From: barnhart@ddsw1.MCS.COM (Mr. Aaron Barnhart)
Subject: IPS:MALAWI: AID FREEZE SQUEEZE STARTS TO HURT
Date: Tue, 26 Jan 1993 23:08:13 GMT
Organization: Evanston, Illinois, U.S.A.

Copyright Inter Press Service 1993, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Title: MALAWI: AID FREEZE SQUEEZE STARTS TO HURT


blantyre, jan 19 (ips/obinna anyadike) -- a donor aid freeze
designed to pressure the government into political and human
rights reforms is yet to really bite. but it will.

last may, donors suspended development aid worth usd 74
million to the autocratic government of self-declared life
president hastings banda. humanitarian assistance in the form of
drought relief were untouched.

''the knock on effects hasn't come in yet because the funds
withdrawn are for future disbursements. the agreements enforced
earlier don't get effected'', managing editor of the financial
post newspaper, alaudin osman told ips.

but, ''1993 is the crunch period now coming and we're going
to feel it'', he added.

agriculture is the mainstay of this central african economy
and the fall in commodity prices on tobacco, tea and sugar has
already troubled the government and the business community as
foreign exchange drys up.

''banks are not suppling letters of credit. even if the
reserve bank gives its permission, commercial banks have almost
exhausted their means of cover'', harry thompson, chair of the
chamber of commerce and industry said.

''humanitarian aid has not been stopped but it is not going
to the government, its going directly to the (non-governmental
organisations) ngos and the ngos are controlling it'', he added.

a serious concern is that ''malawi has an agreement with the
international monetary fund and world bank on a liberalisation
programme. it must be seen to be going on with it even if there
is no money'', thompson said.

what that means is there is a flood of imports coming in.
businesses here have stockpiled goods, in the fear of heavy
devaluation.

malawi still has a good credit rating with international
suppliers who appear at the moment prepared to wait for their
money, but the pinch will come on new imports.

government spending has already been hit. there have been
reports of a health service in shambles, but donors suspect that
this could be due to maladministration as much as the aid
freeze. ''the malawi government always pretends that the effect
(in 1992) has been immense'', one western diplomat said.
(more/ips)


malawi: aid (2)

but for the average man in the street, times can only get
harder. with a gross national product of usd 180, less than
war-torn chad, malawians already suffer.

riots last may -- the first time ever in this repressive
country -- were as much to do with the demand for political
change as the alleviation of poverty.

''i am suffering, that is why i want multiparty'', one
small-scale farmer told ips.

he sells his maize, the staple, to licensed middle-men for
just under seven dollars a 90kg bag, and buys milled maize at
around 20 dollars for the same amount.

''but it's our property, we are growing it'', he declared.
''i work hard and have no money. some people don't work at all
(the government) and are rich''.

a cleaner in the service industry in this southern commercial
city complained that his monthly wage was usd 35. his rent cost
usd 13, and food for his family a further usd 20. that left him
with barely enough to pay for un-piped water -- bought daily --
and firewood.

''the problem in malawi is one of money. the people in the
villages are better off'', he said. ''we are tired and need
change''.

''the problem this year will be for the average man'',
thompson, a senior member of the opposition united democratic
front warned. ''businesses are holding back their stocks waiting
for devaluation. that's when people will feel the difference in
prices''.

banda has set march 15 as the date for a referendum on
multipartyism. he believed that would be enough to unlock donor
funds, but it has not worked.

donors are pushing for real domocratisation. but even after
an election, whoever wins will not be rewarded with a quick flow
of funds. once aid is halted, it takes time to prime the pumps.
''it will be extremely difficult to set the process in motion'',
the diplomat pointed out. (end/ips/oa/fc/93)
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