As the gap between the poor and rich widen, the spotlight is now on Malawi’s successive State presidents who—economic and social commentators say—leave the poor worse off on exiting office than at the point of getting into government.
Not that these leaders had no plans for cutting poverty.
Bakili Muluzi first said he had a plan for eradicating poverty when getting into government in 1994; then he downgraded that ambition to poverty alleviation as he warmed up to the realities of the job.
By 2002, Muluzi launched—with pomp and fanfare—the Malawi Poverty Reduction Strategy Paper (MPRSP) supposedly to put the poor at the centre of government policy, including the national budget, so that the poor could tap from what was meant to be broad-based economic growth.
When the poverty paper was being launched in 2002, inequality was severe, with the richest 20 percent of the Malawi population consuming 46.3 percent of total goods and services while the poorest 20 percent scrambled for just 6.3 percent”.
The Gini coefficient—the statistical measure of income distribution or inequality in a country—was 0.52 in urban areas and 0.37 for rural areas.
But the strategy never helped.
Poverty became more pervasive, widespread and deep as government funding to the so-called pro-poor programmes identified in the paper became elusive while 30 percent of the national budget disappeared into individual pockets, according to the Office of the Director of Public Prosecutions.
The poor were left picking the crumbs as investments in the major causes of poverty identified by the strategy paper—limited access to land, low education, poor health status, limited off farm employment and a lack of access to credit—took a back seat.
No wonder, after three years of implementing the MPRSP, a 2004/5 review report of the strategy’s impact bluntly noted that the “poverty situation remained high over the implementation period” and that “at the end of the third year there has been no significant change in the welfare of the poor people”.
Enter Bingu wa Mutharika whom his political mentor Muluzi sold to Malawians as economic engineer during the 2004 campaign for presidency after the latter was forced to abandon a third term bid that sapped most of his leadership energy during his last tenure in office.
Bingu’s supposed trump card—replacing Muluzi’s poverty paper—was the Malawi Growth and Development Strategy (MGDS), launched in 2006; two years into Bingu’s presidency.
It too, while balancing with private sector growth, had poverty reduction as the end game.
But while starting on a promising note with high economic growth rates and improved human development indicators being recorded, the MGDS faltered in Bingu’s second term as priorities shifted to political survival—just like Muluzi—and the poor were forgotten, left hanging to dry alongside the MGDS.
As aligning budgets to MDGS’s poverty centric agenda became increasingly difficult in the face of a hyper-political environment, governance failures and what the country has now learnt to have been ruthless looting of the public purse widened, the poor became expendable or what some may call collateral damage.
What followed was an economic crisis of historic proportions as Bingu could not lead when it mattered—in fact, the country technically slid into recession in his last days; thereby deepening poverty.
Then Joyce Banda jumped into the presidential ring after Bingu’s death. To say she had a plan would be a stretch.
Banda initially said she would continue with the MGDS, but abandoned it in favour of the Economic Recovery Plan (ERP), a crisis road map meant to clean up the economic mess Bingu had left and soften the poor’s pain with a neo-liberal agenda that was, of course, more pro-market than pro-poor.
But the ERP—with its market driven approach—threw more people into poverty as the shocks of devaluation, price liberalisation of sensitive products and austerity—pinched the poor hard.
And, of course, while the poor were suffering, Banda presided over the blatant theft of K24 billion from government, a cash heist that continues to haunt the poor today.
Is it any wonder that on Wednesday, the Economics Association of Malawi (Ecama), under the auspices of the Centre for Social Concern (CfSC) blamed the country’s worsening economic situation on past presidents who left government it worse off than they found it?
Speaking in Lilongwe in his presentation titled Can an Economy Opt for the Poor presented during a Basic of Needs Basket (BNB) conference organised by CfSC, Ecama president Henry Kachaje also questioned the calibre of leaders Malawians vote into office.
His paper tried to answer whether government policies on the ground are helping to reduce poverty levels and if it is possible to turn Malawi into a winning and progressive economy.
He said: “Every Malawian president has successfully managed to leave the economy worse-off than how he or she found it, thereby leaving the poor poorer, probably with an exception of Kamuzu [Banda].”
Since gaining independence from Britain in 1964, Malawi has been led by five presidents, namely Hastings Kamuzu Banda (1964-1994), Bakili Muluzi (1994-2004), the late Bingu wa Mutharika (2004-2012), Joyce Banda (2012-2014) and the incumbent Peter Mutharika from May 2014.
Kachaje observed that income inequalities have over the years continued to worsen and wondered why the country is even struggling to feed its people despite the economy registering positive economic growth rates “year in and out.”
He said during the past seven years of economic growth, Malawi’s income inequality has leapt from 0.39 to 0.45, at par with war-torn Democratic Republic of Congo (DRC).
And in its ‘A Dangerous Divide: The State of Inequality in Malawi’ report, Oxfam, an international charity and development organisation, said the gap between the poor and the rich is widening in the country.
The report, launched in Lilongwe last month, found that the richest 10 percent of Malawians spend 34 times more than the poorest 10 percent.
In 2011, according to the report, the richest 10 percent of the population accounted for 53 percent of total consumption and, in the same year, the bottom 40 percent of the population consumed 13 percent of total consumption.
The Gini-coefficient, a commonly used measure of inequality, varies between zero reflecting complete equality and one, which indicates complete inequality.
As such, at 0.45, Malawi’s inequality is moving towards one, implying growing income inequalities among Malawians.
“Poverty is the worst form of violence. The main reason why Africans are poor is because their presidents have made that choice and poverty is now optional,” said Kachaje.
He also blamed the prevailing economic situation punctuated by high inflation and interest rates which he blamed it on Capital Hills’s appetite for over-borrowing.
In his reaction to the Oxfam report on the widening rich-poor gap during the launch, Minister of Finance, Economic Planning and Development Goodall Gondwe acknowledged the threat that inequality poses to the goal of attaining sustainable development in the country.
The Oxfam report also faulted poor policy choices which have sidelined poor Malawians in most projects.
The report pointed out that ordinary Malawians were being short-changed in various sectors, including health and economic, political and land issues.
But opinions among parties that have once been in government vary.
People’s Party (PP) vice-president (finance) Ralph Jooma on Thursday said Ecama’s observations are correct that since multiparty, Malawi’s leaders have operated without long-term responsibility, which explains why “loans are carelessly procured and debts are accumulated left right and centre because the responsibility of paying back will be of another government.”
He also cited as leadership problems the fact that leaders’ manifestos are completely delinked from the country’s long term strategies such as Vision 2020; good programmes of predecessors are not carried forward, thus, there is no continuity.
He added that although presidents have changed, people who surround and advise them remain the same, so the country should not expect any improvements.
United Democratic Front (UDF) spokesperson Ken Ndanga said it was not true that governments lack development policies. He said the political and economic environments have changed from the one-party State.
Malawi Congress Party (MCP) spokesperson on finance Alexander Kusamba-Dzonzi, however, agreed the situation had worsened.n —Additional reporting by Lucky Mkandawire.