African Nation’s Economy Seriously Ailing : Marxist Mozambique Takes Dose of Capitalism as a Cure

MAPUTO, Mozambique — The busiest store in all of Mozambique, Logia Franca, tempts shoppers with everything from whiskies and chocolates to televisions and sofas, luxuries that can be had for a small bundle of precious foreign currency.

Yet Mozambicans lucky enough to collect a few U.S. dollars these days do not treat themselves to Sony radios or Portuguese wine. They line up 20 and 30 deep at the cash registers with baskets of no-label soap, sugar, milk and eggs--essentials rarely seen here outside Logia Franca’s well-guarded doors.

What is happening on those tatty, dimly lit floors of the “dollar store” reflects the sad shape of this economic castaway on the southeastern flank of Africa.

Staple foods cannot be found. Gasoline is rationed tightly. Shortages are endemic. The road system has buckled under a decade of civil war and by some estimates that half the country’s 14 million citizens make ends meet only because of foreign aid.

But now Mozambique is trying to climb out of that financial abyss. Its Marxist government, which relies on the Eastern Bloc for military advice and hardware, has chosen a Western-style capitalist plan for its economic recovery.

Nowhere else in black Africa do both the Soviets and the Americans have such a close relationship with, and so much at stake in, the same country. The future of Mozambique’s budding friendship with the West, and the superpower balance in politically volatile southern Africa, ride on the success of that economic program, many analysts here believe.

If the economic reforms “don’t work, for whatever reason, it will play into the Soviets’ hands,” an American diplomat here said recently.

Mozambique has already swallowed much of the bitter medicine prescribed by the International Monetary Fund, the World Bank and other Western financial advisers. It devalued its currency, the metical, by 90% against the dollar this year--the steepest, fastest drop for a currency in Africa.

And just in time. The metical had almost vanished from circulation, replaced by neighboring South Africa’s rand and American dollars as the only money anyone would accept.

Now the metical is back in use, although it remains what one expert calls “a wheelbarrow currency.” The largest bill, 1,000 meticais, is worth $2.50, and Mozambicans lug shopping bags full of currency to pay for such things as airline tickets.

The Mozambican government has also slashed its own budget and laid off 14% of the country’s civil servants. Food prices have been increasing in steep steps, many tripling in less than a year, as a way to spur farmers to produce more. Some of the country’s Marxist-oriented state farms are even being cut up, capitalist-style, to lure city dwellers back to rural areas with the promise of small, private plots.

America Zacarias, a sanitation worker in Zipamanine, a town about 100 miles from the capital, complains that his monthly salary of 29,000 meticais, about $65, amounts “to slavery. Can anyone buy anything in these difficult times of life with 29,000 meticais?” he asked in a recent letter published by Tempo magazine, a news weekly.

Produce Is Costly

In Maputo, the capital, a ranking young government official with a 2-year-old son says he and his wife have put their plans for a second child on hold indefinitely.

“It is very difficult to get milk now,” the official says. “Children must have milk.”

Not far from the government’s dollar store, just off Vladimir Lenin Avenue, the city market opens to the afternoon trade after the merchants’ ritual half-hour of lunchtime dancing and singing. Although such market traditions endure, the market economy is changing.

For the first time in years, the market has plenty of produce. But it is so expensive that few can afford it. A pound of onions, for example, costs 400 meticais ($1), half a day’s wage. Although city dwellers receive some food subsidies from the government, they still must buy about half their food on the open market.

Pedro Chadreque sells cabbage from a stall near the front gate. The legal price for cabbage was 50 meticais (12 1/2 cents) a pound, but Chadreque was asking 37 meticais (9 cents) the other day--and still not finding many buyers.

“Even at that price these cabbages will sit here for two or three days,” Chadreque said. “I’ll have to throw them away.”

The market these days stays open well into the night, not because business is so good but because shop owners have to stay open later just to break even.

Despite the country’s economic troubles, and a devastating civil war, Mozambique is no wasteland.

Few Can Afford Cars

Maputo, a city of 1 million people, has wide, tree-lined boulevards and majestic old mansions. Commanding views of the Indian Ocean are sprinkled with wooden fishing boats and, in the misty distance, giant freighters. Mozambique’s white sand beaches, which once made this the vacation paradise of colonial southern Africa, still meander for hundreds of miles.

But one soon sees the problems. City streets are little-traveled these days because hardly anyone can afford a car. Those who can afford a car have trouble finding gasoline at any price. The government airline’s domestic flights are routinely canceled at the last minute because of lack of fuel and only 100 of Maputo’s 400 buses are in service.

Maputo, because it is the capital and because it is only a few dozen miles from the economic powerhouse of South Africa, remains relatively well-supplied compared to the remainder of the country. Mozambique, about twice the size of California, stretches 1,500 miles from Maputo in the south to the border with Tanzania in the north.

Most of the country is extremely fertile, but a decade of low fixed prices, poorly run state farms and guerrilla attacks on farm-to-market roads has prevented the country from feeding itself. The lack of safe roads and rail lines also has left reserves of titanium, coal and furniture-quality wood largely untapped.

