A Humpty Dumpty State of Mind…and Economy
Updated: Jan 21, 2020
Early January 2017, a bridge collapsed on the M1 road between Phwezi and Chiweta in the North. Wait a second, this is the link between North and South. In other words, our busiest highway had been segmented, in turn splitting our narrow-shaped piece of real estate. Lucky for those that could walk, it was possible to cross the damaged patch on foot, and it was possible to catch a ride making a U-turn on the other side. If luring vertigo in the treacherous highlands of Livingstonia has never been your thing, it was much better to postpone your trip until Account Number 1 returned the call.
To prematurely hand credit to the government, such catastrophes will always be resolved. Not out of ability, but out of no other choice.
In an ideal world, the company and folks that built this bridge would be probed for engineering crimes-on-quality committed. For in Malawi, it is common that runaway bridges are a recurring feature of our annual rainy seasons. Fifty years on, we have not figured that installing resilient infrastructure is not only a long-term solution, but a money-saver that will thwart fattening rehabilitation budgets.
Our justice system is insensitive to the injustices inflicted on the users of the services such infrastructures provide. Neither does it admit the foregone economic benefits which would be paused until the government’s mercy is supplicated. Nor the politicization of the rehabilitation that surely follows is accounted for. Citizens ought to flex their rights by suing the government for not living up to its promises – in this case, a functional road – as government puts to book the perpetrators concerned. But for the cronies running government, it appears a habitual rehabilitation is a way of sustaining incompetent construction companies, which our rulers already hired before walking into Capital Hill.
But successive governments have always administered a dose of fear to limit the appetite for free expression in a system that refuses to serve the majority. From the vantage point of control over law enforcement, throw in a few party zealots that are ever up to no good, our mode of violence becomes a concoction of unidirectional acts by those with power onto those without. The salt to injury is the manipulative government claim of fear of violence that almost always culminates in declaring one loser: unarmed civilians. The threat of force itself, a persistent characteristic of all the regimes we have had, guarantees that Malawians will always carry unquestioning silence. It includes the nerve demonstrated recently by one Honorable Dr. Chiwaya of Mangochi, who’s universe seems to revolve in the bewilderment of short-termed political power, as fifth in command in Malawi’s ruling scheme, as per his claims.
Redress by Malawi’s public institutions is hardly a thing to come by. Since Bakili Muluzi, efficiency of public institutions is attained only through incentives appropriable from those seeking a service. The regularization of corruption and graft in the public system coagulated another power dynamic that skews itself towards the wealthy. The poor indefinitely await to claim their rights. Our laws beam with self-worth on the shelves of the learned, yet fall short when they need to come alive for the regular man, woman and child. Weak institutions have crippled the ability of planners to educate law enforcement to work as a vehicle for justice and not the pawn of oppressors. Otherwise, our democracy could never have afforded to let go the likes of Evison Matafale, Fanikiso Phiri, Robert Chasowa, and the 20 men we lost on 19 July 2011. More continue to die in our major hospitals, and those to be buried beyond Chiweta have to wait till the M1 road is fixed.
If all you need is a functional road to get to a referral hospital, patience must become your biggest virtue. Ironical is how public services go hand-in-hand with affordability, usually if you have enough weight in society, or money. Recall how President Joyce Banda failed to raise a finger at some treasonous acts under her watch, or very recently, President Peter Mutharika’s cold feet on executing standard procedures that ensure unbiased investigations affecting millions of starving Malawians.
How many times will Humpty Dumpty fall?
We recently argued how Malawi’s economy is founded on consumption, as much as we like to soothe ourselves with the belief we are hardworking smallholder farmers. The decline in real growth, hiding under the carpet, is insulted by strutting face-value (nominal) growth on political rallies to quench the endless compulsion for a positive image. Our four multiparty governments have seen Muluzi’s weakness at printing cash, Mutharika’s grip on the foreign exchange rate, Joyce Banda’s restocking of fuel reserves at the expense of other sectors, and Peter Mutharika’s cluelessness on the economy, while campaign messages create illusions of light at the end of the tunnel for the poor. The country’s spring-boarding back to leveraging after debt relief about 10 years ago has brought on a sharp rise in public debt, the large chunk of which we owe foreigners on the pretext of cheaper interest rates. Our larger debt burden is invested in dollar-denominated facilities. Tightening the springs, thanks to things like drought and hunger, enhance fragility in a country whose population growth rate is the only indicator of pride for exhibiting positive statistics.
