Friday, February 22, 2008

America in Malawi: An interview with John Hewko, Vice president of MCC's Compact Development

What does it mean for Malawi to reach the compact status of the Millennium Challenge Corporation?

First, let me start by on behalf of President Bush and on behalf of the chief executive officer of MCC John Danilovich to congratulate you and Malawi and the people of Malawi for the fact that Malawi has now been chosen as an MCC eligible country. I think this is an achievement that we at MCC are very proud of and Malawian people should be very proud of and I think that it represents a further step in the very strong and excellent relations that the United States has with Malawi.
May be just a few words about MCC and how we have organised and then what does this mean in practice for Malawi. MCC is the United States government agency set up in the form of a corporation. But we are a United States government agency and we receive a funding from congress and we provide grants not loans. This is money that countries do not need not return.
We provide grants to our compact eligible countries. Now, MCC works on the principle that our development assistance will be best used by those countries that are doing three things. Countries that are ruling justly, that are supporting democratic principles and human rights, countries that are investing in their people, investing in health and in education, and countries that are adopting policies that lead to economic freedom, that lead to a strong and vibrant market economy and stimulate private sector growth.
So, the idea is to work with developing countries but with a very select group of developing countries. Again that rule justly, that invest in their people, and that promote economic freedom.
How do we determine which countries we work with? We take the eighty some countries that follow into the so-called low income category. And those eighty some countries we apply 17 non United States Government indicators, which measure whether the country is ruling justly, investing in its people, and promoting economic freedom. These indicators maintained by independent both parties. And every year each country’s ranking sheet and the results of these 17 indicators is published on our website. Here is the ranking sheet for Malawi.
We have six indicators that measure ruling justly, we have five indicators for investing in people and six indicators in economic freedom. The medium is established for each indicator. You are being compared to your peer group of countries. Your peer group for example, you are being compared to your peer group of countries and if your country scores above the medium it’s going to be passed. If your country scores below the median you fail. To qualify for MCC Compact eligibility you need to be above the medium of three of the six, three of the five and three of the six. We have one pass-fail indicator, that’s corruption. If you right up corruption you are above. So, this is the methodology that we use to choose countries. Now, Malawi was chosen based on this methodology. We now have in total 24 countries that we work with, 13 of them are in Africa. Malawi is one of the eligible countries.


And very important to know is that every year our board re-assesses eligible countries. So, while it’s important to do well on the indicators to become initially eligible. But every year our board will re-evaluate and so you got to be vigilant as you notice that Malawi is very close to the medium in many of these indicators. So in order to continue in the program every year you need to do well on the indicators.

Does that entail every country that qualifies for the compact status automatically receives aid or there is still some kind of monitoring that has to be done?
What does MCC Compact eligibility mean in practice in Malawi?

One feature with MCC is the way we chose the eligible countries, another feature of our process is that we will finance that which Malawi thinks needs for development. In other words, country ownership. We very much believe that that you know much better than we do what you need for your development needs and we are prepared to finance. There are no preferences. We have no preferences as to sectors. We can do things in health, education or infrastructure or water and sanitation, rule of law, aid for trade. But the point here is that we will finance that which Malawi feels need for its development need. What does this mean in practice, now that Malawi has been chosen as eligible; Malawi now needs to prepare a proposal, a funding proposal, a business plan for MCC which articulates the programs the Malawi has to finance. Our singular mission is to reduce poverty
through the vehicle of sustainable economic growth. So a proposal that we will receive from Malawi will need to focus on poverty reduction through growth. But again we have no sectors that we prefer. So it’s for you the Malawians to decide the sector that you like us to finance.
The next step is for the government to organize a broad consultative process with Malawian civil society and the private sector to ask Malawian people what they feel MCC funding should be used for. We very much view the Malawian proposals that we will receive to reflect a bottom-up approach not a top-down approach so that the proposals that we receive reflects broad consensus among the Malawian people as to what the country’s priorities are.
This is a national program. This is not a program with a particular party or faction, it’s a national program. We work, by definition, with countries that hold elections. Elections mean governments stay, governments go. We would like this MCC Compact to be something that most Malawians can feel represents a significant national priority. I would urge you and your fellow Malawians in the civil society and private sector to get engaged in this consultative process. Once this consultative process is completed then the government will need to put together based on this consultative process a proposal to MCC. And when we receive your proposal we will then review it from a tactical perspective and work with you to help refine it to improve it and will offer help to make this program very strong and after that we sign the Compact and begin working.
The third feature is that you are also responsible for implementing. You will be here to guide and offer suggestions with us but Malawi will be responsible for implementing this program. But again every year during the Compact, the country will be assessed based on these indicators.

