Some Development Issues and Debates

The misfortunes of an old party? analysing the factors

2012-02-11T05:58:00.000-08:00

what led to the MCP disaster in 2009?

read on at an International Relations journal| IPSA

Abstract
In this article, an attempt has been made to explain the performance of the Malawi Congress Party (MCP) in the general elections by focusing mainly on the 2009 presidential and parliamentary elections in which the MCP lost overwhelmingly. Specifically, the role of sectionalism of a regional and ethnic nature on the MCP’s national level performance was examined. Different kinds of data from the Malawi electoral commission and news media are used in the analysis. Descriptive statistics are used to summarise the effects of different factors on the party’s share of votes. It is found that a complex combination of factors such as district and regional sizes, education level of voters as proxied by district and regional level data, party level policies and organisation, incumbency, campaign expenditure, individual leaders personal characters and past legacy, party conduct in parliament among others, may explain the MCP’s 2009 defeat. The findings may be considered as broad guidelines along which efforts to reinvigorate the party may be galvanised.

Read on at International relations journal and remember to post your comments here

One Malawi one People: What to do Post 20 July Demonstrations

2011-07-21T07:56:00.001-07:00

I was shocked by the way events unfolded in my loved country (Malawi) yesterday. Order appeared to be slipping away and the country seemed to be treading toward some of social and political schizophrenia. Things were indeed falling apart and we were quickly losing the oneness and love that was heavily promoted in the past. I felt very angry, very upset and very resentful about all what was happening. I knew people were going to die and so some of them indeed died. We are with them in prayer and may their souls rest in peace. We also pray that the families left behind will have God’s protection and grace as we forge ahead.

Some important questions about this is, how did come this far? Did we have to? How did we let this happen? Going forward, it is imperative that we do serious soul searching and leave all the blame games, concentrate on finding out the root causes of our problems at the moment, address them and forge forward. The issues of the rule of law, economic and social advancement are paramount and we need to seriously address them in our endeavours for a greater Malawi. Vindictiveness, and hateful mudslinging won't have any of the problems we have go, rather these will simply buttress the problems and make them worse than before hence increasing the likelihood of uglier responses in future.

Let's be sensitive to issues of dissent, religions, tribe and regions as these are real potentially explosive points along which unrest often forms. Let us make effort to ensure that all are well represented in our efforts to sort out our problems, lest we draw blanks. Let us seek to repeal laws that appear repressive and hence counter to the post the 1993 constitution. Perception matters in this village that is increasingly becoming global. If we choose controversy over other better alternatives, we will increasingly become isolated and less able to take advantage of the benefits of regional and global integration.

Remember, although some tribes, regions, religions and other social groupings may be larger than others, we are one Malawi and must purport to behave with due cognizance of such a fact. It is dynamically unhealthy for fabrics as large as the Central region, or the Southern region or the Christian community to try and advance leadership that seeks to isolate those outside such circles. If it is dangerous for such sections to be less inclusive in their governance and leadership styles, it is more than just suicidal for smaller groupings such as parties, tribes or villages.

We in Malawi are diverse and diversity has in itself power and the ability for generating societal greatness. We must take advantage of such to advance towards the goals for which the nation was wrestled from the grips of colonialists-the reasons we sought self-determination together. Therefore it is undesirable to start thinking in terms of regions, tribes, religions etc for to do that would be to invite instability in the times ahead. It is undesirable to start paying mercenaries for witch hunting. No single person caused all this.

The 20th July demonstrations were a product of people’s perception of the government’s inability to understand people’s wants as well as the people’s impatience with economic and social problems. The extent of the damages that followed the demonstrations is likely a product of the manner in which the demonstrations were organised, which was itself dependent on how they were permitted. Going forward, there is no need for witch hunting as that will simply put more of the scarce money in the drain as witch-hunters pay mercenaries to do the hunts. If there is anything that should take much of our time as we go forward, it ought to be an attempt to sort out the many social and economic woes that people are worried about. Address issues of inequality, nepotism, governance, social cohesion, macroeconomic stability and international relations. We will never be successful as a government if we choose isolationism internally or internationally.

Mfumusaka

The General Schlieffen Plan

2011-06-18T02:36:00.000-07:00

"To win, we must endeavour to be the stronger of the two at the point of impact. Our only hope of this lies in making our own choice of operations, not in waiting passively for whatever the enemy chooses for us."—Schlieffen, the famous German General behind the Schlieffen plan

the plan involved using 90 pct of german forces to quickly defeat france and then turn them to russia.This plan would prevent any two-front war

Malawi’s economy and the urgent need for radical structural change

2011-06-05T06:49:00.000-07:00

Dr Greenwell C Matchaya
It is a hazy Sunday morning, the neighbourhood is still quite and although I have no intention of going out just yet, part of me is miles away to Africa and the Arab world. On the BBC TV, the mass abuse of human freedoms in Yemen and Syria by the people that are supposed to protect them are conspicuous and disturbing. If only the world and the United Nation System viewed nations and leaderships in the same way, perhaps some variants of no-fly-zones would have been imposed in those countries in a bid to curb the governments’ abuses of human freedoms. Compared to the case of Libya where a no-fly-zone was suggested and subsequently implemented based on the predicted danger that the Libyan government was going to pose in Eastern Libya, the Syrian and Yemen cases are gravely serious especially when we consider that many a person is being killed every day in protest rallies. One would only hope that God and perhaps the international community will do something positive soon.

Selected economic issues at home

Back home in Malawi, a country I love most, progress in terms of infrastructural development is conspicuous and indeed some Malawians are becoming more affluent than ever before. A closer look at the imports and exports data, considered in the context of the recent intermittent foreign exchange and fuel shortages, however reveals another important point about the economy’s ability to sustainably provide economic and social freedoms to all its citizens in the years to come. As I said elsewhere, my examination of the import and export time series data unveils that, not only does the country import more than it exports over time, but also that the gap between imports and exports has been widening and even more so, recently such that a slanted V-shape is markedly visible when the two quantities are mapped on a two dimensional space of value and time.

The increasing differential growth of imports and exports, where imports grow faster implies that the nation’s ability to generate foreign exchange (which it gets when it sells to overseas consumers) lags behind its ability to spend it. Assuming that exports are the major sources of foreign exchange, such a situation inevitably leads to potential foreign exchange shortages. The shortages are even more likely if the growth rate of one of the two departs significantly from its past equilibrium (that is if there is an extra increase in imports growth while exports stay at roughly past growth rates, or when exports stagnate more than before). Of course to the extent that fuel imports depend on foreign currency availability it is not unreasonable to expect a case of fuel shortages in other times of the year depending on aggregate foreign exchange demand.

Of course the data shows that imports have grown considerably more reaching about 2 billion dollars recently, implying that while the asymmetric growth rates in imports and exports is clearly a problem, there is yet another one. The system appears not to be entirely able to make foreign exchange available on the formal market and hence, while the formal system does not have the foreign exchange, the black market has the money. The inability of the domestic formal foreign exchange market to mobilize foreign exchange relates to the price of the kwacha relative to that of other currencies. In the event that the kwacha is given a higher value than its actual market value, many of those holding foreign currency shun the formal foreign exchange market in preference of black markets, which, in those cases are able to offer better prices. Anecdotal evidence reveals that while the bank price of a US dollar was around 150 Malawi kwacha by the middle of May 2011, the dollar was going at closer to 190 Malawi kwacha in other areas at the same time implying an over-valuation of the Malawi Kwacha. It is this differential that repels foreign currency holders from the formal and legal currency market.

Some Options

The import and export revenues I have focused on so far relate to the demand and supply sides of the economy. Drawing from the foregoing discussion, one would say that the supply side of the economy has been growing slowly relative to the demand side. Some of the options are:

(1) Radical changes on the supply side of the economy

The most reliable and effective long term solution is to induce radical structural changes on the supply side of the economy to ensure that the nation is able to generate enough exports that will earn the nation sufficient foreign exchange. Most of the foreign exchange that comes into the nation is accounted for by tobacco earnings whose contribution stands within the neighbourhood of 450 million US$ annually. Although the forecasts for tobacco demand show a future increase in tobacco consumption, important changes are taking place. The major consumers of cigarettes will no longer be the affluent buyers of Western countries but rather developing countries which are predominantly poor and may not pay higher prices.

Developed countries have stepped up their efforts to reduce tobacco consumption owing to increasing incidences of cancers of different kinds among smokers in those countries, and not surprising their aggregate demand is projected to decrease even further. Among the developing countries, China, which has a larger tobacco market, also appears to be set to increase its own domestic production implying that the future tobacco market may be uncertain.

a. Non-traditional crops and associated technology

Policy makers in Malawi therefore need to seriously think about introducing high yielding varieties of non-traditional crops such as soybeans, cowpeas and other oilseed. This is because given the ever increasing prices of crude oil, Western efforts for increasing biodiesel will continue to increase. Moreover as economies of China and India continue to grow together with their livestock industry, their demand for vegetable oils, soybean oilcakes and other crop based feedstuffs are projected to increase.

Although the European sub-region has stepped its own efforts in vegetable oil production from some oilseeds there, their demand outstrips production and hence are projected to be net importers. At present the only major exporters of some of these products are Argentina, Brazil and the United Sates. These are already reaching their peak so that they may not be able to meet any increasing excess demand originating from the emerging economies in Asia.

