Local Economic Development in Mozambique - Responsible Tourism: Critical Issues for Conservation and Development - page 8

Hardware
The development of a physical environment that enables businesses to operate
efficiently in Mozambique has been lacking. Mozambique faces some severe
structural problems that hinder local economies, beyond the large hotels, from
ever exploiting the tourist trade. The poor infrastructure, especially with regards
to the state of the roads, means that tourists can only access many communities
with four-wheel drive vehicles. Hotels and lodges are predominantly located along
the coast, with a small number in game reserves. Tourists are usually transported
directly to these areas by the tour companies and have little opportunity to explore
the wider communities. As a result, there is little evidence of the 'trickle-down'
effect that the Washington Consensus advocates but rather revenue re-circulates
around the established firms, foreign owners and middle classes (Stiglitz, 1998).
The issue of locality is central to the development of local economies in
Mozambique. The lack of transportation for communities and the poor road
system mean that local economies are restricted by the lack of mobility of tourists
but also the transfer of knowledge and skills between communities. Therefore,
infrastructure seems to be a persistent barrier to development for local economies
that exist outside of major cities.
Corruption is also one of the major hindrances to the competitiveness of the
tourism trade in Mozambique. A study into the investment climate in the
Inhambane province discovered that nearly two-thirds (63.8 per cent) of firms in
the province reported being subjected to corrupt actions by public officials. The
situation is at its worst in Vilanculo (82.1 per cent) and least prevalent in Maxixe
(38.1 per cent). It is calculated that firms spend an average of 9.5 per cent of their
gross revenue on corruption (Governo de Provincia de Inhambane, 2004, p2).
Furthermore, land rights are an evident problem in Mozambique as all land is
owned by the State. Land delimitation is costly, complex and time-consuming.
Some private sector residents on Ilha de Mocambique still do not possess title
documents to prove ownership of their property after years of negotiation with
local administrators. The informal acquiring of land in prime locations along the
coastline is dominated by white-owned private investors and is ' exacerbated by
local officials who see the opportunity to cut themselves into any profits from the land '
(McEwan, 2004, p2). Local communities do not have the knowledge or power to
negotiate their role in the development of tourism enterprises. Therefore, they
either provide the private sector with the rights to develop or lose it as a result of
illegal procedures. Corruption could deter investment and in turn thwart the
implementation of PARPA. These problems are compounded by the inefficiency
of the tax collection as the Inhambane government estimates that it collects only
36 per cent of taxes due from firms (McEwan, 2004, p2).
In summary, although PARPA has identified the need to facilitate an environ-
ment conducive for business, it has failed so far to implement its policy
recommendations with regards to employment creation and poverty alleviation.
Lack of infrastructure, corruption and inefficiency in collecting taxes all have
causal affects on software issues such as investment and competitiveness.