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CTA Criticises Government Analysis of Economic Performance

The Mozambican Confederation of Trade Associations (CTA) criticises the way the government, the World Bank, and the International Monetary Fund (IMF) conducted their analysis of the performance of the country's economy...

The Mozambican Confederation of Trade Associations (CTA) criticises the way the government, the World Bank, and the International Monetary Fund (IMF) conducted their analysis of the performance of the country's economy, saying that it is only based on public investments macro-economic indicators, which has nothing to do with the reality in the companies.

CTA chairperson Egas Mussanhane said that the economic growth the analysis is referring to is not about the number of schools, health units or roads, but the figures are about companies, since they result of donors funding.

"They say that there was a growth, only because of the building of such infrastructures, but that is not economic growth, and they are basing their analysis on falacies, which leads people to demand what cannot happen", said Mussanhane.

He was comenting data presented during the recent negotiations between the workers, the employers, and the government, to decide on the statutory minimum wage, that ended up fixed at 14 per cent for the industry and trade sectors, and 10 per cent for the public service.

CTA thinks these figures are too high, while the Trade Union Federation (OTM-CS), describes them as too low, because they will cover only about a third of the workers' needs.

For CTA, OTM's position is unrealistic, because a big wage increase would be a short term gain since, after some time, the companies will not have the capacity to continue paying those high wages, for the lack of money, "and then we will kill each others for things of which we are all to blame, becasue we are not analysing correctly the problem and we are not doing the necessary to ensure that there is enough money for everyone", he said.

He noted that if this situation is to prevail one will come to a limit of offer, and nothing else will be there to share, and some of the companies will come to a bankruptcy. "Many companies have already come to that point", said Mussanhane.

The government, through Prime Minister Luisa Diogo, says that it is implementing a series of measures to enhence the economic growth, which include simplification of licensing procedures in economic activities.

Other such measures include also the reduction of the industrial tax, that has dropped to 10 per cent for the agricultural sector, and 35 per cent for other activities.

Diogo says that the Mozambican Gross Domestic Product (GDP) grew by 7.1 per cent in 2003, particularly due to the sectors of services, industry, and agriculture.

In the same year, she says, exports earned the country 880.2 million US dollars, compared with 682 million in 2002.

Explaining these figures, she says that, due to the government's balanced monetary policy, the country managed to reduce the inflation rate from 16.8 per cent in 2002 to 13.4 in 2003, and the exchange rate saw an unprecedented stabilisation of the metical, the Mozambican currency, that suffered a depreciation of only 0.5 per cent.

However, the World Bank aknowledges that in the companies' restructuring process the Mozambican industry did not see any recovery, contrarily to the agricultural and the services sectors.

While the reforms helped agriculture and services sectors to recover to the levels of 1980-1981, the industrial sector remained about 60 per cent below those levels.
According to the World Bank's report, production in most Mozambican industrial units ranges between 15 and 20 per cent of their real capacity, and their productivity has dropped by more than 60 per cent. This results in that this sector has been shrinking by about 3 per cent a year for the last decade.

Meanwhile, the Mozambican government says that during the last few years it has been developing the concept of smart partnership between the different economic agents (employers, the government, and the workers), "with permanent exchange of points of view, trying to achieve consensual, correct, and mutually beneficial decisions", said Diogo.

Fonte: AIM


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