'Votes' Economics Choking Malawi’s Development

Paradoxically, I have seen alarming escalation of appalling poverty. These conditions and facts have been baffling me (and I guess many others, too) and remain unsolved until now!

We have 'capacity poverty' that affects us in mobilising development resources, managing the resources prudently, implementing the plans as planned and monitoring/evaluating the same for impact.-analyst

Why have I written this article? Simple: to share with you what I think is the main cause of our chronic poverty as a country. I have lived in both the twentieth and the present twenty first centuries. I have lived through the reigns of the country's first President Dr. Hastings Kamuzu Banda, Malawis first democratically-elected president Dr. Bakili Muluzi, the rule of the countrys first president to die in office Professor Bingu wa Mutharika, the rule of Malawis first woman president Joyce Banda, and now into the reign of Professor Peter Mutharika. I have, therefore, seen this countrys development swinging to and fro, like a pendulum.

Paradoxically, I have seen alarming escalation of appalling poverty. These conditions and facts have been baffling me (and I guess many others, too) and remain unsolved until now, but now need to be explained. 

As a journalist, I have travelled all over the country, rubbing shoulders with the rich and the very poor and, of course, those in between. During the course of my work, I have visited with the captains of the industry, chiefs, presidents and ministers, and the ordinary people.

I have rubbed shoulders with and come to know the rich and the totally illiterate and poverty-stricken poor in the country. And through these travels and experiences, I have been asking myself many questions about why Malawi is still poor, 50 years after independence from Britain. But now I think I know the answer why were poor, and will remain poor if nothing is done. 

Before I tell you the main reason why the country is still bogged in gut-wrenching poverty, here are quick facts. According to the UNDP 2014 Human Development Report for Malawi, the countrys Human Development Index-a yardstick of well-being introduced in 1990, stands below average for low HDI countries at 0.414(2013 HDI). 

This means Malawi ranks at 174 out of 187 countries and territories, bundling it among the 10 poorest countries of the world. The 2014 HDI report says Malawi’s poverty and ultra-poverty is higher and increasing in rural areas-rural poverty rate stands at 56.6% (from 56% in 2004/05 vs 17.3% in urban areas). Female headed rural households face highest and worsening poverty-63% (up from 60% in 2004/04) vs male headed rural households (HIS 2004/05 and HIS 2010/11), says the 2014 HDI report. Now this simply means that the majority of our people are vulnerable to multi-dimensional poverty. 

People, says the UNDP 2014 Human Development Report, with limited core capabilities, such as education and health, are less able to easily live lives they value. Strong words those! Poverty, you would agree with me, disrupts the normal early development of childhood-and most of our children are living in extreme poverty, with about of them stunted due to malnutrition. 

And these poverty-stricken children will get into school not ready to learn-performing poorly in class and often repeating classes and dropping out of school( In Malawi it seems it's normal to be short[read stunted]and repeat classes). 

Now, do you really expect such children to grow into productive citizens who will in turn develop the country? Search me! Lets now turn to the crux of the matter-the why? A political and social analyst Dr Blessings Chinsinga of Chancellor College, a constituent college of the University of Malawi, says inconsistency in the implementation of development interventions and political interference have stagnated development in the country. 

With the World Bank ranking Malawis Gross Domestic Product per capita at 227 dollars, Dr Chinsinga said it is shocking and demoralising to every patriotic Malawian but not surprising at all.  We have not been working hard to deserve any better especially since the transition from one party dictatorship to multi-party democracy.

We have not exploited the democratic political dispensation as an opportunity to shovel Malawi out of the abyss of under-development, he said. GDP simply means the total number of goods and services produced in a country. It is measured or computed as an average. In this case, it means that on average every Malawian produces goods and services worth US277 per year.

This in a way measures the productivity of a country, which sheds light on the degree of the productivity of the labour force. My in-depth study into finding reasons why the country is still one of the poorest led me to ask Dr. Chinsinga what he thought were the reasons that have made Malawi to find herself in this precarious position. The answer was startling, to say the least.  He said, It boils done to one thing: We have not had a completely home grown development blueprint implemented consistently over time to facilitate fundamental but sustainable structural transformation.

Development is about bringing about sustainable structural transformation which does not happen in a day, week, or months. It occurs after several years of focused attention, strategic visioning and unwavering determination fuelled by a deeply entrenched culture of reflective learning. 

According to Dr. Chinsinga, a country cannot develop if it implements more than ten development programmes in twenty years, most of them largely inspired by fads and fashions within the wider development community.  We have to have an idea of what we really want as a nation, and not simply fall for anything that passes off as development, he said. I know truth hurts, but lies hurt more.

Malawi has had relative peace, but ironically the country is ranked alongside countries like Burundi and Central African Republic which have undergone some kind of instability.

 Talking to political and economical analysts, I gleaned that this is a clear testimony to the fact that as a country we have had what Dr. Chinsinga calls unproductive peace.  While being peaceful is quite important, it cannot work wonders on its own. Peace serves as a catalyst for development if the elite in a country are development conscious and committed to seeing their country develop.

The main challenge is that as a country we have had no development orientated elites especially after the transition to multi-party democracy.  Like I said right at the very outset, I have lived from Dr. Hastings Kamuzu Bandas reign to the present and have seen it all. 

And what I have seen over the years is that most of the elites have taken their being in power as an opportunity for them to milk the state as much as they can. Instead of pursuing policies that promote the general common good, most of the elites have focused on implementing policies that will accord them considerable opportunities for rent seeking.  

