Full Knowledge Base

The Mozambican economy has been growing at an annual average of 7.5% for the best part of two decades, and has become one of the three most attractive economies for foreign direct investment (FDI) in sub-Saharan Africa. Yet, it has been ineffective and inefficient at reducing poverty and providing a broader social and economic basis for development. It is argued here that the dominant political economy of Mozambique is focused on three fundamental and interlinked processes, namely the maximisation of inflows of foreign capital - FDI or commercial loans - without political conditionality; the development of linkages between these capital inflows and the domestic process of accumulation and the formation of national capitalist classes; and the reproduction of a labour system in which the workforce is remunerated at below its social cost of subsistence and families have to bear the responsibility for maintaining (especially feeding) the wage-earning workers by complementing their wages or trying to maintain the availability of the enormous idle reserve of labour. This article focuses on economic porosity, which, arguably, is a dominant factor in promoting the linkages between domestic and foreign capital, nurtured, supported and mediated by the state.