[stop-imf] NYTimes: Mozambique pays for capitalism in blood

[Robert Weissman]

MOZAMBIQUE PAYS FOR CAPITALISM
IN DOLLARS AND BLOOD

By Rachel L Swarns, New York Times, 22 December 2001

By RACHEL L. SWARNS
MAPUTO, Mozambique, Dec. 16  The morning rain drenches the sidewalk shrine
on the Avenue of Martyrs, soaking the red and purple ribbons and the
sagging banners that still plead for justice. Blood no longer stains the
street here, but when the clouds burst, it seems even the heavens grieve.
Over the past 13 months, two prominent men have been assassinated in this
prosperous neighborhood, exposing the violence and corruption accompanying
the country's remarkable economic growth.
After more than a decade of hunger and civil war, Mozambique gave up its
guns and socialism to embrace the free market in the early 1990's. Foreign
investors are pouring in and Mozambique now has one of the world's fastest
growing economies. 
But over it all is a deadly shadow.
Carlos Cardoso, an investigative journalist, was gunned down last year on
the Avenue of Martyrs, a few blocks from his office. Antônio Siba- Siba
Macuacua, a senior banking official, was hurled to his death from the 15th
floor of a nearby bank four months ago. Both men were investigating
allegations of corruption and mismanagement in the privatization of two
banks that went bankrupt after they were sold.
Earlier this year, the accounting firm KPMG, brought in to do an audit as
irregularities surfaced, reported that some of the country's most powerful
men, including some government officials, had borrowed and failed to repay
thousands of dollars from one of the banks. 
Mr. Cardoso had reported such scandals relentlessly in his independent
newspaper. In June, Mr. Siba- Siba took the unprecedented step of
publishing the names of more than 1,000 of the debtors in Mozambique's
only daily newspaper. 
The men worked in separate worlds, but each wanted to ensure that public
funds were not wasted in a country still desperately poor despite progress
since the war ended in 1992. Now both are dead, and the political
establishment is reeling.
Mr. Cardoso was the chief news editor of Mozambique's state news agency, a
founder of the country's first independent media company and a fierce
defender of the poor. He rarely worried about his own safety.
"He thought by publishing, that was a weapon against any threat," said his
widow, Nina Berg.
In his independent daily newspaper, Metical, Mr. Cardoso reported that $14
million was siphoned out of Banco Comercial de Moçambique on the eve of
its privatization in 1996 and that the prosecutor's office was doing
nothing to pursue those responsible. He was 49 when he was shot to death
by gunmen with AK-47's after he left his office in November 2000.
Mr. Siba-Siba, a senior auditor at the central bank, was relatively
unknown until the government gave him the high-profile task of cleaning up
Banco Austral, the nation's third- largest bank and one of its most
troubled institutions. He learned that more than a million dollars was
unaccounted for and that hundreds of prominent people had large unpaid
debts. He was 34 and one of the nation's brightest young economists when
someone hurled him down the stairwell at Banco Austral in August.
In his state of the nation address this month, President Joachim Alberto
Chissano acknowledged that the transition to capitalism has been
accompanied by an alarming surge in violence and organized crime. The
government has linked the killings of Mr. Cardoso and Mr. Siba-Siba to
corruption in the banks and it has vowed to catch the killers.
Six people have been charged with murdering Mr. Cardoso, including a
former manager of Banco Comercial de Moçambique and a prominent
businessman. No arrests have been made in the killing of Mr. Siba-Siba. 
This month the independent weekly Savana published a biting cartoon under
the caption, "Minister of Interior is prepared to fight crime." It depicts
the minister blowing a whistle while the criminals continue killing right
behind his back.
The killings have deepened the ambivalence here about the country's
economic reforms and its privatization program, which are often praised by
the International Monetary Fund and the World Bank as among the most
successful in Africa.
Since Mozambique held its first democratic election in 1994, inflation has
fallen to about 10 percent, from 50 percent, the I.M.F. says. The economy
has expanded by about 10 percent a year since 1997, although it dipped
after the floods of 2000 before rebounding this year. Mozambique now grows
enough food for its own people, no small accomplishment in a country where
thousands were near starvation in the 1980's.
But the failed privatization of Banco Comercial de Moçambique and Banco
Austral, which were sold in 1996 and 1997, has come at a heavy cost to the
state, which still owns minority stakes in the banks.
On the streets here, privatization is often derided as a scheme that has
enriched a privileged few and opened the door to the gangsterism that
followed Russia's economic reforms in the 1990's. Two of every three
Mozambicans still live in poverty. 
In October the I.M.F. reported that the benefits of the economic reforms
to the poor "are likely to be relatively modest" in the short term.
"Ordinary people don't feel it, so the tendency to think that the reforms
to our system have their relation with crime is there," Prime Minister
Pascoal Manuel Mocumbi said in an interview. "When you have a transition
from one system to the other, you open space for criminals, you open space
also for other problems that were unforeseen." 
The killings have also exposed the weaknesses of the justice system, which
officials say is inefficient, poorly financed, corrupt and poorly equipped
to fight organized crime. 
Police officers assigned to Mr. Cardoso's killing were suspended after
they failed to conduct the most basic of inquiries, including interviewing
potential witnesses. 
A senior prosecutor in the attorney general's office fled the country
after it became clear he had failed to investigate the theft of $14
million from Banco Comercial that Mr. Cardoso had reported. A warrant has
been issued for his arrest.
Ms. Berg, Mr. Cardoso's widow, and his friend and colleague, Joseph
Hanlon, have also criticized Western donors who provided technical
assistance and financial support to the banks but did little to resolve
their problems before privatization. 
In a 1998 assessment of its programs here, the World Bank criticized its
own strategy of supporting the two banks in the 1990's without correcting
their "almost total deficiency of corporate governance and widespread
practice of politically motivated lending." 
The report said 90 percent of the loans issued by Banco Austral and Banco
Comercial would probably never be repaid. Mr. Hanlon, a journalist who
also chronicled the collapse of the banks in Metical, said officials and
donors knew the dangers when they privatized.
On the Avenue of Martyrs, at the shrine set up after Mr. Cardoso was
killed, there is a sign, "Guns won't silence our voices." 
Not far from the shrine, in a coffee shop in the bustling heart of this
rapidly modernizing city, the uncle who raised Mr. Siba-Siba wept over a
glass of Coca-Cola. This month the family took out a newspaper
advertisement commemorate the young man who dreamed of sending his two
children to college.
"We are a family destroyed," said Jorge Antônio Macuacua, the uncle, who
considered Mr. Siba-Siba a son. "I'm not afraid to speak in my son's name,
to demand an answer from the government," he said. "Everybody in town is
looking to the government for an answer. Mozambique is better than before.
It is developing. But if nothing is done, then these people are going to
keep killing."

http://www.nytimes.com/2001/12/22/international/africa/22MOZA.html