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| >> AFR Regional Overview >> Malawi Overview | |||||||||
IntroductionThe United States' national interests in Malawi are the promotion of sustainable development through market-based economic growth and the support for democratic governance. Malawi has gone through a political transition from decades of one-party autocracy to multi-party democracy. Fundamental economic liberalization and structural reforms have accompanied this political transformation. Efforts now center on the consolidation of these political and economic gains. Malawi's economic growth and democratic development are closely linked. USAID activities concentrate on key aspects of policy and institutional change to enhance the efficient delivery of goods and services and foster continued democratic progress. Assistance also helps address significant health and social problems to further enhance the environment for democracy. Promoting broad-based economic growth and development will improve stability in the country and the region and in the long-term, Malawi will be better able to attract U.S. economic investment. The Development ChallengeMalawi's political and economic development has been impeded by its landlocked and narrow economic base, concentrated ownership of assets, limited foreign and domestic investment, the legacy of authoritarian leadership, high population growth, and low human capacity levels. Malawi's social indicators are among the worst in the world, with life expectancy under 40 years, an infant mortality rate of 104 per 1,000, a high prevalence of HIV/AIDS (16% of the adult population), and malnutrition among the most severe in Africa. Compounding these problems, the World Bank has estimated that Malawi's per capita gross domestic product in 2000 was $180. External debt in December 1999 was $2.6 billion, with debt servicing absorbing more than a quarter of the Government of Malawi's (GOM's) budget revenue. The debt was owed primarily to multilateral institutions. In December 2000, Malawi was approved for debt relief under the enhanced Heavily Indebted Poor Country Initiative (HIPC). This is expected to eventually reduce Malawi's average annual debt service. Other DonorsOverall development assistance to Malawi totals about $400 million per year, excluding debt relief. Donor coordination is relatively good. The United Kingdom and the United States are among Malawi's largest bilateral partners. Other major bilateral donors include Germany, Japan, Canada, Denmark, Norway and the Netherlands. Multilateral donors include the United Nations agencies, the European Union, the World Bank, the International Monetary Fund and the African Development Bank. The May 2000 Consultative Group meeting brought together the GOM, donors, the private sector and non-governmental organizations (NGOs) to discuss Malawi's economic progress and outline a strategy for future growth. The process is continuing with the Poverty Reduction Strategic Planning process. FY 2002 ProgramUSAID's FY 2001- 2005 program builds on the lessons learned during the implementation of the 1995-2000 program. USAID will continue to implement activities that increase food security and reduce poverty through broad-based, market-led economic growth. The USAID program focuses on human productivity by addressing the critical constraints impeding the workforce's health and education. The FY 2002 program responds to the need to create employment and income opportunities by addressing the constraints to increased productivity within the agricultural sector as well as the need to expand off-farm employment. The program recognizes that efforts to increase on-farm productivity must incorporate practices that improve the use, management and conservation of Malawi's renewable natural resources. USAID has become increasingly aware that broad-based economic growth is not enough to increase food security and reduce poverty. USAID is working with the GOM and other donors to identify and assist those segments of the population that are not benefiting from the economy's growth. One dimension of this strategy is the pilot P.L. 480 Title II activity which is fully integrated into these activities. USAID's program maximizes the synergies between natural resources, on-farm production, and rural off-farm employment. Other areas of emphasis include increasing civic involvement in the rule of law; developing approaches for adopting behaviors that reduce fertility and risk of HIV/AIDS and improve child health; and improving the quality and efficiency of basic education. The program reflects Malawi's developmental needs, USAID's expertise in the targeted areas, and Malawi's positive record as a development partner. USAID's economic growth program increases income-generating opportunities for smallholder farmers, develops market-based service institutions, improves the sectoral policy environment, and introduces low-cost agroforestry practices to improve soil fertility and increase crop yields. In FY 2002, USAID will support the development of markets for agricultural inputs and outputs, encourage smallholder enterprise development, promote crop diversification and sustainable agroforestry technologies, and strengthen food security monitoring. USAID will continue to support private sector-led growth and development, building the capacity of business associations to work with the government and the legislature to develop trade and investment-friendly regulations. This effort contributes directly to the aims of the African Growth and Opportunities Act (AGOA) and promotes tax, tariff and trade reform. Activities to improve communications and information access in Malawi will continue through the Leland Initiative. In 1999, Malawi successfully completed its second national election following the transition to multi-party democracy in 1994, and in 2000 successfully conducted local elections. A viable decentralization policy was developed which empowers citizens to become more engaged in local government. In FY 2002, USAID will focus on helping inform Malawian citizens about the structures, purposes, and role of government, the importance of the rule of law, and good governance. USAID is helping to lower the population growth rate by encouraging the adoption of modern contraceptive methods and promoting technologies to reduce infant and child mortality, morbidity and malnutrition. USAID is also encouraging behavioral change to reduce the spread of HIV/AIDS. FY 2002 funding will focus on activities which assist Malawi's National AIDS Secretariat to develop and expand HIV voluntary counseling and testing services, including setting standards and guidelines, developing training materials, and establishing a system for monitoring and evaluation. Malawi's economic growth potential is constrained by limited human capacity. The country's basic education system is weak; schools are overcrowded; teachers are not adequately trained; and teaching materials are inadequate. A community-level social mobilization campaign supported by USAID has resulted in a marked increase in female enrollment at the primary level and a dramatic increase in the number of girls entering secondary school. FY 2002 funds will address the quality of education, which declined as a result of the policy decision to promote universal enrollment. Activities will improve teachers' professional skills; develop schools' ability to respond to the needs of the student population; and implementation and monitoring of key reform policies. Activity Data Sheets
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