Blog #4: Poverty in Malawi

By: Sam Whitty

[Malawian farmers work the fields]

            Being one of the poorest countries in the world, Malawi is especially familiar with poverty. Malawi had a per capita Gross National Income of only 320 USD, which is one of the lowest in the world. On top of this, Malawi sits in the heart of poverty, sub-Saharan Africa, and its per capita income growth rate is barely half of the average non-resource-rich African economy (1).

            But Malawi's trouble with poverty and its economy is not an outlier. It is part of a global trend. In Recent years, countries around the globe have seen a drop in poverty, India being the best example of this. In 2019, India reduced its poverty rate to below three percent. This is a bold move for a country that has the second largest population of any country and is set to overtake China in the next decade. On the other hand, Africa has seen largely stagnated in its efforts to reduce poverty. The disparity between Africa and the rest of the world is shown by the fact that seventy percent of the world's poor lived in Africa in 2019. This number will only rise in the future (2).

            Although the country faces uniquely high poverty rates, Malawi has progressed in certain areas. In particular, these areas are education and health. In 2013, primary school completion rates rose to 75 percent in 2013 compared to 58 percent in 2004. Malawi has also seen downward trends in child malnutrition and deaths of children under five years old. In 2004, 133 children under five years old died per 1,000 live births compared to just 64 deaths per 1,000 live births in 2015. There has also been a significant decrease in cases and deaths associated with HIV/AIDS, malaria, and tuberculosis (1).

            The reasons for Malawi's poverty are clear. Bill Gates explains in an interview with TIME magazine that subsistence farmers can be thrown into poverty just because of one year of bad weather. The only way that one can survive a year of bad weather is if they have saved enough in previous years to get through a year without income (3). Given the floods in 2015 and the drought of 2016, Malawi's subsistence farmers have had to deal with multiple weather events that have increased poverty and stunted economic growth. On top of natural disasters, the coronavirus pandemic has created an entirely new crisis. Considering the figures that the International Monetary Fund (IMF) has provided are for 2015, Malawi's poverty problem is likely to be worse than what is recorded in their report (1).

            Although monetary problems persist in Malawi, human capital has been able to grow due to foreign aid. The country relied on foreign aid for forty percent of its budget in 2011 (4). This foreign aid has not always been converted into reduced poverty in the past, but the IMF has recently outlined a new plan to facilitate reducing poverty in Malawi. This plan includes agricultural growth by minimizing climate risks, building newer facilities and infrastructure, and addressing gender equality. The combination of these three goals will help Malawi achieve economic growth and reduce poverty as a result (1).

            Reducing poverty in Malawi is a challenging issue that both the country and international organizations have struggled to solve. Malawi is not alone in this problem, however, as it is part of a region that has been riddled with poverty for generations. Malawi is one of the poorest nations in the world and is one of many developing countries in sub-Saharan Africa. It will be interesting to see if Malawi and Africa as a whole can start to follow the rest of the world by reducing poverty in the coming years.

References

            International Monetary Fund. Malawi Economic Development Document. No. 17. International Monetary Fund, 2017, https://www.imf.org/en/Publications/CR/Issues/2017/07/05/Malawi-Economic-Development-Document-45037

            Kharas, Homi, et al. “Rethinking Global Poverty Reduction in 2019.” Brookings, Brookings, 10 Apr. 2020, www.brookings.edu/blog/future-development/2018/12/13/rethinking-global-poverty-reduction-in-2019/.

            Kluger, Jeffrey. “Bill Gates Talks About Eradicating Poverty in Africa.” Time, Time, 21 Sept. 2018, time.com/5402366/bill-gates-africa-development/.

            Page S. (2019) The Development Aid Situation in Malawi. In: Development, Sexual Cultural Practices and HIV/AIDS in Africa. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-04119-9_3