China and PARPA in Mozambique

European Union countries account for the majority of aid to Mozambique, in total they provide around 80% of bilateral funding (ADB & ADF 2007:21). These have tended to move away from agriculture and infrastructure and focus on cross-sectoral issues and governance. There is a wide range number of actors with a stake on Mozambique's economic development through aid, trade and investment. The most recurrent challenge present in the annual Country Strategy Paper of Mozambique is that of aligning and coordinating the efforts towards development so they all push in the same optimal direction. While traditional Western donors and other institutions such as the African Development Bank have in the recent past paid direct attention to the matters of good governance , a partner like China, because of its non-interference modus operandi, is unlikely to associate itself directly with such programmes. The Government of Mozambique in its 2006-2009 PARPA (Programa para a Redução da Pobreza Absoluta) programme set out three main pillars: 1) good governance; 2) human capital; 3) economic development

China's engagement will have an impact on all three pillars but can affect most visibly human capital and economic development. The numbers of Mozambicans directly trained by China in cooperation programmes are still relatively few and China's greatest impact in this pillar will be channeled through its investment, concessional loans and private sector as will be its impact on the economic development of the country.

Mozambique went from a state-parte regime arguably into a multiparty democratic system, it has a two-party system formed by the organizations which fought against each other the civil war, RENAMO and FRELIMO. Despite the bloody history of relations between the two organizations, the country is stable and political exchanges have been relatively constructive. In geographical terms it is in an extremely strategic location. Its long 2700 km coast gives it great potential for it to become a regional trade hub and have its neighbours conduct through its ports their trade outside and inside of Africa. Forty five per cent of its land is arable and agriculture, though not the most productive sector, remains the most dominant one and that which employs the most people. An important distinction to be made when it comes to Mozambique's employment structure is between formal and informal employment. The latter has witnessed a far greater expansion than the former with the number of informal employment in urban areas rising between 7 and 8 per cent (ADB & ADF 2007:11).

ADB (African Development Bank) & ADF (African Development Fund) 2006 “Mozambique – 2006-09 Country Strategy Paper” Country Operations Department, April 2006