Cut the Chaff

Seize the moment, Mr. President!

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The floods disaster is a catastrophe whose effects will be felt long after the rains have stopped and the raging sun again scorches the Lower Shire and other affected areas nationwide.
Yes, the scars of losing loved ones and most of what they owned to natural phenomena will forever be etched on the hearts of many survivors.
At macro level, the economy—which had shown signs of a strong pick-up, has just been dealt another blow, a shock that, if no emergency economic measures are put in place, could sharply dampen growth.
Let’s start with destroyed crops. With roughly half of Malawi hit by floods (15 out of 28 districts), it means that most of the crops have either been washed away—alongside the Farm Input Subsidy Programme fertiliser and seeds—or have been left in a state that it would be difficult to nurse them back into productive plants.
The first round of crop estimates expected shortly should give us a working indication of the scale of the damage, but on balance, things do not look good—it is obvious that crop production this year will be poor with bad consequences.
First, millions will obviously starve on the back of food shortages following expected poor harvests. The price of maize, the staple grain, will jump sharply, causing inflation—a general rise in prices that mostly hit the very poor, who won’t even have enough to eat.
Usually, when maize is in short supply, domestic animals are coping mechanisms that people sell to buy maize.
But with most of the livestock washed away, it means that Malawi will have more asset-poor households. Thus, more people will fall back into the ultra-poor poverty band where they cannot afford much and most likely will have to depend on handouts.
With weakened purchasing power as disposable incomes shrink to near zero levels, consumption spending will be sharply suppressed—hitting businesses hard and, with it, economic growth.
Second, agriculture accounts for more than 30 percent of our gross domestic product (GDP), mostly from crop output. The impact of lost crops on GDP growth and poverty levels is obvious.
Thus, how the nation pulls out of this disaster will depend on how the same nation, with the help of the international community, pulls those in distress out of their current quagmire not just in terms of immediate relief, but also helping them to rebuild their lives.
To do this, we need a massive reconstruction programme that will not just help the individuals affected, but also jolt the country into increased economic activity. The good news is that we do not have to reinvent the wheel.
One of the reasons Karonga quickly moved out of the ashes of the earthquake that devastated the district was the massive social protection programme that the Local Development Fund (LDF)—with funding from the World Bank and counterpart resources from the Malawi Government—and some NGOs injected into the district.
The emergency programme spent heavily on reconstruction of damaged public infrastructure such as schools and roads, with artisans hired mostly from within the district—leaving the money in the beneficiary area.
The programme’s public works component—which transferred cash to tens of thousands of household members that worked on rebuilding initiatives in their areas—was the direct employment that was needed to jolt the local economy.
I know that some folks such as those at the International Monetary Fund (IMF) would be worried about budget deficits; that we still have to stick to austerity. If prudently implemented, deficit spending has huge economic dividends. Just look at the US, which took the path of stimulus spending.
America is recording strong growth and is now heading for full employment thanks to President Barack Obama who seized the moment. But look at the austere Eurozone. It is stunted.
Besides, Malawi does not have to raise these funds alone. In fact, if IMF does not want Lilongwe to run deficits, they should help us to rally international support for our reconstruction programme so that the burden is not ours alone.
This is why, when Mutharika declared a State of National Disaster, most applauded. The thinking was that he would coordinate national efforts not just for immediate relief, but also for a long-term reconstruction programme.
We thought he would be mobilising his public service agencies to huddle and draw a social protection and public investment agenda he can use to knock at the doors of the World Bank, the African Development Bank, the UN—even the Cashgate angered British, Germans and other bilateral donors—to raise both technical and financial resources. There is always an opportunity in a crisis and visionary leaders seize such opportunities to right the wrongs of the past and forge a better future for their people. But you cannot do that if, hours after declaring your country a disaster, you want to travel to Mozambique to wine and dine with neighbours just because they have a new leader.
Then hours later, you change tune and suddenly remember that you have a Foreign Affairs Minister who can represent you there. No, Mr. President, this is not the time for flip-flopping.
It is time to be decisive and seize this moment—it may be your only chance and the only hope for the country!

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