Monumental task awaits Malawi's new government - Malawi - Elections '99 - Sustainable Democracy

BLANTYRE, 17 June 1999
As Malawians wait anxiously for the final results of the June 15 election expected Friday this week, a monumental task of putting the economy back on track awaits the in-coming government.

Economic indicators for this southern African country do not look impressive. With the gross domestic product (GDP) per capita as low as US$170, inflation above 50 percent and the cost of borrowing at 48 percent, the government will have a lot on their hands on assuming power.

Figures from most international development organisations show that about 55 percent of Malawians live below the poverty datum line.

"There is no question Malawi is a poor country. Poverty eradication is the preoccupation of who ever is going to win this election," says Dr Exley Silumbu, Chief Economist of the Malawi Chamber of Commerce and Industry (MCCI) in Blantyre, the country's commercial hub.

Malawi's economy is largely dependent on agriculture, which accounts for 40 percent of GDP and is the source of 80 percent of all export earnings. Tobacco, which brings in just under two-thirds of Malawi's export earnings, has slumped on the world market, plunging the country into a foreign exchange crisis.

Latest projections from MCCI indicate that tobacco sales in 1999, at US$176 million, will be 16 percent shy of 1998 figures. In 1998, tobacco sales fell by US$80 million.

"This is going to put pressure on the Malawi kwacha, which depreciated by 60 percent between 1998 and 1999," says Dr Silumbu, adding that the only hope is on the promised aid from the World bank and the International Monetary Fund. The Bretton Woods institutions recently pledged a record US$1.3 billion for the southern African country, a move analysts described as a seal of approval for Bakili Muluzi's commitment to economic reforms.

Although some circles lauded Muluzi's government for increasing business opportunities by opening up the economy, including liberalisation of the media sector, critics say the reforms have not benefited the ordinary Malawian.

For instance, says one local reporter, Muluzi introduced free primary education after winning the election in 1994 but did not put in place enough resources to sustain such a policy decision.

"Few new schools, if any, were built, there was no money to train or hire more teachers, more children filled up the classrooms. The result was a slump in the quality of education," says the journalist. He attributes low education standards to the rising problem of unemployment, and with that, escalating crime.

With globalisation taking the world by storm, it is not going to be easy for Malawi, and for the party that wins the 15 June election.
(SARDC)