As a young feminist writer and researcher, Jessica shares how the IMF and World Bank have imposed themselves in her country, and what this means for women experiencing rising inequalities.

By: Fight Inequality

Jessica is giving testimony on Wednesday 11 October, 09:30-15:30 Casablanca Time at the Peoples’ Alternative Global Tribunal on the IMF and World Bank in Marrakech, Morocco. Watch live via Facebook.

The conversation and wording of neoliberalism and austerity is one that falls within the confines of closed boardrooms at Capital Hill in Malawi, where the Ministers of Finance and Economic planning, and the heads of the Reserve Bank, Office of the President and Cabinet, National Planning committee sit together with the President of Malawi to discuss the economic fate of the country. These discussions are followed by Parliamentary sessions where the budget of the country is discussed, and the conversation transcripts are illegible to the people.

Perhaps this is why it has taken so long for the impact of austerity to form part of the civil society conversation, or perhaps it is because Malawi has been devastated by the multiple crises in the last few years- that is, political, economic, climate and public health. Regardless of the motivations, it is necessary to the recovery of the country that this conversation continues and prioritises the wellbeing of the people.

To contextualise the role of the International Financial Institutions (including the World Bank and IMF) in the fate of the Malawian Economy, we must understand where, when and why the Government of Malawi came to build a progressively toxic relationship that has devastated the public services in the country, and ultimately the wellbeing of the people.

Malawi entered into agreements with the IMF and the World Bank during the period of the 1980s and early 2000s. This was because of Malawi’s vulnerability following the economic crisis. The government began implementing Structural Adjustment Programmes following the advice from the IMF. These SAPs included the reduction of public spending on essential services - education and health, and especially cuts and reduction of subsidies in the agriculture sector, which led to a food crisis in the early 2000s. 

The SAPs were introduced as conditions to the loans, and in present day, the SAPs are now termed ‘’austerity measures” or “fiscal discipline measures”, often and mostly recommended by IFIs.

Over the years, the loan conditionalities have gradually increased, and changed in terminology. Until the 1980s, the Fund focused primarily on macro-economic criteria such as budget reduction, restrictive monetary policy, and exchange rate management. 

Now, Malawi has a primarily agricultural economy, and while the agriculture sector is progressive and heavily profitable, it is far from enough to sustain the country’s economy. As such, the economy also depends on domestic revenue through the tax system, donor aid and debt from IFIs to meet the economic needs of the country.

Because of the reduction of funding to the health sector, the healthcare budget has been consistently reduced, therefore disrupting service delivery, especially on the provision and maintenance of public health services. 

From the public service delivery perspective, the introduction of SAPs pushed the State to implement public sector wage bill cuts as well as recruitment freezes. For the health sector, this has resulted in severely understaffed hospitals, causing many to lose their lives.
At the same time, due to the cuts, there is barely enough finances to purchase medication and equipment; hence patients are sent to private pharmacies to buy medication that many cannot afford. In worse cases, patients sleep on the floor due to the lack of beds. This is especially detrimental in the maternity wings in the public hospitals for example Kamuzu Central Hospital and Bwaila hospital, where women go into labour in the hallways, waiting for beds to open for them.

From a fiscal policy perspective, there has been an increase in the implementation of regressive tax policies, with a focus on VAT on consumables as well as medication which affects affordability. This includes taxes on menstrual hygiene kits. This situation has especially been critical in the context of the global pandemic, and the subsequent public health crises that hit Malawi (Cholera and Polio).

To alleviate the devastation caused by the series of economic crises and impacts from the imposition of the IFIs, it is time for the Government of Malawi to heed the advice from experts and CSOs, to first, move toward a feminist wellbeing economy and a progressive taxation system to support resource mobilization to fund essential services by taxing the multinational corporations.
Second, we must renegotiate the colonial mentality of the IFIs which prioritises economic growth over the wellbeing of the people. These recommendations must center the rights of the people as per the Constitution of Malawi, as entitlements and claims, not privileges left to the likes of the IMF.