Tuesday, July 19, 2016

We can not take a step higher than the leg!

The economist Carlos Nuno Castel-Branco said that the debt of Mozambique, as well as unsustainable, is unlawful and, therefore, should not be paid. And regrets that the warnings to the current situation have not been heard, but rather ridiculed, especially in the era Guebuza, what might happen now, serving to rethink the economic model of the country. After having an independent audit.

In general, we have the picture of the problems facing the country today, especially the issue of debt. By 2015, the debt was $ 64 billion, a figure that exceeds the ceiling recommended internationally. The country can handle pay this debt? What sacrifices is that the country will consent? Debt is sustainable?  Clearly not. The IMF statement itself refers to it, and the Government itself has acknowledged that the debt is not sustainable. This question did not begin with the so-called illegal debt, which includes the three secret debts of around 1.4 billion dollars, more Mozal, which is also illegal, of about $ 850 million.

Where did the problem started?   The debt of the central problem starts with trying to use the debt space that the country had created like a mine. People remember that, for two decades, the Government of Mozambique had successive agreements with the IMF financial stabilization and one of the clauses of these agreements was not contracting commercial debt. However, Mozambique's GDP has grown and what is called debt space - the ability of the economy has sustainable debt from the fiscal point of view - has increased significantly. In 2006, the stock of debt in Mozambique was slightly less than $ 3 million, and during the decade of government of President Guebuza, quadrupled and the commercial component of the debt has increased six times. So there was a great resource the government to external borrowing to finance infrastructure.

This option was wrong given that at the time were needed resources to invest in infrastructure? There are two things: Suppose I have a steel ball in hand and to move this sphere, have to have the strength for it. If it is not enough, we move a little ball, and it falls; if sufficient, can not move the ball with a speed that put her in constant motion in space. It turns out that the larger the sphere, the greater the force required. But what happened to our economy was that we jump to grandiose projects, with a strong focus for the mineral and energy complex and the state committed to its political and economic capacity to support these projects. There are two problems with this: First, it is an uncertain return project due to market volatility, and very long term. The state met first priorities of investors, giving them strong incentives not only fiscal, but huge concessions that allow investors to speculate on resources. On the other hand, these projects do not address the country's problems, such as food, employment, education, health and housing. And to put all the political and economic capacity in this type of project, this led to the emergence of a group of millionaires. According to credible international agencies, Mozambique has created just over 1000 new millionaires in the decade of President Guebuza; but at the same time created 2 million poor. Therefore, it is an economic project which favored a process of primitive accumulation of capital, but that has macro-economic sustainability. Imagine a boat that leaves from Maputo to Inhaca and fuel ends up in the middle - when you look back, no longer see Maputo; when you look forward, still do not see Inhaca: this is situation where our economy is. I mean, we invest a lot in a project so far without the ability to support this transition. This was the problem that we put years ago when we insist on the need to negotiate contracts with mega-projects, to mobilize fiscal resources and the government said it had yet to collect revenue. Only it was not true, because the Mozal and Sasol were generating profits, and we could have collected between 300 and 400 million dollars annually. One of the arguments posed was: why we'll worry about it when, in 10 or 15 years, we have billions of dollars of gas and coal? And the question we put was: But let's get to that future? And before that, how do we live? Today we are paying for this very reason. It was like saying, why we'll worry about the boat's fuel, because when we get to Inhaca we have sun and good life.The debt soared in recent years. In 2008, there were almost 4 billion and in 2013 rose to 6, 8 billion. In 2015, it increased to 11 billion - in a few years, up 7 billion. How did we get so high without the conditions to pay for it, so critical mass that the country has so many institutions? It has been seen, it was expected and we all know how the discussion that were misaligned with the official arguments was treated at the time. However, this was provided by the "apostles of doom" by "distracted" by "chatty", the "foreign hand agents." In 2012 we discussed this in 2013 published articles about it in 2014 and 2015 suggest that the debt issue was a priority among the parties in election campaigns. At that time, we were called opposition. So there is a process of discussion in our society that takes place outside of the official institutions, which not only never wanted to hear, as harassed.

