As pointed out by the IMF, PARPA II broadened its definition of poverty to “the impossibility, owing to inability and/or lack of opportunity for individuals, families and communities, to have access to the minimum basic conditions, according to the society’s basic standards”. 17 Through reform efforts, the main aim of PARPA II is to raise the low standard of living of the least favoured population groups, and to decrease poverty from 54 per cent of the population in 2003 to 45 per cent in 2009. 128. Notably, PARPA II differentiates itself by giving higher priority to an increase in productivity and greater integration of the national economy. By focusing specifically on the contribution that reforms in Mozambique may have had on economic growth and poverty reduction after 1992, this section of the report initially highlights the possible effects of reform-induced changes in investment, trade and privatisation on growth and poverty. It then draws attention to the linkages between potential regional imbalances and growth, poverty and employment conditions during the past decade and more. Effects on Growth and Poverty 129. The fairly successful implementation of economic and political reforms in Mozambique has engendered macroeconomic and political stability. This appears to have contributed greatly to large inflows of foreign direct investment (FDI) and an upsurge in investors’ confidence regarding the country’s ability to sustain its turnaround after the mid-1990s. 130. Riding on the back of strong economic growth and a significant reduction in inflation, the sectoral composition of Mozambique’s economy started to show discernible changes. Mozambique’s services sector, being the largest sector, has experienced a volatile period since 1996 after its share of the GDP initially rose by 5.6 per cent to an exceptional high of 55.1 per cent in 2000, and then fell to 48 per cent in 2004 (Figure 2.1). It is argued that, because private sector investments increased by almost 3 per cent of the GDP annually, especially after 1997, they have contributed appreciably to at least the initial growth phase. 18 The services sector – particularly ports and railways, the services it provides for its landlocked neighbours – is clearly one of Mozambique’s core economic strengths that should be developed by means of increased privatisation. 17 International Monetary Fund (IMF). 2007. Republic of Mozambique: Poverty Reduction Strategy Paper. IMF Country Report No. 07/37. Washington DC: IMF, page 8; Social Exclusion Knowledge Network (SKN). 2008. Understanding and tackling social exclusion. Final Report to the WHO Commission on Social Determinants of Health. February 2008, page 49. 18 Biggs, T., Nasir, J. & Fisman, R. 1999. Structure and performance of manufacturing in Mozambique. Re- gional Programme on Firm Development, August. 71