The World Bank recently appointed GREG TOULMIN as new country manager. He takes over from Laura Kullenberg who completed her tour of duty at the end of July this year and was at the helm of the World Bank country office since 2013. In this interview with our business reporter GRACE PHIRI, Toulmin, who has worked in Malawi before, shares his vision and mission on his return to the country. Excerpts:
Congratulations on your appointment. What do you bring to Malawi?
I bring 37 years of experience in a range of low and middle income countries in South Asia, the Middle East and Africa. In that time, I have worked for a bilateral government [United Kingdom], for the European Union [EU], and with various United Nations [UN] agencies, as well as at the World Bank. I have worked on all kinds of subjects both in headquarters and at local level. These include various global topics, such as the international environment and financing for development. However, the first country I ever worked on was Malawi back in 1979 and 1980, so it is very welcome to come back a generation later. It means I bring a historical perspective that allows me to see the great changes since then, as well as the opportunities and challenges the country now faces.
What is your general impression about Malawi and the economy?
In short, I see a country that has made progress, but that people have been frustrated by how slow and uneven that progress has been at times. Malawi has a fantastic resource in its people. Those I have met seem well educated and well intentioned—and of course Malawi is called the warm heart of Africa for a reason. However, progress has been dogged by recurrent climatic events, compounded by macroeconomic instability, and together they have brought high inflation and a fluctuating exchange rate. And the past misuse of public resources has compounded these problems. This is an environment in which it is difficult to plan far ahead, and, therefore, difficult to make the longer-term decisions that are crucial for sustained development.
However, the last year has shown signs of a turn-around, with the exchange rate stabilising and the inflation rate tumbling. If Malawi can sustain this better economic news it provides a real opportunity to change the narrative, and break away from the cycle of crises, by allowing for longer-term planning and implementation of key priorities. In this context, I welcome the work on the third Malawi Growth and Development Strategy [MGDS III], which I am sure will play a vital role in focusing government, its development partners, the private sector, and civil society, on the way forward.
You have pointed out about progress towards macro-economic stability. What do you make of such progress and do you see it being sustained?
I am very encouraged by the recent progress. Inflation is on a downward trend with interest rates consequently falling. The exchange rate has also been relatively stable. All this is good news. The challenge now is for the government to stay the course by maintaining fiscal and monetary prudence, as well as promoting policies that will help build medium-term resilience to climatic variability. All this offers hope for a better future for the country, and with macroeconomic conditions improving, growth is expected to rebound. And sustained growth is essential for Malawi to have the resources to respond to the challenges it faces.
The good news is that Malawi’s economy has been responsive to good policies. What that means is that, if government maintains their current fiscal and monetary prudence, recent progress can be sustained and built on. Policies implemented over the past year in areas such as agricultural markets and fiscal management are key. However, I also know that there are risks that could undermine or frustrate such progress. Past experience suggests that Malawi struggles internally with repeated episodes of volatility in growth and fiscal performance over the political business cycle. Despite the recent progress, the challenge will therefore be to avoid such volatility by containing recurrent spending, especially as we approach elections. Externally, weather shocks remain a major part of Malawi’s economic cycle. A sustained growth recovery will, therefore, require structural reforms towards diversification and agricultural resilience, while strengthening flexible safety nets to cope with such shocks.
What are your plans in as far as supporting the country is concerned?
The World Bank starts from the perspective that any country’s development priorities have to be chosen, and owned, by the people of that country, if those priorities are to be addressed successfully. Our experience of over 70 years, and around the world, shows that externally imposed approaches never provide durable solutions. So, my first step has to be to learn about Malawi’s current challenges and the priorities the country has for tackling them. As noted above, MGDS III is very valuable in this context. Based on that understanding, and my own experience from other countries and context, I can then mobilise colleagues across the World Bank who can offer advice and potential solutions that we hope Malawi will find helpful and appropriate. Two areas which face particular challenges, and where I hope we will have something to say, are agriculture and energy. However, we are also keen to help Malawi invest in the early years of a child, from birth to two years old, increasingly evidence shows that a good start during those years brings life-long benefits to people’s health, education, cognitive ability and earning potential.
Anything you wish to bring to the public attention?
As you may know, twice a year, the World Bank publishes the Malawi Economic Monitor, which provides our perspective on recent economic developments and on a special topic. The next edition will look at the challenges in ensuring an effective, well-targeted, and cost-efficient social protection system that reaches the poorest. In addition to this regular report, we will shortly be publishing a Country Economic Memorandum which examines key challenges facing Malawi and significant potential solutions. I encourage all Malawians to look at this report when it comes out. It has some important insights on sustaining macroeconomic stability, enabling agricultural transformation, promoting economic diversification and strengthening public institutions and financial management. And unlike some such documents it is very readable!