Foreign direct investment has been widely recognized over the past decades as a major contributor to growth and development. It can bring capital, technology, management know-how and access to new markets. In comparison with other forms of capital flows, it also tends to be more stable, with a longer-term commitment to the host economy.
The general policy framework for the promotion of investments in Mozambique has improved greatly in recent years, a trend that is backed the new provisions of the 2004 constitution and important legal reforms. However, it would be also fair to state that the environment for foreign investments protection is still inadequate to attract high quality and efficiency-seeking investments and the incentive framework continues to suffer from a number of deficiencies.
Faced with increased international competition, foreign investors, in their global strategies, seek to maximize their competitiveness by locating facilities in multiple locations around the world. The lack of competitively in comparison with other global FDI destinations signifies that Mozambique is loosing development potential.
In this increasingly globalized world, attracting foreign investment depends more on the ability to provide a favorable investment protection regime and competitive factors of production. The former requires a stable, efficient, and service-oriented environment that welcomes investors into most economic activities without discrimination.
Modern legal and intellectual property rights, effective competition policies, a strong judiciary and minimum bureaucratic harassment are all important to attract foreign investors. The latter are the ultimate determinants of FDI. Competitive factors of production no longer mean just cheap raw labor and basic infrastructures.
Mozambique is becoming a major target and perhaps the most most attractive investment destination as a result of recent legislative reforms
Mozambique has recently made considerable progress towards economic development, absolute poverty eradication and the promotion of well being of the population. In a feature dated May 17 2005 issue, the New York times described Mozambique as the "Rising star of Africa". This is a reason to be proud of for all Mozambican citizens. And this international recognition is just the evidence of the country's considerable performance during the two last decades.
The new country's constitutional framework adopted in November 2004 is a real revolution for the country's consistent progress towards free-market and liberalization. New provisions were introduced with the aim of protecting basic citizen's rights and properties. Political pluralism was reinforced, governance and transparency were widely strengthened. Freedom of association and private initiative, free entrepreneurship, private investments were given official recognition and protection. New laws on tourism and investment are widely acclaimed by national and international observers as concrete improvements of the business environment. Further legislation should be completing these initial foundations towards more credible and internationally acceptable standards. The tone is set for greater achievements.
Still there are important sectors which need special attention if the Government has to realize one of its stated objectives: to achieve modern industrialization by year 2025.The fundamentals for economic growth and economic development still need to be strictly applied through the design of proper policies and the consistent implementation of adequate economic plans. The country still needs to further modernize its legal, institutional and operational framework for the promotion of a better friendly business environment. Modern infrastructure and standards need to be adopted and strict controls pout in place in order to guarantee the success of defined policies.
The basic characteristics of a nation set for sustainable economic success
For Mozambique to become an industrialized nation, it is important to adopt a wide ranging policy package that encompasses all key sectoral aspects. Among the major areas of priority intervention which can be identified, we may consider the following sectors:-
1. Education: training of world class and a highly motivated workforce, both in the public and private sectors, is the basis of success for the Government's economic development plans ;
2. Health: for the Mozambican nation to grow, it is important to have a healthy people. The pandemics of Malaria, Tuberculosis and HIV/AIDS, etc. need special attention.
3. Environment: Mozambique is blessed with an environment which has not been tampered with. Natural resources are still untapped. It is important to carefully plan the exploitation of resources to avoid their misuse for the benefit of all Mozambicans.
4.Social welfare: the Mozambican common citizen is still living in abject conditions. Policies for the improvement of the social and economic well being are needed and their implementation are of priority if the economic development we are targeting need to succeed. Social and political stability are of great importance for the country's future development.
5. Legal and institutional framework: to achieve sustainable development, the country needs a viable environment both for the national and foreign economic operators. Legal and institutional guarantees are of utmost importance if the fruits of economic development have to be properly initiated, developed and matured.
6. Industrial sector and production: the Government should work as a priority on the development of production activities for the transformation of the economy from an exchange economy into a production economy.
(vii) Resource mobilization : the revamping of institutions, in particular, the financial institutions, should be undertaken with the view to harness national and international resources. Measures to encourage national saving schemes should be set as a priority.
Having identified the basic characteristics of a nation set for sustainable economic success, it is now timely to introduce the main lines for the promotion of FDI. Mozambique needs to promote, attract and protect foreign direct investment as the key engine of its economic development plans.
The present article's main objective is to explore the environment, the conditions, the factors and the requirements for the promotion of FDI in Mozambique as a strategy to achieve economic and industrial development by 2025. It is articulated into five chapters which cover respectively: an economic background, the determinants of FDI flows, the priority areas of FDI intervention, the required legal and institutional reforms, the future prospects and finally concluding remarks and recommendations.
No comments:
Post a Comment