Friday, April 20, 2012

(HERALD, NYT) How Malawi fed its own people

COMMENT - Considering his role in the IMF and World Bank, it is ironic that Jeffrey Sachs, long out of office, will praise the common sense economic policies of the country of Malawi and it's President Bingu wa Mutharika. However, the disastrous effects of structural adjustment, 'adherence to free market policies' and neoliberalism on African economies is still not widely understood. Africa does not need 'donor aid' (which are the taxes paid by ordinary people and companies in the West), it needs to tax or own outright it's own natural resources. That is the key issue, because with independent income, comes much greater freedom in filling out local economic and in fact domestic and foreign policies. Donor Aid is used to remote control government policies. Donor Aid is also the taxes that transnational corporations are not paying in Africa - or anywhere on the planet. Right now, for defying the IMF/World Bank in a) not isolating Zimbabwe economically and b) showing the economic success of defying IMF/WB policy prescriptions, Malawi is under economic sanctions and has it's budgetary support suspended. That is why Malawi is in 'dire straits' right now. From professor Jeffrey Sachs. At least Jeffrey Sachs admits that a mere FISP program for poor farmers has a massive positive effect. However, the rest of his article shows the same blinkered economist thinking that is so characteristic of the profession. Just because you know about economic theory, doesn't mean you understand agriculture, infrastructure, or any other discipline or economic sector.

How Malawi fed its own people
Friday, 20 April 2012 00:00
Jeffrey D Sachs

President Bingu wa Mutharika of Malawi died on April 5 of a heart attack at the age of 78. His countrymen, suffering a massive economic crisis, seem to have declared good riddance. Reuters tartly noted that the seven-year boom under Mutharika was “underpinned by foreign aid and some favourable rains,” and that the boom had come to an end last year following a diplomatic spat with the donor community. As is usually the case with Africa, the truth is far more complex. President Mutharika made a great contribution to his country and to Africa even if he is held in disgrace for serious misdeeds in his last years.

Mutharika had indeed engineered a boom, but it was not due to foreign aid and good rains. It was due to his readiness to stand up to the arrogance of the foreign aid “community.” Mutharika won a crucial battle in 2005 when his country faced a drought and famine.

Instead of following the standard donor advice essentially to do nothing and await a ration of emergency food aid, Mutharika used his country’s meagre budget to support Malawi’s peasant farmers through the Farm Input Subsidy Program. In a very short period of time, one growing season, Mutharika’s policies doubled Malawi’s food production and helped to put Africa more generally on a new path of development.

Malawi’s population has soared beyond the carrying capacity of the land.

[Here we go again. People aren't antilopes, Jeffrey. In fact, Malawi has been so starved of development that they could probably suppport a population of 100 million, if more water was stored on the land instead of flowing into Lake Malawi. If you look at the evidence presented here, and see the massive turnaround in agriculture because of a mere $62 million spent on fertilizer support, that alone should make it clear that the number of people is not the problem - actively de-developing Malawi through destructive economic policies imposed from outside Malawi by the World Bank and IMF are. - MrK]


Many farms are one to two hectares, or even smaller, for a family of five or more. Powerful and often foreign owners hold the larger tobacco estates.

[So much for the 'carrying capacity' argument. Land in the hands of few large land owners, used to grow anything but food. Get a hint? - MrK]


Aids began to ravage Malawi, along with the rest of southern Africa, starting in the 1980s and 1990s.

[Actually there is no AIDS epidemic, anywhere in the world. It is a statistically generated disease, based on bad testing and survey methods. The idea of a widespread AIDS epidemic and it's attendant presumed (based on calculation of HIV infection) high mortality rate is belied by high population growth statistics throughout the continent. - MrK]


As a landlocked country, Malawi faces profound challenges of high transport costs. It cannot attract investments in assembly operations — such those required for garments, plastics or electronics — as can other poor but coastal economies.

[More economics drivel. Being landlocked and being host to much of Southern Africa's fresh water resources, doesn't merely present 'problems', it also presents massive opportunities in transportation, for instance. - MrK]


A dozen years ago, at the start of the new millennium, Malawi’s extreme suffering was pretty much ignored by the world. Aids, malaria, TB, hunger, extreme poverty and one of the world’s lowest life expectancies (46 years in the period 1995-2000, according to the UN Population Division) wracked the land. The donor nations did little to help.

I began to visit Malawi in those years through my work as special adviser to Kofi Annan, UN secretary general at the time. I was shocked by the overflowing pediatric wards of hungry, malnourished and dying babies, and the adjoining adult wards filled with Aids patients without medicines in the central hospital, waiting to die an agonising death. I could hardly imagine this hellish scene as actually belonging to the 21st century.

I worked with the government of Malawi in 2001-3 to help the country become one of the first recipients of the new Global Fund to Fight Aids, TB and Malaria that I helped to design and that was finally opened for business in 2002. Yet the donors fought bitterly, and alas successfully, to keep Malawi’s early programs very small, in some ghastly exercise of budgetary prudence. Countless Malawians continued to die unnecessarily as a result of this penny-pinching.

In 2004, Mutharika was elected president. He entered office with a drought already under way. Yet as my colleague and World Food Prize winner Dr Pedro Sanchez explained to me, the drought was not only a rainfall drought, but also a nitrogen drought.

