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Mozambique has banned the
export of unprocessed cashew nuts, ending a five-year struggle with the World Bank and International Monetary Fund. Meanwhile, the IMF
has allowed Mozambique to protect its expanding sugar industry — when
directors overrode opposition from their own staff.
Allowing Mozambique to protect its two most important
agro-industries is a remarkable reversal by the international financial institutions.
It results from intense pressure from the Mozambican
government, trade unions and the business sector which was taken up by vocal international
advocacy groups.
Cashew nut production became a symbol of mindless
trade liberalisation when in 1995 the World Bank forced Mozambique to allow the unrestricted ex-port
of unprocessed cashew nuts |
to India. The World Bank argued that
peasant producers would gain higher prices from the free market. But it did not
happen — as a monopoly buyer, India pushed down the price.
The IMF Executive Board rejected a demand
from its own staff, and agreed that Mozambique can protect its
sugar industry
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Transfer pricing also
lowered the price paid to Mozambique; and traders within Mozambique- pocketed larger
margins.
So the peasants lost out, while nearly 10,000 industrial workers (half of them
women) became unemployed. |
For five years Mozambique has
campaigned for the ban. Finally, on 18 December the IMF Executive Board agreed
on a policy under which some cashew factories will be closed, but the rest will
be protected.
Meanwhile, the IMF Executive Board rejected a
demand from its own staff, and agreed that Mozambique can protect its sugar industry,
which is now being rehabilitated with major foreign investment. IMF staff
had argued that since Mozambique could import sugar cheaper than producing it,
it should allow duty-free import of sugar.
Investors had demanded protection and were backed by
the government. On 18 December, the IMF board agreed with the government.
By Joseph Hanlon |
