Donors on strike

By Joseph Hanlon

Budget support donors are on strike. No budget support money has been released to government since mid-December. Donors are demanding promises from government for action this year on electoral reform, corruption and conflict of interest, and on the growing role of the Frelimo party inside the state apparatus. So far, both sides are taking hard lines, but further negotiations are expected this week. Neither side is totally unified, but the 19 donors in the budget support group are facing a particularly wide range of conflicts and pressures, both in Maputo and at home.

The G19 budget support group is being extremely secretive, refusing even off-the-record briefings, claiming they do not want to be seen to be putting pressure on government. In practice donors seem to be searching for a minimum promise from government which will provide a face-saving solution, and allow the G19 to stay together.

But the government has become increasingly public on this issue. Finance Minister Manuel Chang on Friday told journalists that if the strike continues it may be necessary to revise the state budget, and his statement was published on the front page of Noticias on Friday 6 March.

The government response to the donors, from Development and Planning Minister Aiuba Cuerenia (who is the main government negotiator with the donors), has been widely circulated, and is posted on my website: http://www.tinyurl.com/mozamb

Donors have pledged $472 million for budget support for 2010, about $40 million per month. Before the strike started, the World Bank and the European Union, the largest and third budget support donors, released big tranches of money early. So the lack of budget support is only starting to bite now.

Government ministries are already reported to be making small initial spending cuts, in areas like transport and lunches.

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