The development of natural resource linkages in Mozambique : the ruling elite capture of new economic opportunities

This paper explores linkage creation in Mozambique related to mega-projects in natural resource extraction and development from a political economy perspective. It explores through a focus on linkage development related to extractive industries in Mozambique the 'best practice' attempts between commodity producers and local content providers. The paper argues that a relatively elaborate state organizational and institutional setup based on policies, strategies and units with funding tools has emerged over time in order to begin to reap the benefits of large-scale investments in the extractive sectors. However, despite the formal acknowledgement, very little has been achieved with regard to forward and backward linkages, state institutions are often despite the official government rhetoric of importance simply bypassed not only by foreign investors, but also by the political leadership. The first section briefly considers the scope of mega-investments and their relation to the economic structure of Mozambique. The second section briefly outlines how linkage development has been pursued related to mega-investments. The third section explores what the limitations to linkage development have been. The fourth section briefly explores what the organizational and institutional response has been, while the fifth section analyses why the present wave of mega-investments in the extractive natural resource economy struggles to engage in linkage formation, and is then followed by a brief conclusion.