This critical mass outside of public institutions is now heard?I do not know if you heard, but at least from the formal point of view, is not so harassed. I do not mean that there is critical mass outside of public institutions that are right and that within the institutions is wrong. There in the country the ability to think both inside and outside the institutions, but it needs to be released, heard ... do not have to agree with each other, but we have to be able to think rationally. Just was an article in the press trying to justify the debt in terms of sovereignty. But what is the sovereignty that this debt allows defend when undermines the economic financial sovereignty and the country's politics? The argument goes further because it justifies making illegal decisions by the government, anti-incostitucionais with the political context. If the government has the power to perform or not the Constitution according to their interests, what kind of country and democracy we live? This type of situation can not be. We are talking about the debt crisis, but it is a deeper crisis of the economy, rooted in tapered productive structures, disjointed, the economy. Furthermore, there is a crisis of society, social project. What kind of society have we are able to undermine the country's economy to pursue objectives do not know if obsessed, but oriented to a process of primitive accumulation of capital, by a small group of people who think you have the right to do it does call into question a whole national project? Because these people who think they have the right to get rich that way use the past struggle as legitimate to justify being rich today. These people say they do not want to see rich people; is not true: we do not want is to see a handful of rich Mozambicans and the great mass of poor Mozambicans. We want all Mozambicans have the possibility of living well.

Regarding foreign debt, the government has already revealed the data and have an idea of ​​the problems. But there is also the internal debt, which is also growing and now round 2 billion dollars. It is an expensive debt. How is that looking at the health of our national debt?The internal debt is a huge problem. The first sign of crisis, tension with debt, it was precisely in domestic debt. Mozambique's economy is small and domestic borrowing soared. Interestingly, until 2014, were having an increase in domestic public debt of 300 million dollars a year, about what we could charge to Mozal, Sasol and Kenmar, not to mention other large companies would not need to make domestic borrowing . But it is in part a result of this inability to mobilize domestic resources and the state has to resort to short-term borrowing to cover current expenditures. On the other hand, it is also the result of the budget of external dependence - if disbursements of delay donors, there are budgetary holes. The impact of this is that the state, to maintain the flow of resources to finance them, remove liquidity from the financial system to finance the budget deficit and, as the foreign debt increased, and especially the commercial debt, which should be short-term it is much more expensive and very difficult to renegotiate. As the increased budget pressures, increased the pressure on debt service and the state resorted to other public issues to finance the debt. The impact of this was that, on the one hand, state intervention in the domestic financial system brought up the interest - when the Bank of Mozambique lowered the reference rates, interest rates are not lowered, held up high. On the other hand, has the domestic system much more speculative - this time, which domestic banks invest in government bonds is equal to spending in industry, agriculture, tourism, fisheries and transport, all together. Therefore, the most important item in the portfolio of banks today are debt securities. Which means that we have a financial system increasingly speculative, less and less interested in small and medium enterprises, increasingly unaffordable.

The IMF has already talked to the Minister of Economy and Finance, the Industry and Trade, the Prime Minister, with the President and issued a statement which advances the growth rate will slow to about 3%. Agrees with the X-ray or the problem is even more serious?I not found interesting radiography IMF at all. It is worrying that the focus remains the fiscal unsustainability of debt and the growth rate. And it is worrying why? First, the debt unsustainability is a ratio. The IMF has that ratio of 30%, but that does not mathematical because the debt fiscal sustainability depends on the state of the political capacity to impose austerity in other expenses in order to serve this debt. Now where is that austerity will fall? At school, health, public transport, social security, etc. Who are the most affected? Those that depend on it. If I afford to go to private school, private hospital, private transportation, etc., I am not much affected; but the overwhelming majority of Mozambicans are! So, when making decisions about fiscal sustainability are decisions that represent the political capacity that the state has. Because we will not renegotiate the mega-projects of contracts, for example, instead of discussing the tax debt sustainability ... About the growth rate, I am not too worried - it is clear that moving from 7 to 4% It has impact on the credibility of the economy and a negative domino in foreign capital inflows. One of the reasons why the debt was contracted at this speed was because the process of private capital accumulation to Mozambique depended on external inflows, which depend on the external credibility of the economy and state intervention was to maintain that credibility, including keeping the rates elevated growth. The main issue is not the growth rate, is the kind of growth we have - our growth rate over the past 10 years, it was supported by the public debt and the economy exploded. To slow this growth rate is not necessarily bad, because it allows to rethink the direction of the economy.

