Maravi

(NYASATIMES) Bingu rejects IMF devaluation call, speaks on fuel crisis

COMMENT - The IMF/World Bank still up to their old tricks. Here they want Malawi to devalue it's currency. They made the same demand from Swaziland, after their own privatisation abolished the Southern African Customs Union (SACU), from which the Swaziland government received the majority of it's revenues.

Bingu rejects IMF devaluation call, speaks on fuel crisis
By Nyasa Times
Published: June 24, 2011

Malawians who listened to the national address by President Bingu wa Mutharika Friday evening said he was “hardly convincing” as he did not give plausible assurance to solve the economic turmoil facing the country.

Mutharika, who has been summoned to parliament to explain the chronic fuel crisis, addressed the nation through state controlled Malawi Broadcasting Corporation (MBC) when he accused the donor community for causing the perennial fuel shortage by directing that the business of importing fuel should be left in the hands of private traders.

Mutharika: No devaluation

He said private traders refused to keep fuel reserves because he said it was expensive, hence creating the current fuel crisis.

Mutharika said the problems of fuel queues would be a thing of the past as government is to set up a National Oil Company which would look at ways of establishing strategic fuel reserve.

He said the fuel crisis will be abated in the coming days because supplies are now coming as government will take the responsibility of importing fuel.

“We have already started filling tankers at Dar es Salam which will be arriving in the country on Monday or Tuesday,” he said.

“We have over 300, 000 vehicles on the roads of Malawi; statistics are showing that we are purchasing about 3000 cars a month and all these are running on fuel not water. That aside, there are great construction works going on in the country, whose machinery also needs fuel to operate,” said Mutharika.

He said the opposition should provide solutions to solve the crisis other than taking to the streets for demonstrations.

“We are spending US$ 30 million every month on fuel alone, which shows on how serious we are on fuel. So if the opposition political parties have better ideas than ours, let them come forward instead of making baseless noise in the streets,” President Mutharika said.

Economists say billions of kwacha are being lost each day Malawian fuel pumps are dry as production of goods is affected and provision of service is also hampered as people spend lots of man-hours queuing for fuel.

President Mutharika, an economist, also commented on the call by International Monetary Fund (IMF) to devalue the local currency –Kwacha – claiming it was overvalued.

“The International Monetary Fund (IMF) told us that we should not be keeping our moneys in the Reserve Bank but instead it they should be given to the commercial banks. Last year all our money from tobacco was sent to the commercial banks which in turn gave it to traders,” said Mutharika, who opposed the devaluation saying it will fuel inflation and wouldn’t solve the country’s foreign exchange shortage.

“What these traders do is that when they see that they have bought enough United States Dollars, they call for the IMF to push for the devaluation of the kwacha so that they sell their money and make more profits,” he said.

Mutharika claimed traders are proposing for the Kwacha to be devalued to K180 equivalent to $1 when they bought it at K140.

“I have been asking the IMF to tell me how I am going to protect my people and they have just been saying that they will find measures. Unless the IMF tells me how I will protect my people, I will not devalue the Kwacha,” he stressed.

Mutharika also defended the new financial plan, on ‘zero deficit’ budget and defended the taxes on the poor, saying “there is no country on earth without taxes. It is the taxes which we use to run the country but we cannot put up measures to oppress Malawians.”

He claimed that some donors , which he did not name, have assured him that they will continue supporting Malawi and they are happy with the step the country has taken to fund its recurrent budget, boasting : “I know what I am doing and trust me, you will all be glad with what I am doing.” –(Reporting by Green Muheya, Nyasa Times)

Labels: FREE TRADE AREA, IMF, NEOLIBERALISM, SACU

posted by MrK @ 5:26 PM