The high cost of living, weak investor confidence, high unemployment or underemployment levels are some of the key factors that have affected Malawi’s ranking on the latest World Economic Forum (WEF) report.
The report published by WEF titled Inclusive Growth and Development 2017 ranks Malawi on position 77 out of 79 developing economies.
The aim of the report is to determine whether economic gains largely benefited the country’s wealthiest people or whether growth was spread among the larger population.
Inclusive growth is a concept that creates opportunity for all segments of the population and distributes dividends of increased prosperity, both in monetary and non-monetary terms, fairly across society.
The WEF report measures 109 countries for inclusive development, out of which 30 are considered advanced economies while 79 are considered developing economies.
The results are derived by looking at 12 key performance indicators of inclusive development under three pillars, namely growth and development, inclusion and intergenerational equity and sustainability where Malawi ranked 56, 74 and 76, respectively.
Zambia is just above Malawi at 76 while neighbouring Mozambique is below Malawi at 78.
Reads the report: “Over the past several years, a worldwide consensus has emerged on the need for a more inclusive growth and development model. However, this consensus is mainly directional. Many countries have significant unexploited potential to simultaneously increase economic growth and social equity.
“But activating the virtuous circle of inclusive growth more fully will require them to change their approach to structural reform, reimagining it as an ongoing process of continuous improvement within a diverse ecosystem of demand and supply side policies and institutions, the combined effect of which is to diffuse opportunity, income, security and quality of life as part of the growth process.”
According to the report, poor performance of the economies has been blamed for dwindling levels of living standards within an economy, which has negatively affected consumer demand, business performance and investor confidence, weak investment, expanding unemployment or underemployment, stagnant wages and even slower growth.
Malawi’s average annual cost of living has jumped 22 percent from K127 757 in 2015 to K164 263 in 2016 while the urban basic needs basket also show that the cost of living increased in December to K174 069 from K171 069 in November against a minimum wage of K687.30 a day, according to the Centre for Social Concern (CfSC).
Already, workers are demanding a shift from minimum wage to a living wage to counter the effects of a tanking economy.
Malawi Congress of Trade Union (MCTU) president Luther Mambala earlier said while there are many factors that affect workers well-being, those earning a living wage are better able to plan for emergencies and save towards future projects. n