19th November 2012

As Coal Boosts Mozambique, the Rural Poor Are Left Behind – by Lydia Polgreen (New York Times – November 10, 2012)

posted in Africa Mining, Canadian/International Media Resource Articles, Coal |

http://www.nytimes.com/

CATEME, Mozambique — When Augusto Conselho Chachoka and his neighbors heard that the world’s biggest coal mine was to be built on their land, a tantalizing new future floated before them. Instead of scraping by as subsistence farmers, they would earn wages as miners, they thought. The mining company would build them sturdy new houses, it seemed. Finally, a slice of the wealth that has propelled Mozambique from its war-addled past to its newfound status as one of the world’s fastest-growing economies would be theirs.

Instead, they ended up being moved 25 miles away from the mine, living in crumbling, leaky houses, farming barren plots of land, far from any kind of jobs that the mine might create and farther than ever from Mozambique’s growth miracle.

“Development is coming, but the development is going to certain areas and certain people,” Mr. Chachoka said, taking a break from trying to coax enough food from his scraggly field to feed his six children.

Mozambique is one of the poorest nations in the world, broken by a brutal colonial legacy, a 16-year civil war and failed experiments with Marxist economic policy. But it is also one of the so-called African Lions: countries that are growing at well above 6 percent annually, even amid the global downturn.

Mozambique is poised for a long economic boom, driven by its vast deposits of coal and natural gas. Vale, the Brazilian mining company, is planning to invest $6 billion in its coal operation near here, and other coal giants like Rio Tinto will soon begin producing coal in the Tete region of northern Mozambique.

Gas projects could bring in far more, as much as $70 billion, according to World Bank estimates. Mozambique’s location on Africa’s southeastern coast means it is perfectly positioned to feed hungry markets in southern and eastern Asia. These investments mean that income from natural resources could easily outstrip the outsized contribution foreign aid makes to its $5 billion annual budget.

The country has been growing at a rapid clip for the past two decades, in fact, since the end of its brutal civil war. Yet, after a substantial drop in the first postwar decade, gains against poverty have slowed substantially, analysts say, leaving millions stuck below the poverty line and raising tough questions about whether Africa’s resource boom can effectively raise the standard of living of its people.

“You get these rich countries with poor people,” said the economist Joseph Stiglitz, who recently visited Mozambique and has written on the struggle of resource-rich countries to develop. “You have all this money flowing in, but you don’t have real job creation and you don’t have sustained growth.”

It is a problem in resource-rich countries across Africa. In a largely upbeat assessment of Africa’s growth prospects, the World Bank said in October that rapidly growing economies powered by oil, gas and minerals have seen poverty levels fall more slowly than countries without those resources.

In some nations, like Gabon and Angola, the percentage of people living in extreme poverty has even increased as growth has spiked.

Most of Mozambique’s people live in rural areas, and almost all of them depend on farming. Since commercial farming scarcely exists — 99 percent of farmers are smallholders — this means small-scale, family-based agriculture is the main, and in many cases the only, source of income for the vast majority of Mozambicans.

For the rest of this article, please go to the New York Times website: http://www.nytimes.com/2012/11/11/world/africa/as-coal-boosts-mozambique-the-rural-poor-are-left-behind.html?pagewanted=all&_r=0

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