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Malawi Can Get By - With A Little Help From Its Friends

A new democratic government in Africa is trying to jump-start one of the world's poorest economies

THE economic problems of Malawi are acute and reflect the results of three decades of dictatorship as much as natural weaknesses of climate and geography. This southeast African country's new democratic government wants to alleviate poverty and jump-start the country's economy. Doing so will be exceedingly difficult, as it is in so much of Africa.

Malawi unfortunately begins its fourth decade of independence desperately poor. It ranks eighth from the bottom of world economies; its total annual gross domestic product is only the equivalent of $1 billion.

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Only 500,000 of Malawi's 10 million people are in wage employment, 100,000 in the public service. For foreign exchange and staple food, Malawians are heavily dependent upon two crops, tobacco and maize. Both crops need good rainfall, and Malawi has suffered seriously from drought in the 1990s. Its last maize harvest fell 60 percent short of the country's food requirements. Donors are attempting to supply urgent needs, but many Malawians may go hungry before this year's crop is harvested in March.

In addtion to these woes, the economically and socially destructive policies of H. Kamuzu Banda's dictatorship are difficult to eradicate. Many peasants were prevented from growing profitable cash crops, and state pricing policies for maize and groundnuts (and fertilizer) made the growing of those crops, and cassava, for home consumption difficult and expensive.

Banda also restricted access through fees to primary schools, underfinanced the educational and health systems, and built 13 expensive palaces for himself. His last and final 150-room extravaganza cost $120 million and was never used.

On top of it all, the new government inherited a currency that was rapidly depreciating. In dollars, Malawi's kwacha is worth half of what it was in July, making even critical imports such as fuel, wheat flour, immunizations, and bandages prohibitively expensive. Moreover, inflation is running at 40 percent a year.

The new government wants girls to go to school, so it has abolished primary school charges. As a result, the primary school population doubled, to 3.4 million. Malawi is scrambling to find teachers, school books, and school rooms, all of which are expensive.

Only 122 physicians serve all of Malawi, giving it one of the lowest physician per capita ratios in the world. AIDS is rampant, Malawi having the highest HIV positive prevalence in the world. Moreover, infant mortality and maternal death rates are unusually high.

Family-planning services are essential in a country where the total population is doubling every 20 years. Women also say they want to limit their families from a high 6.7 live births per mother. But without readily available funds, the new government can only rely on American and other donors.

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Malawi must also continue to depend on a crop that commands relatively high world prices but is increasingly despised. Certainly in the short run, the growing of tobacco is Malawi's only hope. It provides 75 percent of the country's foreign-exchange earnings, benefits from the abundance of labor in Malawi, and could increase its share of the world market even if the total size of that market slowly shrinks.

Malawi cannot yet fall back on industry, on other crops, or on services. It is well-placed geographically and climatically for little else. Production of its famed coffee and tea cannot be expanded. Sugar and cotton cannot compete on the world market. There are no known exploitable minerals. Textiles and piecework industry may have some promise, but Malawi has the highest transportation costs in the world and local resource blockages. Tourism is as yet underdeveloped.

A recent report from consultants recommended that Malawi focus on bottom-up growth, on lifting the incomes of tobacco and maize smallholders, and on letting multiplier effects flow from that initiative into the populous rural areas. It also urged the new government to let entrepreneurs, local and foreign, make most industrial and agricultural investments. The proper role of the government, it says, is to reduce the size of the civil service (to reduce the budget deficit) and to help stabilize the fiscal climate.

Malawi needs rain, assistance from the United States and other donors, and a welcoming approach to investors and other entrepreneurs. It also needs the kind of good, liberal democratic government that Banda's regime never provided, which has been available for the past six months.

The political ingredients and the national will are there. But if Malawi is going to progress economically and socially, it will have do it itself, with as much help from the American public and private agencies as possible. The Opinion/Essay Page welcomes manuscripts. Authors of articles we accept will be notified by telephone. Authors of articles not accepted will be notified by postcard. Send manuscripts to Opinions/Essays, One Norway Street, Boston, MA 02115, by fax to 617 -450-2317, or by Internet E-mail to OPED@RACHEL.CSPS.COM.

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