Malawi needs to acquire technology (including post-harvest technology) in terms of high yielding varieties of those non-traditional crops and wage a campaign for their mass adoption paralleled with helpful extension services. Of course agricultural exports in their raw for suffer from lowering net terms of trade in the long run due to various issues, so value adding is an important factor to consider in any bid to radically transform supply side. As far as soybeans and other oil crops are concerned, the country should consider developing its capacity in crushing so that both soy/groundnut products and seeds are exported. This cushions farmers and the nation from world market price fluctuations. It cannot be over-emphasized that these efforts need to be paralleled with advances in small-scale irrigation to divorce farmers from overdependence on rain-fed agriculture.

b. Mining

While addressing issues of technology and marketing in the agricultural sector are important in the equation, the nation should seriously consider mineral explorations. As I have argued elsewhere before, a quick look at a list of Africa’s successful countries reveals that mineral rich countries account for the bulk of the few well-to-do African countries. Of course there are some resource rich countries that are poor due to mismanagement or foreign intervention, but the proportion of promising resource poor countries is small underscoring the importance of minerals for Africa’s economic development. Botswana, Zimbambwe, RSA, Mozambique etc have all benefited one way or another from mineral endowments. Malawi lies on the Great Rift Valley and has a fair share of little mountains where crude oil and some minerals form. While bearing in mind that minerals can be a curse if mismanaged, I would seriously urge the government to intensify its mineral mapping and exploration efforts, while paying due cognizance of the negative effects, that mining could afflict on the environment of course.

c. Entrepreneurship

For the long term, there must be a deliberate effort to encourage export-oriented entrepreneurship. This could be done not only by government’s taxation policy and other efforts the third sector could also play a vital role. NGOs need to have programs that aim to give their clientele an ability to be part of the exporting community where possible. Education programs should also be tailored to develop entrepreneurial skills in future graduates.

(2) Sensible changes on the demand side

The demand side of the economy needs to be controlled in manners that will not reduce peoples’ welfare. The following can be considered:

a. Import substitution where possible

While it would be unreasonable to try to produce everything, some items that demand foreign exchange constantly are those which could be domestically produced. The government and the private sector needs to do what it takes to intensify efforts to erect plants for sufficient cement and even fertilizer production and ensure that these are available domestically at reasonable prices. These will save foreign exchange. Malawians are building houses everywhere and the resultant demand for cement and other foreign building materials poses pressure on forex. I don’t find it useful to talk about pressure from motor vehicle imports as these have been dealt with in this year’s budget.

b. Local currency payment system

There may be a chance for the nation to save some forex by trading in local currencies with neighbouring countries in limited sectors of the economy. The paper by Matchaya (2010) [ http://www.ecamamw.org/home/publications/Currency%20repatriation%20paper.pdf ], commissioned by ECAMA, highlighted some countries where this is being done. Apart from Zambia and Mozambique, the arrangement between Brazil and Argentina is one of the best that the Malawi government must study if the local payment system is to be implemented successfully. Although such a system may not per se be a panacea, it would ameliorate the forex problem so long it is implemented painstakingly while bearing in mind of the potential difficulties some of which are highlighted in that paper.

c. Exchange rate depreciation

In some cases a monetary solution to easing a country’s foreign exchange position is to depreciate the value of the domestic currency. In the case of Malawi at present where the dollar is trading at a higher price on the black market, the Central Bank can reduce the official price of the Malawi kwacha so that a dollar should start fetching something more than the current MK150. The theoretical positive effects are that such an action would encourage those with foreign currency to trade it on the formal market and that producers could gain because they would face better world prices. Depreciation could also punish the behaviour of imports of luxuries hence could control the growth in import demand. However, this is not without problems. In the first place there is no guarantee that once the currency is depreciated enough dollars will be released on the currency market. It may as well be that people will still go to the black market which will still try to hike its prices. Others may still hoard their dollars as they prospect future depreciations. More importantly, whether depreciation would indeed benefit the exporters which in Malawi’s case are farmers, is not straight forward because, while they may face better prices, farm inputs would become very expensive, and inflation would go up. Very high inflation could not only eat into everyone’s incomes, but could even have a more negative effect unfortunately on those that society ought to protect-the poor. This would discredit those in power and also significantly undermine future production and exports.

It is from this perspective that we see the government’s side pulling in a different direction from that of the IMF and others. While I am aware of the standoff on this issue, I have not come across any study specific to Malawi that seeks to examine the potential impacts of depreciation on the Malawi economy so that we move from this theoretical indeterminacy to some empirical result. I would hence urge the Malawi government to work with the IMF, the World Bank as well as ECAMA and some experts in the field to at the very lease run a study on this. I would be interested in examining the import and exports elasticities in the context of the Marshal-Lerner condition and forge ahead. We need to know those for a starting point.

Since such studies may take long and some funding decisions have to be made now, it would appear to me that some form of compromise in form of a mild depreciation would be necessary and authorities can conduct its effects as we advance into the future.

This is by no means closer to an exhaustive list of what ought to be done. Investment in education, energy, tourism, good governance and rule of law are paramount, but I thought that the areas flagged herein need some more emphasis.

** send any further feedback to greenwellmatchaya@yahoo.com

The long-term Terms of Trade (ToT) for Agricultural Commodities and the need for Industrialization

2011-01-09T06:35:00.000-08:00

By
Dr Greenwell Matchaya, Berkshire, United Kingdom

The need for industrialization in Africa and the developing world is real, although a debate about the means through which it may be achieved, has never been settled and may not be settled anytime soon. Fortunately, it appears that whatever the sources of industrialization may be, in practice they depend on the context such that each nation’s nature and degree of resource endowments are likely to help in dictating the feasible paths for industrialization for individual economies. This is perhaps one case where the concept of ‘one size fits all’ does not appear useful. Although the actual debate on the possible options for routes to industrialization for different African nations is being considered in a future article, effort is made herein to say something that could be useful for the Malawi economy.

As we may already know, the lifeblood of Malawi’s economic growth and development is mainly the Agricultural sector so that policy changes in the agricultural sector are extremely crucial to the lives of the poorest many. This is why such changes need to be well-thought through to avoid any unnecessary human suffering of greater proportions. This post purports to consider the current agricultural subsidy policies in Malawi in the context of world agricultural development and Malawi’s own goals of poverty reduction. It also flags the importance of launching an agricultural-led industrialization program to offset the effects of any future decline in agricultural terms of trade for Malawi.

Some development pundits in Malawi and outside Malawi seem to be at unease with the recent crucial DPP Government-led policy changes in the agricultural sector. Specifically, some opponents to the policy changes do argue that agricultural subsidies are inefficient, they should be stopped or they will sap the morale of farmers to look for their own solutions to their liquidity constraints. They also argue that agricultural subsidies are unsustainable and are counter to the ideals of international trade that must be met in this world which is increasingly becoming a global village.

Nonetheless, as a point of departure, I would like to bring to the attention of such opponents, one or two brute facts about subsidies as follow: let it be known that the West (developed world) spends more than 380 billion US dollars on agricultural subsidies annually to bolster the incomes of their farmers in order that they maintain an artificially high level of prosperity. This is a substantial amount of money that cannot even be compared to the total aid that flows to Africa or developing world annually! For instance in 2007, the total official development assistance from the West to all poor countries amounted to circa US$123 Billion, which is less than half their spending on subsidies. Again, some research centres within the developed countries for example Michigan State University’s Agricultural research centre working to support only less than 20 thousand part time and full time farmers in the state of Michigan spends over 80 million dollars annually in agricultural research. Regardless of how you interpret these figures, one role they play is to alert us appreciate that regardless of the nature and stage of an economy, agricultural production is of vital importance and any though that it shouldn’t be subsidised where necessary and possible, in a nation where a majority of the farmers are laden with poverty and liquidity constraints is unreal.

Further, the arguments about the need to remove all barriers to international trade are at best quixotic and far from pragmatic because of the fact that Malawi’s as well as Africa’s trading partners in the West do subsidise their agricultural sectors to a great deal, and moreover, even if they stop today, removing subsidies by 100 per cent from agricultural sectors of developing economies such as Malawi would be meaningless because the Western governments, having benefited from the same over a longer period of time, would have an unfair advantage over nations like Malawi in production and trade. And again, the arguments concerning sustainability in terms of financing need to be crafted more intelligently than how they are being advanced presently where it is implicitly assumed that by receiving subsidies, the agricultural sector is posing a burden on other sectors. This argument needs some thorough analysis before it can be bought because although the agricultural sector is receiving some subsidies, it is again the largest contributor to taxes and foreign exchange which are important ingredients in any country’s daily operations. In fact I do not see the subsidies as waste, but rather an important tool that is working to relieve the nations of pressures in various ways. We need to understand that a hungry rural population will, likely be less educated over time and could impose more pressure on the health sector through endless ailments.

Given what I have said, perhaps it is not surprising that I am of the opinion that the DPP government and its leader Professor Bingu wa Mutharika are on the right track as far as the agricultural subsidy and the general agricultural development policies are concerned. While I agree with the subsidy policies, I would further like the government to consider the following: Revolutionising agriculture sustainably and for the good of the whole nation both now and intertemporally requires another step beyond subsidizing agricultural inputs. There is a need to subsidise those inputs while endeavouring to take advantage of the strong backward and forward linkages that the agricultural sector has with the other sectors to avoid being stuck in the agricultural sector alone, while exporting unprocessed commodities. There is need to launch what we may call ‘agricultural-led manufacturing rebirth’ or more simply ‘agricultural-led industrialization’.

The problem with solely relying on the agricultural sector in the long run emanates from the very nature of agricultural commodities and trade. Even in our households, we would appreciate that we rarely proportionately increase nsima consumption when our incomes go up or when the price of maize goes down, or to be precise, any increase we may register would be less, relative to the change in our incomes or prices of maize flour. At the macroeconomic level of course that implies that expenditure on agro-goods does not rise at the same pace as the expenditure on manufacturing goods and services. In other words, when world incomes go up, economies that rely on agricultural exports alone or primarily are likely to come out as losers of international trade.

In addition to the implied income inelasticity of demand for agricultural goods alluded to above, the terms of trade for agricultural goods in the absence of processing do deteriorate dynamically/overtime, sometimes due to oversupply. In the absence of an active manufacturing sector that draws its resources from the agricultural sector, in some cases agricultural growth could be immiserising. To ensure this does not happen at any point and to ensure that subsidies have a lasting positive impact, there is need to rebuild the manufacturing sector which would get its inputs from agriculture. This would further imply that even in the event of a decline in agricultural unprocessed goods’ Terms of Trade, Malawi would have all the incentives to increase productivity in the agricultural sector as the nation would be exporting processed products, and there would be no immiserising growth.

