International Development Committee - The Development Situation in Malawi Writen evidence submitted by the Department for International Development (DFID)

Introduction

1. This memorandum focuses on the Development Situation In Malawi in response to the International Development Committee (IDC) inquiry. It supplements the oral evidence to be given by DFID’s Parliamentary Under Secretary of State, Mr Stephen O’Brien MP, scheduled for May 2012. The Memorandum addresses:

How the UK can best help to improve opportunities for economic growth, job creation and meeting the Millennium Development Goal targets for Malawi?

The role of DFID in protecting civil liberties including freedom of expression and access to justice.

The conditions under which the UK should continue to provide development assistance to Malawi.

2. Ministers plan to provide £373 million to Malawi for the period 2011–15 to achieve identified development results, working through a mix of programmes with Government, other donors, non-governmental organisations and civil society. Detail on these programmes and the results we expect them to achieve is set out below.

How the UK can best help to improve opportunities for economic growth, job creation and meeting the millennium development goals targets in Malawi

Context

3. Malawi faces both short term and long term challenges for growth and job creation. In the short term a return to macroeconomic stability is key. Malawi had enjoyed a steady improvement in macroeconomic stability after 2004, with inflation steadily declining and improved fiscal discipline. This stability underpinned strong economic growth and poverty reduction. Since 2011 this success has been threatened by a large trade deficit and a fixed and increasingly overvalued exchange rate—the parallel market rate is around 50% higher than the official rate and climbing—leading to shortages of foreign exchange, fuel and other vital imports. Adjusting the rate to reflect market fundamentals will be a necessary step to revive high levels of growth.

4. Malawi also faces a number of longer-term barriers to growth. The economy is highly dependent on agriculture, which remains the main source of growth, exports and employment. With 85% of the population residing in the rural areas, agriculture accounts for 80% of both the country’s employment and commodity exports. In areas where production has been good, poor roads have often prevented the marketing of surpluses.

5. The 2009 Country Economic Memorandum for Malawi funded by donors including DFID contained a growth diagnostic study that identified the key constraints to growth in Malawi as the exchange rate, access to finance, power, and agricultural value chains. Education and the business environment were second tier constraints.

UK Response

6. DFID’s wealth creation programme in Malawi has been designed to address these constraints. Together with the IMF and other donors in Malawi we have encouraged the Government of Malawi to devalue and change the exchange rate regime so that it reflects market fundamentals. We are also implementing a range of programmes to address some of these constraints. We are not proposing to work in all of the sectors identified in the growth diagnostic, given the division of labour between the donors. For example the World Bank and the US Millennium Challenge Corporation (MCC) are planning large programmes in the power sector, so we are only planning a single intervention in that sector. Our programmes in health, education, and governance will have more indirect positive impacts on growth. Our planned and existing wealth creation programmes are set out below.

7. Financial Sector Deepening Malawi (FSDM): We are working with the World Bank and USAID to design an entity similar to the Financial Sector Deepening Trusts already operating successfully in Kenya, Rwanda, and elsewhere. FSDM’s aim will be to increase access to financial services for poor people.

8. Malawi Unpaved Rural Roads Programme: We are working with the World Bank to design a programme to improve the condition and maintenance of rural feeder roads to ensure accessibility throughout the year. This programme will aim to reduce the cost of transporting agriculture produce to markets, raise the incomes of rural farmers, and facilitate agricultural diversification.

9. Malawi Energy Efficient Lighting Programme: This programme is replacing incandescent light bulbs with two million low energy light bulbs, reducing peak time demand by up to 20% at a total cost of around £3 million.

10. Malawi Agriculture Programme: This programme will: provide 350,000 vulnerable farmers a year with high yielding maize and legume seeds; improve value for money in the Government of Malawi’s Farm Input Subsidy Programme; increase incomes for 7,000 existing dairy farmers and enable 2,000 smallholder farmers (including 1,000 women) to move into dairy farming; and support 90,000 farmers (including 31,000 women) to increase yields and improve soil quality through conservation farming. The UK will provide up to £35 million over 4 ½ years.

11. Malawi is on track to reach five of the eight Millennium Development Goals. The three remaining goals are on (1) maternal health, (2) universal primary education and (3) gender equality and women’s empowerment. To assist in addressing these challenges, DFID has the following planned and existing interventions:

12. Direct assets for girls and women: The UK’s aid programme in Malawi (including those programmes mentioned above) is expected to: help 140,000 women develop strategies to improve their livelihoods; provide subsidised seeds to 420,000 female-headed households; establish 1,000 new female dairy farmers by 2016; help 27,000 female farmers to increase yields by adopting conservation agriculture; and increase incomes for 1650 women through a Business Innovation Facility.

13. Better health for women and choice on whether and when they have babies: Expected results include: 1.27 million fewer pregnancies through DFID’s family planning programmes; 50% of women using contraception; 4,460 fewer maternal deaths; 145,000 deliveries by a skilled health worker; and 76% of pregnant women and children under five years sleeping under treated mosquito nets through DFID support.

