By Jon Herskovitz
LILONGWE (Reuters) – Malawi President Bingu wa Mutharika’s fight with
foreign donors may have cost him his life.
When the 78-year-old
collapsed from cardiac arrest a week ago – and subsequently died – simple medicines he needed were out of stock because of a
foreign currency shortage exacerbated by his policies.
The Health Ministry’s pharmaceutical warehouse, across the
street from the Lilongwe hospital the ailing president was rushed to, should have held those life-sav2ing drugs, according to
hospital officials in the capital.
But its construction was delayed due to a budget crunch caused by an aid freeze
over a fight he picked with donors.
Even if the warehouse had been completed, its shelves would have been largely
empty because the country did not have the money to buy foreign pharmaceuticals.
If doctors had been able to put
Mutharika on life support, he probably would not have survived for long.
The precarious electric grid was under
pressure as more Malawians returned home to watch TV and listen to radio reports about the failing health of a much loathed
leader.
The hospital’s emergency generator was out of diesel due to fuel shortages that grew the longer he
ruled.
Down the road from the hospital in Kawale 1, Lilongwe’s biggest township, sympathy for the once respected
leader had long run out.
“We wanted him to die,” said James Sinsamara, in front of a burned-out store where police had
killed two protesters in anti-government demonstrations in July.
FROM DARLING TO PARIAH
Malawi was once the
darling of international donors. Programmes to subsidise fertiliser and provide seeds to farmers created an economic revival
in the early years of Mutharika’s rule that made it one of the world’s fastest growing economies.
Landlocked, with
13 million people and a GDP estimated by the IMF to be about $5.6 billion this year, many people outside the region might
have trouble finding Malawi on a map.
But for international relief agencies it is a prime destination, with South
Korean missionaries, the European Union, USAID and Chinese conglomerates bringing in money and equipment to a country with
low crime, massive poverty and a large Christian population.
When Mutharika came to power in 2004, the former World
Bank economist was seen as a bland technocrat, leading a party that did not have a majority in parliament.
He made a
good start. Farm support programmes helped the economy post annual growth of 7 percent between 2005 and 2010, turning the
country of subsistence farmers into a food exporter.
Life expectancy improved from about 40 in 2000 to 52.2 in 2009
and cuts were made in high HIV/AIDS infection rates.
Many Malawians praised his early years but said his worst
tendencies became exaggerated after he won re-election.
“He was arrogant to start but became a power unto himself when
he won a second term and his party won an outright majority in parliament in 2009,” said a political insider who asked not to
be named.
Mutharika, described by one donor government diplomat as “contrarian by nature”, then shoved aside central
bankers, ministers and MPs to grab control of economic policy.
ONWARD AND UPWARD
Billboards with his image
proclaimed he was “propelling Malawi into the future”, showing projects such as an inland river port which turned into a
colossal waste of money.
He called himself the “Economist-in-Chief” and brushed off a meeting with an IMF delegation,
saying they were too junior to have an audience with him.
He once refused a meeting with a top diplomat from a Western
power, saying he was in another city. But at the time of the scheduled appointment he appeared at a venue near the hotel
where the envoy was staying.
Critics at home were harassed and jailed. Independent newspapers were
threatened.
Months before his death, he gathered some of his country’s most powerful CEOs to discuss economic policy
only to lecture them for days about how they should run their companies.
He expelled the British ambassador about a
year ago over a leaked diplomatic cable in which the president was described as “autocratic and intolerant of criticism”. In
response, Britain froze aid worth $550 million over four years.
In a watershed moment for the normally peaceful
country, 20 anti-government protesters were killed by Mutharika’s police in July 2011, prompting international condemnation
and a suspension of other aid projects.
One of the biggest was a $350 million construction project from the U.S. aid
agency Millennium Challenge Corporation to rehabilitate power lines and stations.
This put under pressure a budget
that traditionally relied on foreign donors to bankroll about 40 percent of spending and made worse a foreign currency
crisis.
