President has proved willing to comply with the demands of western donors, but the people she governs are not impressed.
The historian Margery Perham once wrote that “the basic difficulty” with the British colonial technique of indirect rule, of which she was a major architect, was “the great gap between the culture of rulers and ruled.” “People do not understand what we want them to do,” she wrote, “or, if they understand, do not want to do it.” The only thing for it, according to Perham, was “to instruct the leaders of the people in the objects of our policy, in the hope that they will, by their natural authority, at once diffuse the instruction and exact the necessary obedience.”
The International Monetary Fund are back in Malawi pursuing their long-running project of structural adjustment, and their head, Christine Lagarde, may have felt something like Perham’s frustration earlier this year when she visited the country for the first time. Malawi’s president Joyce Banda may have recently fallen out with Madonna but she is more or less quiescent to the urgings of western technocrats like Lagarde – it’s the people Banda must try to rule who are not impressed. Plus ça change, plus c’est la même chose.
After years of being frozen out by Bingu wa Mutharika‘s administration, Joyce Banda has restored the IMF to the top table of Malawian policy-making and has pushed through a sweeping program of reforms at their behest, principally a massive devaluation of the kwacha and the removal of major subsidies on fuel and other commodities, all in the name of attracting foreign investment. The immediate prize was a three-year loan of $157 million. These funds had been withheld from the recalcitrant Mutharika, along with an $80 million credit facility, but were restored in June last year as a reward for Banda’s currency devaluation.
It should be noted that the UK government is very much involved in forcing the Malawian government into line with the IMF agenda. WeepyBritish chancellor George Osborne has no intention whatsoever of following IMF advice himself — just this week Lagarde told him again that he is pushing his so-called “austerity” agenda of public sector cuts much too far — yet the UK has nonetheless been active as part of a bloc of donors (including Norway, Germany, the EU and the World Bank) that has insisted that Malawi has no alternative but to obey the IMF, and made their budget support conditional on this. The IMF only knows best for some countries, it seems.
The Malawian economy has not responded well to the IMF program.Bloomberg recently reported that the kwacha is now the worst performing unit in Africa. A Malawian research organisation, the Centre for Social Concern, puts the rise in the cost of living for the average low-income urban family at 20% for 2012, with inflation above 30 per cent, food shortages spreading, and the cost of fuel and other commodities rocketing since the devaluation. Last November the cost of petrol rose from K539 per litre to K606, and another price hike in early February saw it rise yet further to K704.30. Two years ago, an increase from K256 to K290 was considered unsustainable.
Malawians reacted to the latest fare hikes by staging public protests in January, and then again in February. Civil servants and teachers went on strike, demanding a 67 per cent pay rise. After two weeks without lessons, Blantyre’s school children decided they had had enough andorganised their own demonstration across the city in support of their teachers. Dressed in bright blue and green school uniforms, they marched on Sanjika Palace before staging a sit-down protest on the road right outside the Malawian stock exchange. Stones were thrown at the Joyce Banda Foundation school, where classes were unaffected by the strike action, and angry pupils chanted their demands for equal provision across private and public schools.
This extraordinary collective action by Blantyre’s schoolchildren went scandalously unreported internationally. The western media doesn’t know “empowerment” when it sees it, because it’s learned so well the old lie that the African poor (especially women and children) are waiting to have this thing called empowerment brought to them by western NGOs.
The strike, irresistible as it was, was called off only when government conceded to a remarkable 61% salary increase for the lowest-paid civil servants, saying they would find the money from somewhere. Lessons resumed around Malawi and the schoolchildren had got their way. So much for the IMF’s big plans and patronising soundbites.
“The IMF is in panic mode,” says Professor Thandika Mkandawire, a development economist at London School of Economics. “The social consequences of the policies are dire. The IMF is blaming this on poor implementation of social measures, whatever that means.”
Lagarde acknowledges that things haven’t gone to plan, but she still flew to Lilongwe in January and ordered Banda to persevere with the IMF agenda. Lagarde left Malawi with a statement offering “congratulations”to Joyce Banda for her “bold” economic policies, and urging her to “stay the course”. Demonstrators in Blantyre, Lilongwe and Mzuzu took to the streets and sung songs insisting Lagarde is unwelcome in Malawi, and accusing Banda of having sold the country to the IMF.
