When Malawi’s third president Ngwazi Professor Bingu wa Mutharika pioneered the openly declared fertilizer subsidy programme to support poor farmers despite aggression and disenchantment of her major donors in 2005, few people believed it could be a reality for such a poor country to implement, let alone that the programme would be a success with such contagious spread across the continent. Public support to farmers, in fact, poor farmers is rather a noble than not an evil to be condemned upon. What was wrong with the late Malawi president (may his soul rest in peace) was his style of doing business. Rather than consulting the donors before announcing policy or at least before actual implementation, he ignored them and their advice or threats.
With good rains, the programme managed to pull maize yields from a national average of 870 kg per hectare in 2004/05 season to 2,660 kg per hectare in the 2006/07 season. What that means is that land and labour productivity were improved by the fertilizers. Importers made a killing on increased volume of fertilizer business, so did the truckers who move the fertilizer bags across the country. Increased production was more than enough to excite Malawi’s predominantly poor subsistence farming population. This earned Mutharika extra political credits at home, and more so abroad. On the 27th of November 2008, the Food and Agriculture Organization of the United Nations (FAO) decorated Mr Mutharika with an Agricola Medal in recognition of his efforts to support agricultural development in Malawi, In January 2010. Mr Mutharika was voted by fellow African heads of state and government to chair the African Union.
While the nation was basking in maize, a grain that makes up to 90 percent of dietary energy supply (DES) for the Malawian population, perhaps, what Mutharika was enjoying most is the political breakthrough. He went on to declare and implement the fertilizer subsidy programme, a policy that was looked at as evil in the global polity. In fact, there was a growing dissatisfaction among donors of Mutharika being a “good leader”. His pan-Africanist ideologies were feared could potentially get entrenched in African politics hence ruining a lot of foreign political and economic interests on the continent. Both at home and abroad, Mutharika repeatedly said “Africa is not a poor continent but rather its people are”. This was to some extent blowing some mist of policy influence in development and aid debates, considering level of international media interest and coverage for Malawi since the recent past.
Trained as an economist backed by many years of international practice at the UN, World Bank, COMESA, Governments of Zambia and Malawi, Mutharika’s pan-Africanist campaign might have been influenced by his long and diverse experience. His ideas were at times poorly followed, sometimes even misunderstood, by many of his colleagues, ministers, and country folks.
By and large, the rage among the donor community grew with the climax being the deportation of the British High Commissioner to Malawi in 2010 due to a leaked communication cable by the Wikileaks where the British diplomat is alleged to have said that Mr Mutharika is becoming intolerant to donor advice and does not respect the rule of law. As revenge, the British Government also expelled the Malawian High Commissioner to London, immediately cut the bilateral British aid flow, and possibly enticed its allies to do the same. The cutting of lending and aid deprived Malawi of the much needed foreign currency to finance her importation of drugs, fuel, fertilizers, etc.
The cutting of aid was a big blow for a poor country Malawi that depends on borrowing and donations to cover up to 60 percent of her national budget. The donors made it clear that the cutting of aid was not meant to punish the poor Malawian population but rather aimed at putting indirect pressure on Mutharika to change his way of doing business. Contrary to the expectation, Mutharika again took another step away. In June 2011, Mr Mutharika introduced what he called a “zero deficit budget” in the 2011/12 national budget. In brief, a zero deficit budget is an austerity budget that aimed at cutting government expenditure and increasing income so as to match the two without revert to borrowing or begging. This was another scoff at the donors who often leverage their political influence on poor countries with promises of donations.
