End austerity, policy intrusion

The world is facing collective crises disrupting the business-as-usual approach to State business.

This includes developing nations’ position on global issues versus their survival, sovereignty and popular interests as opposed to superpowers’ ideologies.

The lockdowns to reduce the Covid-19 crisis exemplify how, in the worst-case scenario, every country selfishly safeguards its interests and people.

The media in Malawi has recently reported policy paradoxes backed by western financiers.

Among others, teachers, doctors and nurses trained in heavily subsidised public institutions remain jobless amid understaffed schools and health facilities.

Besides, the government-led internship programme keeps exploiting graduates to avoid employing them.

Meanwhile, public institutions maintain modest wage bills by freezing recruitment, salary increments and promotions.

These are neoliberal policies that emphasise economic liberalisation to facilitate entrepreneurs’ freedoms, free markets, privatisation of State-owned industries, deregulation and globalisation with minimal governments’ role in socio-economic development.

They limit government spending and downsize public service jobs to increase the private sector’s space in the economy.

In the 1980s, the World Bank’s Structural Adjustment Loans pressured Malawi to privatise most public industries.

Similarly, the Poverty Reduction and Growth Facility of the International Monetary Fund (IMF) heralded dramatic cuts in public servants’ salaries and benefits. These conditions remain part of the IMF’s Extended Credit Facility for countries with forex problems, including Malawi.

In return for its grants and loans, IMF decides what makes policy in Malawi.

The approach intended to facilitate sustainable macroeconomic policies for economic growth have not brought the desired benefits.

Malawian women, the country’s largest population, are highly affected since they dominate the lowest-serving jobs in teaching and nursing.

Some of the unemployed go into exile in search of decent income.

This affects the quality of education and health service in the country with high student-teacher  and caregiver-patient ratios.

The freezing of salaries keeps wages way below the cost of living, leaving civil servants struggling to sustain their livelihoods.

Consequently, public servants feel compelled to take part-time jobs and open private businesses. At worst, some women supplement their income with sex work.

Nationwide, many public servants prioritise meetings and workshops to earn allowances, neglecting core services.

Meanwhile, delayed promotions lower deserving workers’ morale, with fewer women in high-ranking positions.

Women also dominate the small-scale business sector, with low access to loans laced with prohibitive conditions, high interest rates and taxes. 

Covid-19, the global financial crisis and steep devaluation of the kwacha have paralysed small-scale businesses, leaving them at the mercy of loan sharks with high-interest rates.

Yet small businesses and farmers in developed countries are heavily subsidised when IMF and its Betton Woods cousins require developing nations to scrape subsidies. This approach does not in any way facilitate economic growth but reinforces poverty.

Political players need to commit to safeguarding autonomy in economic policymaking and securing resources from other partners without the IMF’s approval.

This calls for access to information, transparency, accountability and public consultations in the government’s dealings and negotiations with IMF and other providers of loans and grants.

Malawi’s socio-economic well-being should be governed by political ideologies aligned with the unique Malawian context and realities, not prescriptions from abroad.

Malawi needs a government that defines and defends its policy position in line with the social contract made in the best interest of its people, especially women.

The importance of building critical consciousness and achieving a social welfare State for the benefit and interests of poor Malawians without borrowed agendas needs no emphasis.

Changing the narrative for developing countries will make social welfare States more accountable to their citizenry, a vital step towards liberating developing economies from donors and international lenders.