As a point of exit therefore, let me state that I think for Malawi and nations that see agriculture as the mainstay of their economies, it is pertinent that they wisely subsidise and restructure agriculture such that they can produce beyond subsistence while not ignoring the manufacturing sector which itself must be set up to take advantage of the agricultural sector’s strong backward and forward linkages.Although farm parcels are smaller in some areas, we must try where possible to reclaim marginal land including wetlands to try and expand total farmland. We should then seriously think about taking advantage of transgenic technology and irrigation possibilities to increase total factor productivity. This is why I am in total support of the DPP Government’s Greenbelt Project which focuses on irrigation.

To avoid immiserising growth and ensure intertemporal sustainability, we should invest the gains from agriculture into the manufacturing sector hoping that in future the share of the manufacturing sector will be larger than that of agriculture in the overall economy, at which point we will be a developed nation. The other importance of a vibrant manufacturing/industrial sector is that by providing jobs to both skilled and unskilled personnel, the manufacturing sector has the potential to meaningfully depopulate the rural areas and thereby freeing up more land per capita.

Send any feedback to greenwelmatchaya@yahoo.co.uk

To the students at Bunda College

2010-12-29T22:49:00.000-08:00

by Greenwell Matchaya

Dear beloved students
This might sound unusual especially coming within this festive season however real learning doesn’t and mustn’t stop until you stop breathing (Lol).

You can, and should be proud that you have made it to a UNIMA college that is very good and progressive, with a reputation of producing some of the finest minds of our society. The fact that you have made it to Bunda is an indication that you can also ‘found’ in yourselves great leaders, entrepreneurs and researchers of the future.

As you are already aware there at Bunda you have programs that each of you belongs to such that some of you are pursuing BScs in Irrigation Engineering, Crops Sciences, Agribusiness, Agric Econs, Aqua-sciences, Social forestry, Animal science etc. These are fantastic programs that are tailor-designed to impart in you some of the rare core transferrable skills that you need for the future soon to come.

As a member of the Bunda alumni community I would like to advise you that if you can, then while pursuing you fantastic programs, and if circumstances permit you and if it is permissible, take some effort to audit (study even if the course won’t count in determining your degree)some carefully chosen courses across programs. This may be important because although your programs are undoubtedly professionally designed to make you future experts in your fields, you may find that it would still be value adding to take some courses in order to acquire that much needed broader view of issues.

For example (not that you must do this), while course such as Experimental design and analysis, Research methods, Econometrics are great tools for sciences and social sciences(economics), for both a science student and a social science student, there are gains to be had from having familiarity with both. Similarly, although mathematical skills imparted by a course in mathematics for economists are adequate for purposes of getting a degree in economics, it wouldn’t hurt one’s abilities if one decided to seek further familiarity with one or two seemingly more mathematical modules from the basic sciences or the engineering department if they are still offered. There also many other examples which you may have in mind too.

Of course it is important to remember that for most purposes your program performance is very important and so you cannot afford to compromise it. In view of this I would recommend auditing courses if and only if your intelligent assessment tells you that you won’t compromise your final degree grade. So, if you are a student whose GPA is in the dangerous margins, perhaps it is more important to work towards pushing it forward than to audit a course that may not have direct complementarities with courses you are yet to study in your program. However, if you are that student whose GPA is unlikely to change negatively once some time is allocated to the quest for further multidisciplinary knowledge, auditing courses might be a dynamically more helpful use of your time than Kachasu imbibing for example.

Auditing courses will make you readier to adapt to most environments and groups. With auditing, you should be able to listen and understand and contribute to talks from experts from many specialties without too much hassle, and you should also be able to do higher degrees in most other fields not directly related to your current field should need be. You should be able too, to work in any environment where people see, admire and reward knowledge even in the most difficult times.

Cheers and have a Happy 2011!

From the Desk of Mfumusaka
Berkshire, the United Kingdom
Feedback: matchayag@yahoo.co.uk

Ownership Structure and the Performance of Air Malawi

2010-07-21T13:48:00.000-07:00

Greenwell Matchaya, PhD
Leeds University-Business School-UK
__________________________________________________________________________________

In this article effort is made to highlight some theoretical mechanisms through which Air Malawi’s ownership structure could affect its very ability for innovation and ultimately, performance. The article further considers some of the many possibilities that Air Malawi may need to try in order to survive these hard times.

If records are correct, Air Malawi became independent in 1967 following the dissolution of the Central African Airways that year and since then the airliner went through a series of tough and good times. A number of aircrafts were bought and added to the airliner’s fleet and at the turn of the political upheaval in 1993 the company had just acquired the Dornier 228, Boeing 737-300 and the ATR 42. It appears however that the dawn of the many changes in the political ecosystem in the mid 1990s also marked the end of the company’s heydays such that by the year 2000 news that the company was facing enormous financial difficulty were rampant.

In this article I do not claim to give solutions to the ailing company nevertheless, it is my intention to endeavour to remind those responsible, of some important principles that govern efficiency in the hope that someone, somewhere, sometime will find these useful in their bid to breathe life back into Air Malawi. Perhaps the fact that having a national airline is pivotal for national prestige as well as economic growth cannot be overemphasized. A nation without an airline misses out on important opportunities that could foster development.

Since 2000, it appears that Air Malawi has vainly attempted to partner with South African airways, Zambezi air ways and has only managed to get a less than better deal with Comair. It appears that the attempts taken by relevant authorities to bring back life to Air Malawi have not been that successful, and at present, pundits seem to predict only one possible outcome-air Malawi will extinct! This is not only disturbing to potential customers, is defeating to nationalists, and it is certainly not a plus from the perspective of development in general. What might cause such inefficiency at Air Malawi when other regional airlines such as the SA airlines, Ethiopian airlines, Kenyan airlines etc seem to be thriving well?

As is often the case with any organisation where there is separation between ownership and control issues of ownership are potentially very important. The fact that Air Malawi is owned by the state may imply a number of important issues namely that a) managers at Air Malawi have to be answerable to authorities that are poorly defined compared to what would be the case if Air Malawi was privately owned and shareholders acted as bosses to the managers, b) The company may implicitly have a multiplicity of objectives some of which may be antagonistic, such as profit maximisation and employment, c) Air Malawi can basically not go bust as it enjoys soft budgets from tax-payers money, and d) separation of ownership and control itself implies principal-agency problems where the tax-payer is the principal and the Air Malawi managers are the agent.

Based on ownership structure alone, it should be trivial to make some predictions as follows: Air Malawi managers have little incentive to be efficient because the company cannot go bust, and it is difficult to take them to task not only due to the antagonistic and sometimes fuzzy company objectives, but also because the principal (the tax-payer) really does not have much leverage in matters of performance monitoring among other things. These factors may stifle managerial incentives for innovation leading to mediocre performance.

In a world where markets for managers and corporate control exist, separation of ownership and control of Air Malawi may not necessarily pose much of a problem because it would be common knowledge among managers that poor performance could be read by the market as a sign of X-inefficiency, which could attract bids for hostile company takeovers at the expense of their very jobs. In those cases managers would work harder to be efficient to avoid potential hostile bids for takeover. Nevertheless, it appears that within the spheres where Air Malawi operates there are no active markets for managers and corporate control. No other parties apart from the government or its agents can fire Air Malawi management or take the company over. It may be the case that this factor works together with the ownership issue to increase the likelihood of slack at Air Malawi’s managerial level.

The managerial slack that is generated and perhaps reinforced as a result of the ownership structure and absence of markets issues, leads to dismal strategies across the board. Some of the areas that could be affected as a result are marketing planning, airline scheduling, aircraft and aircraft equipment maintenance, pricing strategies, staffing and research and development. A quick look at the air Malawi website or a quick stop at an Air Malawi tickets office clearly reveals that little consideration has been given to investment in infrastructure that could ease marketing. More often than not, purchasing an air ticket online is next to impossible, buying tickets at air Malawi offices using a credit or debit card is unthinkable while most air Malawi ticket offices have no functioning phone numbers. Marketing in this digital age should involve all possibilities or an efficient combination of strategies and should make good use of the internet, credit cards, debit cards, not just cash!

Of course the infrastructure in mention requires money to acquire, and an argument may be levelled that the company never gets enough money for such ventures to be feasible. However, research has shown that non-state owned companies do tend to have a higher tendency to invest in such important technologies than state owned ones, given the same level of resources.

Anecdotal evidence suggests that while Air Malawi may only have few functional aircraft at times, the company continues to overstaff perhaps to honour the employment objective that is characteristic of state-owned companies. For sure airline business is labour as well as capital intensive, but there should be an allowable threshold below which the business is not doable. Air Malawi’s labour force in these troubling times need not significantly deviate from such a threshold.
The airline needs to embrace innovation by adding programs to attract more customers, gain market share and boost revenues. This is not easy to do and this is why the organisational ownership structure must provide incentives and/or mechanisms to ensure that management works towards this goal. These programs, if not already in place may be, those for earning travel miles, attractive price discrimination where those who travel as a group receive a lower fare, or ask travellers to buy a certain number of tickets and they can get one for free, giving fares that include accommodation in Malawi lodges/hotels etc.

Anyway, the bottom line is that as aviation fuels show no sign of becoming cheaper anytime soon, profitability of Air Malawi possibly depends much on, not only pay and job cuts, but also on managerial innovation and search for new paradigms of marketing that place the customer first. Air Malawi needs to take advantage of this digital age to reduce its long run costs of marketing and operation in general by fully embracing technology at least in the area of advertising and selling. Various programs aimed at attracting customers may need to be introduced, a new positioning strategy should be thought about while it is also pertinent that the company properly defines its target segment. In these infantile stages, it will not pay to fly everywhere.

On the dimension of ownership and control, it appears that the effectiveness of all the recommendations implicit in this article depends so much on the incentives for managers and owners of the company to work towards the goal of profit maximisation. It seems that some form of public private partnership is required. Regulation could be important as well, but as long as regulatory bodies are state structures, the system may still be clogged by the same agency problems. Schemes that would see the government and the people of Malawi and outsiders owning some portion of the company, or participating in management would probably reduce the agency and incentive problems that exist in purely state owned companies. Management should again endeavour to explore the applicability of profit sharing schemes to Air Malawi, and must further critically study at least some of the world’s small but successful budget airlines such as Ryanair, Jet2, flybe and many others. Certainly, the future of Air Malawi is in the hands of all of us, and while it is obvious that we may be centuries behind our competitors within Africa and beyond, with a little bit of critical thinking and a desire to do good it should be possible to revive the airline in less than half a decade.

