December 15, 2005

Local NGOs critical of donor/IMF policy directives

A new report by the Malawi Economic Justice Network (MEJN), a civil society organisation, questions the benefits of International Monetary Fund (IMF) and donor policy directives, noting that Malawi's poor remain marginalised. 'The Impact of the Poverty Reduction and Growth Facility on Social Services in Malawi' was compiled with the support of Norwegian Church Aid and commissioned by the African Forum and Network on Debt Development (AFRODAD). According to MEJN, there was a need for the IMF and other donor partners who subscribe to the fiscal position of the Fund to begin considering the Malawi government as an equal partner whose views and models had also to be taken into serious consideration.

Rafiq Hajat, executive director of the Blantyre-based Institute for Policy Interaction, echoed MEJN's concerns by stressing that there were numerous policy adjustments for the past years, as agreed with the donors. The people were now poorer than they had been in the past 12 years. There is massive poverty today because of some of the conditions donors. He added that most of the state-owned enterprises in Malawi had been privatised on the recommendation of donors, "but when you look at the benefits one would ask, 'who has benefited from the privatisation of state companies'?"

IMF resident representative Thomas Baunsgaard noted that he disagreed with the report, but said that the document was still a draft, and views and comments were still being sought by the authors. Government officials did not wish to comment on the report. However, MEJN acting executive director Mavuto Bamusi said his organisation stood by the document.

During an IMF staff visit to Malawi in November as part of its quarterly assessment of the country's economic performance, the Fund said the government's economic policy was on track. In 2001 the IMF and other donors suspended economic aid to Malawi due to corruption, over-expenditure, and poor governance. Aid flows resumed after president Bingu wa Mutharika took office in 2004 and embarked on an anti-corruption drive that donors have praised. In its recommendations the MEJN report urged the Malawi government to free-up resources for social sector spending. "The government and IMF should not subject the poor and the vulnerable ... [to] lack of social protection, through agreement on privatisation of essential services and parastatals that are of strategic social interest to poor people in Malawi," MEJN said. (Rts)

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