Mr. Oldemiro Marques Balói:

I thank members very much for their questions which clearly show their interest in the situation in Mozambique. I will try to be deep but brief and we will see if I get the balance right.

My biggest challenge is not answering the questions of this committee but rather doing so in such a way as to please the members of my country's Parliament. My hope is that they will realise it is correct to approve the Government's budget for foreign affairs because we are really working. I hope they realise life is not easy for me.

I will now address the issue of elections and voter participation. The political landscape in Mozambique is changing rapidly but there are basically three kinds of political party. The first are those sitting in Parliament, of which there are three. Then there are those who do not sit in Parliament but are constantly active between elections. The third group consists of those that only show up at election time. The performance and visibility of each group is obviously different. Peak participation is around election time, when more than 20 parties seek parliamentary seats. The registration process has just concluded and we expect that around 8 million people will vote. This is around 87% of registered voters. To ensure that most people vote, there is a permanent civic education campaign. Abstention was one of the major problems in the last election and this is surprising in a young democracy such as Mozambique. It is more common in mature democracies such as Ireland. Something is wrong and we are working hard to reverse it.

I agree with the suggestion that the potential for bilateral trade should be explored more fully. As was mentioned earlier, the trade balance is not favourable to Mozambique, and this is why my delegation is here today. We aim to raise the level of co-operation between our countries. We are here to ask you, among other things, to help us help ourselves. We are concentrating on self-explanatory sectors such as agriculture and agri-industry. We must produce and process goods so we can export goods with added value and consume high-quality goods. The education and health sectors are important in the formation of human capital as they help improve levels of productivity over time and have a positive influence on the performance of the economy.

The participation of girls in education is a complex matter that has been identified by the people of Mozambique in general and by the Mozambican Government in particular. There is a cultural component to this issue and it also relates to the level of development. It is a matter that is tied to poverty. Some parts of Africa have a patriarchal societal model and others have a matriarchal pattern of cultural development. Mozambique is so huge that it has each model in different parts of the country, and this is an influencing factor. The cultural influences to which I referred act indirectly rather than directly. Poverty means that families must engage in agricultural production, but the technology is poor, as is the quality of seed. Infrastructure has not yet responded to the needs of agriculture, and for cultural reasons, girls are expected to help their mothers solve these problems. Girls are expected to engage in farming, fetch water for the family and take care of younger children. These facts mean that solving the problem of the participation of girls in education will take some time, but the trend in this matter has been positive.

Some decades ago, far fewer girls were enrolled in school than boys, but now there are often more girls than boys. However, as family difficulties intensify, these girls tend to abandon school. The main problem is no longer enrolling girls in schools but keeping them there. This can be done by educating parents. Adult illiteracy is high in Mozambique, at over 50%, so unless parents and grandparents are educated and learn the crucial importance of education, we will continue to face these problems. This is why adult education is a key component of our education system. Supporting the struggle of women for empowerment is another way of motivating people to study. Seeing women in government, parliament and positions of leadership can motivate families to send girls to school.

The Government of Mozambique aims to finance its own budget, and I believe this is realistic. We are quickly reducing dependency on our co-operating partners. I emphasise the word "reducing" because, as our capacity to finance the budget increases, our needs increase faster. We are trying to reduce the gap as fast as possible. Based only on what we in Mozambique call the traditional economic sectors, we can sustain our growth. These sectors have driven Mozambique to an average growth of 7.2% in the past ten to 15 years. Now we have discovered gas and coal, and this will produce income in 2018.

In the meantime, we have two non-recurring sources of income due to sales and purchases of assets between the investors. Although it is non-recurring, it is nevertheless very useful. In the medium term, we will be in a much better position to finance our budget both through growth of the so-called traditional sectors, namely, agriculture, industry, tourism and services, and due to the benefits we will accrue from these new discoveries.

Foreign direct investment benefits the citizens greatly. We would like it to be more beneficial in terms of creating jobs but foreign investors are in the upper level of the economy and being in the upper level often means they use high technology and capital intensive techniques rather than making labour intensive investments. This is why our bet - it is a common belief everywhere - is to promote the development of the domestic private sector, mostly at the level of micro, small and medium enterprises. These sectors are by their nature job creators. We are trying to match the big investments with these sectors through linkage processes. From the outset, we want to ensure that the services required by the big investors are provided by the private sector, and preferably domestic companies. The first big investment attracted into Mozambique was the Mozal aluminium smelter. We have learned from that project and are trying to implement this approach in all the big projects we develop. However, we do not have big expectations from the new discoveries when it comes to job creation. We want to get things upstream and downstream. That is where we will build our competitiveness in terms of medium-sized enterprises.

A question was raised about Chinese construction in Mozambique. There is a misperception in regard to how Mozambique is dealing with China. There is a general fear when it comes to China that problems arise in terms of its human rights and its approach to the environment. I remind people that it is the Government's responsibility to enforce its own laws and regulations. If one ties it, they fulfil it but if one loosens it, they may take advantage. That applies to all human beings. We do not have cases of deficit due to bad construction. We may have one or other building with problems of quality but that is not because of China; it is because the person who was paid to supervise construction did not do his job. It is the system that failed. We refuse to attach that to a particular country because it happens with everyone, even among Mozambiqueans. I refer to micro, small and medium enterprises. We try to give them opportunities to build small schools, small factories, houses and so on. Besides the fact that a minority of them under perform, a certain number disappear with the money after they receive their first payment. These are Mozambiqueans. It is a human problem, not a problem of nationality.

Budget support is a precious tool for Mozambique not only because of the money, although that is critical, but also because of the externalities of the process. We need to manage the budget accurately. We need to train people. We need to be accountable. We are, by nature, accountable to the Parliament but because it is providing us with budget support, we are also accountable to it. That helps to improve the system because, underlining all this, there is a problem of human capital, which is weak everywhere without exception. Through budget support we interact intensively and we learn to finance our budget. That is not a tradition with co-operating partners but we are also learning to use the money in a transparent and credible way. It is a win-win situation and that is why we value the budget support. In the past we received credits and grants from everywhere, many of which were channelled through NGOs, but when it came to measuring the impact of these grants nobody, including the Government, had the figures. That is why the concept of concentration and co-ordination arose and that is what we are trying to implement jointly.

Capital flight and corporate tax evasion are challenges. We prevent capital flight by maintaining peace and stability. Investors need to trust a country. Macroeconomic stability is also important. We are doing well in this regard, as Ms Lagarde has noted in a recent statement. We are focused on providing even more peace and stability. That is why investors trust us and remain in the country. Corporate tax evasion is a matter of efficiency of our fiscal authority, which is striving and succeeding. The levels of tax collection are improving every year and we have a strong entity that is delivering a good performance.

In that region of the continent, Mozambique has a role. We are one of the founders of the South African Development Community, SADC, we were a member of the Frontline States, FLS, and we are chairing the Community of Portuguese Language Countries until July. That last organisation has eight members, five of which are African. In March, we finished our term on the African Union Peace and Security Council. We are pretty busy. We are also involved in the Great Lakes region. Some of the SADC's members belong to the Great Lakes region organisation, those being the Democratic Republic of the Congo and Angola. Although an infant democracy, Mozambique enjoys a good reputation worldwide. Even before everyone was seated at the SADC, we were asked to chair it in specific contexts.

There is the principle of subsidiarity. This word is hell for me, even in Portuguese, but members get the idea.