Mr. Horst Koehler, Managing Director

MAPUTO/BONN |

MAPUTO/BONN (Own report) - During his upcoming trip to Africa, the German President, Horst Koehler, will address the question of German economic interests and their expansion in Mozambique, rich in natural resources. German-foreign-policy.com has learned this from industrial circles in Germany. Since the installation of a major aluminum smelting plant (MOZAL) with the aid of German development funds, an appetite has been awakened in Germany for Mozambique as a location with its cheap labor. The Deutsche Investitions- and Entwicklungsgesellschaft mbH (German Investment and Development Corporation - DEG) and the Deutsche Bank are participating in this industrial project. As former managing director of the International Monetary Fund (IMF), Horst Koehler had dealings with MOZAL and is acquainted, from that time, with the economic power structures in the capital, Maputo. The current German president is judged as being capable of procuring for more German businesses access to this Southeast African nation. In this former Portuguese colony, that nurtures an intensive cooperative relationship with the Peoples Republic of China, Germany has its own spheres of influence in both government and opposition - thanks to long-term activities of German political party foundations.

President Koehler, who, during his presidential incumbency, has yet to travel to either the Latin American or the Asian continent, underscores the strategic orientation of German foreign policy with his second trip to Africa. It is aimed at a reinforced influence in Africa, since the international competition for access to natural resources has made their supply more precarious. According to the German Foreign Ministry, aside from Madagascar and Botswana, Koehler will also visit Mozambique.

90 Percent

For decades German enterprises have considered this Southeast African nation economically insignificant, changing their minds only with the emergence of the prospect of constructing a gigantic, multinational aluminum smelting plant. So as not to miss out on the chance to join the French, British and Japanese investors, the German Investment and Development Corporation - DEG Cologne - jumped into the construction project with a direct and a subordinate loan.[1] Once MOZAL became operative in September 2000, the Deutsche Bank accorded a boost of $75 million.[2] Already in the early months of operation, MOZAL smelted approx. 1.3% of the world's production of aluminum (280,000 tons) and doubled its production in the second construction phase. In 2002 nearly 90% of Germany's aluminum imports (€80.5 of €91 million) was comprised of Mozambique's MOZAL aluminum.

Dependent

During his incumbency as managing director of the IMF, Horst Koehler was in support of Mozambique's exports being highly concentrated on aluminum and let himself be debriefed on the monetary yield of the economic standardization through a subserviently written report from the government in Maputo.[3] This memorandum from the national planning minister and the president of the National Bank ("Mr. Horst Köhler, Managing Director, International Monetary Fund, Washington, D.C. 20431") reveals the loss of African sovereignty rights to the former colonial powers and their supervisory personnel through detailed controls of finance. Economic experts predict disastrous consequences for Mozambique arising from the development imposed by Koehler. "Mozambique has never been this dependent upon a single product," considers Prof. Carlos Nuno Castel-Branco at the Economic Institute of the Eduardo Mondlane University in Maputo in 2003. The results of this concentration on aluminum are "a high rate of unemployment, underemployment and a state subvention policy" warns Dr. John Cameron, an assistant professor for economic sciences at the British University of East Anglia.[4] In fact, Mozambique is still one of the poorest countries in the world, whereas German enterprises, are still comprehensively profiting from the low prices of aluminum.

Boost

Plans for the expansion of German economic spheres in this Southeast African nation are flanked by bi-lateral investment protection agreements (2002), as well as by a significant increase in payments from the so-called "development funds." A result of the German government negotiations, at the end of 2005, is that the government augmented the chapter of the budget (2005/2006) earmarked for Mozambique to €68.5 million, a boost of more than €15 million, when compared to the previous finance plan.

Low Costs

Mozambique, as one of the priority target countries for development financing and one of four pilot project regions of the "Action Plan 2015," holds a place of distinction in the Africa section of the Foreign and the Development (BMZ) Ministries. The country disposes of "natural (...) even at times rare (...) raw materials" and due to its "geographical position as a transit country for neighboring land-locked nations (among them Zimbabwe)" it is of regional importance, explains the German government.[5] Finance investors, when they begin to swoon about the "rare raw materials" and Koehler's MOZAL Project, are more precise: "Thanks to modern production technology, its optimal location in the vicinity of a harbor, favorable electricity prices and low personnel costs, MOZAL is among the world's least expensive producers.[6]

Competition

With its measures aimed at gaining more geopolitical influence, the German government stands in competition particularly with the People's Republic of China, with its rapidly growing activities on the African continent. China has also intensified its economic relations with Mozambique. In March 2005 a "Chinese-African Chamber of Commerce" was inaugurated in Beijing. This chamber of commerce is charged with the systematic expansion of the economic network between the People's Republic and five African states (Cameroon, Ghana, Mozambique, Nigeria and Tanzania). China is becoming Africa's third most important commercial partner (after the USA and France).

Options

The Chinese influence in Mozambique can be traced back to the civil war period between the present government party, FRELIMO, and the oppositional alliance, RENAMO. Whereas Beijing supported the socialist oriented FRELIMO, RENAMO enjoyed the protection of the South African apartheid government and its militias. German foreign policy opted for both sides and thereby laid the cornerstone of what has developed into an outstanding relationship with the elite in this Southeast African nation through contacts developed by German party foundations handling African questions. The CDU parented "Konrad Adenauer Foundation" was working with RENAMO to promote German interests, while the Friedrich Ebert Foundation, parented by the SPD, has been active since 1982 in the entourage of the currently ruling FRELIMO.

Unknown

Among the things organized by the social democratic Friederich Ebert Foundation was the introductory visit of the FRELIMO presidential candidate, Armando Guebuza, to Berlin in September 2004. Guebuza was allowed to pay visits to representatives of the German government, (among others to the SPD Development Minister) and to interested parties in the German industry, where he discussed "the prospects for the expansion of the economic relationship between Germany and Mozambique." The elections that followed were carried by the SPD favored candidate, and were accompanied by massive protests alleging fraud. Commentaries emanating from the Foreign Ministry, proclaiming that the government shares the concerns about corporate governance are unknown.

[1] Ausgezeichnet: Mozambikanische Aluminiumschmelze Mozal wird vom International Project Management Institute zum "Projekt des Jahres" erklärt; DEG mbH 05.12.2001
[2] Deutsche Bank arranges USD 75 Million NEXI supported Facility for Mozal Aluminum Smelter Plant Project; Deutsche Bank Singapore 30.07.2002
[3] Memorandum of Economic and Financial Policies of the Government of Mozambique for 2002; Maputo 03.06.2002
[4] Die ungeteilte Euphorie; afrika süd 5/2003
[5] Pilotland Mosambik. Profil; www.aktionsprogramm2015.de/www/ armutbekaempfen_mozambique_profil_101_17_0_f.htm?query=
[6] Ausgezeichnet: Mozambikanische Aluminiumschmelze Mozal wird vom International Project Management Institute zum "Projekt des Jahres" erklärt; DEG mbH 05.12.2001

see also Nikolaus, Glücksfall and Offensive in Afrika