Economist Dr. Cornelius Mwalwanda, who served as deputy minister in the late Bingu wa Mutharika cabinet has told parliament that the Mutharika despite being touted as ‘economic engineer’ didn’t understand basic economics.
Mwalwanda commenting on the 2012/13 budget said it was “a very difficult task” to convince Mutharika on devaluation as an essential element to turn around the economy.
The Karonga central MP said late Mutharika despite of all the knowledge that he had and a doctorate in economics “he could not appreciate the laws of economics and particularly laws of demand and supply.”
“On several occasion we tried very hard to convince the President that devaluing the Malawi Kwacha was going to be key to unlock the donor funding we needed to support the economy.
“Indeed I can speak with conviction that even when we were in the National Advisory Council whose Chairman was our [Peter] Mutharika, we discussed this issue excessively, and indeed we also suggested that devaluation was essential. But I must admit, as we all know, our late President did not want to hear anything about devaluation and that could not be taken,” said Mwalwanda attracting applause from government benches.
But DPP Thyolo East MP Peter Mutharika standing on a point of order said Mwalwanda “was the loudest supporter of Bingu’s voice” in the advisory council.
“At no time did he ever oppose what we were trying to do in the government. Let’s not try to distort history just because somebody is no longer alive,” Mutharika said.
In his contribution to the budget, Mwalwanda said devaluation of Kwacha will be helpful.
“ Our people will indeed be impacted negatively when it comes to certain elements of devaluation, but the simple reality is that an exchange rate is like any price, is like a price of tomatoes, when you have plenty tomatoes the price goes down, when you have less tomatoes the price goes up. This is simple economics as Professor Chikaonda said. Whether we like it or not, I appreciate what the government has done to take us out of this quagmire; the parallel market has disappeared.”
He however called on government to deal with the negative impacts of the devaluation on the people.
“Devaluation on itself is not a panacea that has to be understood. We need to have measures that will stimulate our economy towards growth, and in this regard, I welcome the initiative that the President is putting in place in order to increase production,” said Mwalwanda.
“We need to increase production; we need to create jobs,” he said.
The former deputy minister said there should be emphasise on tourism, saying he drew up a master plan for the tourism sector when he was deputy minister of finance.
“ Let’s finalize that master plan to make sure that the tourism sector will be a sector that will generate growth, and in the long run, create employment. Similarly, let’s finalize the master plan for fisheries industry, that’s another important sector that could generate growth, employment and export earnings,” he said.
He expressed the hope that the good policies advanced by the Banda administration if put in place, Malawi will find itself on the paths of recovery.
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