The eastern port cities, such as Beira, have long been the commercial centers. Sitting on a cusp of land 400 miles north of Maputo, Beira wears the ugly marks of war and economic decline.

The People Press On

Once-lush flower gardens in the center of town now support tall maize plants; decades-old lattice-work is hung with drying laundry and the pastel paint has peeled away. A stray dog fell asleep in the middle of a major downtown thoroughfare one recent morning and long minutes passed before a car came along and woke him.

Yet the people of Mozambique’s second-largest city press on amid the steady decay, the power outages, the absence of such basic commodities as cooking oil and coffee.

In the dining room of the Dom Carlos Hotel, waiters in pressed white jackets serve a four-course meal of fish, pork, cabbage and greens--and repeat it with slight variations for a week of lunches and dinners.

Each evening, the hotel bartender arranges his drink selection carefully on the display shelf behind the bar. There is beer in brown, unlabeled bottles and a lemon-flavored soda in green, unlabeled bottles. Some nights there is only beer.

“Despite our troubles, people here have not lost their will,” said Prakash Ratilal, former governor of Mozambique’s central bank and now vice minister of the department coordinating foreign relief. “There is something here. It’s not something you can put on a graph. It is the determination of the people to survive.”

In Maputo, for example, thousands of Mozambicans are on the streets before first light each morning, striding to work past women already out sweeping the streets with long-handled brooms.

“In one sense, this is a basket case,” one Western envoy said. “But on

Relations Have Improved

The late President Samora Machel launched a relationship with the West three years ago, at a time of tense Soviet-Mozambican relations. When Machel died in a plane crash last year, his successor, Joaquim Chissano, moved swiftly to solidify friendships with both East and West.

Chissano traveled to Washington earlier this month to meet with President Reagan, and many here considered the journey an indication of the Mozambican leader’s commitment to having a strong relationship with the United States.

Although the Soviets are said to be unhappy that Mozambique is seeking the West’s help in turning its economy around, relations between the two countries have improved slightly since Chissano met Soviet leader Mikhail S. Gorbachev in Moscow during the summer.

The Mozambican army now has 500 to 800 Soviet advisers and receives $100 million to $200 million in military support annually from Moscow, although the Soviets have no military bases here.

Mozambique has made no secret of its desire for U.S. military assistance. That is not likely to be forthcoming, although the State Department has vowed to continue its moral and economic support for Mozambique.

Some conservatives in Congress, led by Sen. Jesse Helms (R-N.C.), have recently criticized U.S. policy here, however. Helms held up confirmation of Melissa Wells as ambassador to Mozambique for seven months, saying he wanted the Administration to withdraw support from Chissano and open talks with the insurgents of the right-wing Mozambican National Resistance, known as Renamo. The new ambassador was confirmed by the Senate last month.

Little Popular Support

Since the late 1970s, Renamo has destroyed a large chunk of the country’s infrastructure, including bridges, schools, factories and hospitals. Its guerrillas terrorize civilians, stealing food and clothing, using forced labor and in hundreds of cases, slashing the noses, ears and lips of people whom it suspects of collaborating with the government.

Most foreign military analysts here think Renamo has little popular support within Mozambique. Those analysts say Renamo receives substantial help from South Africa, which wants to weaken its neighbor as well as discourage the banned African National Congress from launching attacks from Mozambique.

A stable Mozambique, with its Indian Ocean ports and rail routes to Zimbabwe, Zambia and Malawi, could strengthen the economy of black nations adjacent to South Africa, reducing their dependence on that white-ruled country, analysts say.

When Mozambique won independence in 1975 after nearly 400 years of Portuguese rule, the majority of the Portuguese expatriates and white settlers left virtually overnight, taking what they could carry and destroying what they could not.

Since the Portuguese had, for the most part, trained only fellow Portuguese to run the country, their flight robbed the country of its expertise and left the ruling Mozambique Liberation Front, known as Frelimo, precious little on which to build.

A major international relief effort has begun to airlift food to areas struck by war and, in some cases, drought. The civil war has forced 1.5 million people from their homes and left another 3 million people unable to feed themselves, officials say.

Reached Critical Point

Mozambique has one doctor for every 47,000 people and the infant mortality rate, a key indicator of general health conditions, is believed to be among the highest in the world, with an estimated two of every 10 children dying before they reach the age of one.

“Little by little over the years, the situation has deteriorated,” said Marta Mauras, the U.N. Children’s Fund’s resident representative in Mozambique. “People have been adapting and adapting, but now they’re at the point where it gets very critical.”

The aid also has poured foreign exchange into the country’s coffers and, temporarily at least, created what some here call a “disaster relief economy.”

“It’s very hard to moralize, but perhaps we’ve taught them some bad habits by the sheer vulgarity of our generosity,” said Rick Williams, program officer in Mozambique for World Vision, the Christian relief, development and evangelism agency based in Monrovia, Calif. “We may have pushed them into becoming people who say, ‘Give us more, give us more.’ ”

The worldwide response to Mozambique’s problems “saved lots and lots of people from starving,” said Rosemary Fieth, of the private British relief agency Oxfam.

But, she added, “In the long run, it’s got to be Mozambique that copes with these problems.” This time next year there may be another Ethiopia and everybody will go somewhere else.”