How long will the process take and how much is Malawi expected to get from MCC
How long will the process take?

History has shown with other countries that generally it takes six to eight months for a country to produce a solid proposal, in other words to do the consultative process and then come up with a good proposal. We then need six to eight months to review, and to refine the proposal and technically assess it. So, I would think that the earliest that we will be in a position to sign something with Malawi will be in the second and third quarter around the year 2009. We had no minimum and maximum number we give a country. There is no quota or formula or funding envelope that we have for Malawi.
You can see that we have given Madagascar US$110 million; we have given Tanzania US$700 million. So, there is no number for Malawi. The number that we will give Malawi will be a function of the quality of the proposal. Was it the result of the consultative process? Can the country effectively implement and absorb the amount of money that it’s asking. So there is no minimum and maximum number. We will evaluate the proposal on its merits. It is very important that we do not politicize this process. This is a national program between people of United States and people of Malawi. And it is designed to reduce poverty through growth and we urge them no to politicize but come together as a country and give MCC a solid national proposal that most Malawians could rally around.

After Malawi finally receives the grant from MCC; are there any ways of monitoring that the country does not relapse on its performance as dictated by the indicators?


Of course we will monitor the indicators every year. That’s one level of monitoring. The second is together with Malawi we will develop very robust and very strong mechanisms for monitoring and evaluating. We want to make sure that the money is properly used. Two, to make sure that we are achieving the results that we would like to achieve. In other words, we have in the Compact agreed specific benchmarks that we hope to meet in this Compact. We can sign compacts for up to five years. So, we can only finance programs that can only be completed in five year period.

So the there will be nothing like the politicians say ‘we have the money but we can go back to old ways?’

No, because the money is not disbursed immediately. If we gave for example X number of dollars to Malawi, we just don’t just turn the money over to the country. What we do is out of our bank account we take the X amount and we reserve it upfront. So to reserve for Malawi and it is disbursed over five years as needed. It’s disbursed over those five years only if during those five years Malawi continues to perform well on the indicators and continues to implement the program well.

America in Africa

Challenging poverty through economic growth
By Emmanuel Luciano

It’s not always the case that great expectations make frustrated men.
The Chairman for the Parliamentary Committee on Trade, Commerce and Industries, who is also Member of Parliament for Lilongwe South West Constituency, is an optimistic man.
Willard Gwengwe envisages a wonderful future for Malawi. He envisions a Malawi with more referral hospitals than the present four of Mzuzu, Kamuzu, Queens and Zomba Central hospitals.
He dreams of a time when even the remotest of places like Phoka in Rumphi, Sinyala in Lilongwe, Makanjira in Mangochi and Marka in Nsanje will have roads befitting a country that gained independence some 44 years ago.
In Gwengwe’s ideal country there are no trees that transform into classrooms of some sort because the available school blocks can not accommodate the surging numbers of pupils in primary schools.
His is a world of conventional secondary schools and proper education system where teachers are spared from the bedlam of shacks they currently call homes because there are enough and proper teachers’ houses.
In the MP’s perfect world, it is only a country with a top-notch health and education system that can spur development in other sectors like of trade and commerce.
Just days after meeting John Hewko, the vice-president of Compact Development of the Millennium Challenge Corporation (MCC), Gwengwe has every reason to positively look into the future. After all, as Anna Eleanor Roosevelt would have it, ‘the future belongs to those who believe in the beauty of their dreams.’
The prospect of Malawi getting huge grants from MCC’s Compact should, therefore, be exciting news to any development conscious Malawian.
In Africa, MCC has approved nearly US$3.9 billion for its engagement with countries like Ghana getting US$547 million; Mozambique US$ 507 million; Lesotho US$363 million; Morocco US$ 687.5 million; and Tanzania US$ 698 million.
The money is not yet here, and there are still a few things that have to be done in the interim before Malawi starts receiving the grants. But with all these figures that went to other countries, Gwengwe can now start counting the eggs.
“It’s my sincere hope that the administration of the fund is not going to be politicised. We should priotise the key areas of education and the health sector as well.
“To spur trade and investment, we need to remove the supply-side constraints. These are bottlenecks like poor road infrastructure, electricity problems and water supply which the private sector is facing in the country,” says Gwengwe.
Dreams, wishes, prospects are just words that on their own are meaningless and in the case of Malawi’s MCC Compact, meaning will on be attached to these words when, as Hewko said, a consultative process to formulate proposals for Malawi starts.
“The next step is for the government to organise a broad consultative process with Malawian civil society and the private sector to ask Malawian people what they feel MCC funding should be used for.
“We very much view the Malawian proposals that we will receive to reflect a bottom-up approach not a top-down approach so that the proposals that we receive reflects broad consensus among the Malawian people as to what the country’s priorities are,” said Hewko.
It is in the consultation process where the chair for Parliamentary Committee on Trade, Commerce and Industries thinks that Parliament should be involved to remove the fear of government politising the issue.
“At least if one or two members from Parliament would be part of the consultative process. We can for instance involve the position of the speaker since he is supposed to be neutral because he represents all political parties represented in Parliament hence the wishes of the people can be priotised,” Gwengwe says.
But Steve Malamba, Chairman for Parliamentary Committee on education, one of the perceived priority sectors, is a bit skeptical because he thinks at the end of the day it will still be government that will draw proposals to be submitted to MCC.
“If government wants to maximise on the benefits of the Millennium Challenge Corporation and they want us to participate, then we are ready to assist. But the ball is in their court really.
“I understand that there has to be the Malawi Challenge Account Board that will also comprise people in government, that’s when they might want to consider involving other sectors,” Malamba says.
Malamba’s doubts stems from his experiences on how the country has handled some critical issues without consultation.
“What might prevent the government from cheating that they consulted us if they could not even consult on the China-Taiwan issue?” he asks.
Those who subscribe to the notion of measuring reality according to their experiences are right in their own way. They need not be worry when their expectations are not met.
There is a lot that has to happen before the great expectations of the likes of Gwengwe are met.
If the country all over a sudden starts performing badly on ruling justly as inherent in the corruption control, or stops investing in its people and warranting them economic freedom as provided for in the indicators that have to be continually observed, then they will be cause for worry.
According to MCC, there are no pre-set limits on Compact amounts that countries can request as “final Compact amounts will be based primarily on program quality, estimated costs, and available funds.”
And given all factors equal, the future looks very bright for Malawi.