[This is typical economist nonsense. Anyone familiar with Malawi's green lush mountainsides knows there is no 'nitrogen drought'. What is there, is an adherence to old, chemically based agriculture, as opposed to 'modern' (and yet ancient) organic agriculture. In fact smaller 1-2 hectare plots are ideal for organic agriculture, especially Natural Farming and Permaculture. And as always, the more hands the merrier. - MrK]


Malawi’s impoverished farmers were too poor to buy fertiliser, and their intensive farming over many years had depleted the soils of nitrogen, with a consequence that the farm yields were among the lowest in the world. Tiny farms, unstable rainfall, an epidemic-ravaged population and nitrogen-depleted soils all spelled a silent holocaust. And yet the world continued to stand by. — The New York Times.

[Lesson: leave Malawi's development to the Malawis, and get the IMF/WB and their 'conditionalities', economic sanctions and phantom epidemics out of the way. - MrK]


Jeffrey D. Sachs is director of the Earth Institute at Columbia University and author of “The Price of Civilisation.”

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posted by MrK @ 7:25 PM 1 Comments

Friday, May 25, 2007

China's lesson for the World Bank

China's lesson for the World Bank
By Jeffrey Sachs
Friday May 25, 2007 [04:00]

The China Daily recently ran a front-page story recounting how Paul Wolfowitz used threats and vulgarities to pressure senior World Bank staff. The newspaper noted that Wolfowitz sounded like a character out of the mafia television show The Sopranos.

At the same time, while the Wolfowitz scandal unfolded, China was playing host to the Africa Development Bank (ADB), which held its Board meeting in Shanghai. This is a vivid metaphor for today’s world: while the World Bank is caught up in corruption and controversy, China skillfully raises its geopolitical profile in the developing world. China’s rising power is, of course, based heavily on its remarkable economic success.

The ADB meeting took place in the Pudong District, Shanghai’s most remarkable development site. From largely unused land a generation ago, Pudong has become a booming center of skyscrapers, luxury hotels, parks, industry, and vast stretches of apartment buildings. Shanghai’s overall economy is currently growing at around 13 per cent per year, thus doubling in size every five or six years. Everywhere there are startups, innovations, and young entrepreneurs hungry for profits.

I had the chance to participate in high-level meetings between Chinese and African officials at the ADB meetings. The advice that the African leaders received from their Chinese counterparts was sound, and much more practical than they typically get from the World Bank.

Chinese officials stressed the crucial role of public investments, especially in agriculture and infrastructure, to lay the basis for private-sector-led growth. In a hungry and poor rural economy, as China was in the 1970’s and as most of Africa is today, a key starting point is to raise farm productivity. Peasant farmers need the benefits of fertiliser, irrigation, and high-yield seeds, all of which were a core part of China’s economic takeoff.

Two other critical investments are also needed: roads and electricity, without which there cannot be a modern economy. Farmers might be able to increase their output, but it won’t be able to reach the cities, and the cities won’t be able to provide the countryside with inputs. The officials stressed how the government has taken pains to ensure that the power grid and transportation network reaches every village in China.

Of course, the African leaders were most appreciative of the next message: China is prepared to help Africa in substantial ways in agriculture, roads, power, health, and education. And the African leaders already know that this is not an empty boast. All over Africa, China is financing and constructing basic infrastructure. During the meeting, the Chinese leaders emphasised their readiness to support agricultural research as well. They described new high-yield rice varieties, which they are prepared to share with their African counterparts.

All of this illustrates what is wrong with the World Bank, even aside from Wolfowitz’s failed leadership. Unlike the Chinese, the Bank has too often forgotten the most basic lessons of development, preferring to lecture the poor and force them to privatise basic infrastructure, rather than to help the poor to invest in infrastructure and other crucial sectors.

The Bank’s failures began in the early 1980’s, when, under the ideological sway of President Ronald Reagan and Prime Minister Margaret Thatcher, it tried to get Africa and other poor regions to cut back or close down government investments and services.

For 25 years, the Bank tried to get governments out of agriculture, leaving impoverished peasants to fend for themselves. The result has been a disaster in Africa, with farm productivity stagnant for decades. The Bank also pushed for privatisation of national health systems, water utilities, and road and power networks, and grossly underfinanced these critical sectors.

This extreme free-market ideology, also called “structural adjustment,” went against the practical lessons of development successes in China and the rest of Asia. Practical development strategy recognises that public investments – in agriculture, health, education, and infrastructure – are necessary complements to private investments. The World Bank has instead wrongly seen such vital public investments as an enemy of private-sector development.

Whenever the Bank’s extreme free-market ideology failed, it has blamed the poor for corruption, mismanagement, or lack of initiative. This was Wolfowitz’s approach, too. Instead of focusing the Bank’s attention on helping the poorest countries to improve their infrastructure, he launched a crusade against corruption. Ironically, of course, his stance became untenable when his own misdeeds came to light.

The Bank can regain its relevance only if it becomes practical once again, by returning its focus to financing public investments in priority sectors, just as the Chinese leadership is prepared to do.

The good news is that African governments are getting the message on how to spur economic growth, and are also getting crucial help from China and other partners that are less wedded to extreme free-market ideology than the World Bank.

Many African governments at the Shanghai meeting declared their intention to act boldly, by investing in infrastructure, agricultural modernization, public health, and education. The Wolfowitz debacle should be a wake-up call to the World Bank: it must no longer be controlled by ideology. If that happens, the Bank can still do justice to the bold vision of a world of shared prosperity that prompted its creation after World War II.
www.project-syndicate.org

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posted by MrK @ 5:12 AM 1 Comments