Whose development is it?

Since 1999 foreign governments have given large financial and political support to the building of the Mozal aluminium smelter in Mozambique. Half the costs of building Mozal came directly from publicly owned institutions, or were guaranteed by them. In return, they and the private investors have received large returns in profit and interest. But the Mozambique government has been left with very little. For every $1 from the smelter being paid to the Mozambique government, we estimate that $21 has left the country in profit or interest to foreign governments and investors. Mozambique’s economy is booming, doubling in per person terms between 1998 and 2010. Yet the number of people living on less than $2 a day actually increased from 15.2 million in 1996 to 18.3 million in 2008 (the latest year for which there are figures). Mozal is one example why; growth which primarily benefits foreign companies and governments, and local elites. Moreover, the smelter may also have had damaging impacts through distorting the economy, using up valuable electricity and impacting on the local environment.