14. Getting girls through secondary school: The programme is expected to: provide 8,000 girls with DFID bursaries to help them stay in secondary school; fund 213,500 girls in primary schools; support 2,000 mothers’ groups working across Malawi to support girls in school; train 1,000 new teachers (including 380 women teachers, as important role models); and build 4,200 new toilets and latrines in schools, which are particularly important to encourage girls to stay in school once they reach puberty.

15. Preventing violence against girls and women: This will ensure: better access to local justice for an extra 4.5 million women and girls; female judges in 99% of traditional courts; and over 100,000 women getting more choice over their lives and able to hold decision-makers to account. 30,000 women will be helped to raise issues of concern with formal representatives like their MP, and safe spaces, support and counselling will be available for adolescent girls. Results expected by the end of the period include a 10% reduction in violence against women and girls and no children being kept in prisons.

The role of DFID in protecting civil liberties including freedom of expression and access to justice

Context

16. The return to multi-party politics in 1994 saw positive changes in political governance, human rights, and access to justice in Malawi.(i) After a period of economic and political instability at the end of President Muluzi’s second term (1999–2004), the election of President Bingu wa Mutharika was seen as a positive break from the past and is associated with a return to stability and a period of good economic growth.

17. However, progress since then has not been straightforward. Following President Mutharika’s election to a second term in 2009 there has been a deterioration in human rights and governance. The current economic crisis has led to rising food prices(ii) and scarcity of fuel, drugs and foreign exchange. Restrictions on freedoms, a centralisation of power and a negative Government response to criticism from civil society and other actors have further fuelled increasing levels of public discontent. This public dissatisfaction over political and economic governance came to a head during civil society-organised public demonstrations on 20 and 21 July 2011 which turned violent and led to looting with 20 people killed as a result of the use of live bullets and teargas by police.

18. Recent changes in legislation have the potential to be used to restrict civil liberties. These changes have given the President the power to set the date of local elections; allowed police to search houses without warrant; given the Minister of Information powers to shut down independent media; banned ex-parte injunctions against the Government; and further criminalised homosexuality. Other rights have seen de-facto erosion as demonstrations have been banned, local elections cancelled, people arrested on charges of insulting the President, sedition and treason, and academics, human rights activists, opposition politicians and journalists have been harassed, attacked and driven from their homes. Malawi has fallen 67 places in one year to 146th in the Reporters without Border Press Freedom Index.(iii)

19. Under international and domestic pressure the Government entered a UN-facilitated dialogue with civil society groups to discuss action on political governance concerns. Some progress has been achieved. Many of the recent legislative changes have been sent back to the Law Commission for review, although they do remain active in the meantime. However, there are continued reports of harassment of journalists and human rights activists, with some facing prosecution, the threat of violence and others in hiding outside the country.

20. There are significant barriers to accessing formal justice in Malawi, including cost, distance to courts, the language of the courts (English), and the scarcity of judges and lawyers. State legal aid provision amounts to about US 1.5 cents per person,1 so few of those charged with criminal offences are represented in court. Malawian prisons are overcrowded. Almost a quarter of prisoners are awaiting trial, often for long periods of time and in very poor conditions, leading to severe negative socio-economic and health impacts.2

21. The majority of Malawians, including almost all of the rural poor, avoid the formal system entirely. Only 8% of the population have used the formal justice system in the last five years, compared with 84% who have used the informal system, accessing family counsellors, village heads and traditional authorities to resolve disputes relating to marriage or family matters, land, property, domestic violence or assault.

22. There are Government initiatives to address some of these issues including the new Legal Aid Act (2010), which provides for a Legal Aid Bureau and Fund. The Ministry of Justice and Constitutional Affairs is developing a sector strategy, which will identify strategic priorities and coordinate reform efforts.

UK Response

23. The UK response to the deteriorating political governance situation has been coordinated across HMG. Diplomatic and political interventions have been crucial to focusing the attention of the wider international community on the situation in Malawi and making our concerns clear. The British High Commission (BHC) and DFID have both strongly condemned repressive action by the Government, both publicly and in bilateral discussions. The Foreign Secretary, DFID’s Parliamentary Under-Secretary of State and FCO’s Parliamentary Under-Secretary of State (Minister Bellingham) met with Malawian Ministers in London in October 2011 for a detailed discussion of the UK’s concerns. The Secretary of State for International Development met President Mutharika at the African Union Summit in Addis Ababa, Ethiopia, on 29 January 2012. The Secretary of State and the President had a frank discussion on human rights, economic management, and the expulsion of the UK’s previous High Commissioner. During the 20 July 2011 demonstrations we publicly condemned the police’s use of live ammunition. Following the firebombing of a number of human rights activists’ homes and offices we also made a public call for protection and speedy access to justice for human rights defenders who had been victims of violence. BHC and DFID continue to push for non-discrimination of people based on their sexuality or gender, and to ask Malawi to live up to the human rights commitments specified in international instruments to which it is a party, and in their own constitution. We maintain a wide network of contacts in civil society and the media, including with those who have been victims of harassment and violence as a result of their work. DFID has also reacted with practical support, for example funding security training for civil society organisations.