Monday, January 14, 2008

Still waiting for Mam’s

By Emmanuel Luciano
THE Musicians Association of Malawi (Mam) has been in the news not for the wrong reasons as some would have it but for the right ones. This association’s executive is yet to hold its Annual General Meeting three years after being ushered into office.
Reason the powers that be in Mam give for failing to hold even a single AGM, for a grouping that represents the interests of musicians in the country, has always been lack of funds.
More recently, the association failed to hold a scheduled AGM in Mzuzu as the year was drawing to an end for the same reason of lack of finances.
The going has been a rough one for the executive that is yet to produce audited accounts of its operations in the three years that it has been in office. It was not surprising, therefore, to see squabbling and heckling characterising the running of affairs in Musicians Association of Malawi.
But with only three months to go before the month of April, when the mandate of the present executive committee expires, according to its president Wellington Chatepa, it appears the storm of trouble rocking the association is failing to abate.
Wellington Chatepa says the association will hold its AGM in April not anytime between as previously arranged.
This has irked some quarters within the association that feel the executive is unconstitutionally running the organisation by not holding the AGM.
Chatepa says they are trying to raise funds for the April AGM to take place without any hurdles.
“Actually the elections are due in April that is when our mandate expires. We had no AGM all these years because we had no money. The one we were to hold in Mzuzu failed to take place because we only had K50 000 which came from Mr. Wawanya one of the trustees instead of K400 000,” he says.
Chatepa dismisses those who were agitating for ‘early’ elections as individuals who were just bent on ousting the existing committee for unknown reason.
Overton Chimombo, one of the candidates that were ready to pit themselves against Chatepa in the failed Mzuzu AGM, however, says the executive is executing the functions of the association illegally.
“Holding the AGM in April is against the wishes of the majority of the people. There were issues that the office is being personalised a lot and that’s why we called for an AGM.
“According to our constitution, the president or the secretary cannot approve anything without the approval of the general assembly. Even the spending that is being done now is illegal because it has not been approved by the general assembly. There is no accountability. Right now we hear the president is busy conducting some Mam projects with funding from donors in the Centre but how do donors find activities of the association without audited accounts? Chimombo asks.
Vice secretary for Mam’s southern region chapter Diwa Khwiliro says members did not agree to shift the AGM to the month of April.
“We agreed that the elections or the AGM be held as soon as we have the money. If we find sponsors today we can have the election this week. The president is not a trust to make that decision alone,” Khwiliro says.
But Mam central region chapter chairman Edward Munjeru says holding the AGM in April would only be the rightful decision.
“The term of office is really supposed to end in April and that’s when we should have the lections because by then we will have found people to sponsor us,” says Munjeru.
Chairman of the trustees Geoff Gondwe says it was disappointing that members did not understand the significance of holding an AGM.
“Lack of money should not be a reason for acting unconstitutionally. That’s the price you pay for democracy. People should not water down AGMs because it is at this meeting where leaders renew their mandate. You can’t execute plans without the authority of the people who put you in office.
“It is at AGMs where plans and budgets of the organisation are approved. The assembly looks at the expenses incurred or whether they have spent within budgets.
Gondwe says he expects the association to have audited accounts ready by they hold the AGM.
“If they want to have the AGM in April, perhaps they want to give themselves time to prepare. The accounts haven’t been audited all these years and as a constitution requirement their books have to be done prior to the AGM,” he says.

