Part 1
Policies, Institutional
Interventions and Market
Forces
1
Local Economic Development in
Mozambique:
An Assessment of the Implementation of Tourism
Policy as a Means to Promote Local Economies
Andrew Rylance
Introduction
In 2001 the Mozambique Government produced a framework for economic development entitled the âAction Plan for Absolute Poverty Reductionâ (PARPA). PARPA highlighted the importance of poverty reduction and job creation as focal points for economic growth. The policy stresses the importance of local economic development (LED) as one of the most effective ways of contributing to poverty reduction, creating sustainable jobs and building local capacity (Empel et al, 2006). The Government of Mozambique identified tourism as an instrument to promote local economic development. This chapter analyses the PARPA document and the validity of tourism as a proposed solution to achieving PARPA's objectives. It assesses the structure of LED in Mozambique before analysing whether the practical experience reflects the policies and promotion of sustainable growth of local economies.
Helmsing defines LED as âa process in which partnerships between local governments, community and civic groups and the private sector are established to manage existing resources to create jobs and stimulate the economy of a well defined area. It emphasizes local control, using the potentials of human, institutional, physical and natural resources. LED initiatives mobilize actors, organizations and resources, develop new institutions and local systems through dialogue and strategic actionsâ (2003, p69). Consequently, LED strategies require engagement with all relevant stakeholders and must promote equitable development and access to resources.
This chapter assesses whether the promotion of tourism has achieved its goals against VĂĄzquez Barquero's (1999) framework that LED strategies ought to focus on three criteria: hardware, software and orgware (in Rodriguez-Pose, 2001, pp10â11). Hardware is the facilitation of the physical environment by the government to assist the development process (VĂĄzquez Barquero, 1999 in Rodriguez-Pose, 2001). This often includes the development of infrastructure, legislative and tax systems, enabling an efficient environment in which businesses can operate. Software is the construction and implementation of comprehensive and sustainable development strategies. VĂĄzquez Barquero asserts that these strategies ought to be balanced between the competitiveness of local firms, the attraction of investment and the advancing of human capital (VĂĄzquez Barquero, 1999). Orgware goes beyond the structural development of the economy, seeking to involve and empower civil society in the decision-making process and the recipients of the end goal: sustainable development1 (VĂĄzquez Barquero, 1999). The criteria, recommended by the International Labor Organization (Rodriguez-Pose, 2001), focused on balanced growth, rather than traditional strategies, which were designed to attract foreign investment. It is an appropriate tool for assessment because it satisfies the preceding definition of LED as involving communities, encouraging local control and job creation. Therefore, this chapter assesses the implementation of PARPA upon reflection of these criteria, using practical field data, and whether it has achieved its goals of poverty alleviation, employment creation and local capacity building.
Although Rodriguez-Pose provides an applicable monitoring tool for assessing strategies, the organizational effort involved in developing a strategy that incorporates all relevant stakeholders may be viewed as inefficient and it cannot be guaranteed that the most effective strategy will evolve (Rodriguez-Pose, 2001, p12). There is not one single comprehensive tool for assessing LED strategies but this enables current practice to be compared to the objectives of policy. The criteria allow broad observations and recommendations to be made. In addition, this study is confined by the lack of empirical data on Mozambique. The Strategic Plan for the Development of Tourism in Mozambique confirms that there is âlimited reliable statistical data and satellite accounts to form a base for planning and to measure the actual economic impacts of tourism on the national economyâ (MinistĂ©rio de Turismo, 2004, p46). Consequently, this chapter aims to stimulate debate and highlight issues around the impact of tourism on local economies.
Economic background to Mozambique
The economic development of Mozambique has been variable. Whilst it has maintained strong macroeconomic management, it remains characterized by high levels of corruption, inefficiency and poor infrastructure. In turn, this has discouraged foreign investment in the country. Nevertheless, since 1993, real GDP growth was 7.2 per cent in 2004, while GDP per capita grew at an average of 8 per cent per annum over the last decade. Annual inflation decreased from over 54 per cent in 1995 to 13.5 per cent in 2003 and 9.1 per cent in 2004. Socially, literacy rates and school enrolment have all recorded significant increases, which are reflected by an increase in government spending on education (USAID, 2007, p1).
Box 1.1 Objectives of PARPA
âThe central objective of the Government is a substantial reduction in the levels of absolute poverty in Mozambique through the adoption of measures to improve the capacities of, and the opportunities available to all Mozambicans, especially the poor. The specific objective is to reduce the incidence of absolute poverty from 70% in 1997 to less than 60% by 2005 and less than 50% by the end of this decadeâ (Republic of Mozambique, 2001, p1).
Despite these achievements, Mozambique remains one of the poorest countries in the world and in 2004 per capita income was equal to $320 (UNDP, 2004). The economy remains largely dependent on international donor funding and the lack of capacity of the government means that there is an over-reliance on local economic development agencies to provide social services and local economic projects. Agriculture is the prominent sector of employment accounting for 80 per cent of all jobs in 2003 and contributing to 26 per cent of GDP (SNV Mozambique, 2007, p3).
