Poor Malawi struggles beyond reach of G8 largesse
Last Updated: 2006-07-03 8:30:36 -0400 (Reuters Health)
BLANTYRE - Malawian widow Akice Kunkhoma makes just pennies a day as she looks after five grandchildren orphaned by AIDS, but she still owes the world's richest nations $240 -- with interest.
With her 12 million countrymen, she lives in one of Africa's poorest countries and one that, so far, has benefited little from the rich world's pledge last year at the Group of Eight summit to redouble efforts to end world poverty.
"The harvest from the garden was not good enough because I spent most of the farming season in hospital tending to my late daughter," Kunkhoma, 56, told Reuters at her small village just outside the commercial capital of Blantyre.
"These children also need to go to school. What will I clothe them with?" she wonders.
Critics have used the July 8 anniversary of last year's Group of Eight (G8) Africa plan to highlight how few of its promises to Africa have been kept, with much pledged aid still unavailable, funding for HIV/AIDS drugs still insufficient and agricultural trade barriers still hobbling African exports.
And while debt relief is beginning to show results in some African countries, others such as Malawi are still on their own.
Struggling with a devastating AIDS epidemic and hit by frequent food shortages, Malawi shoulders a debt burden of $2.9 billion to lenders in the developed world.
Paying it back means less money for schools, hospitals, AIDS drugs and roads in a country where paved highways suddenly turn into dirt tracks and many rural inhabitants bathe in rivers, risking attack from man-eating crocodiles.
Unlike some of its African neighbours, Malawi has not enjoyed much debt relief from lenders such as the International Monetary Fund and the World Bank; with concerns over its fiscal management keeping it off the list of countries earmarked for the quickest help.
STRUGGLE TO SURVIVE
Malawi officials say the country is struggling to survive.
"It's a fighting time and we're at a very critical stage in the country's economic history. We need immense funds," said Finance Minister Goodall Gondwe.
Malawi's needs are apparent from almost any vantage point. Despite boasting one of southern Africa's great natural wonders in the form of Lake Malawi, the country is desperately poor with many people scraping by on little more than subsistence farming.
The lake, a source of food for much of the population, is dangerously overfished. Malawi's main commodity export -- tobacco -- is getting hard to sell and, while tourism potential is huge in this sun-kissed land, infrastructure is woeful.
World Bank data highlights the largely pre-industrial state of Malawi's economy, with agriculture accounting for over 90 percent of its export earnings and 45 percent of its gross domestic product.
Gondwe hopes to direct debt relief to areas such as health.
"Once the 2006/7 budget passes and the World Bank and IMF boards approve debt cancellation, we should go ahead to spend on reforms that aim to overhaul national health and education systems," he said.
Gondwe's 2006/07 budget of about $1 billion factors about $62.59 million expected to flow from the IMF's Heavily Indebted Poor Country (HIPC) initiative and the International Monetary Fund's Multilateral Debt Relief Initiative (MDRI).
The budget also assumes that about $1 billion of a total of $2.9 billion of Malawi's external debt stock would be freed in the first year of achieving debt cancellation -- although this depends on whether the rich world fulfills its promises.
HELP ON THE WAY?
The IMF and World Bank are due to consider if Malawi has reached completion point under HIPC in August and September, World Bank Country Economist Khwima Nthara said last week.
About half of the country's total population of 12 million was in need of food aid last year following a severe drought.
Besides food shortages, Malawi's health and education institutions are crying out for resources as most hospitals are short of basic amenities while state schools suffer from a lack of teachers.
Meanwhile, AIDS kills 10 Malawians every hour.
Nthara said two conditions for HIPC are that the share of health expenditure be at least 13 percent of the discretionary recurrent budget and yearly enrolment of 6,000 students in teacher-training colleges, tough goals for a country with such limited resources.
The finance minister said Malawi was supposed to reach HIPC completion before Zambia in 2003, but failed to implement reforms as agreed with IMF and World Bank -- leaving Kunkhoma pondering her future, and that of her grandchildren, in a country that remains on the edge of disaster.
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