Paper short abstract:

Gas extraction in the Rovuma Basin may invoke developmental state aspirations on both sides of the Tanzanian-Mozambican border; yet the political-structural conditions for reinvesting extractive rents in industrial and social development are very different.

Paper long abstract:

The offshore Rovuma Basin on the border between Mozambique and Tanzania and the prospects of simultaneous extraction of natural gas reserves in the basin, offer the opportunity to compare two real-life experiments of post-neoliberal extractivism in Africa. The purpose of this paper is to review the recent research literature on petroleum policy and use insights from this work to assess the developmental potential of offshore gas production in Tanzania and Mozambique. The paper starts out understanding changes of the ideal type East Asian ‘Developmental State’ model due to the current stage of post-neoliberal global economy and to what extent, and how, this model has inspired the design of different extractivist trajectories in Mozambique and Tanzania. Despite clear risks of “resource (or ‘presource’) curse” in both countries, the development of offshore gas projects opens possibilities to reinvest extractive rents: on the one hand, in industrial development that goes beyond “enclave” structures; on the other, in social programs that address extreme poverty. Review of the existing literature indicates that Tanzania has better conditions to harness this potential than Mozambique. Stronger and more autonomous state institutions in the former may lead to a more effective regulation and taxation of the extractive industries for reinvestments in other sectors. The dominance of predatory political networks in the latter favors a model of rapid revenue generation that undermine coordinated plans and policies necessary for sustainable economic and social development.