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Spinning economic growth for political advantage

In 1995, in a speech at the United Nations World Women’s conference held in Beijing, China, renowned author and eminent speaker on African affairs, Wangari Maathai observes, “Africa has suffered from lack of enlightened leadership and a bad style of political and economic guidance. While African leaders could have excused themselves for being unable to protect their people from the exploits of colonial empires in the l9th and 20th centuries, they can hardly escape blame for allowing neo-colonial exploitation which continues to reduce many of their people into paupers in their own countries.

“During the past three decades, Africa suffered lack of visionary and altruistic leaders committed to the welfare of their own people. “

Invariably, the reason why African leaders have got away with this scathing indictment is that they have managed carefully to spin their economic development stories in the eyes of their people.

In public relations, spin is a form of propaganda, achieved through providing an interpretation of an event to persuade public opinion in favor or against a certain organization or public figure. Traditional public relations relies heavily on creative presentation of the facts, “spin” and often implies disingenuous, deceptive and/or highly manipulative tactics.

Recently in Malawi, in the face of severe economic hardship and an ominous economic growth prognosis for the foreseeable future, The Malawi Chamber of Commerce and Industry (MCCCI) was quoted as claiming that the economic reforms that critics have been against are actually the necessary cure for the country.

“So far the reforms have already brought fuel back to filling stations and foreign exchange is back. As a matter of fact reliable sources indicate that the demand for fuel has already dropped from a high of US$30 million per month when fuel prices were artificially controlled to about US$23 million per month now due the automatic pricing mechanism, another reform measure.

“This is an important efficiency measure of the reforms. One now cannot just decide to drive out without a justification! In addition government is not going creating another liability to oil importers. Remember that government owes about K24 billion (the amount may be slightly lower now) because of accumulation of shortfalls arising from controlled fuel prices,” said MCCI’s Chancellor Kaferapanjira, a well-known government sympathizer.

Mr Kaferapanjira was in fact dancing to the political drum by presenting the facts in a manner that favored the government- an old trick in the spin-doctor’s book.

Although it cannot be disputed that the reforms were necessary, the spin regarding their impact ought to be obvious. Surely a much thorough study would be needed in order to determine whether the so called fuel and forex availability are not just a result of the fact that they are now very expensive and Malawians cannot afford them.

Kaferapanjira’s economics is suspect because in order to come to the conclusion he was preaching, the government has tampered with so many macroeconomic variables (on the money supply side). The truth of the matter is that there is still a pathetic fiscal management team that is unable to put out coherent ideas to move Malawi out of its excess consumption of foreign goods. In essence what the monetary authorities have been doing so far is to say “since we cant produce, then we must not eat” which is in sharp contrast to the policy regime that has been replaced which was “we will eat whatever we want but we will not produce”. The fact of the matter is that forex will always be available if its price is raised beyond reach and is too expensive to obtain. Likewise fuel.

In any case, the much-touted foreign exchange is not as much as presented. To put this in context, the Malawian situation cannot even be described as hand to mouth but rather, IMF’s hand to Malawian Mouth. Hence the bigger picture is that we are far from being out of a very vulnerable situation. In the long term, Malawi will continue borrowing and accepting all conditions from our lenders because we have no choice and the only one to have benefited will be President Joyce Banda and her supporters. Having to borrow from Botswana a meager US $10 million speaks volumes about the real success of Banda’s so called successful reforms.

As pointed out, during the Mutharika administration, Malawi was experiencing the very opposite of this situation, which was also problematic. While Malawians enjoyed an unprecedented level of welfare, particularly in the first period, this was primarily due to heavy subsidies on imports as a consequence of the fixed and over-valued currency. During the Mutharika administration, basic welfare indicators such as per capita income, infant mortality rates and use of health services increased significantly. Of course while dancing to the tune of donors, there was no problem in covering this excess demand for imports, but the situation was exposed when relations soured. Hence balancing these two extremes in a manner that reduces misery and leads to economic stability is the essence of astute macroeconomic and financial management. In short, Malawi’s problem, a problem in most of the developing world, is that it cannot produce what its consumes, and the traditional agricultural and the relatively underdeveloped mining sectors cannot generate the necessary export revenues to cover the consumption of basic imports. This is nothing new to the Malawi leadership but the puzzle remains why is the Government ignoring reforms on the production (supply) side of the economy?

