Malawi’s ‘rain and mud’ economic crisis

In the local lingo, Malawi’s current economic tango fits plumb with the old saw; those who cry for rain should accept the mud it creates.

In 1994, Malawians ululated hoarse at the advent of multiparty. They had survived 31 years of keeping one step ahead of the police. Many had fallen foul of the dictatorship, even the innocent were not spared the gross human rights abuses, denied economic participation and government protection.

Euphoria was another new addition to the vocabulary. Almost in haze, dreamlike fashion, they discovered that democracy also meant choices in the economy. Hundreds, perhaps thousands of jobs were shed in what the experts suspiciously called downsizing.

State enterprises were sold to the private sector in order to expand the government’s narrow tax base, create efficiency in business and de-politicize (they didn’t say) state enterprises, which were uniformly unable to remit taxes, pay utility bills, city and ground rates, debtors and lacked liquidity for daily operations. They were gobbling up scarce at the cost of sustainable development.

As it were: Late president Mutharika and the then Vice President Joyce Banda – now Malawi’s head of state on a mission to revive the economy

It was stark choice. State enterprise had existed for as long as Malawians could remember. The sale was inevitable retrenchment of workers who had become accustomed to this cradle-to-grave security style, the miserable pay-off and the struggle to get government to be more generous was to leave deep scars on the nation.

When the Agricultural and Marketing Corporation (ADMARC) fell into the cross-hair of privatization, the convulsions were so serious that it was simply political Armageddon for the ruling party. It was seen mostly as denying most people their childhood noted Ghanaian economic Mohamed Hassan Mohamed.

Economics and emotions seemed to be strange bedfellows. However, the nationwide market of last resort was to reconstitute ADMARC Limited, its objectives largely as a food storage since it had a sound infrastructure covering the remotest of rural communities.

It had bowed down to the realities of a liberalized business environment where private companies participated in buying and selling farm produce particularly maize, the staple food.

ADMARC could not compete in prices offered to farmers by moneyed and enterprising upstarts, so to speak, many times buying at more than double prices offered by ADMARC, which was at the mercy of state subventions, inefficient system and prone to politically-charged demands. A truest political cow to be milked at will and inevitably increasing its liabilities.

For most part of the period of multiparty democracy from 1994, the government has had to try to tricky balance actions. Sometimes, it seemed nobody was in control. At others, it was quite the opposite; politicians were on top of things but at all times, nothing stood still long enough to keep the momentum of economic reforms ticking.

It was only after 2004, the third Republic, when over-ambitious schemes and unchecked excesses by State House blurred the dividing line between the economy and politics.

The highly inflammable mixture brought the country into a grinding halt and ruin. Traditional donors, lending agencies, and friendly nations brought the shutters crashing down while national unity was tested to breaking point.

It was a dramatic turn of events; some describe it as a national tragedy of the infamous Cabinet Crisis in 1964 when cabinet ministers dissented in Parliament leading to first widespread purge of people holding views different from Kamuzu Banda.

For the next three decades, the fear, uncertainty and suspicions never left Malawians. The collective psyche was badly rocked that nobody trusted anyone. The under-currents of that experience were traumatic and the country was in a perpetual lock-down of under-development, seeming duality and fatalism. Nothing good happened to Malawians.

As the Union of Soviet Socialist Republic (USSR) was facing its last days, new President Mikhail Gorbachev (he of glasnost and perestroika) accountability and transparency in government cautioned the restive conglomeration of unwieldy states forming the rival super power status to the US and western bloc, ‘we cannot solve old problems with old solutions’.

President Joyce Banda has also inherited a fair share of problems. Political questions although equally pressing for positive response, the economy is a different kettle of fish.

Mrs. Banda by and large, has to rely on the support of the international community with its largesse. However, economic injections are painful in the short and medium term.

The easy solution as Minister of Finance Ken Lipenga called the controversial Zero Deficit Budget had a balm effect but soon the pain became unbearable and to make matters worse, it eroded all hope from the people for better times in the foreseeable future.

There simply was no alternative to a devaluation of the local Kwacha currency in order to rekindle the following industries and growing shortages of essential good and commodities. Foreign exchange and fuel shortages were the most visible of the outcomes of the easy solution.

President Bingu wa Mutharika (may his soul rest in peace) had got it wrong and for a self-acclaimed ‘economic engineer’, his legacy has suffered. He inadvertently exposed the nation’s soft under-belly and some quarters suggest that it will need all the tools Mrs. Banda has in her toolbox to win back suspicious investors, angry donors and reluctant friends to price out Malawi from the political quagmire that swallowed it like quick sand.

The President will be called upon to give much more than what many childhoods we recoil. It will be more or less as beginning again; a renew, rebirth of the nation which will suffer the horrible pangs of withdrawal like a baby from breastfeed to porridge.

However, the mere fact of being inflicted with the International Monetary Fund (IMF) and World Bank conditionalities is no reason to kill the political goose that lays golden eggs.

Civil society and opposition political parties would be committing a disservice to the larger nation if they paint the picture of people suffering with a broad brush intended outcomes of the economic recovery programme.

The President has traversed the globe, lobbying and advocating a better deal for the poor of Malawi who will not be spared the negative repercussion through no fault of their own.

In fact, it’s about time civil society leaders shed the masquerade of human rights defenders while they willingly agitated and actively supported the rise of dictatorship that has brought the country to its knees.

They backed a constitutional imbalance, shredded the constitution and teamed up with the clergy, media and commercial organizations to abrogate the cardinal rule of democracy standards-majority rule-to achieve narrow political ambitions.

Their courage and honesty was displayed before the world when they vanished at the eleventh hour of a planned protest march which left over a score innocent and unarmed people dead, gunned down by a trigger-happy police.

In contrast, President Joyce Banda then Vice President was the stuff of leadership. She walked where angels fear to tread.

In her time as member of Mutharika’s Democratic Progressive Party (DPP), she vehemently refused to bow down to her scheming superior, quit her position as DPP Secretary General, weathered conspiratorial scheme, braved persecution and numerous attempts of psychological and physical abuse.

There is no existing record when a high-ranked official has fought back the combined forces of the state and a ruling political party. Mrs. Banda did and came out like two fried eggs, sunny side up. Clearly, she was not terrified of not only losing her job but salary and prestige, which only Clement Chiwaya did as cabinet minister in 2005.

Mrs. Banda is prepared to live up to her dream that does not include the mere attainment of personal gratification even if it means selling out the people as the case is in civil society organizations. It would be an insult to the poor to give the impression that the President is being mean and does not care about their well-being. It’s almost criminal to tell the people that the rain they cry for will this time pour down without the accompanying mud.

In fact, the current state of economic hardship has been stopped by President Banda from getting into an uncontrolled and uncontrollable tailspin. It will not be a permanent state of affairs although it certainly will call on everyone to pull in the same directions.

If it’s about campaign 2014, many, if not the majority of eligible voters, have already made up their mind.

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