Tobacco sales, which usually accounted for 60 percent of foreign currency revenues, plunged on diminishing
international demand and the decreasing quality of the local product.
The Malawian Church, one of the most powerful
forces in the deeply religious country, last month condemned Mutharika for pursuing poor economic policies, political
violence, tribalism, nepotism and for badly conducting international relations.
In a letter read to the faithful
during Palm Sunday, the Church of Central Africa Presbyterian Nkhoma Synod said: “We need to pray against poor and selfish
decisions by government”.
BLAME THE DEVIL
The currency crisis caused queues for petrol and doubled
the
price of essentials for the typical Malawian, who struggles to get by on less than a dollar a
day.
Mutharika made things worse by telling donors they could go to hell and proposing a “zero deficit budget” that
cut spending and raised taxes on the few firms and individuals with the money to pay them.
This pushed more of the
formal economy into the black market, stifled the few sectors responsible for job creation, and, combined with the loss of
international support for the budget, sent the economy on a downward spiral.
Mutharika blamed Satan, international
donors and political opponents for the fiscal woes and cozied up to the Chinese, who helped build a massive parliament
building in the capital.
He wore Chinese-style attire and took out a $90 million loan from the Import & Export
Bank of China to build a massive luxury hotel in Lilongwe.
Humanitarian aid from other major donors was not cut, but
large chunks were diverted away from influence by Mutharika.
But these projects still suffered as the price of petrol,
often smuggled in from neighbouring Zambia, hit about $8.25 a litre on the black market.
“Every programme we had was
being impacted by the fuel shortage,” said Doug Arbuckle, the mission director of USAID in Malawi.
Medicine to fight
malaria could not be delivered to remote areas. The maternal mortality rate, already one of the highest in Africa, increased.
There was not enough money to buy gloves and bandages for midwives and more mothers were dying because there was no fuel to
transport them to clinics.
“The government cut funding for training. Nursing students are sitting at home because they
cannot afford to pay for school,” said Dorothy Ngoma, executive director of the National Organisation of Midwives and Nurses
of Malawi, the country’s largest healthcare union.
In the private sector, a major sugar refiner was exporting its
goods abroad to raise hard cash, resulting in queues a mile long.
When Thomas Banda Nkosi opened his franchise
business of South Africa’s Steers and Debonair restaurants in the city of Blantyre two years ago, he envisioned success and
growth. He achieved neither.
“Any franchise business in Malawi is now struggling. We can’t pay royalties on time
because the banks have no forex. It’s difficult to import stocks and the result has been massive layoffs,” said
Nkosi.
WAITING FOR DOLLARS
Malawi became a cautionary tale of what happens when aid is diverted and a leader
defies those trying to help.
The IMF is concerned about Malawi’s over-valued currency the kwacha which is officially
set at 165 to the dollar but trades at about double on the black market.
“Now that he is gone, we are praying the
dollars will come back,” said taxi driver James Sikelo.
The new president, Joyce Banda, has talked to major donors
including Britain and the United States to restore aid packages worth nearly $1 billion. The diplomatic corps showed their
support by visiting her home before she was officially installed as the new leader.
The new president of Zambia,
Michael Sata, is making the transition easier, contributing 5 million litres of petrol that should help the
economy.
Banda, a 61-year-old policeman’s daughter who won recognition for championing the education of
underprivileged girls, now enjoys widespread support among a population whose lives grew increasingly difficult under
Mutharika.
She could signal her intention to repair ties with the IMF, which has suspended a $79 million aid facility
due to conflict with Mutharika, by devaluing the kwacha.
The IMF has said too much of the state’s precious foreign
currency reserves are being used to defend the kwacha.
She can also ease concerns of donors by meeting international
calls to restore the independence of the central bank, protect human rights and ensure a free media.
Finance Minister
Ken Lipenga said the economy could return to its fast rate of growth if aid was restored. But the country needed to move away
from tobacco and increase the strength of its value-added businesses.
“We really need to start generating forex for
ourselves,” he told Reuters.