Feedback to matchayag@yahoo.co.uk

The Potential Role of Local Currencies Payment Systems in Trade between Malawi and Regional Partners

2010-07-11T05:35:00.000-07:00

A summary of the paper by Dr Greenwell Matchaya, presented at public seminar organised by Ecama at Cresta Hotel in Lilonge on firt July.

Guest of Honour: Minister of Finance, Hon. Ken Kandodo, MP
Presenter: Ass. Professor Charles Mataya (PhD)
Discussants: 1. MEJN Executive Director, Mr. Andrew Kumbatira,
2. Chair, Trade and Industry Committee of parliament,
Dr. Cornelius Mwalwanda, MP
_____________________________________________________________________________________

Author: Greenwell Collins Matchaya, PhD , Leeds University-Business School, June, 2010

Summary

The recent foreign exchange shortages in the country point to the economic threats that exist for economies that solely rely on foreign exchange in their daily trade. A study of the literature shows that foreign exchange problems could partially be reduced by carefully establishing local currency payments systems with significant regional trade partners. At the local scale, such arrangements are not rampant at present, however it is noted that the same reasons that could merit the establishment of the local currency payment system between trading nations, also form a good part of the grounds on which large monetary unions such as the European Monetary Union are formed.

Local currency payment systems in the pristine form suggested herein exist between Zambia and Mozambique, Brazil and Argentina, and some elements of this may be traced in The Association of Southeast Asian Nations (ASEAN) and in bilateral trade between Russia and other countries. Prior to the formal launch of the Euro currency, nations in Western Europe also engaged in different kinds of bilateral trade albeit without formal agreements on invoicing designs. In those cases trade invoicing went on through negotiations between importers and exporters and was often settled in nonvehicle currencies although the dollar was also significantly used (Grassman, 1973; Ligthart and da Silva, 2007). Where formal steps have been taken to enhance the establishment of payments systems in trade, it appears that besides ameliorating foreign exchange constraints, local currency payments systems have the potential to encourage international and intra-regional trade and cooperation. This may be so because the arrangements potentially simplify procedures and, consequently, may be expected to reduce the financial costs of operations, stimulating the participation of small scale companies in bilateral trade.

From the perspective of the exporter, the local currency payment system makes it possible to eliminate the exchange risk generated by external sales. In the long run, it seems though that whether such arrangements would be effective in delivering on the objectives for which they were set may be conditional on political will and stability between the cooperating partners. It has to be pointed out though that the evidence is hard to find for the cases of Zambia versus Mozambique, Argentina versus Brazil and China or Russia versus other parties as data doesn’t seem to be publically available. Despite the potential problems of operationalisation of the local currency payment concept, it appears that a careful move towards this goal may be a worthwhile and inevitable step in the development process of Malawi.

Fish consumption drops : a reply

2010-06-19T06:46:00.000-07:00

(Fish consumption decline: hypotheses.)
GC Matchaya, PhD

This note is in response to the article ‘Fish consumption drops’ that appeared in the nation paper of Friday, 18 June 2010 published online at http://www.mwnation.com/index.php?option=com_content&view=article&id=1206:fish-consumption-drops&catid=66:business-news&Itemid=64
The said article is interesting and tackles an issue of importance for health and general societal welfare. The annual fish catch figures it presents are enlightening and helps readers to understand the fish availability problem in Malawi in a proper context.
Nevertheless the article seems to present otherwise simple facts in a manner that may get the readers confused. Firstly the characters mentioned in the article seem to insinuate that the decline in fish per capita consumption is due to general disinterest in fish consumption by consumers, so that there should be policies that seek to encourage fish consumption as perhaps in fish importance awareness! This may not really be correct because the reasons behind per capita fish consumption decline most likely include
1. The increase in population at a rate higher than the rate of fish production means that per capita values will go down. This should hold regardless of how the population structure has changed because we know for one thing that population of fish eaters must also have increased.
2. The rate at which fish production has grown is likely very low, either because fish harvesting and rearing technologies have not progressed fast enough or perhaps because the regeneration rate has gone down over time perhaps due to unsustainable harvesting.
In fact the article only gives one data point for the nationwide fish quantity. For the picture to be clear there was need to give data points for past production. These would show whether production levels have been constant, increasing or decreasing over time This would in turn show us whether the declining consumption was due to disinterest or the reasons above, allowing for population growth too.
In short I agree that per capita fish consumption has dwindled over time but not due to consumer apathy, but due to a differential between the rate of population growth and the rate of fish production, of which the latter may be related to general fish scarcity resulting from unsustainable fish harvesting. It is also possible that the differential might result solely from the rate of technological progress in fish farming and harvesting being surpassed by the rate of population growth.
The policies that should be touted relate to unsustainable fish harvesting, introduction/enhancement of inland fishing, control of population growth, diversification of the sources of protein. Encouraging fish intake is always important, but is unrelated to the present issue discussed in the nation article.

Cheers

Grandpa

2010-06-15T15:18:00.001-07:00

http://www.youtube.com/watch?v=lCuErm9RqSY

"I still worry and stress about what I had with you
I still feel the pain as it is ceaseless
since my heart is mute, the burden is on me
eyes get shy but heart still feels and stays
your only courage (oh my love)
I have done everything I can, but you still mad"
Blandine, prittynae2008

tribal groupings, politics and development in Malawi

2010-05-18T04:26:00.000-07:00

what is the role of tribal groupings in Malawi's present and future politics?
what is the potential role of such groupings on development?

dedicated to childhood friends

2010-04-18T15:47:00.000-07:00

This is a song by Noel Ngiama
http://www.youtube.com/watch?v=5D5kq-BqeYE

while this is by Rochereau and sung by Mbilia Bel
http://www.youtube.com/watch?v=5D5kq-BqeYE

friendship

2010-04-07T04:55:00.001-07:00

As they say friends aren't jumper cables, you don't throw them into the trunk and pull them out for emergencies. True friendship should be perpendicular to achievements in areas of power, wealth, education or religion. It must show up regardless of conditions, it must edure misfortune, it must conqure distance, and must pass a test of time, otherwise, it is fake, or thinly veiled opportunism!

On Choosing a Chief Executive for ESCOM

2010-04-05T04:15:00.000-07:00

Greenwell C. Matchaya

A slightly modified version appeared in the Nation news paper’s Business section on Thursday 04/03/2010

I am pretty sure that for most government theorists, executive search agencies, management consultants and those of us with some advanced level of management theory it is platitudinous that the quest for any company’s CEO is probably the single most important decision that a Board of Directors has to periodically make. The decision of a CEO is very critical to the immediate and inter-temporal health and productivity of any organization. CEOs can, and do, make or break organizational fabrics and integrity conditional on their style of leadership, foresight and dynamism. It is hence so obvious that boards ought to usher themselves into robust search for the right candidates for the job while bearing in mind the larger goals of the organisation.
The recent media debate on the choice of the CEO for the troubled ESCOM, partly tackled by MIE staff (referring to The Nation publication of the 24/02/10) and Dr Thomas Munthali is enthusing and in my view it opens an opportunity for a flow of ideas on what board members have to seriously consider when determining who should be at the helm of larger and important organisations such as ESCOM. The purpose of this article is not to take any sides in the debate, but to contribute my pound worth of points that board members may need to consider once challenged with the difficult task of anointing a CEO.
Board members have to be aware that competency constitutes a complex matrix of values, attitudes, personality traits, knowledge and skills as well as inherent foresight. It is a complex combination of factors some of which (for example, values) are slow and hard to change, while others such as skills can be acquired once someone is already in the leadership position. The implication of this is that, although competencies can, and do grow over time, any well meaning Board of Directors is wise to assess the competencies of a candidate from different angles, robustly. This implies that the mere fact that a candidate is a well-trained engineer or economist may not always be enough. Although ESCOM is charged with power generation and distribution, which on the face of it suggest the need for engineering expertise, this should not necessary apply to the top most man/woman on the job. In general ESCOM’s Board Members ought to consider a number of competencies in their quest for a CEO and must look beyond the engineering profession alone and indeed should consider those with organisational, business and managerial acumen too.
At the very least, the CEO needs be someone who is accountability oriented, and should hence welcome the opportunity to evaluate his own work relationships and performance, and that of others. He/she has to be that person who would remain optimistic and not pessimistic when issues are unresolved and is able to take measured risks even when the outcomes are uncertain. While clarity and attentiveness are also important for him/her to effectively communicate decisions, there also has to be some marked tangency between the values and vision of the CEO and those of the organisation he/she leads. Although one would argue that a CEO’s attachment to an organisation should be correlated with their profession, such correlations may not per se obtain in practice.
Furthermore, the demands imposed by the position imply that CEOs need to be endowed with some advanced level of conceptual thinking to be able to make connections between seemingly separate relationships, trends, issues and patterns as an input into mental frameworks that aid their understanding and interpretation of issues and information. Not only should they also need to have concern for excellence, delegation, effective judgement, empathy, objectivity, open-mindedness, progressiveness, staff fulfilment and personal integrity, they need to be process oriented and should be those who have the capacity to actively and fairly work towards resolution of firm level conflicts.
Again, CEOs with a know-it all attitude with little latitude for being directed or advised, often plunge organisations into low moments and hence it is important that CEOs be people who know their inner-resources such as gifts, character, personality et cetera, well enough to provide room for consultation and advice. They need to be productive themselves and should also know what constitutes firm-level productivity and how such productivity reflects in the welfare functions of the people their firm serves. Although self-esteem is important it needs to be measured as arrogant CEOs have little chance of taking their organisations to greater heights.
So, it seems to me and it should to some of you, that corporate leadership needs not necessarily depend on technical competence in the product being produced by the firm concerned, but it ought to depend on a good combination of factors that are both person specific as well as learned. To the extent that economics PhDs empower students with a worth of related competencies, managerial skills and discipline, and to the extent that MBA programmes from accredited and great institutions do offer their disciples a range of skills discussed herein too, there is absolutely no reason why it should be stated with confidence that an MBA or PhD economics candidate should fail to deliver in an energy, water or let alone a financial firm. Economists are trained to be versatile and the skills they acquire can, and do often get applied across the board. So, while it might show lack of sanity for any board to appoint a Central Bank boss without any Economics knowledge, it shouldn’t be insane to appoint a non-engineer to head ESCOM. Having said this, it has also not escaped my notice that, well-trained engineers with the said abilities could make great CEOs too. Ultimately, the board should further look at the past and present performance of ESCOM, associate it with the cadre of the bosses that have headed it, and make judgements in the context of resources and operating environment that characterised their respective tenures.
It must be acknowledge though that there are many other factors that may explain ESCOM’s lamentable performance, apart from the cadre of a CEO, such as financing, management structure and style, ownership structure/regimes, competition, macroeconomic factors including political will, and a few others, and these must be explored if ESCOM is to turn into a reliable generator and supplier of electricity.

