DEVELOPMENT: Aid Workers, IMF Trade Blows Over Malawi Famine

By Emad Mekay Reprint | | Print |

Emad Mekay

WASHINGTON, Jun 13 2002 (IPS) - Starving Malawians are forced to eat grass seeds, banana roots, and tree leaves because the International Monetary Fund (IMF) gave their government bad advice, according to aid workers.

ActionAid, an international non-governmental organisation (NGO) with offices in the southern African country, said in a report Thursday that the IMF played a role in causing hundreds of famine-related deaths in Malawi, one of the world’s poorest nations.

It did so in three ways: By advising the government to sell some of strategic grain reserve to settle commercial debts; by advising it to privatise the National Food Reserve Agency (NFRA), and in the process incur the debts in the first place; and by requiring it to remove price controls, fuelling inflation in the price of staple foods.

An IMF official said the agency gave its advice to Malawi on the basis of information that turned out to be faulty. The IMF did not advise the government to sell of its entire, 165,000 metric ton reserve, she added.

ôYou cannot blame us for something that we didn’t do,” said Fund spokesperson Simonetta Nardin. ôWe are a fiscal institution. Food security is not our specialisation area.”

The IMF based its advice — to sell part of the reserve and make effective use of a remaining 60,000 metric tons — on information supplied by Malawian authorities and the European Union, said Nardin.

“This was not a condition for the IMF lending,” she added. “It was a budgetary point of view that made sense to the government at the time. But the food situation deteriorated rapidly afterwards.”

ActionAid acknowledged this and the fact that Malawi’s government allowed the grain to be sold at home despite IMF recommendations that it be exported.

In turn, said Paul Kwengwere of ActionAid Malawi, local traders profiteered by buying maize cheaply, stockpiling it, and selling it at mark-ups of up to 400 percent. This prevented thousands of poor Malawians from getting food. Hundreds have died and thousands now face starvation in a country of 10.5 million people.

Nevertheless, it set the developments in the context of the IMF’s advice to Malawi under an overarching structural adjustment programme designed to reduce government spending, end farm subsides, and allow food and other prices to float on the market.

ôWe want to see an immediate moratorium on such programmes and focus on food security first,” said Irungu Houghton, executive director of ActionAid USA. ôThose people (Malawians) should be able to feed themselves.”

Houghton said that there should also be an investigation into the precise factors that led to what could have been a preventable famine.

ôWe know now that the losers are the people who are now starved to death,” he said. ôWe want to know who have been the winners. We want to see a legal action inside Malawi.”

President Bakili Muluzi declared a disaster in February and said the country needed 21 million dollars in international food relief.

The famine was quickly overshadowed, however, by a heated exchange of accusations between Malawian officials and the IMF and donors, who faulted the government for economic mismanagement and governance failures.

The report faulted the donors for embroiling themselves in a futile and mistimed attempt to figure out what happened to the reserve rather than moving quickly to respond to the human tragedy.

Houghton said that although aid and food was urgently needed to help those who cannot afford to buy food, international donors should not dump maize, Malawi’s staple, as this would squeeze local farmers out of the market.

The IMF, meanwhile, has urged Malawi to overhaul its economic databases and its information system. ôIn particular, the failure of the information systems for crop estimates had tragic dimensions,” it said in a statement.

ActionAid, however, urged the IMF to wean itself off the practice of withholding loan disbursements to punish countries for not meeting its conditions.

ActionAid timed the release of its report to coincide with the World Food Summit, which concluded Thursday in Rome, and to precede meetings here next month of the IMF’s executive board, which is scheduled to review Malawi’s macroeconomic programme.