonds with other developing and emerging economies and carve out a role for itself in global trade and affairs.

“It is of fundamental importance that we take maximum advantage of our location in the interests of economic development,” said Armando Guebuza, President of Mozambique, in an interview with TBY. And while the country invests in preparation for the tide of natural resources, including coal and natural gas, that will be leaving Mozambique’s shores, the authorities are busy building ties with the old world and the new, hoping to maximize potential export destinations and attract attention inward.

If any organization can sum up Mozambique’s role in the post-colonial era, it is the Community of Portuguese Language Countries (CPLP), of which the country currently holds the presidency. And while many Portuguese companies, such as industrial conglomerate Mota-Engil, have turned their attention to Mozambique, it is the significant investments made by Brazilian firms in the country that have turned heads. “In recent years, Brazil has made significant investments in Mozambique, and despite the great distance between the two countries there is now a significant and growing movement of Brazilian business toward our country,” commented President Guebuza. One such example is Vale, a global mining group that plans to invest $2.6 billion into coal and related projects in 2014 alone. A chunk of that figure is earmarked for the development of a rail link, passing through Malawi, to the Port of Nacala. And through such projects, Mozambique is also growing as a gateway to the Indian Ocean for the hinterland nations of Swaziland, Zimbabwe, Lesotho, and Zambia, as well as Malawi.

But Vale’s contribution doesn’t end there; in 2012, Mozambique gained its first anti-retroviral (ARV) drugs manufacturing plant through an investment from the Brazilian government ($23.5 million) and Vale ($4.5 million).

As a member of the Southern African Development Community (SADC), Mozambique’s role in the region is once again underlined. “Mozambique is a very important neighbor of Malawi economically. As a landlocked country, Malawi’s traditional routes to the sea are Mozambique’s ports of Beira and Nacala,” Joyce Banda, President of Malawi, told TBY.

It is with fellow SADC member South Africa that Mozambique shares the most trade, with Zimbabwe being the only other African nation among the country’s top 10 trading partners, underlining the importance of Mozambique as an outlet to the ocean. Other trading partners include the UAE, Bahrain, and the UK, although imports from these three countries are less than Mozambique’s combined imports from South Africa, which were as high as 13% of GDP, or $2 billion, in 2012. The advent of LNG exports, set to begin in 2018, as well as the ramping up of coal exports, could change the face of Mozambique’s exports in favor of developing economies in Asia and beyond.

With the population waiting to assess the impact of the natural resources boom on living standards and a potential end to foreign aid, Mozambique can begin to look to fellow developing economies as it seeks the investment it needs to build first-world know-how.

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