But take effect on the lives of people, especially the neediest?The point is that the growth rate before high, did not benefit the poor. No! The example is that the economy, in the ten years of President Guebuza, grew at a very high average, however, the number of poor increased by 2 million - poverty has not decreased. So, that growth has not benefited the poor.

The IMF statement said one of the things to do is create a key package of policy measures. After the government announced austerity measures corresponding to 10% of government expenditure. Where and how will you cut? How do we feel these cuts?The government did not say what measures will be taken - has said it will not cut social spending, but at this point I think anything the government says, no one believes, because the credibility is very bad. In 2015, the Minister of Economy and Finance said that having a stock of high debt was good because it gave us international visibility. Even in 2015, when it exploded the issue of secret debt, he said it was the IMF error. After that, it becomes very hard to believe what the government says; it is preferable to wait for what the government does. It is the Government going to drink the measures and then say that we have to implement them because donors forced it. We can increase the bargaining power to the IMF and creditors if we take offensive action if not wait to be told what to do. One of the things you should do is to refuse to pay the debt and expropriate the assets goods call companies that benefited from this illegal debt, return the money and we will not have to pay. We will reduce the sacrifices.

Anyway, the decision had to come from political power?The IMF will not say to do this because it is a serious political decision. The talks can suggest. But the ambassador of the European Union in Mozambique has said it does not make sense to pay the illegal debt and everyone must agree.

There is room, watching the political situation of our country? There may be an independent audit?We have to create this space. That is why I ask the question that, instead of going to negotiate with the IMF - that we, citizens, do not know what they are negotiating on our behalf - which then comes with a booklet that the G 40 will use - ' because donors imposed '- in addition, why not get it right among us, Mozambicans in Parliament or wherever. What is our strategy on this issue?

But the government has often been to Parliament ...  It has been, but did not show anything; the Government went to Parliament to omit information - and Parliament has two more interested parties in to insult and war than in solving the country's problems. But this is an issue that concerns us all. I'll pay, you will pay, our children and our grandchildren unborn will pay it. We must accept? Or should we say that we have to our country and to discuss the way? We will protect those who violate the Constitution and bring into question our sovereignty? Or will we protect the people, the sovereignty and the country? It is a matter of accountability, making the rigth of the illicit debt that has to be done by returning the money, which is not the country, not the people, who did not benefit from it. These companies that received the money have not done the things for which they received the money.

But how do you see the role of the IMF which, in recent years, said that the Mozambican economy was robust? Cast messages between the lines, but has never been incisive on debt ... How sees the IMF as financial advisor of our government?The IMF has a monetarist approach, neoliberal, which is not conducive to the development of countries like Mozambique - or to no. Let's look at the crisis in Europe and the world: the IMF did not anticipate or solve any crisis until today. And just the IMF Managing Director lamented that the neoliberal model followed by the IMF in the last decades have proved more costly than beneficial to the economy. So the IMF is not the solution. But we come to a situation where our fiscal policy is so retrograde as favorable to big capital and unfavorable to small and medium businesses and citizens in general that the IMF was less reactionary than our government. Our fiscal policies were more right than the IMF, which is hard to accept. Another issue is that during the first 20 years of the agreement between Mozambique and the IMF, this prevented the government from spending, contracting commercial debt. Now prohibit spending is not the same to teach to spend well - never learned to spend well! The IMF and donors are also responsible for, for decades, they rejected the criticism that posed questions about our development path, because they called into question the image they wanted to launch, for the rest of the world, an exemplary country in order to legitimize their approaches. And finally, the public debt in Mozambique is not only the fault of the Government, but also of great international capital, especially financial. How do banks with Swiss Credit and BTV, among others, give such irresponsible claims, nor legitimate, the government of a poor country?

Not for having sovereign guarantees? What guarantees? The guarantees we gave these banks was the people - the life of the people.

What do you do with this debt so that the country can balance accounts, build schools and, above all, give hope to the population?We have to make an extremely strict international audit in order to identify exactly what the situation is: Where are the resources? What kind of problems do we have? Who is responsible? There may be cases in our system that are responsible for these errors and, depending on the audit can be a crime. The second thing is that we can not afford an illicit debt, because it is unfair. The third thing is that we should be very careful with fiscal expenditure policy.

How would that be done?There is a peaceful debate, but there must be determination. We have suggested models to do this. A key thing is to have a national and international political alliance that supports the government to do this and have the development of technical capacity to be able to do the negotiations. (O PAÍS )

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