***Send any feedback to matchayag@yahoo.co.uk

tip

2010-03-21T11:12:00.000-07:00

The pursuit of wealth and that of education aren't necessarily complementary. You can either become a billionnaire, but without too much formal education or you may become a professor but without the tambalas. It's all to do with how we invest our time.....sad reality, isn't it?

The implication though is not that we should not endeavour to achieve excellence in academia, or in business, but that we should realise that we need to search for an optimal combination of the two given the scarce resource of time.

the rules

2010-01-25T09:56:00.000-08:00

1. If you don't believe in yourself, no one will
2. Keep your value or get a paid job
3. Thrive to exist between the extreme of greed and stupid altruism
4. 'closing deals' is very different from having a 1000 leads
5. set the price as high as you possibly can at the pre-existing market conditions.

Mpira Africa Cup of Nations. Will Malawi qualify for the second round?

2010-01-14T15:38:00.000-08:00

lets see the olds by clicking in this below

cheers

Selection to secondary schools: More questions than answers

2010-01-07T13:07:00.000-08:00

Question: is it possible to get the names of students and primary schools they attended to put these results in perspective as this is the only way we could know whether the percentages presented to all of us mean something?

any comments are welcome.

MCP changing; Good or bad?

2009-12-31T11:16:00.000-08:00

I have just heard that JZU and many of his critics have agreed to reconcile and this will be followed by JZU's announcement of his retirement. This will then be followed by a convention where the MCP will elect its members in a manner that will not only make the MCP a strong party once again, but a trully reformed party for the nation too. It sounded too good to be true, but they say it is true. Is this good for you or for the nation?

realities seem too different from what we desire

2009-12-26T04:31:00.000-08:00

Realities seem too different from what we desire and this forms the real genesis for frustration. We r often too frustrated and at times, we even start considering the bibilical story of Job. Should one be happy to be a Job of today? What real incentive can one have to rejoice when he feels that he is Jobised?

What really an explain the myth of success?

nuclear energy option in Nyasaland

2009-11-29T10:28:00.000-08:00

What are the pros and cons of nuclear energy for Nyasaland? Is it an option in the medium to LR, especially considering its landlocked nature and the drying rivers (hence dwindling reliability of hydro-energy)? Despite being a peaceful nation, it's trivial to note that Nyasaland's erratic energy sources puts a bar on serious investors. Could nuclear energy be i(u)nfeasible or harmful?

Corruption rates: Malawi versus Zambia

2009-11-17T06:28:00.000-08:00

Transparency International has released the 2009 Corruption Perception Index (CPI) and Malawi seems to be doing fine relative to last year's scores. See http://www.transparency.org/policy_research/surveys_indices/cpi/2004

The trend in CPI ranking and the scores for Malawi are graphed below, by year
Cheers

The bottom line is that we are not too bad, are we?

Mayimbidwe a ku Africa

2009-11-15T14:43:00.000-08:00

http://www.youtube.com/watch?v=0ThIfnemg4g

Interesting Twists and Turns in Nyasalande since the May 2009 elections

2009-10-31T06:19:00.000-07:00

The 19 May 2009 arrives, Malawians vote for leaders of their choice. The outcomes are such that 67 % choose Bingu wa Mutharika, 32 % choose John Tembo and one percent chose to vote for the others. Conspicuous in the vote pattern are the following facts
-the Southern voters generally vote massively for the southerner Bingu wa Mutharika although the Machinga and Mangochi districts choose MCP markedly, for the first time since the dawn of democracy.
-the central region splits the vote between Bingu and Tembo –the first time that the central region has markedly backed a non-central candidate since the birth of democracy
- The northern region votes wholly for Bingu wa Mutharika and does so more than any other region, in per cent terms. Ultimately, the South gives Bingu 48 % of his vote, the centre gives him 32 % of his vote, while the north gives him 20 % of his vote. He has won, the opposition is defeated , this time massively.
Bingu is sworn in and organises a tour to thank voters. He calls people to be united and reminds northerners to be for Malawi first.
A come back bid is straged by young leaders in MCP but is weakened in its tracks by the death of the leader (Chafukira).
The president later comes on Tv to remind Malawians that his bro can be anything he wants in Malawi, hence fuelling speculations of a Peter succession in 2014,
Makes clear his stand on quota system and tells the nation that exams-based selection was not perfect and advantages one group of pple. Attends the Lomwe function and warns critics of any opposition to such.
Harry Mkandawire lashes out at the president in the media accusing him of hating northerners and punishing them with the quota system, and he is fired from DPP within the next few days. He later urges his tribesmen to form their own forum to protect his region.
Soon after, the one time powerful man, loved by his bros and sisters, Goodall Gondwe reveals his sympathy for equity in Malawi's edication system and is quickly branded a mercernary and traitor, ...taking it after his late father who never wanted colonialism to go..., by his own people-the very same people.
What will be next?
Can news papers in Malawi chart the turn of events in their online and paper based news papers so we can read. Mine here is a primer and is far from even ¼ perfect!! Its intended to stimulate such analyses.

About being humble

2009-10-03T07:38:00.000-07:00

To be humble to superiors is duty, to equals courtesy, to inferiors nobleness.

Benjamin Franklin

About Faith

2009-09-07T13:00:00.000-07:00

Ask not, what God can do for you, but ask what you can do for God

The Stuff that makes a Great Economist

2009-08-23T05:34:00.000-07:00

The master economist must possess a rare combination of gifts. He must reach a high standard in several directions and must combine talents not often found together. He must be a mathematician, a historian, a statesman and a philosopher in some degree. He must study the present in light of the past for the purpose of the future. J. M Keynes

JZU Promises to Pave way for New blood: Honour him

2009-07-07T13:36:00.000-07:00

I am very happy to learn that Hon JZU has deemed it wise to pave way for new blood in 2014. There is no sin that is never cleansed, and if we thought he was going to cling to power and leave a divided MCP, and hence a politically insecure Malawi, we were wrong. He has once again proved that he is a changed man, who, even though led the MCP to a massive defeat by the ruling DPP, realises that the nation must come first in his decisions. A democratic system with a weak opposition, lacks the much needed checks and balances, constructive criticism of government undertakings, and is as good as ‘dynamically dead’. Hon JZU’s decision on this issue is wise and is in line with democracy consolidation and equitable distribution of opportunities, development and many other things in the country. He deserves honour! Viva democracy. Viva Malawi.

Decision Decisions

2009-06-30T07:52:00.000-07:00

'There is a time in every man's education when he arrives at the conviction ....that he must take himself for better for worse as his portion; that though the wide universe is full of good, no kernel of nourishing corn can come to him but through his toil bestowed on that plot of ground which is given to him to till', Ralph Waldo Emerson, 1841

Remembering Michael Jackson

2009-06-26T08:06:00.001-07:00

He was a marvel of nature, a God's gift to the world and indeed a King of pop. For me, Michael Jackson goes into history as the greatest pop star of all time. He brought to this world, talent, originality, and his success in his heydays, brought to question, the notion that people of his colour and/or social status at the time were only hewers of wood and drawers of water, with neither talent nor inherent ability to propel themselves into careers worth discussing!

May his soul rest in eternal peace

Mfumusaka (GC Matchaya)

Global financial meltdown and Malawi’s economy

2009-06-24T03:47:00.000-07:00

December 09, 2008 04:55 AM (as it appeared on nyasatimes)
By Greenwell Matchaya

Just like any other individual in the global economy, I crave to understand the meaning of the financial turmoil hitting the developed countries, for the developing world including Malawi. In this post I will say something briefly about it. To do this, I will make some assumptions about the predominantly Western economic downturn in the short, medium and long term.

As a point of departure, let's assume that the downturn will
continue to trouble Western countries for sometime considering that part of its life span is hidden in whether consumers will soon regain confidence in the financial markets or not, then one would argue that for countries like Malawi, the short-run is less troubling because Malawi does not have a vibrant financial market and the Malawian economy is only indirectly and perhaps remotely related to it.

Malawi's economy is also not driven by the housing market, whose collapse has led to the collapse of banking sector, many financial institutions before cascading into the real economies of the developed countries, so on impact (short-run) there is not much that Malawi may lose.

In the medium term, the impact on Malawi's economy depends on what Malawi does to withstand the impact. In case Malawi remains less innovative in its taxation and government expenditure is not revised, the crisis could hit us through international aid.

While some officials from multilateral institutions could be quick to argue that they would do everything to protect the poor (e.g. WB, IMF) implying that they would continue to finance developing countries' budgets, their financial clout depends directly on the clout of their donors most of whom are on sickbeds following the crisis.

The United States for example has lost 10s of hundreds of thousands of jobs as a result of the crisis. Financial bailout of major banks is underway albeit with problems some of which need further billions of dollars to be sorted.

Given that the USA and the developed world are the major financiers of the W. Bank and many other institutions with activities in developing countries, even the most optimistic analyst with some insights should be able to embrace the postulate that, unless the Western economies resurrect quickly, willingness to finance the World Bank and other development institutions, and hence the developing country programmes will wither.

Depending on the extent to which this happens, the effects on developing countries could be big, small or ignorable. The case becomes nontrivial if you consider that the UK, whose economy and currency has been the marvel of Europe and the world has recently cut its own jobs, tried to bail out its own banks and has cut interest rates from 5 % to an astounding 2 % to stimulate the economy, something that has never happened since decades ago.