Made in China: New song of development or begging for neocolonialism

By Emmanuel Luciano
Blue Diamond, a nightclub that is mostly frequented by animated students and some zealous outgoing adults, is perched at Sunnyside close to Colony Casino in Blantyre. This place can be reached using the Chikwawa road past Catholic Institute. Those driving from Victoria Avenue, downtown Blantyre, will only take a minute to get there. That is how close Blantyre is to Beijing.
And there is Machaina in Lilongwe, a name of a nightclub that needs no introduction for Lilongwe revellers who spend their time at Bwandiro.
At Trade Fair in Blantyre, on the opposite left of the Chamber’s house if you are entering the fair grounds using the main gate, there is a tiny restaurant which is run by people whose identity is easily deceived by a language that somewhat sounds Greek save for some guttural sounds that accompany it. Not that they serve any Chinese food at this place, no. It’s the same food you find in most second rate restaurants in town. And that’s how near mainland China’s Peking can be to Malawi.
If you have never been to any of these places you need not worry that you have never visited mainland China in Malawi because there are numerous China shops in all cities and towns that sell Chinese and other products at prices Malawians can afford.
But it’s not that easy to get to Taiwan in Malawi. In Blantyre you have to scale the walls of the timber factory at Green corner in Blantyre or that of their nail factory at Mapanga. You also need to do a lot of travelling, say travel some 30 kilometres away from Zomba town to reach Namasalima Rice scheme where the Taiwanese are running a rice growing project.
If you are in Lilongwe, to reach Taiwan in Malawi, only ask around for a location of the fertiliser factory which the Taiwanese are running.
Naysayers of Malawi establishing diplomatic ties with Beijing, in what is being termed as the country’s strange way of asking to be hit by a wind of neocolonialism, have argued their cases well.
Proponents of the red China-Malawi relation have also articulated, with passion of a soothsayer, the enormous economic gains that the country is going to get by establishing ties with mainland China at the expense of its 40-year-old relationship with Taiwan.
The debate appears to have been boringly exhausted but there are others like Malawi Watch’s Executive Director Billy Banda who argues that the train of thoughts on whether Malawi should stick to Taiwan or jump ships to join Beijing is being derailed deliberately to curtail the apparent healthy debate.
Perhaps Banda is right considering that the Malawi’s supposed move to dump Taiwan is now considered as Taiwan’s worst diplomatic crisis since the island broke ties with its long-time ally, Costa Rica.
Banda says there is no need to establish another tie with red China because he believes that Malawi already has relationship with Beijing.
“People should be able to differentiate two different sets of ties. We already are pursuing economic ties with mainland China. There are so many businesses from China that are operating in the country with our knowledge, ofcourse. So what else do we want?
“People are talking about economic gains, but we don’t go into diplomatic relations with any country as a profit-making venture because that relation may be a sugar-coated pill that is going to eventually destroy us,” Banda says.
The fact that there is a lot of speculation surrounding the Malawi-China relation does not help matters either as it is also generating conjectures that the ties are meant to advance an agenda that is not going to benefit the majority of Malawians.
“The government is playing hide and seek by allowing information that cannot be properly substantiated to circulate. This is not quite healthy. Diplomatic ties are not done for personal reasons but for the benefit of people of this country today, tomorrow and the future generation.”
“As a civil society, we will be watching closely the progress to see whether the decision to switch to China has been made in good faith. Any advancement that comes out to have induced benefits should not be made. What reasons does government give for going for China?” says Banda.
The Parliamentary Committee on International relations said earlier this week that it was going to meet to debate on the matter, but the Malawi Watch Executive Director says “the committee should consult widely on the issue regarding Taiwan and Mainland China.
“The committee has been idle for too long yet this is an issue that involves foreign policy which cannot be left to the executive alone to decide. There are issues like Malawi’s latest position on Nepad. Was the Malawi-Scottish partnership properly reported to Parliament and exhaustively discussed for instance?”
The question of foreign policy, at the time Malawi is at diplomatic loggerheads with Libya and in the news over its relation with China, excites even those in opposition.
UDF’s Sam Mpasu, who at one time secured computers for his Ministry of information from Beijing when UDF was in power, says the UDF government never made any ties with Beijing.
“It’s not proper that anyone in opposition should be dragged to say much on the country’s foreign policy. We in UDF are being blamed for the issue of Libya and Taiwan.
“But foreign policy is an extension of the domestic policy. What you do inside determines who your friend is. Governments deal with governments. But we deal with political parties and it’s mainly Liberal Democrats in the UK and the Democrats in America because we are a democratic party.”
As Dr. Chris Alden, an authority on China writes in the Commonwealth Press Union Magazine of August 2007, “for the investment starved African continent, China’s arrival has been overwhelmingly welcomed with open arms.”
“At the same time, there are signs of disquiet on the part of local trade unionists as the use of Chinese labourers and conditions in some Chinese enterprise has tempered the initial unbridled enthusiasm.”
As Alden continues in his article, Leveraging the Dragon: Toward "An Africa That Can Say No" in eAfrica of March 2005, Africa, when approaching China, needs to re-orient the very premise of its engagement with China from a residual liberation paradigm, … where Africa needs to consciously promote and preserve its interests.
As wrote Fred M’membe, editor of The Post, Zambia found itself in a precarious situation for not properly bargaining in its deals with China.
“It doesn’t seem we’re engaging the Chinese in the most beneficial way. China investment in Zambia is, in many respects, continuing the pattern established with the West---which has left Zambia poorer.
“We continue to place very little value on our natural resources and a much higher value on capital required to exploit them,” Mwembe wrote in CPQ Magazine of August 2007.
As Banda says, the rush for China should have come after a well-thought out cost-benefit analysis that would translate those ties into a new song of advancement other than a new form of colonialism.

