Typescript prepared by Lisa Winkler at UNU-WIDER. UNU-WIDER gratefully acknowledges the financial contributions to the research programme from the governments of Denmark, Finland, Sweden, and the United Kingdom. The World Institute for Development Economics Research (WIDER) was established by the United Nations University (UNU) as its first research and training centre and started work in Helsinki, Finland in 1985. The Institute undertakes applied research and policy analysis on structural changes affecting the developing and transitional economies, provides a forum for the advocacy of policies leading to robust, equitable and environmentally sustainable growth, and promotes capacity strengthening and training in the field of economic, and social policy-making. Work is carried out by staff researchers and visiting scholars in Helsinki and through networks of collaborating scholars and institutions around the world.

The current Mozambican industrial development pattern, a mix of private sector initiative and a public sector licensing mechanism, replaced the post-independence public sector-led industrialization of the central planning countries’ tradition. The transition to a market-driven economy in the mid-1980s followed an international trend with the collapse of the socialist bloc countries and the end of the Cold War era. Before its independence from Portugal in 1975, Mozambique had the mixed industrialization pattern of a dual society. On one hand, there was a growing colonial, urban, and industrializing population, and on the other hand, a local majority population dedicated to low-productive agriculture and other manual activities such as mining and public works. Although the rules of a market economy applied, the public sector was heavily present, distorting labour relations. This national discrimination within an international market economy system partially explained the choice of a socialist economic system after independence.

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