The bad news is heavy and sudden shocks. Currently, at least 6 million Malawians are hungry since mother nature and agriculture agreed to separate a while back. Any threats, and exogenous changes in the international environment, wreck the country’s already weak social, economic and environmental structures, or any combination of them, back to zero. To get back on message, the M1 disaster only added to the list of demands for drawing from a pocket that is already holed with indebtedness. If international maize prices will claim more of the Eastern and Southern African Trade and Investment Bank (or simply, PTA Bank) loan, the weakly rehabilitated M1 bridge that results from a tight budget may struggle through the torrential rains, until the next time it is washed away.
As per the foregoing, Malawi has reasons to worry about fragility. Our journey through fragility expounds a study titled OECD States of Fragility 2015, released in the wake of the Sustainable Development Goals in 2015. Suggesting a new, more flexible framework, it deduces a country’s condition using five dimensions of fragility: violence, justice, institutions, economic foundations and resilience. In our view, the interactions of these five dimensions allow for fragility to be universally applicable in a continuum from very fragile to very stable countries, and tremendously improves the understanding of the notion in different contexts, while clarifying our own.
Pasting the hashtag "#FRAGILE!" on the ‘Welcome to Malawi’ banner easily rouses defensiveness in the political arena. First, because it will be construed by Mr. Mutharika as a statement underscoring massive failures in his administration and, second, stamps an underestimation of the many successes that he, and he alone, has gifted to Malawians since his elevation to the presidency in May 2014. But we choose to see Mr. Mutharika as, indeed, the silhouette of a naughty child sneaking up on Humpty Dumpty (a.k.a. Malawi), who is about to fall of the wall.
Mr. Mutharika’s administration wants to convince us the economy is on track while the economy continues to borrow for consumption. When hungry Malawians are finally fed, and the PTA Bank loan eventually flushed into the sewerage, we will be left hungry as before, and with a large hole in Account Number 1 to amortize. Mr. Mutharika has somehow convinced the PTA Bank, a facility designed to facilitate trade and investment, to lend so we can throw nsima pieces into our stomachs. And a relatively small M1 road disaster becomes what turns anthills into the mountains teasing our stamina.
But the GoM continues to leverage, as in, simply, borrowing more than it can repay. According to the Ministry of Finance, government debt relative to GDP had almost doubled between 2013 and 2014, a jump from 38% to 66% (see Annual Review of Public Debt Report Final 2014). Mrs. Joyce Banda had just been to town debt-shopping by the time Mr. Mutharika inherited the reigns in 2014. And Mr. Mutharika, who does not like to be outperformed by Mrs. Banda, brought us the current maize crisis.
Putting Humpty Dumpty together again.
Deleveraging is an option. But it comes with profound austerity which will not help generate necessary aggregate demand required to breathe life to our economy. As we emphasized in the past, the answer is in shifting from consumption to investing in secondary industries. The country needs to get serious if it is going to borrow, meaning any borrowing that directly adds dump in latrines needs to stop forthwith, as it will not ease the stings of uncertainty. Someone at Capital Hill needs to be held accountable next time the Ministry of Agriculture is turned into a humanitarian organization for hunger crises. But this is just a random hint.
Repositioning in regional trade will be critical. Again, this website has posited before that there is more the country can produce for export, even among its many challenges. But lessons from the East African Community show how Uganda primarily survives on integration in this bloc even in the face of adverse international conditions. It has pumped up Rwanda’s boldness and now calls for a graduation date from ODA. East Africa will soon see the completion of a multi-billion-dollar electric rail line that is connecting countries in the region to ‘choo-choo!’ the movement of goods cheaply. This is the time Malawi needs to define its allies.
Finally, a review of partnerships beyond Africa is in complete order. The new development assistance strategy of Scotland, titled Global Citizen: Scotland's International Development Strategy, promotes that all key development sectors in partner countries participate in sustainable development. It offers a good model for development that responds to the needs of current generations while investing in future ones. Scotland’s “Beyond Aid” agenda ensures the shaking up of production sectors and stimulate them for trade and investment, offering a more sustainable development-oriented approach to partnership.