24. There are four partnership principles upon which financial aid to the Government of Malawi is based:

1.Poverty Reduction and the Millennium Development Goals.

2.Respecting human rights and other international obligations.

3.Improving public financial management, promoting good governance and transparency and fighting corruption.

4.Strengthening domestic accountability.

25. The deterioration of the last three of these partnership principles (and concern over economic management and its impact on the first) has led to the Secretary of State ending General Budget Support to Malawi on 11 July 2011.

26. DFID has specific programming to address the deterioration in governance and to protect civil liberties. The Building Empowerment and Accountability in Malawi (BEAM) programme focuses on supporting projects to strengthen Government accountability. BEAM’s core component is a multi-donor fund to support civil society projects on governance issues, called Tilitonse—meaning “we are together” in Chichewa.

27. Tilitonse funds projects to strengthen community voice and initiatives to hold the Government to account for delivering services and protecting rights. Evidence from elsewhere(iv) shows that strengthening people’s ability to voice demands and hold Government to account, and linking them with other groups who share their aims, will create an increasingly responsive Government. The approach is one of collaboration not confrontation, working with civil society, the media, private sector, Government and others wherever possible to achieve positive results. These results will include the improvement of services and the protection of democratic space and civil liberties, including freedom of expression.

28. DFID has supported the justice sector in Malawi since the mid 1990s. In the absence of agreed strategic priorities for the sector, we have agreed a division of labour with the European Union, which has a programme aimed at strengthening key elements of the formal justice system. DFID’s focus is on assisting Government and non-state actors to improve the parts of the system which are of greatest importance to poor people. Our new Justice for Vulnerable Groups programme therefore aims to reduce violence against women and children; increase women’s access to fair and unbiased justice from the traditional justice system; end imprisonment of children; and reduce the exposure of Malawians to pre-trial detention. DFID has also offered support to the Government in reviewing the laws recently returned to the Law Commission.

The conditions under which the UK should continue to provide development assistance to Malawi

29. Malawi continues on a trajectory of economic decline. Without economic reforms, including devaluation and relaxing exchange controls, the economy is unlikely to start what will anyway be a painful recovery. In the face of increasing hardship, and the absence of general budget support, the UK has already provided significant additional support this year (fertiliser, emergency drugs and emergency feeding), thereby keeping our commitment to the Malawian people.

30. There appear to be two main possible scenarios for Malawi: (1) changes to economic policy, including reforms to the management of foreign exchange and the budget, which help it to get back on track with the IMF; or (2) the Government continues on its current path and there is no significant improvement in the economic or governance situation.

31. Whichever scenario Malawi follows, additional support to cushion any impact on the poor will be needed. Over the past six months Ministers have chosen to reprogramme funds that could have been used for budget support to other programmes to protect the poor. The ongoing shortage of forex has resulted in severe shortages of fuel, fertiliser and drugs, which are having a major impact on all Malawians. Ministers agreed to provide £19.5 million to buy seeds and fertiliser for the Government’s Farm Input Subsidy Programme (FISP) and £10.2 million to buy emergency drugs for the next 18 months. Ministers agreed to increase the emergency drugs programme by £3.5 million to expand our support to major hospitals around the country.

32. This additional support from the UK (together with Ireland and Norway on fertiliser, and Norway and Germany on drugs) has been largely well received locally and the majority of opinion is positive that we are keeping our pledge to support the poor people of Malawi. There are however some voices that suggest any support to Malawi at this time—whether through Government system or not—is seen as supporting the Government.

33. We are scaling up on the governance side, particularly around accountability and empowerment, and considering how we can best support the tripartite elections, due in 2014. We are also looking to do more on building resilience (agriculture and livelihoods) and have a small, but expanding, private sector portfolio. Our support to health and education continues through the sector wide approaches both through the government’s systems and also increasingly with other partners, for example scaling up family planning services and increasing our support to schools through UNICEF. Whichever scenario Malawi follows over the next few years, we are planning for increased social protection programmes.

Department for International Development

16 February 2012

References

(i) See World Bank World Governance Indicators
http://info.worldbank.org/governance/wgi/index.asp

(ii) The cost of a basic needs rose by almost 30% over the course of 2011 (see Centre for Social Concern, Basic Needs Basket January 2012).

(iii) http://en.rsf.org/spip.php?page=classement&id_rubrique=1043

(iv) See for example IDS Citizenship Research Centre, Putting Citizens at the centre: linking state and societies for responsive governance, 2010.

1 Access to Legal Aid in Criminal Justice Systems in Africa, Survey Report, Paralegal Services Advisory Institute, Malawi, February 2010, p 5.

2 OSJI. The Socio-economic Impact of Pre-trial Detention, 2011.

Prepared 23rd July 2012