Paper short abstract:

This paper reads critically the austerity narrative in Mozambique since the 1980s as fiscal-monetary discipline that has led to greater privatization, financialisation and reproduction risks, illustrating results through the workings of an agrobusiness financial intermediary.

Paper long abstract:

This paper deploys a Marxist critique to explicate the austerity narrative in Mozambique since the 1980’s adjustment programmes as a dynamic that leads to the unfolding of the next crises. Contrary to the ‘invisible hand’ of the market, the hand of austerity intervention is very ‘visible’ in disciplining monetary and fiscal policies supposed to achieve stabilisation, inflation control, or economic growth, at the detriment of social reproduction. Selected state actions are highlighted here to show the links from privatisation to foreign direct investment to ‘finance for development’ entailing state leveraging of private financial flows. Effects have included a narrower productive economy. The current inflation crisis has invited renewed disciplining policies in recent framework documents. Far from a “new paradigm” of development, they point to persisting (inter)national accumulation patterns, enhanced by growing financialisation. Agriculture is a good example of this. The initial withdrawal of state services, coupled with privatisation and external funding for commercial agriculture failed to generate private investment, yet opened the door to further privatisation and eventually financialisation. Agriculture has come back on the agenda, this time mostly funded with risk capital leveraged by states. This Marxist political economy approach to an exemplary case, an agrobusiness financial intermediary, illustrates the concrete processes and consequences of its modus operandi. As such, it provides a comprehensive and realistic understanding of the forces at work by integrating finance and spheres production in a systemic manner that illuminates the roots, reach, and risks of austerity-led policies in Mozambique.