The answer rests in the fact that such reforms will conflict with political interests. In Malawi, politicians see government coffers as personal money reserves and are unwilling to let anything drain their “sacred pot”. And to support their paymasters, the government spinners then have to deliberately use simple indicators like fuel and forex to show progress just because there was a fuel and forex crisis before Mutharika’s death. They will ignore all other economic indicators such as high inflation and high bank lending rates, and a worsening level of welfare. With the devaluation and floatation of the kwacha, and the subsequent inflation, what is being ignored is that real disposable incomes at the household level have been reduced tremendously and people can hardly afford even basic commodities. All this is in the background that over 70% of the Malawi population lives on less than 1.5 dollars a day. Thus although the old forex and fuel story is irrelevant in the present period, it is the story that the government will continue to spin to the common man even though it is that same common man that is staging strikes and protests demanding higher pay. Is it not then surprising it is only the government and its sympathizers who see progress and not anybody else?

Although some perceptive African visionaries such the late Bingu wa Mutharika have stated that Africa knows its problems and their solutions, and that we have simple problems that simply require simple but consistent solutions, selfishness and greed are the main culprits and enemies of Africa’s economic growth prospects.

For instance, Malawi is a land-locked country. In Malawi, former president Bakili Muluzi was happy to let go to waste the railway line linking Malawi to Mozambique because he stood personally to gain from road transportation. In setting up the Railway line, Hastings Kamuzu Banda had understood that the railway was the lifeline for industrialization for a land-locked country like Malawi. The selfish pulverization of the rail service meant that Malawi’s 15 million now people have to be supplied by road direct from South Africa or Tanzania. In Malawi, fuel, which used to come in great volumes by rail, now has to come on trucks (each track requiring its own supplies), fertilizer and other imports also must come on trucks, and for the Malawian industry, bulky raw materials have to come by road.

What connects all this to government spin and to the observations by Wangari Maathai is the fact that to the government, the story of this sad state of affairs is told as economic growth, and that in the background the key road transporters in each government are people that support the government and pay premiums into the bank accounts of the leadership. The leaders are then happy to watch this level of greed that is in the process costing lives (yes the shorter life expectancies that are a consequence of our underdevelopment), and spin with impunity stories of economic achievement. The so-called reforms that the Malawi government and its sympathizers are applauding are simply instructions from IMF. They were followed to the letter, and are now being rewarded with loans that are far too meager to solve the problems. President Banda’s administration has not articulated any holistic reforms that will take Malawi out of the economic mess. To be sure, the little forex that the IMF has given is being used to buy luxury cars, to finance presidential globetrotting and on many other extravagant things. The Malawian situation is quite simply not sustainable. Already, SMEs are closing shops and some are surviving by charging goods in Dollars and Rands, further punishing consumers.

Spinning the stories economic growth for political advantage at the expense of the people is a problem across Africa. African governments engage government sympathizing economists and so called experts to spin economic stories for political advantage, and with no other aim than to deceive their own people and remain in power. It is an abuse of democracy and indeed an immorality of the highest order. The Malawi Chamber of Commerce needed to appreciate the fact that what is obtaining in Malawi is a case of “reforms” that should have been simultaneously pursued alongside supply side reforms.

With the kind of self-serving policies the Malawi Government is pursuing, what is happening is a tuning down of the Malawian economy to a level of misery which, with clever spinning, the government hopes will soon be accepted by the people to the point that it can claim that Malawi is “an improved” state. – By Z. Allan Ntata

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