PARPA
The Government's PARPA is a series of five-year plans that act as the integrated development plan of the country. The 2001â2006 plan aimed to substantially reduce the levels of absolute poverty from 70 per cent of total population (1997) to 50 per cent in 2010 (Republic of Mozambique, 2001, p1), whilst the 2006â2009 plan (PARPA II) is intended to reduce the incidence of poverty from 54 per cent in 2003 to 45 per cent in 2009 (Republic of Mozambique, 2005, p1).2,3 The main economic policy goal, therefore, links strong and broad-based growth with poverty reduction. It acknowledges that whilst it has achieved economic growth, social development remains unresolved. The PARPA states that âthe country remains one of the poorest in the world, and poverty clearly remains as the key challenge facing the country. Our ability to address this challenge is still limited by a severe scarcity of resources resulting from a serious structural weakness of the economyâ (Republic of Mozambique, 2001, p2). PARPA has identified rapid economic growth as the catalytic force that will assist in addressing these concerns. Therefore, to achieve these objectives, the government has asserted that Mozambique needs to be viewed as a favourable environment for foreign investment and must facilitate the expansion of its private sector (Republic of Mozambique, 2001).
The strategic plan argues that it has developed strategies to ensure that growth is inclusive and benefits the poor, but that primarily there must be a climate that can facilitate this growth. In other words, the large private hotels must first exist before jobs can be created for its staff. The PARPA states that âpro-poor growth strategy also requires a policy climate which stimulates the private sector to accelerate job creation and increase income generating opportunities through self-employment⊠The dynamics of human development and broad-based growth are interdependentâ (Republic of Mozambique, 2001, p3).
The collation of evidence by the government was wide-ranging and included Participatory Rural Appraisals, taking into account the views of the poorest communities. PARPA states that âin the 2001 diagnoses, the need for access to basic social services was emphasized, particularly the shortage of health posts near where people live, lack of transportation for the sick (ambulances), and insufficient personnel. Problems of corruption, lack of a potable water supply â especially the poor maintenance of the existing infrastructures (such as pumps) â were also reported during this diagnosisâ (2006, p20).
Although the strategic plan makes a strong case for promoting pro-poor development, the document produced a strategy without an action plan. It primarily focuses on what Bond (2003) refers to as âsmokestack-chasingâ of foreign investment. Bond further asserts that âorthodox LED strategies that desperately seek foreign investment will only exacerbate their shortcomingsâ (2005, p155). In addition, Clarke and Gaile argue that urban policies have often âfavoured investment in amenities, such as hotelsâ which tends to benefit the skilled rather than the unskilled (1998, p31). Chasing investment rather than controlling development in a strategic manner hinders its pro-poor impact. PARPA creates a gap between policy and action that should be coordinated by central government.
Tourism as an instrument of development
Tourism was identified by the PARPA (Republic of Mozambique, 2001) as a strategic area that could assist the government to achieve its objectives. PARPA states that âthe travel and tourism industry now ranks first, worldwide, in terms of revenue generation. It is the industry that employs the most people and an industry that has demonstrated an ability to adapt quickly to crises that have battered the world economyâ (Republic of Mozambique, 2001, p135). For these reasons it was highlighted that Mozambique was ideally suited. It has the potential to attract foreign investment into the area and a labour-intensive industry, promoting extensive job creation. It was agreed that Mozambique's natural assets have provided it with a comparative advantage to other holiday destinations.
The Mozambique government has taken a series of actions to promote the tourism sector, including creating a separate Ministry of Tourism in 2001, adopting a Tourism Policy and Implementation Strategy (2003), producing a National Biodiversity Strategy and Action Plan (NBSAP), and by preparing a Strategic Plan for Tourism Development in Mozambique (SPTDM) (Ministério de Tourismo, 2004).
The SPTDM argues that tourism in many developing countries has been proven to be a significant catalyst for economic growth and job creation. Tourism is labour-intensive and âpro-poorâ, with significant opportunities for women and unskilled workers as well as opportunities at the level of small, micro and mediumsized enterprises (SMMEs) and communities (MinistĂ©rio de Tourismo, 2004). In 2001, tourism accounted for 7.5 per cent of total employment in sub-Saharan Africa (MinistĂ©rio de Tourismo, 2004, p2). Therefore tourism can play a fundamental role as an instrument in poverty alleviation.
Despite the above, although tourism may have economic benefits for developing countries, it does not come without some negative social impacts. While tourism may be labour intensive, it demands low skills and produces correspondingly low wages. Ashley and Roe maintain that tourism âbrings disadvantages to the poor, by causing displacement, inflation, inequality and social disruptionâ (2002, p61). Archer (1978) argues that tourism has reduced the moral standards of developing countries and that they have experienced increases in crime, prostitution and gambling as means of generating incomes (in Mathieson and Wall, 1992). Rothman (1978) found that crime was positively correlated to increases in tourism (in Mathieson and Wall, 1992). The experience of Jangamo District in Mozambique found that âan increase in thieving ha[d] been mentioned by tourist operators and begging is quite obvious on driving through the villagesâ (SLE, 2003, p67). In addition, one may argue that tourism erodes the social culture and local environment to accommodate the demands of tourists.
Impact of tourism on LED
Tourism within Mozambique remains relatively underdeveloped but its âkey strengths lie in the quality of its beach product, the exotic ambience and cultural profile of the country and in its wilderness areas with high bio-diversity. It is one of few countries that can offer this diversity of productsâ (MinistĂ©rio de Tourismo, 2004, piv). Tourist attractions in Mozambique include beautiful sandy beaches and coral reefs; isl...