Thursday, September 24, 2015

"Liberalization of the economy ended our industry"

A key player in the economic trajectory of the country, Eneas Comiche retreats in the past and explains how liberalization has destroyed the industrial base. He also speaks of Ematum and shows the way for the future.Eneas Comiche is one of the few licensed Mozambican before national independence, having been formed in economics in 1969.

What was your contribution to Mozambique postcolonial? put their knowledge at the service of independence? It's hard to sum up in so few words, for when they gave independence of Mozambique, I was in the Credit Institute of Mozambique, as an administrator, and soon after as president. The Credit Institute of Mozambique came to turn up in December 1977 in People's Development Bank (BPD), at the time we did the restructuring of the banking system. So it was more immediate action so that the Mozambican people feel comfortable with the bank.

What was the practical contribution after training, ie put knowledge at the service of national independence? Absolutely. That's why I came back to put all the wealth of knowledge acquired to serve the people, is that this was the decision.

He participated in the negotiations between Frelimo and the Portuguese government, the economic and financial field. What was really their contribution in these negotiations? It was part of the delegation of Frelimo in late 1974 and early 1975, and was an excellent contribution. I remember that was part of a committee that was concerned with financial matters. Basically, we worked to negotiate the restructuring of banks, with the aim to implement what had been agreed in Lusaka, which was to transform the National Bank of the Overseas Department in Central Bank. This whole negotiation process encompassed economic aspects and culminated in April 1975, before the proclamation of independence, with the signing of several assurance protocols. Among these protocols, the HCB is, scientific protocols, friendship and cooperation, among others.
Resultado de imagem para eneas comiche 
It was the passage of these institutions for the management of Mozambique's ...
They can not say they were passages, it was necessary to negotiate and were negotiations that were extremely difficult.

How was it possible to keep the operation of banks in a context of great difficulties?
It was extremely difficult. As you know, the paintings were mainly Portuguese, Mozambicans were very few. What happened was, in late 1974, there was a mass exodus of Portuguese. For example, every Monday, I came to the bank, here on September 25, where today works Barclays Bank, there was the Credit Institute of Mozambique, and I was on the 11th floor and could not find ... no one. Half of my way credit was gone and we had to quickly recruit Mozambicans with 9th class. Then there were no more people with 9th class and we started to recruit people with 8th and 7th grade and we created conditions to make training. It was from there that came the idea of ​​training the Credit Institute. It was what was needed so that the bank did not stop ... and did not stop.

And what was the importance of banking shortly after the proclamation of independence? At that time it was already PCA Moçambique.Foi Credit Institute as important as this. us, though without great command of what it meant to run a bank, we were creating management conditions. From 1975 to 1979 we had fully Mozambican staff. In 1975 it was PCA seat and rode across the country in order to disseminate what is this bank thing. People were afraid to enter the bank, hide money, some buried in cans, others in the trees, others in huts.

Disseminate the concept of savings and lead people to acquire saving habits ...
This was a process, because it was necessary that the population had confidence that he could enter the bank and make the deposit, which was to leave the money in the bank and the money was not going to disappear. It was extremely important moments of the beginning of the banking business. To date of national independence, we had nine banks, but in 1977 the number reduced. The Bank of Mozambique had been created with central bank and commercial bank functions. We had BPD and the Bank Standar Tota.

Between 1975 and 1984, he served on the boards of some companies, representing the Credit Institute of Mozambique and People's Development Bank. I speak of Texlom, Texmanta, Bicycle Factory, Maquinag, Riopele and Texmoque. Helped build, to expand and financially solidify these companies, which later went bankrupt. What were the reasons?
They were profitable companies. The Texlom and Riopele were profitable companies, the Mozambique Bicycles Factory not. When they came to seek financing from the Credit Institute of Mozambique, we did a study. I personally did the study and we set out to fund, and in return said it was necessary to be in management. Two years later, it became a rentável.A Texmoque company is created by textile companies and was the group Textile Africa. The Riopele was built in Marracuene and no one believed in Marracuene could be a textile company, but the workers who were in the building were recruited there. When he began to work, some workers coming from the building had a training and have become good workers têxteis.A Riopele producing and exporting, because did not use domestic raw material, did not use cotton, used acrylic fibers and had the Mozambique market and the exterior. The Texmanta was created by the set of textiles in order to make use of waste. The idea was to manufacture blankets and location in Pemba was no accident. It was a political decision, it was not the best location. The best would be close to textile factories where there was this waste and it was known that, in Cabo Delgado, there was no factory. So the decision was made, I was the president Samora. When it amounted to Texmanta, it was necessary to identify a location near the airport, but the area was intensely inhabited. It was necessary to speak with the authorities for the resettlement of populations. That's where the neighborhood was renamed-Texmanta and there was build the factory.

