Post-Stabilization Economics in Sub-Saharan Africa: Lessons from Mozambique

An important part of the argument for incorporating the Cairo language in the MDG framework, albeit belatedly, was the assertion that all or nearly all of the MDGs would be unachievable unless the Cairo goal was also achieved. The uniform conclusion of all these analyses is that, absent effective programmes to enable individuals to manage their own fertility more effectively, virtually none of the MDGs, can be achieved by the target date of in the majority of low income countries. That is the bad news. Adapted from World Bank Development Indicators According to the World Bank, living standards have risen dramatically over the last decades.

Substantial improvements in social indicators have accompanied growth in average incomes. Infant mortality rates in low- and middle-income countries have fallen from 87 per live births in to 54 in Life expectancy in these countries has risen from 60 to 66 between and The goal of halving extreme poverty between and has already been achieved in East Asia. Between and , the number of people in poverty has fallen by around million in China alone.

In the developing world outside China, the poverty rate has fallen from 40 to 29 per cent over —, although the total number of poor has remained unchanged at around 1. In absolute terms, the number of poor people has nearly doubled, from million in to million in However, there have been signs of recent progress; the poverty rate fell from 58 per cent in to 50 per cent in However, it needs to be borne in mind that East Asia as defined by the World Bank also includes Southeast Asia, including Thailand, the countries of Indochina, Indonesia and the Philippines.

Many of these countries, not coincidentally, have registered quite dramatic declines in fertility over the same period of time. It is highly plausible, if not provable, that the decline in poverty and the improvement in living standards that have occurred in Asia over the past 25 years are attributable at least in part to the very successful fertility reduction policies these countries pursued simultaneously.

An exception that perhaps proves the rule is the Philippines, where fertility has declined very little and poverty rates remain essentially unchanged from their levels. Another measure of development, albeit one that is not universally accepted, is the distribution of income. Most development economists, however, view movement towards a more equitable distribution of income as an indicator of development and modernization. Improving income distribution usually accompanies poverty reduction and indicates improving opportunities and prospects for the lowest income groups.

Dark blue bar, poorest 20 per cent; light blue bar, richest 20 per cent. I hope that the review of recent theory and research on this question earlier in this paper will persuade readers that there is a strong reason to believe that reduced fertility can in fact lead to economic development and higher standards of living. The case of Latin America demonstrates, however, that while reduced fertility may be a necessary condition for economic growth and development, it is not a sufficient one. If countries fail to put in place and effectively implement sound economic policies, reduced fertility by itself will not automatically produce economic advancement.

Despite impressive fertility declines over the last 30 years, Latin America as a whole has seen comparatively little reduction in poverty or improvement in income distribution. In fact, it is arguable that the failure of governments in that region to address extremely skewed income distributions and to invest in human capital is the primary underlying factor in the failure to grow economically of course, a number of countries in Latin America—Chile, Costa Rica, Brazil—represent important exceptions to this generalization. My own view is that the fertility—economic development relationship is a mutually reinforcing one, where improvements in one tend to encourage and then accelerate improvements in the other—the so-called virtuous circle.

Where countries succeed in stimulating economic growth and then encouraging its continuation most of today's rich countries , declining fertility will usually follow an exception is the oil-rich states where economic growth is an artefact of mineral extraction with non-indigenous labour and where modernization in its usual sense has not occurred.

But, on the other side, where countries succeed in encouraging reduced fertility Korea and Bangladesh , they put in place an important potential stimulant to economic development.

STRONGER CURRENTS

Where the two occur simultaneously as part of a comprehensive development strategy, as they have in East Asia, the most virtuous of circles can develop. One thing that has become increasingly clear in recent years is the importance of investing in human capital and in human development. Whereas an older generation of economists paid little attention to the importance of education and health in promoting economic development, today's economists are increasingly of the view that a well-educated and healthy population are essential ingredients in sustained economic growth.

The most influential of development institutions, the World Bank, has become increasingly insistent in its publications and in the advice that it gives to countries, that they place high priority on their educational and health systems and that they strive to bring about improvements in both the educational and health status of the population, not just on moral grounds but as essential conditions for economic growth.

The history of the last 30 years in East Asia has had a profound impact on the thinking of the current generation of development economists.

