The curious curse of donor dependence: Malawi situation

“It’s the economy, Stupid!” – James Carville, Campaign Strategist for Bill Clinton’s successful 1992 presidential bid

One cannot help the nagging feeling of “déjà vu” given our fast deteriorating economic and fiscal scenario following the withdrawal of direct budgetary assistance under Joyce Banda’s PP administration which has spilled over to the new government. There is an eerie sense of history repeating itself, a premonition that we have been down this road before.

Under every regime since independence, we have seen donors withholding their purses, and this has, invariably, led to economic hardship for Malawians and significant changes in the socio-political landscape of Malawi. Reasons for  withdrawal of aid have ranged from human rights abuses and in support of democracy during Dr. H. Kamuzu Banda’s reign, to rampant corruption, lack of respect for the rule of law and accountability under Bakili Muluzi, executive arrogance, intolerance and governance issues with Bingu wa Mutharika and, most recently, unprecedented financial scandals known as CashGate, JetGate and MaizeGate under Joyce Banda.

Smarting from the unexpected loss of power following the sudden death of Bingu wa Mutharika in 2012 and the humiliation of having its leaders arrested and vilified under Joyce Banda’s rule, the DPP faithful regrouped and masterminded a contentious come-back in an elaborate campaign and election strategy that left no stone unturned. Come May, 2014, two years after Bingu wa Mutharika’s death, the DPP was triumphantly back in power under Peter Mutharika!

But the donors have remained adamant on resumption of aid until there is full transparency and accountability with regard to moneys plundered or alleged to have been stolen from government, now from as far back as 2005. President Peter Mutharika and the DPP administration inherited the heavy aftermath of CashGateet al and donors have added another weight by requesting – and providing funding from the Germans – for a forensic audit by PriceWatehouse International to unearth any abuses from 2005 to 2012. This is, coincidentally, the time that the same DPP was last in power.

Can one blame the donors for “abandoning” the Malawian people following the massive looting of government coffers? Perhaps not. In principle, it is purely a question of ensuring adherence to acceptable standards of moral integrity and fiscal prudence. Mind you, donors are also accountable to their taxpayers who are keen to know whether their moneys are benefiting the poor or enriching an elite cabal of selfish and greedy individuals. They, therefore, expect the highest levels of honesty, integrity and conscientiousness from our political leaders and public office bearers. So, ostensibly, the agenda for donor withdrawal is upholding ideals of democratic principles, rule of law, transparency and accountability.

To their credit, and in an act of good faith, our benefactors have not totally ditched us; they are still willing to support social and development programmes directly without channeling resources through the government’s leaking bucket.

Whilst our leaders are most culpable for betraying our trust, we, collectively as Malawians, are equally complicit and have only ourselves to blame for the withdrawal of budgetary support through our actions and inaction. We need to take ownership of our problems and ensure that our leaders address both our concerns and donor disquiet timely to regain lost trust and confidence. As troubled and burdened Malawian taxpayers we must, simultaneously, demand full accountability, punishment, recovery and reparation for and/ or of the unprecedented shameless thievery. And hold our leaders to account.

It’s noteworthy that, all over the world, donors do not usually directly interfere with the local socio-political dynamic. However, they can influence the agenda by withholding aid or imposing sanctions, thereby creating a state of affairs that may result in commotion, coerce compliance to set conditions or lead to significant political transformation. Our own history provides adequate positive correlation between donor withdrawal and seismic changes in the political and socio-economic landscape. It has become a vicious cycle. It is up to us, as Malawians to offer support to, and by our actions, to patriotically compel the government to break the curse and collectively craft a way out of our current dilemma and forge a more inclusive and prosperous future for Malawi.

Economically, the aid withdrawal has started to bite hard and Malawians are, once again, suffering. We are already seeing the signs of an economy that is heading for disaster – a rapidly depreciating currency amidst insufficient foreign exchange reserves, high inflation, already high interest rates expected to go even higher with the recent increase in the central bank policy rate from 22.5% back to 25%,continuous increases in the cost of living, an eminent increase in fuel prices that could further exacerbate the general price increases and spark wide-spread calls for wage and salary increases, increasing unemployment, increasing insecurity and indications of economically unsustainable increased government borrowing to finance recurrent expenditure.

Given the above, and in the spirit of “United, we stand; divided, we fall,” let us, together, urgently and concretely address donor anxieties and solve our looming national crisis. This impinges on Peter Mutharika, as president, to show strong, proactive leadership and to be courageous enough to accommodate “unpalatable” truths and good advice, to be sensitive to the peoples’ concerns and public mood, to be decisive and to take hard decisions that may even be unpopular with some within his own party; to do what is right, and not necessarily what is expedient, as a matter of survival and in the best interests of the nation.

Just like in the touching, highly acclaimed movie, ”The Curious Case of Benjamin Button,”it would appear that the older we grow as a country, the more retrogressive we become  as a nation; it’s a question of two steps forward followed by three steps backward at every turn. It’s time to change and chart a positive way forward.

And right now, we are sitting on an economic and fiscal time-bomb with potentially disruptive political ramifications.

Tick! Tock! Tick Tock!

Please don’t shoot the messenger.

CJN

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(Chikavu Nyirenda is a Senior Lecturer in Banking and Finance at The Catholic University of Malawi and contributes, in his personal capacity, a weekly column, ‘Views from the Sunset,’  which is published in ‘The Daily Times’ every Monday).

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