As a nation, we have been busy robbing ourselves in a context where democracy has been erroneously construed as indiscipline or, more precisely, scapegoat for misdemeanours.  

Right now, for example, implications of the countrys public financial mismanagement of billions of kwacha in 2013 popularly known as cashgate are putting the government under pressure, as donors have withdrawn budget support. 

In my quest to know why we continue to wallow in gut wrenching poverty, I quizzed Dr. Chinsinga whether we are finding ourselves in this situation because, as a nation, we are simply poor and we just cannot do anything about it, or our ideas are poor and unrealistic; hence, this current situation in which the country now finds itself? Not at all! said Dr. Chinsinga.

Malawians are neither poor nor incapable of producing grand and transformative ideas. In fact, most of the ideas that are working wonders in southern Africa have originated here but the challenge is that we have never really gotten serious to embrace a transformative development agenda.

This boils down to the leadership that we have had thus far. The notion of leadership has been wrongly construed.  Nearly all the post-multi-party leaders look at themselves either as great men or women of history instead of looking at leadership as a process of mobilising the country toward a shared vision and destiny.

In this regard, our leaders as great men or women of history waste time focusing on themselves instead of working with all segments of society to take this country forward. As indicated above, we have degenerated into a situation whereby patronage follows policy and not policy following patronage. 

Dr. Chinsingas reasoning seems to be shared by that Dr. Thomas Munthali, another renowned economist, who said, I hold the strong view that we still lack political will to get things done. Legacy leadership is not there.

This country is still bogged down into 'votes' economics. In other words, 'what will bring me and my party more votes in the next general election? According to Dr. Munthali, most politicians focus on the short-term economic needs of the peasantry - like handouts and subsidies so they are voted back into power (the Farm Input Subsidy Programme-FISP comes into mind here). 

Politicians seem to be scared to support SMEs and creating a middle class because it will act as a threat to their political grip to power.

So they would rather have polarity - the majority poor and the rich where the rich are the politicians and their sponsors, he said. 

The economist further said all we need is leadership that wants to leave legacy behind even if it means serving in the office just for one term.  

He said, “Look, once you are president, your future needs as a person and family will be taken care of for life - so you dont have to mind those around you who cheat you into extending your term of office simply because they want to secure their own future at your reputational expense.”

My discussions with some learned economists and political analysts during the course of my work as a journalist-whether here in Malawi or overseas- reveal that when it comes to implementing plans, again, we dont have leadership that punishes mediocrity and rewards good performance.

This often leads to business as usual in government where visions and plans never get translated into any tangible implementation.  

Linked to this is when we begin to define success as how much donors are still supporting Malawi instead of looking at how much productive we are as a country so we can graduate into economic independence - at least as far as recurrent budgets are concerned.  

Without realizing it, by looking up to donors, we end up implementing programs like the IMF's Extended Credit Facility(ECF) which ties us to chasing inflation thereby keeping interests so high - hardly possible for anybody to invest. 

Right now, according to the World Bank Malawi Economic Monitor, March 2015 edition, the countrys inflation is significantly higher than the regional average, with inflationary pressure continuing to have a negative impact on Malawis economy (the 2014 inflation rate stood at 23.8 percent compared to 27. 3 percent in 2013). 

According to Dr. Munthali the problem is further compounded by the fact that, as he puts it, our central bank is captured and lacks a mind of its own.  In India, the central bank clearly regulates the production direction of a country basically where banks need to lend money.

A bank has to have a certain percentage of its portfolio directed towards sectors that have been defined as priority - and has to be censured accordingly if does otherwise, he said. 

Put to him why Malawi still has so high policy rates like 25% (which implies even higher for the commercial banks - as high as 39%), the renowned economist had this to say: The reason is because the IMF says so.

You see, in a western and American economy, they operate at almost maximum capacity utilization. So any reduction in interest rates would cause inflation as it will mean too much money chasing a few goods.  

However, for Malawi, we are operating at below maximum capacity as low as 50% and below at times. So reducing interest rates would not cause inflation but would actually lead to huge production that would bring inflation down - simple economics wisdom. But we keep listening to the IMF and can't listen to our own home-grown economists. 

What a sad situation we are in! But, as a nation, do we have a magic bullet to turn things around? If we continue having the same type of leadership (non-transformative leadership), I think there is no magic bullet to this challenge, honestly. 

This is the case because policies that create an enabling environment for development are not easier to implement since they require pushing for structural transformation which many people in privileged positions tend to resist. 

Actually, it seems our politicians prefer populist policies which are easier to implement and dole out direct benefits to the voters such as subsidies but they hate policies such as land reforms that create an enabling environment for transformative development.

What is needed is what the Public Affairs Committee calls 'visionary leadership' that is not obsessed with pleasing people for the sake of it but rather governing responsibly which involves making tough choices.  

These tough choices should be made in the context of a well-defined development blueprint articulated and implemented consistently. In the main, it seems the problem with Malawi is not really about not having short or long term plans but the capacity to implement the plans.  

As Dr. Munthali would put it, we have 'capacity poverty' that affects us in mobilising development resources, managing the resources prudently, implementing the plans as planned and monitoring/evaluating the same for impact.  

So unless we end this votes economics, Malawi will continue to wallow in abject poverty while her neighbours are prospering. The choice is ours!