50 Years Is Enough: The Case against the World Bank and the International Monetary Fund

By Kevin Danaher | Go to book overview

14
Mozambique: In the Coils of
Structural Adjustment

Mozambique Information Agency

Wages serve the basic function of allowing workers to survive and to produce future workers—their children. When wages are too low to guarantee this, then they are dysfunctional, and the economy is in very serious trouble.

From the World Bank offices in Mozambique's capital, Maputo, there issues a regular stream of triumphalist statements about how the structural adjustment measures forced on Mozambique have reversed the decline of the economy.

But for those on the minimum wage it doesn't look like that at all. Under structural adjustment, the real value of wages has fallen drastically, while subsidies on basic foods have been abolished or severely cut.

In January 1991, the minimum industrial wage of 32,175 meticais a month was worth US$31 at official exchange rates. Inflation and devaluation ate rapidly into this. When the minimum wage was raised to 40,000 meticais a month in December 1991, it was worth just $23. There has been no wage increase since then, but devaluation has gathered pace so that, as of late August 1992, the minimum wage is worth less than $14 a month.

It is theoretically possible for one person, buying the cheapest available foods, to keep himself alive in Maputo on this sum. But the Ministry of Health's nutrition department has shown that no family can sumve on the minimum wage.

The results of the low-wage economy are readily visible on the streets of Maputo, where children eke out the family income by engaging in all manner of petty trade (such as buying packets of cigarettes at one price, and then selling them one by one at a slightly higher price).

Low wages generate theft and corruption, too. Scandals repeatedly occur in Mozambican schools, where low-paid teachers demand bribes to allow children to attend classes or, worse still, to pass exams. Theft

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