In the particular case of this plant, the failure to build near the source of raw material can be the source of failure? This is why not led to the bankruptcy. The company was good, despite all the difficulties that existed at the beginning, in terms of work. First, we had to find a source of water because the plant would consume a lot of water, as well as the city. We found a source of water and came to the conclusion that it would be enough. It was channeled and used during construction and throughout the factory production process. All textile mills begin to have difficulties in the context of the liberalization process, which takes place after our accession to the Bretton Woods institutions. Produce and have to sell in the market is one thing. Compete with products from China and India is another. And then our textile industry started to have difficulties to compete.

But not only the textile, other failed industries, speak of Maquinag, Metalworking ...
True, but in another context. All this openness to the market economy has brought some difficulties so that our industry could position itself well in the market. It is true that the war situation also featured.

What was the economic and social impact of bankruptcies?
First, I must say that these industries were business cards in the country. President Samora Machel when the received their counterparts, were going to visit the Texlom, Riopele the Maquinag ... In the visits I attended, the president Samora knew the workers to their names. The point that arises is that when we went ahead to liberalization, with the entry of used products, this ended our industry. Because the same products already existed in the market at cheap price, given the occurrence. The clothing bales used were the factor of strong competition for the textile industry. So on the one hand, there is competition and we could not compete with markets like Indian and Chinese. Also the policy that was adopted at the time was not favorable for our industry to position itself well in the market. Indeed, there were workers who lost their jobs and many affected families, but had to face the challenge, to move towards believe in the great potential of our industry, taking advantage of local raw materials.

What today inhibits the revival of these industries?
I think that nothing inhibits. We have to actually make a big bet. I suppose the Five-Year Government Programme 2015 to 2019 shows the way in this regard. We have to take the raw material we have, particularly in the textile, cotton, and invest. I suppose we can make strides. Today, we have more specialized Mozambican staff and are prepared to face major challenges.

Resultado de imagem para eneas comicheAs deputy finance minister from 1974 to 1986, he headed the first technical talks with the IMF and World Bank, where the Union's financing of Soviet Socialist Republics and East countries had decreased and the Nordic countries conditioned the continuity of funding to accession to the institutions of Bretton Woods. As the negotiation and constraints Mozambique refused? I remember the first meeting with the IMF and World Bank, where we were very scared, because at the entrance, we have witnessed demonstrations in which they staged a funeral procession with the coffin of the IMF and think, what we stuck? In 1984, we had begun to negotiate the debt with the so-called Paris Club. We tried to negotiate with commercial banks relating to bank debt, but it was not possible. As a condition to take the first tranche of the IMF and it went through being members of the Bretton Woods institutions. We had to pay the first tranche and was extremely difficult because we have our Mozambican pride, we know what we want and where we want to go. Of the first meetings we had with the IMF, still remember the head of the FIM delegation, an Egyptian master. As an African, it should be more understanding with African countries, but said "we, the IMF, we think the same way and all is well." After all, we can negotiate and have support to move forward in negotiations on the official debt and also the commercial debt.

He said the negotiation process was difficult. I speak for the fact that the World Bank had promised to pay a value between 100 and 150 million dollars for the first operation and then review the value to 45 million. We came also to add constraints that were impositions of economic policy. How did they react to all this and as Mozambique managed to get around? It was necessary to redouble our negotiating capacity and were gaining some experience. At times, the decisions were all later in the day and even at night, after the other party is tired, and that was where the memorandums of understanding were signed. Despite all this, it was possible to get right step. I remember the social reorganization program. there was a social component, was only the economic component. It took President Samora Machel himself contributed to this shift.