Again, think about this, if Iceland was a largest financier of Malawi's programmes, it would be anyone's guess what shape our economy would have assumed already given what happened to their economy recently. So, money from multilateral institutions and/or bilateral donors may become sticky. We might also feel the hit through financial saving changes (e.g. parsimonious recruitment procedures, remuneration structures etc) in the NGOs and many donor funded programs.

The other means through which Malawi could feel the heat is through international trade given that some of Malawi's trading partners are Western. Assuming that the meltdown continues, then those who consume our exports will revise their choice baskets given that they have less purchasing power than before.

They might also want to try import-substitution strategies for their economies. Depending on whether their actions could affect pricing of our commodities, Malawi may in future start experiencing low terms of trade (assuming it can still produce for export).

Moreover the financial crisis seems to have invited nationalist ideas and protectionism. Depending on how much other nations think they should protect their markets, we could see an increase in import tariffs or unfavourable import quotas in those other nations. Whatever happens, it could be argued that developing nations may become worse off in that regard.

The same medium term could also see remittances to developing countries from overseas being reduced as the economies that employ our friends plummet.

Again, it should be easy to argue that as financial markets get hit overseas, foreign direct investments in countries like Malawi could decrease in diversity and value.

One can read that from Obama's speeches when he consistently argues that …. 'We need to protect our industries and jobs, we need to bring back all those jobs from China and other countries and have those machines manufactured on USA soil employing USA labour force!'

Even though John Maynard Keynes would argue that in the long-run we are all dead, I will divert from his postulate and argue that for those that will embrace the long run, the impact of this crisis is likely going to shrink and finally vanish not only because nothing lives forever, but because in a world of technological change, it should be possible to see solutions to the crisis being hatched gradually.

So even if Malawi became a rich nation with a vibrant housing market in the longer run, Malawi may not necessarily have to worry about this same problem because there will be a starting point!

The discussion so assumes that developing countries will suffer some consequences of the financial meltdown, however, let me leave pundits with some food for thought in form of counteractive questions: Is it possible from a political economy perspective, that the financial meltdown in the West coupled with the fact that developing countries may not be badly affected (on impact), may in fact be the turning point in history such that the future might as well see today's wealth ranking inverted (though not perfectly so)?

By that I mean could the crisis present an opportunity for developing countries to reorganise and develop their economies, so long the leaders of those economies have brains and the will to play it to their advantage? As natural resource producers, and relatively less poor than before the crisis, they would help set the economic development torn. All what is needed are the brains, acumen, will and regional integration. What do you think about this seemingly counterintuitive idea? Do you think it is an opportunity or a misfortune?

Some of the things that Malawi could do to lessen any future impacts are: the Malawi Revenue authority would need to scramble to broaden its tax base among other things to prepare for any future shortfalls in donor assistance. There is also need to control government expenditure and reduce any monetary expansion growth strategies because any inflationary repercussion that could result from such strategies could be hard to handle in the absence of substantial foreign assistance.

The country needs to strengthen its trade with local trading partners who have not been hit by the crisis and where transportation costs are low. However, it must be known that trade with surviving economies of the West is still important as most of our neighbours may not even need a good number of our products e.g., Uranium, Coal etc.

There is also a need to diversify the economy and attempt to export different kinds of items to ensure some amount of foreign exchange even when some exports completely lose international demand. The technocrats should also critically study the decisive actions that are being taken by Western nations to salvage their banks in case Malawi may have to do the same one day.

Obviously this is a diverse field and this post has just covered some broad outlines of the salient issues. Pundits in Malawi and elsewhere are welcome to comment anyhow even through the emails below. It would be helpful

Malawi’s New Cabinet: What others Say

2009-06-17T18:19:00.000-07:00

GC Matchaya
One month after the Malawian people from all parts of the country gave the DPP a mammoth vote in the presidential and parliamentary elections, the DPP top brass has now released this year’s names of men and women who will head ministries as the president endeavours to forge ahead with development goals for the nation. The just-gone elections were unique and memorable with regard to the voting pattern that ensued and the absence of serious voting irregularities as such, people had unique expectations regarding the composition of the cabinet that was to follow.

The cabinet has many new faces and some old faces have lost their posts which is normal. At present we do not have the CVs of the appointed ministers and we will postpone any serious and specific comments about expected performance of individual ministers to a later time. The cross-regional or district distribution of the ministers which people are implicitly or explicitly alluding to in their deliberations on issues on discussion forums such as Malawitalk, nyasatimes, nyasanet, Malawiana and many others, is also hard to pin down and we will only try to talk about it inconclusively.

The expected performance of our new ministers is hard to predict because, since some of them are new, one would need to gather their CVs and evaluate them in light of the work ahead of them and the environment they will need to operate. We are unable to do this soon, but we bet, others will do, so stay tuned!

On the other hand, the cross-regional distribution of our ministers may not be a very important issue to pursue since it really does not matter where a minister comes from as long as they perform for the nation as a whole. Nevertheless, reading all the aforementioned discussion groups, one is bound to conclude that people are interested more in knowing where ministers hail from in terms of regions than the number of degrees that a minister has. Is it useful? I do not know, but one poignant criticism of the supposedly would-be JZU’s cabinet which circulated on the said forums was that it was going to be more of a Central and North cabinet hence leaving those in the South in the cold. Has the mighty DPP done it any differently?

Unfortunately evaluating the DPP’s cabinet in terms of spatial diversity requires that one knows the origins of those appointed, which, in the absence of their passports or any other aids, you would agree, is next to impossible to achieve. In these cases people on the forums seem to have come up with a convention/rule of thumb where names are used to proxy regions. With respect to the Cabinet at hand, I must admit that such a rule of thumb is in some ways confusing and impotent and risks yielding false results. For instance, it is tough to tell some Central region names from those of the South, which has a potential of yielding imprecise results.

All the same, as economists often argue ‘it may be better to proxy’ things than to do nothing’. Following such rules of thumb, and making use of some information from those who claim to have inside information and other sources the following are the results:
Considering the cabinet to have 40 positions (upon excluding posts held by the president and his vice), the following table shows the regional proportions:

Table 1: Distribution of ministers across Malawi’s three regions

Region , Number, Percent

south ,19 ,48

centre ,11 ,27

north ,10 ,25

Total ,40 ,100

The data in table 1 do show that the DPP’s 2009 cabinet has about 40 ministers and out of these, 19 hail from the South, 10 from the North and 11 from the Centre. In other words, a ratio of roughly 48:27:25 (South: Central: North). There is a possibility that these figures may change slightly because among the ministers, there are about one or two names which we, as well as our sources, were not sure as to whether they were Southern, Northern or Central region names. Some sources also argued that our reliance on constituencies could sometimes be misleading as anyone can potentially become an MP in any constituency.

We are also yet to know the real rationale behind the size of the cabinet. The cabinet seems a bit larger than expected and, while this might not necessarily be a bad idea given the multiplicity of goals that the government has this term, it would be useful if the public was made aware if this was the reason for this year’s cabinet size. Others have also questioned Goodall Gondwe’s replacement by Ken Kandodo’s at the Finance ministry and some have gone further to question whether Ken is the kind of brains we need as we forge ahead with development efforts. I think people should ask the right question i.e. whether Ken is indeed the best out there for the job. For instance couldn’t Professor Chikaonda be a better choice? I of course cannot question the rationale for moving Gooodall from the Finance ministry because that will be similar to questioning the rationale for choosing a new cabinet! It would be similar to asking the president why he did not include the fallen MCP, UDF, DPP and more other men and women who supported him massively during the campaigns. For example the Ken Lipengas, the Katsongas, the Phoyas, the Kalebes, kumtsaira who allegedly took matters further to accuse his former boss JZU of witchcraft, the Dausi’s etc, are also not in the new cabinet.

I think that Goodall is a very capable man and together with Bingu and many others, have achieved many great things for the country. Goodall set a high standard at the ministry of Finance and Ken and his men should realise that, while it would be unreasonable to expect them to do wonders immediately, Kandodo and his team need to endeavour to meet people's expectations about how the ministery of Finance should perform. For Goodall, time has come that the same spirit that led to his success at the ministry of Finance, should characterise his work at the local government ministry, which is, as many have argued, an equally important post needing a dynamic individual of Goodall's calibre. I wouldn't encourage the president to bow down to a few people's demands that he reshuffles the cabinet before it is given some chance to perform as that would surely give a very wrong impression to many stakeholders and would cast the government as suddenly disorganised, dishonest and naive for not painstakingly selecting its cabinet in the first place. If there are any serious observable weaknesses in the new cabinet, those responsible should find means of fixing them in a manner that upholds the government's credibility.

Ultimately, we need to pull up our socks and start helping these ministers to deliver, and the sooner, the better. As a new guy at the Finance ministry, Ken will surely have some difficulties in the short term, but we should not count the ministry dead because of him. I am hopeful that with consultations, humility and determination, Kandodo will deliver, after all, very few of the past ministers were a priori expected to deliver before they actually delivered!

So, I am certain that the new cabinet, coupled with the visionary leadership of Dr Bingu wa Mutharika, will deliver on the issues of interest to the Malawian people. It would be inappropriate of us to think of frustrating some ministers simply because we think our sister, uncle, brother or father deserved the post more. Remember we are in Malawi and here ministerial posts are assigned by the president and no one should try to cling or feel that he/she must be a minister by all means. It has been this way since independence!

One Malawi, one Vision! Here is a glimpse of the vision http://www.ra.org.mw/rp-ongoing.html
The battle for 2014 elections has begun!
Thanks for reading and stay tuned!

