Banda faces crisis of confidence in Malawi

Posted by admin Africa & World Politics Wednesday, January 23rd, 2013

SHE has taken a personal pay cut, promised reforms, resumed aid flows from Western donors and put her predecessor’s private jet up for sale.

Malawi’s President Joyce Banda seems to be making all the right moves to win over the hearts and minds of this impoverished southern African nation’s roughly 14 million people.

With over 65 percent of the population living below the poverty line, 1.4 million children involved in child labour and 74 percent of the country scratching out a living on less than 1.25 dollars a day, Malawi is desperate for change, and Banda has been the face of it for nearly a year.

Riding on a groundswell of popular support, the president came into office in April 2012 after the sudden death of her mercurial predecessor, Bingu wa Mutharika; but that popularity is eroding fast as she implements painful austerity policies to fix a sputtering economy.

The aid-dependent country teetered under the late Mutharika, whose squabbles with international donors led to a freeze in major assistance packages amounting to about 500 million dollars.

The cut in aid, which has traditionally accounted for 40 percent of the country’s budget, coincided with a steady decline in tobacco sales, Malawi’s main export earner, which have gone down by more than 50 percent since 2010.

In an attempt to pull the economy from its slump, Banda embarked on a range of reforms, few of which have found favour with the local population.

Perhaps her biggest gamble has been to cultivate closer ties with international financial institutions like the International Monetary Fund (IMF), whose heavy-handed austerity plans have recently come under fire in countries like Greece, Ireland and Spain.

In fact, experts in the country said that the high-level visit early this month by IMF Chief Christine Lagarde may have done more harm than good for Banda’s waning popularity.

Already the president has capitulated to unpopular reforms demanded by the IMF and other Western donors on whom Malawi is heavily dependent, such as devaluing the currency by 49 percent, increasing petroleum prices three times in her presidency and cutting off subsidies by moving to an automatic fuel price adjustment mechanism.
Via Guardianwp_posts