Why aid money has returned to Malawi
Aid donors, such as the US Millennium Challenge Corporation, have reinstated aid projects that had been suspended because of authoritarian policies of Malawi's previous leader.
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America was not the only aid donor to cut off Malawi for its authoritarian policies, and it is not the only aid donor to reinstate aid when Banda began to strip away the Bingu baggage.Skip to next paragraph
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Last April, the African Development Bank announced that it was ready to provide $45 million in budget financing for Malawi to help the new president revive the country’s weak economy. Malawi is dependent on one sector, agriculture, for 35 percent of Malawi’s gross domestic product, and 80 percent of its export earnings.
In May, Britain pledged $35 million in economic stabilization programs, and $15.4 million for the country's health sector. Two thirds of the country’s population live in poverty, and one in five is unable to afford even the most basic minimum food requirements, according to the United Nations Development Program.
The role of democratic governance
Yohannes of the MCC says that the US is committed to supporting democratic governance, and it will continue to use aid dollars as a leverage to encourage better economic policy.
“In order to a member of the MCC family, you have to have the conditions of democratic governance, human rights, and the rule of law,” Yohannes says. “Under the previous president, there were some laws that banned free expression, that were very difficult for civil society. There was a crackdown on the media. So when we suspended Malawi, it was because of the killing of civilian protesters by the police.”
Banda has taken “bold actions to improve Malawi’s human rights environment,” Yohannes adds, and announced economic reforms as well.
While refusing to talk about other donor nations, such as China, which may not be as focused on human rights policy, Yohannes says the goal of his agency “is to reduce poverty. Our goal is to help partner countries to get rid of poverty so that aid is no longer needed.”
Creating the conditions where countries can wean themselves from foreign aid and stand on their own feet requires the use to become “extremely selective,” Yohannes says. “Out of 100 countries that are considered to be poor, we have a relationship with 24.”
“When a country does not abide by the preconditions for an MCC grant, they will be suspended,” Yohannes says. “Now we believe that we have a good relationship with President Banda, and it will benefit Malawians as well as the people of the United States.”