Back Matter : Regional Economic Outlook, October , Sub-Saharan Africa:

The policy package that is now broadly advocated by the bank and other development advisers places a very high priority on improving health and education, alongside the more conventional economic policy prescriptions regarding savings and investment, incentives to industry, export-oriented growth, monetary and fiscal policies and the development of capital and equity markets. Still missing from the standard set of policy prescriptions, and a very important omission in my view, is one regarding reduction in fertility.

As I mentioned earlier, one searches long and hard, and usually in vain, for advice from World Bank officials to African governments to address the issue of high fertility and rapid population growth. Perhaps, it is because of the sensitive nature of human reproduction; because of the unfortunate history of coercion in a handful of earlier family planning programmes in Asia, or because of persisting skepticism of economists regarding the fertility-development linkage.

Whatever the reason, African policymakers are not hearing the message that the future of economic development in Africa depends in part on bringing down the extraordinarily high fertility of most Sub-Saharan states. Africa is, in many respects, the last frontier in terms of economic take-off and sustained economic growth. In every other region, despite the presence of outliers and differential rates of growth, there is clear evidence of movement towards improved living standards and overall well being.

There are also several bright spots in Africa and some relatively recent evidence of broad improvements, but continuing civil unrest, poor governance and economic corruption and mismanagement in too many countries means that overall progress is slow and setbacks are many. Why in such an environment should one even think about advocating on behalf of intensified efforts in fertility limitation, reproductive health and family planning? If there were not several examples of success in population planning in Africa, it would be very hard to answer that question, but the truth is that in several countries south of the Sahara, strong programmes have yielded perhaps surprisingly positive results.

Situating Mozambican Histories, Epistemologies, and Potentialities

I refer not only to South Africa, where fertility has been fairly low for quite a long time, but also to the historic successes in Botswana, Zimbabwe and Kenya, and more recently in Rwanda. In all these countries, the interest and commitment of the political leadership translated into national policies and programmes designed both to influence family size norms and to provide family planning services to those who wanted them.

The response on the part of the public in every case was positive and substantial. All of these countries saw large increases in contraceptive use and falls of between 15 and 25 per cent in their birth rates. In addition to these national examples, there is the interesting and promising Navrongo Community Health and Family Planning Project, a field experiment conducted between and in the isolated and impoverished northern region of Ghana.

As the Matlab experiment in Bangladesh showed a decade earlier, the Navrongo study showed that even under conditions of extreme poverty and depressed living standards, a demand for fertility limitation could be identified and satisfied by appropriately designed services Phillips et al. Fertility was reduced by 15 per cent in the programme areas, whereas it remained essentially unchanged in the control areas.

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Kenya, Zimbabwe, Botswana, Rwanda, and the Navrongo project, have all demonstrated that population policies and reproductive health programmes can work in Africa. What is needed now is for African leaders to understand this and also to believe that effective fertility control programmes need to become essential elements of the economic development strategies they design and implement in their countries. In tracing the recent history of theory and research on the connection between demography and economics, we find a new consensus is emerging; that reductions in fertility and declining ratios of dependent to working age populations provide a window of opportunity for economic development and poverty reduction.

Empirical studies increasingly support the idea that countries which have incorporated population policies and family planning programmes in their overall economic development strategies have achieved high and sustained rates of economic growth and that they have also managed significant reductions in poverty.

Fertility reduction is by no means an economic development panacea and is certainly not a sufficient condition for economic growth, but it may well be a necessary condition, establishing conditions in which governments can invest more per capita in education and health, thus creating the human capital for sustained economic growth. Likewise, with fewer children to care for and raise, families can improve their prospects for escaping the poverty trap.

At both the macro- and micro-levels, moderating fertility enhances economic prospects. Throughout the developing world, declining birth rates and rising living standards have gone hand in hand. The evidence suggests that the interrelationship between them represents a virtuous circle, whereby improvements in one reinforce and accelerate improvements in the other.

The virtuous circle can be initiated either by investing in human development programmes such as healthcare and education or by investing in programmes to reduce fertility. But the example of the East Asian Tigers suggests that the best strategies have been those that do the two simultaneously. These recent historical experiences hold important lessons for Africa, development's last major frontier.

By drawing on these examples, as well as Africa's own success stories, and by recognizing the link between demography and economic development, African leaders and policymakers can devise integrated economic development strategies that give a prominent role to population policies that include strong reproductive health and family planning programmes. Had I been a more careful student of demographic-economic research at that time, I might have made a different decision.

