afrol News, 28 October - Economic growth has been too slow during the last years to reduce the rampant poverty in the country. Drought had contributed to this, the Malawian government holds. This year's and next year's outlook is however much better, according to government reports.

In a September Malawian government 'Letter of Intent' to the International Monetary Fund (IMF) - released today by the IMF - Friday Jumbe, Malawi's Minister of Finance, is optimistic. The poor development of recent years seemed to have turned brighter.

Growth over the past few years "was too low to reduce poverty," Minister Jumbe acknowledged in the letter to the IMF. Real GDP had contracted by more than 4 percent in 2001, and preliminary data indicated that growth had remained below 2 percent in 2002.

In 2002, growth in the manufacturing and services sectors was estimated to have "remained negligible due to the low agricultural and agro-processing output and high real interest rates." Industrial activity also shrank to its lowest level in more than a decade.

However, agricultural output was projected to rebound strongly during 2003. Nevertheless, overall real GDP was only expected to "recover modestly" as "growth in other sectors continues to be negatively impacted by the persistent high real interest rates."

Outlining Malawian economic "policies and measures for 2003-04," Minister Jumbe says his government was counting on a "rebound in economic growth to 5-6 percent, driven by small-scale agricultural production, manufacturing, mining, and tourism." The 2003 growth goal could however prove difficult to reach.

Overall, Malawian economic policy had the goal of reducing poverty, the Minister says. "Our poverty reduction strategy aims at reducing the incidence of poverty to 59 percent in 2005 from 65 percent in 1998." During the 2002-03 drought, the poverty rate had however risen.

Reducing poverty was to be achieved by a "higher and sustained economic growth," Mr Jumbe outlined the main focus of Malawian government policy.

This again, was to be achieved by developing "human capital, as a healthy and educated population will be more productive;" reducing income inequality, "as it restricts the productive potential of the poor;" improving the "quality of life for the most vulnerable;" and establishing "good governance, thereby ensuring that public institutions and systems protect and benefit the poor."

In its letter to the IMF, the Malawian government further said id recognised that "the delayed implementation of macroeconomic and structural policy reform has also impeded Malawi's progress." The Ministry now however was to improve its economic management and "accelerate the pace of structural reforms."

The Malawian government is observed to be strongly dedicated to the economic recipes prescribed by the IMF and virtually no opposition to these policies exist. Even the so-called labour opposition cries out for "more market economy," observers hold. There has been close to no public debate on the wide-ranging structural reforms in Malawi.

By staff writer

© afrol News

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