Bingu Names cabinet

2009-06-17T06:04:00.000-07:00

GC Matchaya
we will comment on it later, but it seems promisory to me!
Size PORTFOLIO June 15, 2009
1. President Dr. Bingu wa Mutharika
1. Vice President Joyce Banda (Mrs)
1. Agriculture and Food Security Dr. Bingu wa Mutharika
1. Agriculture and Food Security(Deputy) Magret Roka-Mauwa(Ms.)
1. Finance Mr. Ken Kandodo
1. Finance(Deputy) Mr. Fraser Nkhoma Nihora
1. Foreign Affairs Dr. Eta Elizabeth Banda
1. Foreign Affairs (Deputy) Augustine Mtendere
1. Education Dr George Chaponda
1. Higher education, Science and Technology (Deputy) Otilia Moyo-Jere (Ms)
1. Primary Education (Deputy) Victor Sajeni
1. Development Planning and Cooperation Abi Marambika Shawa
1. Development Planning and Cooperation (Deputy) Daniel Siwimbi
1. Transport and Works Khumbo Kachali
1. Transport and Works (Deputy) Lazaro Kasaila
1. Justice Dr. Peter Mutharika
1. Irrigation Ritchie Bizwick Muyewa
1. Irrigation (Deputy) Gringer Musolira Banda
1. Local Government Goodall Gondwe
1. Local Government (Deputy) MacJones Mandala Shawa
1. Industry and Trade Eunice Kazembe (Ms)
1. Industry and Trade (Deputy) Steven Stanford Kamwendo
1. Lands and Housing and Urban development Dr. Peter Mwanza
1. Lands and Housing (Deputy) Tarsiziu Tony Gowelo
1. Gender, Children and Community Development Patricia Kaliati (Ms)
1. Gender, Children and Community Development (Deputy) Catherine Gotani Hara (Ms)
1. Tourism, Wildife Anna Kachikho (Ms)
1. Tourism (Deputy) Shadreck Jonasi
1. Labour Yunus Mussa
1. Labour (Deputy) John Bande
1. Health Moses Chirambo
1. Health (Deputy) Teresa Mwale (Ms)
1. Youth and Sports Dr Lucius Kanyumba
1. Youth (Deputy) Billy Kaunda
1. Home Affairs Aaron Sangala
1. Home Affairs (Deputy) Annie Lemani (Ms)
1. National Defence Sidik Mia
1. Information and Civil Education Lenford Mwanza
1. Information and Civil Education (Deputy) Kingsley Namakwa
1. Natural Resources and Energy Grey Malunga
1. Natural Resources and Energy (Deputy) Ephraim Chiume
1. Disabilities and Aged Bessie Reen Kachere (Ms)
1. Disabilities and Aged (Deputy) Felton Mulli

Thoughts on Kwacha’s over-valuation

2009-06-12T06:30:00.000-07:00

GC Matchaya

I may not claim to have a lasting answer to this question however given the silence I will try to give my sketch of ideas on this as follows. The concerns about the Mw Kwacha being held at some fixed but high level surely spring from many angles but possibly the most useful one for most of us is the effect of such an exchange rate regime on the Malawi’s national accounts analysed in the context of a nation that has more on its table (projects etc requiring increased government spending) to deliver.

As appoint of departure therefore it might be important to recap the basic major components of the two major accounts that may be impacted by the exchange rate regime more directly and these are the current account here proxied by the trade balance (value of exports-value of imports) and the capital account proxied by the value of capital inflows into Malawi minus the value of capital outflows to other countries. Now remember again that under a market determined exchange rate, the sum of the capital account and that of the current account should be zero and remember that these accounts move in different direction such that if one is positive, the other should be negative. Further remember that under a fixed exchange rate, the condition above does not hold anymore but rather, the sum of the current account and the capital account need to equal a change in national reserves.

Chabwino, suppose the price of Mw kwacha in terms of US dollar or other currencies has risen over some period i.e. the kwacha has strengthened against the dollar or other currencies, or is deliberately held at a higher value than its real market value, then it is important to bear in mind the following:

Firstly, the volume of Mw exports may go down because, if our exporters maintain their prices in Mw kwacha terms, then the price in US dollar or other currencies rises, which could be expected to reduce demand for our exports such that the volume of exports falls. Even if our exporters cut Mw kwacha price to maintain US dollar or other currencies’ price (to remain competitive) the demand may then not be affected, but exporting could become less profitable, and exporters may reduce supply, so the volume of Malawi’s exports would still fall. But to calculate the impact on the balance of trade, we are typically interested in the VALUE and not just exports (i.e. price times volume is our interest). It turns out that we cannot predetermine the impact of this on value because the value of Mw exports depends partly on the extent to which exports go down in volume. For example, if the Mw kwacha price is unchanged, then the US dollar or other currency price rises, volume falls, then value of exports (revenue from exports) may rise or fall depending on how far volume falls (hence depends on elasticity of demand i.e. the extent to which exports change given a change in prices).

Secondly, the price of Mw imports would go down because if the other currencies price of imports remains unchanged, then the kwacha price would fall though it depends on the pricing policy of firms importing into Malawi. The volume of Malawi’s imports would go up because if the kwacha price falls then imports could be expected to increase from the basic consumer theory; well assuming all through that we are dealing with goods that are normal. Nonetheless, here again, the value of imports in the wake of the fall in price of imports and an increase in volume of imports depend on the extent to which the price falls and to which the imports increase. This is an issue dependent on the price elasticity of Malawi’s imports.

Given this simple analysis, it may already have become clear that the current account proxied by the trade balance would change in a manner that we cannot know in the absence of further information on the elasticities of exports and imports. The current account depends on the values of exports and imports which, as we just argued have an indeterminate change. Since I also stated a priori that the two accounts (capital and current) related negatively, we know that the change in the Capital account will depend on the change on the current account and hence we cannot tell what will happen to it before hand. The information we need to finally resoulve the question of the impact of an over-valuation on the balance of payments is about the elasticities. As a general approximation, a depreciation of the currency, would improve the trade balance and hence the current account of the sum of the easticieties in question exceeded one (they call this the Marshall-Lerner condition).

The other impact of the over-valued currency is somewhat positive and is on prices (general price level or inflation). The general price level in Malawi may go down because the change in import prices in Mw kwacha terms would either be zero or negative. If import prices in Mw kwacha fall, domestic firms are likely to have to follow suit and reduce their prices to remain competitive. Thus there could be a possible knock-on effect on prices charged by domestic firms and on remuneration (?), reducing the general price level in Bingu’s economy. Whether this is generally good, depends on how many jobs are lost as result of not being able to earn more revenue from trade etc (recap the negative relationship that sometimes ensues between inflation and unemployment-the short-run Phillips curve).

Earlier I mentioned issues on the government’s agenda and I flagged projects for development that need government spending to execute. I have all along and throughout chosen not to talk of aid and donations as possible moderators in the BOP equations. I will continue to do the same below as I make an assumption of increasing expenditure. So, suppose the DPP government, in the bid to fulfil its promises on development, and in the wake limited external assistance, continued to spend more under a fixed exchange rate, one can assume that national income and output go up, but then provided that the Marshall Lerner condition holds, the balance of trade goes down because as income rises, immediately the demand for imports rises so the balance of trade deteriorates (in the short run).

The capital account will then need to go up because the current account would worsen due to the deterioration of the balance of trade. Of course the immediate effect of a worsening current account could be a fall in reserves, but as we know possibly, there is limit to how far reserves can be run down, therefore at some point the capital account would have to increase to balance out the fall in the current account. The capital account, if it may improve, short term interest rates would need to go up because an increase in capital inflows must be encouraged. Increasing domestic interest rates to encourage the purchase of financial assets and attract more foreign investment would be desirable, though this is not solid to lean on given that our financial markets are in the egg and that FDI flows in like milk from an ailing cow!!

In other words, given an overvalued exchange rate, and the need to increase government expenditure to meet development needs of the people, one can expect increasing current account deficits, which leads to some combination of declining reserves, increased capital account inflows and higher interest rates. The decline in reserves is limited by the stock of reserves available. The increase in capital account inflows can be sustained provided foreigners are prepared to lend. However, continued borrowing from anywhere increases outstanding stock of debt and of interest payments to overseas, which may not be desirable in the long run as essentially we would be strangling future generations with ngongole.

In Practice

Following the discussion above and the assumptions made, one can note the following crucial issues: whether the over –valued kwacha would indeed lead to a deterioration of the Current account depends on the elasticities of imports and exports. So, are the elasticities of agro-products such as tobacco, coffee, tea, sugar, uranium very high such that an increase in prices will lead to a massive drop in our exports (?), may be NO, in which case it’s possible that over valuation may not even negatively affect the trade balance. Even if it did, could such a small deterioration be of real importance to the fiscal stance of the nation? Maybe No, unless the effect is so much so that donor aid is not enough to compensate for the negative change in the trade balance (at present Malawi enjoys more donor aid due to prudent macro-economic management by the incumbent government). Of course an over-valuation could be deflationary, which is advantageous as well. There are basically several other issues to consider, let us stop here for now, but stay tuned!

Eh tu

Bingu and DPP‘s Mind-Blowing Victory: Understanding the Results and the Sources of his Power

2009-05-24T09:08:00.000-07:00

The Republic of Malawi held its fourth Presidential and Parliamentary elections on the 19th of May, 2009 under the supervision of the Malawi electoral Commission (MEC) chaired by Mrs Anastasia Msosa. This election was of its own kind not only in the manner in which it was conducted (which was characterised by drama as one major presidential contestant-Muluzi got barred from contesting), but also the campaign process, themes and tools as well as the outcome, were by and large quite fascinating. Indeed for those who were found in the middle of their studies, the fun that accompanied this election surely robbed them of their good chunk of precious time. I still vividly remember the despair in the voice of a friend of mine, a student in China, who almost failed to submit his essay on time as he had spent most of his time, listening to Zodiak online radio, to try to acquire a picture of what was going to ensue on the voting day in Malawi. The good news is that he passed, and his party won LoL! Anyway, the purpose of this post is to attempt to delineate Bingu’s win in a bid to help those interested, to understand Bingu’s sources of political strength (besides God of course). This may be important for political purposes among other things, not to mention the fact that voters would be happy to notice that they are noted!