National Center for Biotechnology Information , U. Author information Copyright and License information Disclaimer. This article has been cited by other articles in PMC. Abstract Economists, demographers and other social scientists have long debated the relationship between demographic change and economic outcomes. Introduction From the time of Malthus onwards, economists, demographers and other social scientists have been debating whether and how high fertility and rapid population growth affect economic outcomes and vice versa.

Does a large number of children diminish a family's present well being and future prospects? Does rapid population growth adversely affect the overall performance of the economy and its ability to achieve and sustain general well being? Is rapid population growth a symptom, rather than a cause, of low national output and poor economic performance?

What do we know—macro? What do we know—micro? The seven quantitative MDGs and their targets are as follows: Millennium development goals Goal 1: Halve, between and , the proportion of people whose income is less than one dollar a day. Achieve full and productive employment and decent work for all, including women and young people. Halve, between and , the proportion of people who suffer from hunger. Ensure that, by , children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Eliminate gender disparity in primary and secondary education preferably by and in all levels of education no later than Reduce by two-thirds, between and , the under-five mortality rate.

Reduce by three-quarters, between and , the maternal mortality ratio. Have halted by and begun to reverse the incidence of malaria and other major diseases. Mozambique's democratic institutions proved robust again in , with the dominant FRELIMO party comfortably preserving its electoral mandate. TBY talks to His Excellency Filipe Jacinto Nyusi, President of the Republic of Mozambique, on building a government, the recent historic gas discoveries, and supporting the traditional sectors of the economy.

Shinzo Abe, Prime Minister of Japan, on the importance of the growing partnership between the two countries, especially for energy, construction, and FDI. Rich oil discoveries in the Rovuma Basin have primed Mozambique's growing economy, leaving the nation as a potential suitor for the many Asian countries that are increasingly demanding LNG. The location of Pemba, next to Rovuma Basin and in relative proximity to the expanding Asian market, will play a key role in the development of Mozambique's future ventures.

Mozambique is edging closer to the realization of its potential in the coal and gas industries, with immense reserves, both onshore and offshore, ready for exploitation. Agencies tasked with improving awareness of Mozambique's trade potential internationally are playing a key role in supporting the economy. The International Growth Center ICG in concluded that the domestic construction sector, which predominantly consists of SMEs, had been unable to break into the formal market dominated by foreign players.

Nevertheless, the overall situation has improved in recent years. The largest companies in Mozambique have a wealth of information about the economy at large, maintaining activities across multiple and diverse sectors. Mozambique's long-term prosperity is contingent on broad-based development to avoid overdependence on external investment.

Leading international conglomerates see an opportunity in Mozambique for considerable growth, given the market's relative immaturity. While massive industrial and energy projects are the hallmark of Mozambique's economy, the vast majority of its citizens and small businesses remain beyond the reach of financial services, calling for alternative remedies from various quarters.

Rui Barros, Administrator, Barclays Mozambique. TBY talks to Rui Barros, Administrator for Barclays Mozambique, on the scope of regional banking, capitalizing on economic development, and what attracts foreign banks to the country. Capitalizing on the country's growth requires foresight, and close attention to customer demands. Local banks are not only riding the success of booming sectors of the economy such as real estate, construction, and SMEs, but also their services are ensuring that these trends play out in the long-term.

Mozambique, like other African nations blessed with the minerals required for growth, is seeking ways to add depth to its financial markets. The Mozambique Stock Exchange has expanded rapidly since its inception, reflecting the expansion of the middle classes, and increasing capital for business. Insurance remains largely beyond the means or radar screen of Mozambicans, yet the middle class is on the rise, planning for what tomorrow may bring.

TBY talks to Rui Oliveira, President of the Insurance Association, on synchronizing regulation with market realities, promoting indigenous insurance companies, and raising penetration rates. Already holding the third-largest LNG reserves in Africa, the country is set to become one of the world's top producers in the coming years. TBY talks to John W. Peffer, President of Anadarko, on managing gas finds that are set to notably impact Mozambique's economy, with positive socioeconomic consequences. The discovery of vast amounts of fuel reserves in Mozambique is a potential game changer for the country's current itinerary.

