MOZAMBIQUE

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					                                          MOZAMBIQUE

Environmental

After emerging from 16 years of brutal civil war, Mozambique stands at a crossroads
between conservation and development—although when done properly, both are
possible. While one of the world's poorest countries, Mozambique has tremendous
potential for eco-tourism with its beautiful beaches, safari life, and Lake Malawi diving
opportunities. Foreign investors are financing the construction of a number of hotels.

In the early to mid-2000s, an American internet executive committed more than $30
million to rebuilding Gorongosa National Park in central Mozambique as an ecotourism
destination. Greg Carr, former chairman of Prodigy Internet and Boston Technology,
planned to reintroduce animals from elsewhere in Africa.

Natural Resources

While forest covers nearly a quarter of the country, Mozambique has little tropical forest
coverage. Nevertheless, deforestation rates are quite low—only 3.7 percent of the
country's forest cover was lost between 1990 and 2005—and have not increased
significantly in the past five years. As of 2003, 5.7 percent of the country was under
some form of protection, although poaching is a problem in some areas. Mozambique's
large protected area is Limpopo National Park, which is part of the larger Great Limpopo
Transfrontier Park, consisting of Limpopo, Kruger National Park in South Africa, and
Gonarezhou National Park in Zimbabwe.

Biodiversity

Mozambique has 685 species of birds, 195 mammals, 228 reptiles, 59 amphibians, and
nearly 5,700 species of plants.

In 2005, Mozambique launched a "Small Grants Programme" with the support of the
United Nations Development Programme (UNDP). This provides grants of up to
US$50,000 and other support to community-based groups and non-governmental
organizations for activities that address land degradation, biodiversity, and climate-
change issues at the local level

Economy of Mozambique

The resettlement of civil war refugees and successful economic reform have led to a
high growth rate: the average growth rate from 1993 to 1999 was 6.7%; from 1997 to
1999 it averaged more than 10% per year. The devastating floods of early 2000 slowed
GDP growth to 2.1%. A full recovery was achieved with growth of 14.8% in 2001. In
2003, the growth rate was 7%. The government projects the economy to continue to
expand between 7%-10% a year for the next five years, although rapid expansion in the
future hinges on several major foreign investment projects, continued economic reform,
and the revival of the agriculture, transportation, and tourism sectors. More than 75% of
the population engages in small scale agriculture, which still suffers from inadequate
infrastructure, commercial networks, and investment. However, 88% of Mozambique's
arable land is still uncultivated.




A view of the Cahora Bassa reservoir.


The government's tight control of spending and the money supply, combined with
financial sector reform, successfully reduced inflation from 70% in 1994 to less than 5%
in 1998-99. Economic disruptions stemming from the devastating floods of 2000 caused
inflation to jump to 12.7% that year, and it was 13% in 2003. The Mozambique's
currency, the Metical, devaluated by 50% to the dollar in 2001, although in late 2001 it
began to stabilize. Since then, it has held steady at about 24,000 MZN to 1 U.S. dollar.
New Metical replaced old Meticals in rate thousand to one on January 1, 2007 bringing
the exchange rate to 25 (new) MZN to 1 USD.