Malawi loses $350m US energy boost aid over Mutharika tyranny

It is official. The USA government has finally suspended the US$350 million Millennium Challenge Corporation (MCC) investment for Malawi sighting the impudence over last year’s visit of Sudanese President Omar al-Bashir, recent arrests of opposition and human rights leaders and inflammatory rhetoric by senior government officials as some of the major reasons for the suspension.

Ben Canavan, of the US embassy Public Affairs department, confirmed the suspension from Lilongwe that the MCC Board of Directors, which is chaired by US Secretary of State Hillary Clinton, made the decision during its quarterly meeting on Thursday.

 The aid agency Board also said it was concerned with the lack of progress on economic policy to bring the country’s IMF program back on track which it says has contributed to significant deterioration of the economic environment and put at risk the viability of MCC’s planned compact investments.

Mutharika: Cost Malawi aid

 “The MCC Board expressed very serious concerns about the economic and political situation in Malawi, and emphasized the need for the Government of Malawi to respect the rights of its citizens and civil society organizations to assemble and speak freely,” reads a statement released on Friday.

 The statement said the Board voted to suspend the Malawi Compact due to a pattern of actions by the Government of Malawi that is inconsistent with the democratic governance criteria that MCC uses to select its compact partners.

 “MCC maintains compact partnerships only with countries that demonstrate a clear commitment to good governance, economic freedom and investing in their citizens. Through its actions over the past year, the Government of Malawi has failed to meet this standard,” added the statement.

 The statement said while the Government of Malawi had taken initial steps in the right direction after the violence of July 2011, more recent events — including the arrests of opposition and human rights leaders and inflammatory rhetoric by senior government officials — supported MCC’s finding of a pattern of actions inconsistent with good democratic governance.

 “Malawi’s decision to allow Sudanese President Omar al-Bashir to attend a trade summit in Lilongwe, despite the International Criminal Court’s (ICC) outstanding warrant for his arrest, further deepened MCC’s concerns,” said the statement.

 MCC CEO Daniel Yohannes stated that an MCC compact is a partnership, and the commitment to democratic rights, accountable government and sound economic management is fundamental to that partnership.

 “In light of our ongoing concerns about democratic governance in Malawi, MCC has formally suspended the compact. The future of this compact now rests on the actions of the Malawian government leadership between now and June, when the MCC Board is next scheduled to meet,” he said.

 MCC’s planned $350 million investment in the power sector was expected to provide close to $2 billion in net income benefits to nearly six million Malawians, the great majority of whom live on less than $2 per day.

 The statement further said as a result of the Board’s action, all MCC assistance to Malawi is suspended but MCC will continue to monitor events in Malawi closely, and the Board “will decide whether to terminate the compact at its meeting in June, provided action is not required before then.”

The MCC suspension came on the same day that President Bingu wa Mutharika challenged a Public Affairs Committee (PAC) resolution asking him to resign or call for a referendum and barely two days after the arrest of one of the leading opposition figures UDF’s Atupele Muluzi.

 While the board voted to suspend the Malawi programme, the same meeting approved a $354.8 million compact with Zambia saying the country has demonstrated commitment to democratic governance and the rule of law, including free and fair elections in September 2011 and a peaceful transition of power.

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