I.  COMMERCIAL OVERVIEW

WHILE MOZAMBIQUE IS EMERGING FROM THE DEVASTATING EFFECTS OF 16
YEARS OF CIVIL WAR, IT IS STILL CONSIDERED BY THE WORLD BANK AS
THE POOREST COUNTRY IN THE WORLD WITH A PER CAPITA INCOME OF
ABOUT USD 60.  THE COUNTRY HAS LITTLE FUNCTIONING INDUSTRY AND
MOST MANUFACTURED PRODUCTS ARE IMPORTED.  DUE TO DEPENDENCE ON
FOOD AID AND CONTINUED WEAKNESS IN ITS EXPORT SECTOR, MOZAMBIQUE
RAN A RELATIVELY LARGE TRADE DEFICIT OF USD 763 MILLION 1993.
MOZAMBIQUE, WITH A POPULATION OF OVER 16 MILLION, REMAINS HEAVILY
DEPENDENT ON THE GENEROUS DEVELOPMENT AID RECEIVED FROM DONOR
COUNTRIES TOTALLING OVER USD 1 BILLION PER YEAR.

THE GOVERNMENT ABANDONED ITS MARXIST ECONOMIC PRINCIPLES IN THE
MID-1980'S.  WHILE THE TRANSITION TO A MARKET-BASED ECONOMY HAS
BEEN SLOW AND DIFFICULT, THE MOZAMBICAN GOVERNMENT HAS BEGUN TO
TAKE STEPS RECENTLY TO SUPPORT AND ENCOURAGE THE DEVELOPMENT OF
THE PRIVATE SECTOR.  NEVERTHELESS, GOVERNMENT BUREAUCRACY,
CORRUPTION AT ALL LEVELS, AND UNEVENLY APPLIED CUSTOMS DUTIES
FRUSTRATE MANY FOREIGN BUSINESS PERSONS.

AMERICAN BUSINESSES REPRESENTED IN MOZAMBIQUE ARE RELATIVELY FEW
BUT THE NUMBERS ARE GROWING AS GREATER ATTENTION IS FOCUSED ON
THE SOUTHERN AFRICAN REGION.  GOOD TRADE OPPORTUNITIES FOR U.S.
COMPANIES EXIST IN CONSTRUCTION AND AGRICULTURAL EQUIPMENT,
ENGINEERING SERVICES, USED EQUIPMENT OF ALL KINDS, PERSONAL
COMPUTERS, AND GENERAL CONSUMER GOODS.  THE MAJOR TRADE
COMPETITORS ARE SOUTH AFRICA AND PORTUGAL.  AS MOZAMBIQUE BEGINS
TO BUILD ITS POSTWAR ECONOMY, LARGE CONSTRUCTION PROJECTS ARE
BEING PROPOSED, INCLUDING REHABILITATION OF THE COUNTRY'S ROAD
NETWORK (USD 800 MILLION) AND A NATURAL GAS PIPELINE FROM CENTRAL
MOZAMBIQUE TO SOUTH AFRICA (USD 700 MILLION).