Economists have argued that the current socio-political environment is one of the contributing factors to slow progress the country is making in its quest to graduate into a middle income country.
Based on the recent report by the United Nations Conference on Trade and Development (Unctad), Malawi is not on the list of countries projected to graduate from the Least Developed Countries (LDCs) status by 2025.
This means Malawi will continue to be one of the poorest countries in the world unlike neighbouring Zambia, which is a middle-income country and Mozambique and Tanzania which are on the path to rapid economic development.
The list of LDCs is reviewed every three years by the Committee for Development Policy (CDP), a group of independent experts reporting to United Nations Economic and Social Council (Ecosoc).
Part of the condition for graduation into a middle-income country is a threshold of $1 242 (about K906 000 at the current exchange rate) per capita gross domestic product (GDP) annually.
World Bank figures show that Malawi’s per capita GDP in 2015 stood at $366 (K267 000).
Per capita GDP is a measure of the total output of a country that takes GDP and divides it by the number of people in the country.
This means if more than 17 million Malawians are to share their wealth equally, each will get about K267 000.
The report says to graduate from LDC status, the country needs to more than double its per capita income and Malawi is one of the nine countries in the world with its per capita GDP at less than $500.
Ben Kaluwa, economics professor at Chancellor College, a constituent college of the University of Malawi, said in an interview yesterday the pronouncement by Unctad is of huge concern.
“Government is stressed and cannot raise enough revenue to invest in infrastructure, which is beneficial for progress,” he said, adding that for a country which has never been formally at war since independence, it is unfortunate that this has always been the situation,” he said.
In a separate interview, Catholic University head of economics department Gilbert Kachamba said there is need for the country to start turning ideas into actions to move out of the LDC status.
“Government needs to create a conducive environment to improve on economic and social conditions. With the rising levels of corruption and lack of political will, Malawi will remain an LDC even beyond 2025,” said Kachamba
The report also highlighted that the state of being landlocked affects the graduation, calling for huge investment in infrastructure which could ease movement of goods. n