One of the evidences arm railways between the government and the IMF are in the following positions. The IMF argued that, being serious the disease, the prescription should be right, but Mozambique defended the idea that the remedy could be so strong that eventually kill the patient. As they came out of this impasse?
In fact, it was possible for us to find a solution to the issues that were raised. The question of valuations was one of the aspects that shocked us because it was necessary to make very sharp devaluations in the period immediately after the Economic and Social Rehabilitation Programme, in particular 1987-1988, then 1989-1990 lighter, and more afternoon there was a certain unification of the exchange rates of the official and parallel markets. I believe that these institutions were understanding as time went on. Because it's just not a country that can gain positions, but with a group of them. It is true that it was the level of governors of African banks that defended positions. Even in the African Union summit it was placed this question, especially when it came to debt.

What were the consequences of the accession to the Bretton Woods institutions? Today, 30 years later, what criticism and praise that makes the intervention of the IMF and World Bank in Mozambique? Today, I will say that the relationship is completely different, both in the IMF and the World Bank, and some leaders who were already here have come up with some opening for dialogue.

As Deputy Minister of Finance, he participated in the first negotiations of Mozambique's foreign debt. As governor of the Bank of Mozambique, headed delegations that negotiated the rescheduling of external debt with the Paris Club and the London Club. Today, the country has regressed and public debt is almost red (over 40% of GDP). How is your sustainability? The thing that I like putado, heading the Commission Budget Plan, and I've been very careful, indicate that at present, the Mozambican public debt is sustainable.

Mozambique has been recognized as a country exemplary in meeting debt service (since 1987). Given that the state will renegotiate debt Ematum, the financial rating agency Standard & Poor's cut the rating of Mozambique. We risk not honor the debt service? I think not. We will not regress nor should we allow that to happen. It is speculated much around the Ematum. True, it is a subject that deserves careful handling. This issue when it came to Parliament, we worked with civil society organizations. It was in our relationship between the Commission of Planning and Budget and the Budget Monitoring Forum and that this matter has been placed. Of course that also had been alerted by the IMF. On the face of it, we made the correction in the State Budget for 2014. The proposed budget law did not have enough information and adequate treatment of this issue of debt Ematum. We had to correct, to 350 million US dollars be one component to defense. This year alone we learned that, after all, there is another type of equipment that had not been considered and that are not 350 million but 850 million dollars, which means that 350 million dollars are allocated to the company Ematum and $ 500 million to defense. This aspect deserves a necessary treatment in the General State Accounts 2014 the account has been received and we are following the normal manner. The Administrative Court has a term until 30 November to make the preparation of the whole process. Once the Administrative Court acts as external auditor, to November 30, when we receive the report with its opinion, it will indeed be vigilant.

As Finance Minister (1991-1994), contributed to a greater rationality in public expenditure, particularly in reducing defense spending. You look at the evolution of spending in the country, particularly in the defense sector? I think we should pay more attention to issues related to defense and national security. We have capacity in terms of State resources for this purpose. So I have to look at public expenditure component with the issue of public revenue. Because the recipe has performed well, but we have to find ways to maximize state revenue, so that our security forces work better, so we can pay better wages and we can do better defense of our coast. So we have to look carefully for the issue of sovereignty, it is no coincidence that in the Government's 2015-2019 Five-Year Plan there is the pillar of the consolidation of national unity, peace and sovereignty.

How a country can invest in the defense without compromising agreements with donors?
What is required is that there are resources and we know how to manage and make better rationalize spending. So we have to create debt capacity, so we can invest where it is needed and where it is a priority.

Resultado de imagem para eneas comicheEneas Comiche headed the delegation of the Government in the Economic and Social Commission Reintegration of demobilized under the Comprehensive Peace Agreement. However, the stalemate continues on the reintegration. What went wrong in this process? With the reintegration commission, did not fail anything. Was fulfilled because it was in fact the reintegration of demobilized soldiers and also those who were displaced, refugees in neighboring countries. Those outside returned, had all the support and were each for their province or district of origin or even to places of your choice. They had kits to resume their activities. This reintegration commission worked well, it has achieved its objectives and has nothing to do with what one can speak today with regard to those who continue with weapons without the hand and are not fulfilling what was agreed in September last year.

Very quickly, what is the balance that makes 40 years of governance?

Very positive. It is indeed a privilege for any of us to say that we have reached the 40 years of independence Mozambique and see where you are. It should be higher up if not for the 40 years of destabilization war; if not for all the aggression, of war, Iam Smith, apartheid, etc. We are well, we have to put into practice what we dream, and what we dream is translated those who have no role in the government or political parties, but they joined for 2025 agenda because there were representatives of political parties, academics, religious, students, etc., who designed the agenda which was revised in 2013.

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