The Zero-deficit Budget (ZDB) Project sounded a great sovereignty ambition that any country would wish to attain if and only if the world order was right. Mutharika has at several times attempted to explain how weird the world order is but failed to realize that it is not him who can correct it. He had no kind words for IMF, World Bank and WTO which he accused of coercive exploitation in today’s global economy. He accused IMF of imposing austerity on debtor countries, shrinking their investment and production, resulting in rising unemployment and domestic fiscal crises, while making debtor countries more dependent on foreign suppliers. A widening trade deficit that ensue is financed by further borrowing whose interest charges aggravate the overall payments deficit in a deteriorating spiral. As for World Bank, Mutharika often narrated that the Bank’s demands on debtor countries to raise money by privatizing their public domain, despite the notorious underpricing of the assets under the same public domain, exorbitant underwriting fees, insider dealings, and falling post-privatization service standards. He also attacked the WTO for its neo-liberal agenda that aims at turning control over markets to the multinational corporations, while promoting tax codes that enable companies to deduct from taxable profits all interests and insurance charges, management fees, and intra-company transfer pricing through offshore tax havens. This starves governments fiscally, forcing them to increase domestic taxes, mostly the value added taxes (VAT), borrow more even as they slash public services deeper.
Mutharika might have counted less on the nominal figures of pounds, dollars, euros that Malawi borrows or begs from these donors who themselves also accumulate much debt, in fact, some of them have highest debt/GDP ratios in the world. He might have counted more on the revenues of tobacco export sales for foreign currency. Little did he know that the world trade is also politically controlled? For the first time in Malawian history, in season 2010/11 Malawi realized the lowest earnings from tobacco with the selling season extended to the next season. Sales of Malawi's main foreign exchange earner tobacco slumped 35 per cent in the 2010/11 season dropping the total earnings to $267 million from the $363 million earned the previous year.
It was a typical economic isolation. As the rift between Lilongwe and world capitals increased, Mutharika could feel the heat of political isolation, even from his neighbours. Mozambique, unexpectedly overturned the deal to allow Malawi proceed with her ambitious Shire-Zambezi Waterway Project that was aimed at opening out the landlocked state of Malawi and other central African countries. Just when Mr Mutharika in presence of his fellow presidents Mugabe of Zimbabwe, Lupiah Banda of Zambia and other senior diplomats were to officially launch the Nsanje Port for the waterway project, the Mozambican Government could not allow the two boats (barges) pass through Mozambique to Malawi. The Mozambicans are demanding a comprehensive environmental impact assessment (EIA) report first. This was depite earlier (in 2005) agreement to the project. The Malawi side suspected some foreign influence in the sudden change of tune on the Mozambican side.
While many African and indeed some Eurozone countries were//are being carefully and silently treated by short term loans from the IMF, the Fund refused Malawi for not qualifying due to failure of meeting its criteria part of which was to devalue the local currency. Mutharika defiantly declared that he will not devalue the Malawi Kwacha because Malawi does not does not have competitive magnitude on exports that would rise as a result of devaluation as there is virtually no value addition industries in the country.
Since the unfortunate death of Mutharika, his vice Her Excellency the State President Mrs Joyce Banda took to the driving seat. Many Malawians who were tired of the noxious effects of economic and political isolation the country was subjected to felt she was a rescuer and indeed the first Malawian female president’s priority was to bring peace in the Malawian family. Unlike Mutharika who was strongly linked to his ethnic Lhomwe tribe and that his tribal colours were greatly reflected in his appointments to higher positions in government, business and politics, Mrs Banda adopted a government of national unity. To that effect the whole opposition is now dismantled.
Again, while Mutharika was in most cases arrogant at the donors, Mrs Banda is carefully tolerant to both bilateral and multilateral donor demands. The land mark of which is the devaluation of the local currency by about 37%. Mrs Banda has already visited capitals of several African and overseas countries in a bid to salvage the diplomatic ties that were shaken during Mutharika’s administration. She has realigned public appointments to bring about natural balance. While Mutharika spoke tough in defence of fellow African leaders including President Mugabe of Zimbabwe, and President Omar Al Bashir of Sudan who has been indicted by the International Criminal Court to answer charges of war crimes in his country’s Darfur Region, Mrs Banda does not tolerate them. The July 2012 AU Heads of State and Government Summit was shifted from Lilongwe to Addis Ababa, because Mrs Banda barred Al Bashir from entering Malawi.
The big question is: is the leadership change taking Malawi to glory or misery?
No comments:
Post a Comment