Rethinking the political economy of commodity-based linkages: Insights from the coal sector in Mozambique

Publikation: Bog/antologi/afhandling/rapportPh.d.-afhandlingForskning

Abstract

Hoping to break the chains of aid dependence, most countries, including Mozambique, have sought to tap into their natural resources so as to transform their economies. While it is almost certain that natural resources can provide longstanding benefits if linkages with the local economy are established and deepened, in these countries such linkages are lacking. In light of this, the study seeks new answers to a relatively old question: ‘how can we understand linkage formation in the commodity sector by examining the conditions that influence the ways in which they develop?’ Insights from the literature to answer this question, despite their generous clues, have separately focused on either technical or political explanations, thus providing us with partial glimpses of why countries have grappled with the problem of linkages. In the belief that studying technical conditions is as valid and useful as studying political conditions, a framework that combines the two perspectives has been developed here and applied to the coal sector in Mozambique.
Research findings demonstrate that, when coal came back on stream in Mozambique, domestic firms were ill-equipped to participate effectively in the coal value chain. On the one hand, while the observed weaknesses of domestic firms operating or aiming to operate in the supply sector of the coal industry constitute a longstanding problem, signs of improvement are lacking due to limitations in the transfer of knowledge to domestic firms, the malfunctioning of government support mechanisms, with limited or no benefits to domestic firms, and the poor implementation of local content provisions. Altogether, the government has been too hands-off in a context in which supporting domestic firms is crucial. On the other hand, given that domestic capitalists are highly dependent on ruling elites for their existence as capitalists and the fact that they constitute an unimportant source of rents for funding the state and/or the ruling party, ruling elites face few consequences if they pay them no heed. Other findings are that ruling elites have no incentive to develop a strong and diversified economic structure, even through linkages, as they fear that the emergence of new centers of economic power could open the doors to future opposition, which in turn could challenge the holding power of the Frelimo ruling coalition. All things considered, it can be argued that linkages in the coal sector are characterized by a shallowness that is due not only to the country’s historical legacy of poor industrial capabilities and unmet technical requirements, but also because ruling elites have incentives to keep the private sector under control and underdeveloped.
OriginalsprogEngelsk
ForlagRoskilde Universitet
Antal sider228
StatusUdgivet - 16 okt. 2019

Bibliografisk note

The author would like to give credit to the assessment committee members.
Assessment Committee:
Thorkil Casse, Associate Professor, Roskilde University Denmark
Ellen Hillbom, Associate Professor, Lund University, Sweden
Jesse Salah Ovadia, Associate Professor, University of Windsor, Canada

Citer dette