Friday, January 4, 2008

Civil servants suffering from Aids to get K5000 monthly

By Emmanuel Luciano
Civil servants who are suffering from HIV/ Aids will get a new lease of life because government will be paying them an extra monthly K5000 to enable them access drugs and food supplements.
The government’s decision to consider the HIV positive civil servants is contained in the circular from the Office of the President’s Department of Human Resource Management and Development ref. No: HRM/GOP/20/61 dated November 5, 2007.
But Principal Secretary responsible for Nutrition and HIV and Aids in the Office of the President and Cabinet Dr. Mary Shaba said the civil servants who wanted to benefit from the K5000 monthly portion had to come forward if they wanted to access the facility.
“Though the issue of HIV and Aids is confidential, but what it means is that somebody should be prepared to come forward to provide information to those who are coordinating the issue in offices. You still have to tell somebody in one way or another.”
Dr. Shaba allayed fears of stigma that the monthly K5000 facility might generate in various government offices and departments.
“There are systems in offices that are being used. But we don’t need to have names of the people who are suffering from HIV and Aids.
“We are looking at developing some kind of a coupon system which bears the number of the individual and the code. If I lose my coupon, the number and code will not reveal the name of the owner. We are also using hospital health passport,” she said.
The Principal Secretary said they had already started implementing the facility.
“The issue was already being implemented because some people who needed help came out were assisted with food packages and it was through that system that those who were hiding also came out.”
Executive Director of Nurses and midwives organisation of Malawi Dorothy Ngoma said the monthly amount for the affected health workers was government’s way of implementing the policy on caring for caregivers.
“There was no system for caring for caregivers, yet the health workers who are infected need extra support. They need to buy extra drugs,” Ngoma said.
Ngoma, however, said it would have better if the money were used to buy insurance or a medical scheme for those that are HIV positive.
“It’s an opportunity for those who are HIV positive to buy insurance or Masm because they might be admitted at an expensive hospital to access better treatment at one time,” she said.
But Dr. Shaba said government has already worked out a more detailed guideline that will include a scheme.
“We are looking at the scheme that will go beyond the K5000 to reach the affected households. Once this guideline is discussed then it will be implemented. You realise that K5000 could not be sustainable,” she said.