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A spate of recent security incidents in central Mozambique has highlighted the ability of opposition parties to threaten government efforts to develop resource-rich areas of the southeast African state. On April 10, for example, a prominent opposition leader admitted to ordering a recent deadly attack on a police station in central Mozambique, exposing the lack of government-provided security in opposition-controlled provinces. This dynamic has disrupted the long-established political order that has allowed the ruling Mozambique Liberation Front to ignore vast regions of the country -- including those where the government is now attempting to attract foreign investment in coal and natural gas production.
Considering the government's limited ability to invest in northern and central Mozambique, foreign companies operating there could be hampered by persistent export infrastructure issues and face increasing security vulnerabilities. With elections on the horizon and development of the country's most promising economic assets in the balance, the ruling party will need to share power and patronage with opposition elements and find ways to cultivate influence in the long-ignored regions.
Mozambique is one of Africa's poorest countries -- the average citizen earns roughly a dollar and a half per day. But the country's sizeable reserves of coal and natural gas could fuel a transition to a middle-income economy (though translating macroeconomic growth into widespread quality of life improvement would be difficult). These natural resources are located in central and northern Mozambique -- areas that, for various reasons, the government has otherwise largely neglected.
Mozambique's budgetary constraints have been the first factor. Historically, subsistence farming and a small amount of plantation agriculture have defined the economy in central and northern Mozambique. Because these regions have contributed little to the national purse, the government in Maputo -- itself still poor by Western standards -- could not afford to devote much capital and attention to developing areas outside the political and commercial core.
The second issue has been one of ethnic interests. The Mozambique Liberation Front has held power since the country's independence from Portugal in 1975. The party receives most of its support from ethnic Shangaans living in and around the southern city of Maputo, the country's political and commercial capital. Most of Mozambique's limited wealth is concentrated in the capital region, which has benefited considerably from its proximity to South Africa, which is economically more robust.
By comparison, the central and northern regions of Mozambique are dominated by non-Shangaan ethnic groups, especially the Ndau and the Sena. The opposition Mozambique National Resistance Movement, commonly known as Renamo, receives most of its support from these ethnic groups and fought the ruling party during Mozambique's civil war, which lasted from independence until a peace accord was reached in 1992.
Major Infrastructure Challenges
The emergence of coal and natural gas industries far outside the ruling Mozambique Liberation Front's core is forcing the party to find ways to gain influence in the remote regions, lest it lose the ability to shape the development of the newfound natural resources. For example, significant deposits of thermal coal and coking coal in the central Tete province have attracted international mining firms such as Brazil's Vale, which is active in both exploration and production activities with an eye on exporting to foreign markets. However, the scale of the coal resources surpasses the capacities of the country's existing port, road and rail networks. Major infrastructure rehabilitation is needed to support meaningful export-oriented operations.
Currently, small-scale coal exports in the region can be facilitated by trucking or limited rail operations, but these are seen as temporary measures until the expansion of the Sena rail line connecting Tete province to the port city of Beira is completed. The port at Beira is also awaiting expansion. Currently, the rail line can transport approximately 2 million tons of coal per year, but it is projected to eventually have a capacity of 12 million to 18 million tons per year. However, progress on the line has been beset with problems, including shoddy work, and slowed by seasonal floods.
Mozambique is also constructing a new rail corridor that will run from Tete province through Malawi to the northern Mozambican port city of Nacala -- a larger project the government hopes will facilitate the export of upward of 40 million tons of coal per year. However, the line still needs external financing, and it is hampered by insufficient construction capacity and the absence of agreements between the Mozambican and Malawian governments.
Meanwhile, Mozambique's sizeable natural gas fields off the northeastern coast are being produced by two primary operators: Italy's ENI and U.S. energy company Anadarko. To facilitate continued production, the impoverished area will need major development of support infrastructure, including a liquefied natural gas terminal costing as much as $20 billion and onshore infrastructure such as roads, personnel and materials.
Security Vulnerabilities and Recent Attacks
If northeastern Mozambique becomes essentially an industry-dominated geographic enclave under the strict control of a distant national government -- akin to Angola's Cabinda province -- local opposition elements can be expected to claim that regional communities are being cut off from the benefits of indigenous natural resources. In this environment, export infrastructure would become vulnerable to attacks. Indeed, the recent pattern of security incidents in central and northern Mozambique is already threatening to worsen the existing supply chain challenges facing the long-neglected regions.
In late February, for example, an Irish mining engineer was killed in a carjacking in the Nampula province town of Moma, though no one claimed responsibility for the attack. The incident occurred days after Renamo activists trashed the local offices of the ruling party in the nearby town of Nampula. Then, on April 6, gunmen allegedly wearing Renamo military uniforms attacked a fuel tanker, two commercial buses and a cargo truck, resulting in several deaths and disrupting traffic bound for Sofala province on the national highway. Renamo leaders denied responsibility for the attack, instead blaming government agents they said were disguised in opposition uniforms. On April 10, however, Renamo leader Afonso Dhlakama claimed responsibility for an April 4 attack on a police station in the Sofala province town of Muxungue -- mere kilometers from the site of the April 6 highway incident -- in which several policemen were killed.
The attacks have not led to a withdrawal of foreign workers or curtailed investment activity, but they have exposed the lack of security in provinces where the ruling party has little control. Mozambique has local-level elections scheduled for November and national elections in 2014, and political rhetoric has been heating up between the ruling and opposition parties. But despite any campaign promises it makes, the government is fundamentally constrained in its ability to deploy political and economic capital to the regions it has historically ignored. Still, it will attempt to do so slowly, likely starting by negotiating limited power-sharing agreements with opposition leaders. Indeed, it must do this to ensure security for and sustain investment in the extractive industries that are the country's best hope for boosting Mozambique's otherwise meager economy.
Courtesy : Stratfor (www.stratfor.com)