Jun. 26, 2015


Mark Lundell

Mozambique

Mark Lundell

Country Director, World Bank for Mozambique

TBY talks to Mark Lundell, Country Director of the World Bank for Mozambique, Madagascar, Mauritius, Comoros, and Seychelles on hitting benchmark targets and turning crops into an industry.

BIO

Mark Lundell is the World Bank Country Director for Mozambique, Madagascar, Mauritius, Comoros and Seychelles. An American national, his experience includes previous positions in China, Brazil, and Europe and Central Asia. Mark Lundell was Sector Manager for Sustainable Development for China and Mongolia in the East Asia and Pacific region from 2012-14. Prior to that post, he was the Sector Leader for Brazil for Sustainable Development (2006-12). He worked in the Europe and Central Asia Region of the Bank between 1993 and 2006 as a Lead Agricultural Economist and Sector Coordinator. He holds a PhD in Agricultural and Resource Economics from the University of California Berkeley, and a BSc in Economics from Georgetown University.

How would you describe Mozambique's progress in achieving the Millennium Development Goals (MDG)?

Mozambique's progress has been steady, but uneven. In some areas, such as education, gender equality and to some degree health, progress has been substantial. For example, enrolment rates in primary education have risen steadily over the past 15 years. Completion rates could use improvement, but gender parity in education has also increased to almost 50%. There is always room for expansion and improvement, specifically in enrolment rates, and there are still efforts being made to open more schools in remote areas. We have seen child mortality MDGs being met in the health sector, and though maternal mortality rates have been decreasing steadily, from 650 to 100,000 down to 400, Mozambique probably will not reach the MDG goal of close to 200. In general, progress has been slow in the area of communicable diseases; malaria still remains a serious problem. Between 1995 and 2006, there were substantial strides made in the reduction of absolute poverty, but over the past 10 years progress has slowed. In 2000 the rate of poverty was close to 60%, and 15 years later it has been reduced to around 50%.

More than three quarters of the population are involved in agriculture, but this sector contributes only about one quarter to GDP. How can the government transform this sector from subsistence farming to a more efficient and productive agro-industry?

Agriculture has actually been growing reasonably well at 4-5% per year over the past 10 years, but it needs to grow faster. The challenge is to bring in more commercially oriented small farmers. To some degree, the government needs to provide knowledgeable services to the farmers, and locate market opportunities. While private enterprise is the best estimator of sustainable economic activity as opposed to government estimates of where comparative advantages exist, there needs to be a matching of private sector investment with ancillary service support from the government. Mozambique relies on intermediary smaller farmers, which is a model we see working worldwide. The best model is one in which farmers can form associations with training and governmental support such that in negotiations and partnership forming with large enterprises they maintain equal status. To increase access to markets, farmers need more tertiary rural roads and perhaps the establishment of more rural agricultural credit institutions. Lastly, the government plays a role in extending the degree to which Mozambican farms, small and large use irrigation in their production.

Unsatisfied energy demands and access to electricity remains a concern in Mozambique for individuals, companies and potential investors. What role can public private partnerships play within this sector?

The main role of the private sector will be primarily in generation and, to some degree, transmission. The generation of natural gas will be the prime focus for the private sector, especially as the natural gas in Palma becomes available. Consortiums are also pursuing an energy generation installation on the Zambezi River. Rather than extending the grid, many countries have been finding off-grid solutions, with solar energy in particular. The public sector can assist with grants to establish localized solar generation. In many schools for example, programs of this type have been developed. Once consumers realize the value of power, private companies can usually find customers to provide cost effective maintenance service on an annual basis. Public private partnerships can establish public installations with private sector maintenance service.

How would you describe the role that foreign financed mega-projects play in Mozambique's economic growth?

We have seen significant growth in some of the natural resource sectors, such as aluminium, coal, and minerals, which has helped to drastically improve the level of production, added value and exports. There is direct employment associated with this, in mining and construction in particular, though I think the employment impact of mega enterprise investment has been less than expected. Large-scale investors recognize this, which has been evident in changing approaches to stimulating groups of SMEs to be more focused on meeting the needs of the megaprojects.