In the first place, the size of Bingu’s victory in the presence of a seemingly powerful opposition alliance is the first I have ever heard of in Africa. Furthermore, the fact that there were no any reported cases of rigging, makes his win even more credible and even more and more wonderful. Bingu’s party, the DPP, won the presidential election with roughly 2,730,630 votes while the MCP/UDF alliance scooped circa 1,270,057, almost 200,000 votes below half of Bingu’s votes. In other words, Bingu’s political capital at the dawn of the 21st of May stood at roughly, 66 % out of the possible 100 %, that is to say, about twice that of MCP/UDF alliance which stood at approximately 30 %. The strong message arising from these figures is that Bingu was voted into power by the entire nation, raising postulates about whether good leadership styles could obliterate the tribal cancer that many of us thought was out to consume our political and everyday lives.

Indeed, even though one could still argue that the few surviving opposition parties do exist in their once-upon-a-time strongholds, serious inroads by DPP are conspicuous, perhaps signalling the beginning of real change. For instance, the people of the central region, home to MCP’s leader, has voted enormously for DPP and for the first time we have witnessed almost the entire Kasungu, Dowa, Ntchisi, Ntcheu and a good part of Mchinji, Salima, Lilongwe and Dedza voting against MCP’s bid to power. Again, despite there being two major parties in the Southern Region, almost all the people (in terms of the districts and/or ethnic backgrounds) of the South have all given Bingu the ok to rule the country.

Going further to look at the national figures, we learn that as far as votes cast are concerned out of the 100 % political muscle/mandate/votes that is given to Bingu, about 46 % were cast by Southerners, 30 % were cast by people at the central region while the remaining 24 % were cast by people of the Northern region. The picture does not change significantly once the number of DPP MPs is used as a proxy for Dr Bingu’s political stamina. This too shows that Bingu has acquired about 46.5 % of his power from the South, 32.5 % of his power has come from the Centre and 21 % of it has come from the Northern region as is shown in the table that follows.

Table 1: MPs won by Parties summarised by Region

north, centr, south, Total,
independent 8, 8, 16, 32,
DPP 24, 37, 53, 114,
MCP 0, 26, 0, 26,
UDF 0, 0, 17, 17,
AFFORD 1, 0, 0, 1,
MAFUNDE 0, 0, 1, 1,
MPP 0, 1, 0, 1,
Total 33, 72, 87, 192,
North, Centr, Sout, Total,
DPPMPs% 21.0, 32.5, 46.5, 100,

At least one of the messages that this conveys to all of us is that Bingu is, just as I have argued earlier on, on my blog (http://www.mfumusaka.blogspot.com/ ), a man loved by almost all, regardless of religion, village of origin, district or region. He is a blessing to all of us and indeed to the nation.

Even at its heyday, UDF was never a powerful party as DPP today. This is not to say that DPP is infallible, rather DPP has risen to strengths that are adorable and I hope, even though it’s difficult to perfectly replicate what Bingu has done, other leaders will seek to understand more about the bonds, bolts and nuts that have led to his political success for the benefit of their own political parties in future, and indeed for the benefit of all of us.

There are many other issues obviously that arise from a comprehensive analysis of the details that are hidden in the figures. This is beyond the scope of this posting. May God bless Bingu wa Mutharika, the visionary Leader of Malawi. May God bless us all. Pano tiyime kaye pompo.

GC Matchaya
http://www.mfumusaka.blogspot.com/

SPENDING THE ACQUIRED POLITICAL CAPITAL

2009-05-21T10:45:00.000-07:00

Once again congratulations our President (Bingu wa Mutharika aka Chitsulo Cha Njanji) for the smart and decisive wins over the combined force of the opposition. The people of Malawi have spoken and, so loudly. They want a man with a vision and a government that is prudent, benevolent and pro-poor. I wish you all the best and God’s blessings as you now start spending the garnered political capital for the good of Malawi. You can now be confident that you are the man of the people, by the people and for the people. You have my thumbs up throughout your term and I am confident that given the support that you will surely enjoy, your demonstrated determination, strong will and God’s blessings, we should be at a different level in five years.

I should also congratulate all the MPs who have made it for the job well done, and again all the others who have not made it on this occasion, for accepting the results.

Of course I should also congratulate the Malawi Electoral Commission and other stakeholders for everything they did to ensure a peaceful election. Gospel Kazako and colleagues at ZBS and Nyasatimes have also done a commendable job of informing the general public in Malawi as well as overseas-they deserve our gratitude. Kutukuka ndi komweku, tayamba.

Greenwell

Bingu’s win: The demise of tribalism in its shell?

2009-05-20T13:22:00.000-07:00

Looking at the performance of Dr Bingu wa Mutharika across the nation in the foregoing elections, it is clear that he is once again a national president and hence a blessing to all of us. He has scored well all the way from the North, Centre and the Southern region. This is very impressive and there is one important message being pushed forward. Malawi is no longer as tribalist as people thought or at least we are now advancing appreciably fast towards that state where credit will often be given where it is due and only a small section of our society will put nepotistic agenda first in their execution of duties.

This is good news for us and the future leaders of our nation. Let’s go on, take advantage of this moment, to continue to change the mentality of our siblings starting from our own homesteads. We will surely get there and, while we are at the bottom of the wealth ranking, given another five years of decisive leadership, economic prudence, vision, peace and acumen we should be climbing up the ladder in a manner that none will ignore.

Bravo Bingu, Bravo DPP, Bravo opposition for accepting, Bravo the people of Malawi.

Greenwell Matchaya (PhD Econ (cand.)

Tidziwane Ndi Olemba Athu

2009-05-20T12:22:00.000-07:00

I do constantly study and question the process of development of nations in light of their social and political fabrics. Development and political economics including law caught my interest long ago when, as a child, my kinsmen and people in our neighbourhood introduced me to the thought that Malawi was relatively poor and under-developed relative to other nations. Frequently, these people bragged and talked about the Republic of South Africa (RSA) as being a marvel of Africa, with advanced infrastructure and social life.

As a young boy, not only did I long to get to RSA to see for myself, I boggled my mind with questions whose answers turned out to be more complex every day I advanced to an older boyhood and every time I tried to delve more into my quest for answers. The dominant questions that characterised my childhood were hence of the following kind; why did our country choose to build fewer and unattractive infrastructure? Why did our leaders, mafumu (chiefs) choose to preside over poor communities? Was it not possible to replicate the RSA dream?

It did not take me long to discover that most of my pals, who were unquestionably brilliant, did not care much about such weird questions. Most of them chose to teach me other important things for which I am greatly thankful. Anyway, as I grew up and advanced in my studies, my interest continued and I set out to attempt to answer those questions. I will not become too prescriptive on this blog, but one thing is now clearer than before and that is development of nations generally hinges on a mix of many different issues at different times.

In terms of education, I am trained up to the Doctoral degree level and my skills have generally been acquired through my primary, secondary and university studies in Africa (Malawi), Europe (Norway and the United Kingdom) and North America (the United States). I also have a BSc, an MSc and an MA in Economics and owing to the broadness of the training I have undertaken, my expertise is in the fields of Econometrics, Development Economics, Microeconomics, and Macroeconomics (International economics, Public Policy), property rights, investment analysis, corporate governance and many others.

As a scholar, I have achieved several honours and without wasting too much time on this, it is worth mentioning that I graduated as the best student among 120 other students at the University of Malawi and won the National Bank Student Achievement award; have won numerous scholarships and presented at different forums in Africa, many countries in Europe, Asia and the United States. I have twice represented Leeds University at doctoral symposia for European and American universities where participants are said to be the gifted few, and indeed this year’s (2009) participants at the University of London (London Business School), mainly came from Harvard, Massachusetts Institute of Technology (MIT), Stanford, Yale, New York University, University of California –Berkeley, University of Chicago, Oxford, Cambridge, London Business School, Warwick, a few others from Asia, Germany, Portugal and France, and of course Leeds University-UK (which I represented). I was one of the only two Africans (the other was Nigerian) who made it to the event.

With respect to Malawi’s development, I should say that just like the incumbent president of Malawi, his government and most of his lieutenants, I am development conscious and I hope that as a nation we will forge ahead with the quick, sustainable and sound development agenda for the nation. The time is now, we need to develop this nation!

This blog will be characterised by briefs and issues about politics, the law and development in general and more often for Malawi in particular.
Enjoy the blog my friends, countrymen and fellow planet men.

Greenwell (Mfumu Saka)

Bingu's Splendid Nationwide Victory

2009-05-19T15:37:00.000-07:00

Tivotera o Bingu omwewo!! (We will vote for the same Bingu). That was a resounding statement coming from my fellow constituents deep in the heart of Lilongwe District, juts 3 days before the elections. At that point, as someone interested in politics and the development of our nation, I found it impossible to stop there but had to inquire more. In my inquiry, I wanted to know why these kinsmen and friends of mine thought it was appropriate to vote for the DPP and Bingu into office again. The outcome of my inquiry was amazing as the answers were straightforward. Below were some of the reasons my kinsmen and childhood friends and others put forward for voting o Bingu en masse.

Firstly, before Bingu came to power, our village was so vulnerable to hunger and starvation, however Bingu’s arrival on the political scene seems to have repelled those and we are now fine as far as food sufficiency is concerned.

Secondly, Bingu’s government is pro-poor in that they have realised what the poor need. As the poor, we need enhanced access to affordable inputs and Bingu’s subsidy program has met this goal to a greater extent.

Thirdly, the DPP-led government’s agricultural policies have improved our earnings. As a matter of fact, while it was almost unthinkable to think of seeing millionaires in our lifetime, it is not unusual to see some at present. Furthermore, we feel encouraged to grow crops because we know we will recoup our investments.

Fourthly, commodity prices in the country are stable and our money buys more than before.

Fifthly, there are many other reasons, but we have also noted that Bingu is a president who seriously wants to develop our nation. Za nkhambakamwa alibe.

At the end of my inquiry, I came with a simple but powerful prediction. O Bingu owina massively, because it seemed his message had gone to the people and he seemed to be the man in touch with the rural masses who matter big time in such elections. All this is indeed not different from what research has pointed to.

What is impressive is that it seems he has support across the board and he is the president sponsored by the whole country and hence, he is a president for all families, villages, and indeed the whole nation.

We wish you Bingu all the best and God’s blessings as you continue to propel Malawi’s economy into success.

Ifeyo Omenewo. O'Matchaya
England