Banda is a compelling and contradictory figure. She’s now a fixture oninternational power-lists and she gets to hang out with whoever she wants in Washington DC, but at home she faces a cocktail of misogyny and class snobbery from jealous opponents who still mock her as “mayi wa mandasi” (the woman who sells fritters). The chauvinism of Malawi’s political elite doesn’t trouble her, but if she’s not careful the pleasures of fostering her international popularity might prove to be her undoing at home.
Banda has found herself leading her country at a particularly puzzling historical conjuncture, but if she’s not careful she may not last long in State House. It was inside the very first month of her presidency that Banda made the decision that will surely define her tenure, rushing through a devaluation of the kwacha that saw it drop 50% against the dollar. It looked a bold move at the time, but to many observers the devaluation seemed the only plausible option in engineering a general rapprochement with an international community that had had enough of the irascible Mutharika and withdrawn budget support.
Banda’s feet were just fresh under the desk, mere weeks after the sudden death of her predecessor and the brief but highly-charged stand-off which followed had yielded up one of the most dizzying political turnarounds in modern southern African political history. Utterly cast out of the Lilongwe political machine, Banda had founded the People’s Party, whose members were so few in number that their bright orange uniforms seemed at that time to bespeak an optimism verging on the harebrained.
There are two questions worth asking of this intriguing moment. The first concerns the balance of Malawi’s electoral calculus. In plain terms: will Joyce Banda lose the election in 2014 if she follows through with what the IMF are demanding of her, and what if anything would a defeat of that kind mean for the way global economic institutions go about their business in the Third World? The second question is to try to think through the broader historical and economic currents that underlie the current Malawian situation. In particular, how is it that for just $157 million, the Bretton Woods institutions can still dictate the fiscal policy of a country like Malawi in 2013? The question of Malawi’s reliance on global financial institutions has not always been so perplexing, but things were supposed to be changing.
The country’s much-vaunted relationship with China, fostered over the past decade or so, is plainly not sufficient to allow Malawi to ignore IMF directives. A grand new parliament building has sprung up in Lilongwe, a national stadium is on the way, and while Banda doesn’t go as far as her predecessor did in wearing a Chinese-collared shirt, relations appear to remain very cordial. But whatever China is getting from Malawi, Malawi isn’t gaining much in the way of hard financial clout. In his second term, Mutharika ruled as though the only international relationship Malawi needed was with China. Western donors withdrew, and ordinary Malawians soon found themselves suffering a nationwide shortage of foreign exchange, fuel, and medical supplies.
What about Malawi’s natural resources? While the country seems to have discovered considerable energy resources and mineral wealth, (tensions with Tanzania over the oil apparently to be found beneath Lake Malawi notwithstanding,) and has done so at precisely the right moment, just when economists around the world were scratching their heads over how Malawi’s economy would function when the world tobacco market finally peters out, still, it will likely be a number of years before the Malawian treasury takes in its first petro-kwacha.
Until then, Banda has to govern with whatever funds are available to her. Late last year she spoke to an audience of Malawians in the diaspora at the plush Waldorf Astoria hotel in Manhattan. One of the first things she did after taking office was to examine the national finances as Mutharika had left them. These, she told us, were comparable to the numbers one might expect to find in the current account of an ordinary private individual in the United States.
It’s a striking claim, and one that certainly helps explain why she was willing to take such a large political gamble in order to get hold of the IMF’s $157 million, but it also gets to the heart of one of the defining contradictions of Banda’s presidential style: that she is a gender rights activist who is constantly trying to sound like a saleswoman, and that she attempts to perform both these roles on the international stage at the same time. She has learned to speak in the public relations-style language of the business school circuit, in which Malawi is to be sold as an attractive investment opportunity, a place to do business. This is no incidental concern, since encouraging FDI is the fundamental objective of the IMF reforms. Yet in the very same western capitals, Banda is feted wherever she goes as a pioneer for the rural poor and women’s rights, and it’s when she offers Malawi as a sob story that she convinces.
The two lenses through which Banda depicts Malawi — near basket-case on the one hand, confident emerging market on the other — simply don’t make sense when offered together. Ordinary Malawians are telling her that they have had enough of “donor-fearing” politics.