Economist faults economic system
Chancellor College economics associate professor Ronald Mangani has dared the country to move away from traditional economics and face the economy with a fresh and new mindset to register meaningful growth and move away from poverty.
Mangani in a three-hour public lecture delivered at the Chancellor College on Tuesday night argued that Malawi’s poverty is by design saying the country stands a chance to correct its mistakes if it among others prioritizes meaningful agriculture that goes beyond the traditional ways, make a reasonable investment in power and tame corruption.
He observed that Malawians earn much less today than they did 10 years ago, have become poorer over the decade and live in a society that is nearly as unequal as a decade earlier.
Mangani, a former secretary to the Treasury, in the lecture titled The quest for a pragmatic economic management framework in Malawi blamed the country’s underdevelopment on factors, including lack of economic independence and neoliberalism, which he said lean towards weakening the weak while strengthening the strong.
“The success of neoliberalism is its failure. I call it tragic neoliberalism and the justification was to address structural economic weaknesses and create resilience to shocks from the economic crisis of the late 1970s through comprehensive policy reforms dangled in return for Western aid since 1981.”
“We therefore need to move from the current model which says growth is a long-term because we have clearly seen that the economy is failing to cope with development,” he said.
Between 1981 and 1994 Malawi adopted Structural Adjustment Programmes (SAPs) aimed at addressing balance of payments (BoP) and fiscal deficit challenges before embarking on Fiscal Restructuring and Deregulation Programmes (FRDPs) as well as enhanced SAPs between 1995 and 2000 to address the same BoP and fiscal deficit woes.
In 2000 and beyond, the country adopted Poverty Reduction Strategy Programme (PRSP) to reduce poverty through macro-economic stability.
But Mangani said such policies have only deepened aid dependence in Malawi, arguing that Malawi is getting poorer by design.
He observed that there is a lot of evidence that economies like this one will always use agriculture as a stepping stone to world’s development. But Malawi is agricultural country that can’t do agriculture.