There is no doubt that the government of Filipe Nyusi has a unique opportunity to transform Mozambique into one of the most significant African economies. With the majority of the population living off the grid, the government is looking to foreign investment, new regulations, and low-cost tariff strategies to develop energy sustainability.

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Mining related investments in Mozambique are attracting some of the largest megaprojects in Africa. These projects have the potential to recreate the country's infrastructure and boost exports. Mining has been bearing the brunt of depressed prices and markets, but prudent strategies are enabling it to see a light at the end of the tunnel.

Last year's industrial sector was marked by increasing potential in FMCGs, as disposable incomes rise with the growing economy. Industrial and trade facilities geared at promoting sectors, international trade, and competition will play a larger role in diversifying Mozambique's economic landscape. Local and multinational producers of alcoholic and non-alcoholic drinks look forward to growth in consumer spending and better regulation in the short term. As the government expands infrastructure in light of a changing reality, boosting reliance on local production for raw input promises to reduce prices for local consumers, while propelling the wider economy.

The village of Matchedje once hosted the 2nd Congress of the Mozambique Liberation Front Frelimo , the country's incumbent government. Today it is the namesake of Mozambique's first locally manufactured car. Mozambique still faces substantial challenges in developing an adequate ICT infrastructure to connect all of its population, but a number of concerted moves are underway to expand the network and increase the number of users.

The national telephone and communications infrastructure has expanded exponentially as a consequence of the growing economy. Inevitably, ICT continues to exact its wholesale significance in propelling business into the future. A pan-African initiative has taken root to encourage the development of an indigenous media industry that presents constituent nations as they are, and in their own voice. Its far-reaching objectives champion journalistic integrity and freely expressed opinion. Mozambique is emerging as a central transport node for the region, as developments in road, rail, air, and port infrastructure are helping to move the country's significant mineral resources throughout the region.

A modest military installation has been transformed into what will become a regional transport hub, taking Mozambique's economy to a higher altitude. Mozambique's access to the Indian Ocean makes it an important regional shipping center, but the capacity of its ports must be developed to take full advantage of its location.

Sustainable growth in Mozambique—and indeed across the continent of Africa—is predicated upon resource exportation, the revenues from which could swiftly percolate throughout the economy in the form of employment and higher standards of living. The impact of the development of transport infrastructure in the capital will be profound, facilitating communication among businesses and individuals.

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An iconic structure, the Maputo-Catembe Bridge is another shining component of Mozambique's comprehensive infrastructure overhaul. A number of accomplished firms offer construction support in both the public and private sectors. Located in the Afungi peninsula, the 25,ha area of Palma is one of the first major projects planned to develop the gas-rich region of Northern Mozambique. TBY talks to two leading figures from the cement industry about the conditions of doing business and current production activities. The proliferation of megaprojects in the energy and transportation sectors is providing ample opportunities for construction and consultancy firms.

Uneven supply-demand dynamics, a boom in Mozambique's extractive sector and the proverbial rising middle class combine to fuel the real estate sector. Luxury residential assets, retail centers, and property management for commercial enterprises are some of the high-potential segments in the market.

Following an influx of foreign investors, a construction boom and positive growth perspectives in the country, several companies are developing luxury real estate projects in Maputo. The country's geographical location makes it ideal as an agricultural hub for the region and beyond. As Mozambique rethinks its agricultural landscape, interesting innovations are occurring that make fuller use of local cash crops. After years of steady growth, healthcare spending has kept pace with the economy, and both access and quality are now improving.

Mobile technology is gradually narrowing the health gap in remote areas of Mozambique, easing suffering and reducing unnecessary risk of epidemics. The evolution of health insurance has allowed more access to better treatment, offering diverse opportunities to clinics across the country. As the country struggles to provide modern education to all in the face of immense adversity, rising indicators for attendance and gender equality are pointing the way forward.

Private higher education institutions play a key role in educating the country's workforce and are increasingly attracting international students. As more and more foreign workers flock to Mozambique, there is a growing demand for internationally recognized schools. The government is working with international organizations to develop a strategy to help the tourism sector continue on its growth path well into the next decade.

TBY talks to, Quessanias J. TBY talks to Silva Dunduro, Minister of Culture and Tourism of Mozambique, on expanding the remit of the Ministry, key strategies for attracting visitors, and improving air connections with the region and beyond.