Malawi, the Issues that a country at a low level of development faces

Malawi is a landlocked nation is the south east of Africa.

 

Debt:

It gained independence from the British Empire in 1964 and was key recipient of ‘petrodollars’ during the debt crisis in the 1970s. The debt continued to accumulate in the 1980s as the country struggled with higher interest rates and a falling price for their key agricultural commodities. The government had to deal with food shortages (due to drought) and over 1 million refugees from neighbouring Mozambique (where a civil war was occurring). For every year in the 1990s the country was paying over $100 million in servicing their debt. The country joined HIPC in 2000 and reached completion stage in 2006. This was due to the IMF and World Bank requesting that the nation removed support and subsidies for farmers, these conditions contributed to the famines in 2001/2002 and 2004/2005, since reaching completion stage the country has reintroduced these. Another requirement was that Malawi privatise industries and organisations such as the agricultural marketing board, which previously ran a buffer stock scheme and provided subsidies on fertilisers. In 2006 $2.6 billion of debt was written off. This reduced debt repayments by $40 million a year and has allowed the government to fund primary school places for 1 million children.

 

Quality of Life:

HDI is 0.4 compared to UK which is 0.9. This shows that the quality of healthcare and education are poor in comparison to a developed country.

74% of the population live on an income beneath $1.25 a day. This is highest in the rural areas of the North and South of Malawi. This is because rural areas have poor access to services and are unable to diversify out of agriculture. 51% of exports are tobacco and this is not valorised at all. Tea is the second largest export at 6%. Significant imports include medication, fertilisers and wheat. These being imports mean that a deterioration in the terms of trade can lead to these no longer being affordable. There is currently a large trade deficit which is partly being sustained by aid.

40% of exports are to Europe while 30% go to other African nations. This could support neocolonial ideas regarding dependency.

-Very densely populated with 115 people per km.

 

Social Problems:

-Autocratic government up to the mid 1990s, current democracy is unstable. This has led to a sporadic policy making leading to regular movements between growth and recession. DFID give Malawi £400 million a year in aid however the government in 2015 bought a private jet for the president.

-Serious problem with HIV/AIDs which kills tens of thousands of Malawians every year.

-The youthful population has led to a dependency ratio of 94.5% (CIA World Factbook), meaning the number of economically active citizens is low therefore inhibiting growth. The median age is 16!

-Illiteracy rate of 19% which makes the workforce less productive/equipped for certain jobs. It makes educating citizens about conditions such as HIV/AIDs more challenging.

-Only 15% of the population live in urban areas, this means that industrialisation is unlikely to occur.

-Climate, along with the growing of cash crops results in regular famine. In 2005, 40% of the population required emergency food support.