From Contract Workers to “Madgermanes”

How did the employment of Mozambican contract workers in the GDR come about?

by Hans-Joachim Döring

By no later than mid-1977, the SED (Socialist Unity Party) leadership realized that the planned economy of the GDR was facing a severe foreign currency crisis. The GDR’s weak foreign trade yields were subject to one-and-a-half times the amount of hard currency international credit obligations. This led to over-indebtedness, and national bankruptcy was looming. GDR leader Erich Honecker’s policies were at stake. Mobilizing or substituting fresh sources of foreign currency was a matter of urgency. To this end, three African countries in particular within the US dollar currency zone seemed suitable: Angola, Ethiopia, and Mozambique.

All three nations had gained independence from colonial rule only a few years previously, subscribed to a Marxist school of thought, and wanted to catch up on development quickly. For these ambitious plans they required partners urgently. GDR officials expressed solidarity with the African countries, but their focus was on monetizing strong political connections; behind any act of “socialist fraternal aid” lay concrete economic interests. The SED politburo started an “African export offensive”. Its systematic implementation was assigned to Alexander Schalck-Golodkowski and the Commercial Coordination Department (KoKo) under his supervision: the goal was to “achieve visible economic results for the GDR, rather than only unilateral solidarity actions”.

Honecker in Mozambique

At the end of February 1979, Honecker visited the former Portuguese colony of Mozambique in south-east Africa, which had been independent since 1975.

Over 80 agreements were made, and a direct flight connection was even set up between East Berlin and Maputo. Various large-scale projects were started, often without any prior planning. Arrangements to employ workers from Mozambique in the GDR were also set up.

 

Debt Repayments by Wage Transfer

In the following years, Mozambique’s debt to the GDR swelled to a huge level, not least because of above-average interest rates. However, debt relief to a vulnerable developing country with whom they also had a friendly connection was not a priority for the SED. On the contrary, in 1986 Schalck-Golodkowski set new target figures for foreign exchange generation. The new goal was to reduce debt through a staggered migration of Mozambican workers to the GDR. Without any preparation from the authorities on either side, 4,500 additional contract workers were to come to the GDR within a year. The GDR aimed to have Mozambique repay its debt using a withheld share of the contract workers’ wages, with the contract workers simultaneously offsetting worker shortages in East Germany.

 

Forced Levies

Between 1979 and 1985, a flat rate of 25 percent was deducted from each worker’s monthly net wages. Later, in 1986, as much as 60 percent of net income in excess of a basic allowance of 350 marks was withheld as a “compulsory  transfer contribution”. A “transfer” meant a sum of money from an individual worker’s net monthly wages which was withheld and centrally to the GDR government by their company. These sums were deducted directly from net income by the company, transferred to the GDR Ministry of Finance and made available to the Commercial Coordination Department there for the purposes of “offsetting” debt.

As told by a former employee of the GDR State Secretariat for Labour and Wages at a 2019 conference in Magdeburg, “[…] from the beginning, the ‘transferred’ sums of money were by mutual consent not transferred to Mozambique, but were used in the GDR for the purposes of intergovernmental offsetting and went towards Mozambique’s debt repayment.”

Outstanding Accounts

The contract workers were not informed of the fact that that their wages were not transferred to Mozambique, but used to settle debts. On the contrary, their individual contract agreements with their companies in the GDR guaranteed, or rather pretended to guarantee, that individual bank accounts would be set up for them in Mozambique for personal access when they returned to their home country. In this way, the workers were systematically deceived and lied to by the GDR through their contracts. The bank accounts remained empty, and the money deducted from their wages stayed in the GDR. Still today, there are unresolved claims to pension rights resulting from payments into the GDR social welfare system.

Text: Hans-Joachim Döring, an extract from “Bittere Solidarität, fehlende Anerkennung, offene Rechnungen”(Bitter Solidarity, Lack of Recognition, Outstanding Accounts), Gerbergasse 18, Thüringer Vierteljahreschrift für Zeitgeschichte und Politik, Edition 2/2019

The Madgermanes’ Fight

After returning to Mozambique, the contract workers found that the bank accounts that had been romised to them did not exist. Hardly any workers were paid the withheld wages owed to them. The professions they had learned in the GDR were not needed in Mozambique. Today, many of the former contract workers live in abject poverty. Since the beginning of the 1990s, they have come together to campaign regularly for their rights as “madgermanes”. They are bullied by the Mozambican state, and often face malice and contempt in society. To this day, no party has assumed responsibility for this organized wage fraud.