Malawi Rejects advice from phony neoliberal "free market" experts, and averts disaste

Cypress

Well-known member
Malawi Rejects advice from phony neoliberal "free market" experts, and averts disaste

For 20 years Malawi followed the advice of neoliberal "free market" ivory tower experts at the world bank, leading the country to starvation and destitution.

After rejecting World Bank neoliberal "free market" advice, and implementing public/government investments Malawi averts disaster and is now successful in its agricultural policies


Ending Famine, Simply by Ignoring the Experts

The secret of Malawi’s success: heavy subsidies for fertilizer, farmers say. The World Bank had pressed for their elimination

By CELIA W. DUGGER
Published: December 2, 2007

LILONGWE, Malawi — Malawi hovered for years at the brink of famine. After a disastrous corn harvest in 2005, almost five million of its 13 million people needed emergency food aid.

But this year, a nation that has perennially extended a begging bowl to the world is instead feeding its hungry neighbors. It is selling more corn to the World Food Program of the United Nations than any other country in southern Africa and is exporting hundreds of thousands of tons of corn to Zimbabwe.

In Malawi itself, the prevalence of acute child hunger has fallen sharply. In October, the United Nations Children’s Fund sent three tons of powdered milk, stockpiled here to treat severely malnourished children, to Uganda instead. “We will not be able to use it!” Juan Ortiz-Iruri, Unicef’s deputy representative in Malawi, said jubilantly.

Farmers explain Malawi’s extraordinary turnaround — one with broad implications for hunger-fighting methods across Africa — with one word: fertilizer.

Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have periodically pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers. But after the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached.

Stung by the humiliation of pleading for charity, he led the way to reinstating and deepening fertilizer subsidies despite a skeptical reception from the United States and Britain. Malawi’s soil, like that across sub-Saharan Africa, is gravely depleted, and many, if not most, of its farmers are too poor to afford fertilizer at market prices.

“As long as I’m president, I don’t want to be going to other capitals begging for food,” Mr. Mutharika declared. Patrick Kabambe, the senior civil servant in the Agriculture Ministry, said the president told his advisers, “Our people are poor because they lack the resources to use the soil and the water we have.”

The country’s successful use of subsidies is contributing to a broader reappraisal of the crucial role of agriculture in alleviating poverty in Africa and the pivotal importance of public investments in the basics of a farm economy: fertilizer, improved seed, farmer education, credit and agricultural research.

Malawi, an overwhelmingly rural nation about the size of Pennsylvania, is an extreme example of what happens when those things are missing. As its population has grown and inherited landholdings have shrunk, impoverished farmers have planted every inch of ground. Desperate to feed their families, they could not afford to let their land lie fallow or to fertilize it. Over time, their depleted plots yielded less food and the farmers fell deeper into poverty.

Malawi’s leaders have long favored fertilizer subsidies, but they reluctantly acceded to donor prescriptions, often shaped by foreign-aid fashions in Washington, that featured a faith in private markets and an antipathy to government intervention.

In the 1980s and again in the 1990s, the World Bank pushed Malawi to eliminate fertilizer subsidies entirely. Its theory both times was that Malawi’s farmers should shift to growing cash crops for export and use the foreign exchange earnings to import food, according to Jane Harrigan, an economist at the University of London.

In a withering evaluation of the World Bank’s record on African agriculture, the bank’s own internal watchdog concluded in October not only that the removal of subsidies had led to exorbitant fertilizer prices in African countries, but that the bank itself had often failed to recognize that improving Africa’s declining soil quality was essential to lifting food production.

“The donors took away the role of the government and the disasters mounted,” said Jeffrey Sachs, a Columbia University economist who lobbied Britain and the World Bank on behalf of Malawi’s fertilizer program and who has championed the idea that wealthy countries should invest in fertilizer and seed for Africa’s farmers.

http://www.nytimes.com/2007/12/02/world/africa/02malawi.html?_r=1&th&emc=th&oref=slogin
 
Friedman and his acolytes will be condemned by history. Hopefully we're waking up to the bullshit they peddle.
 
Friedman and his acolytes will be condemned by history. Hopefully we're waking up to the bullshit they peddle.

Careful, you're likely to start a riot on this board with that blasphemy.


Just give Friedman "six more months". I'm sure his world bank theology will eventually be proven right. Just six more months.
 
Stop hating those bad economic policies, Cypress, you crazy fool.

If the African economy is ever going to succeed, it needs to fail, for several decades first. Development isn't easy, you know.
 
Subsidizing an infant industry can do wonders for your economy sometimes.

The problem with most nations and free trade is that they're naturally very small. They will have to depend on one or two vital resources. Whenever these resources fail, the government fails, and is not able to keep up. If they had developed with trade protections their economy would be more diversified.

Free trade really only makes sense with nations and unions so large that their economies are naturally diversified, and they can provide government services at all times to needy regions. USA, EU, China, basically. If the AU gets underway and becomes more like the EU, free trade may make more sense.
 
Also, farm subsidies are needed so that farms never fail. If your farming industry fails it's a pretty big disaster. If steel, it's not much of a big deal.

Our farm subsidies, however, are basically pork. Most of it goes to corn, huge agribusinesses, and random people who live in cities.
 
Really stupid article. The article pretends they have been faithfully applying free market policies. But that is not even close to true.
 
After decades of following the advice of the luminaries at the World Bank, most African nations have witnessed foreign multi-nationals taking ownership of their natural resources and a steady withdrawl of profits from those industries to their shareholders, whilst Africans become poorer.

Why on Earth would it come as a surprise to anyone that "liberalizing" your market is proffered as a solution to all your problems, when the helpful chaps offering that advice just happen to be friends with the chaps who'll come along and buy all your mines, oil rigs, farms, etc.?

Subsidies are bad (unless you're a Western nation)

Protectionism is bad (unless you're a Western nation)

The IMF, eh? Destroying the economies of the poor since 1944. Well done there.
 
Subsidizing an infant industry can do wonders for your economy sometimes.

The problem with most nations and free trade is that they're naturally very small. They will have to depend on one or two vital resources. Whenever these resources fail, the government fails, and is not able to keep up. If they had developed with trade protections their economy would be more diversified.

Free trade really only makes sense with nations and unions so large that their economies are naturally diversified, and they can provide government services at all times to needy regions. USA, EU, China, basically. If the AU gets underway and becomes more like the EU, free trade may make more sense.

Oh my god, you're a collossal idiotic dumbass. This is probably the stupidest post I've ever read.

He rejected it because 'free market' today means letting foreign nationals rape your country.
 
It's another statist hellhole, but they had one decent crop and that somehow proves freedom does not work.

There are not simply just two choices in the world: either adhere to the neoliberal "free market" policies dreamed up by some ivory tower geeks at the World Bank; or follow the idiotic Soviet collectivist model for agriculture. That seems to be the black and white world view of many ideological libertarians.

There are always hybrid choices and middle ground. Prudent and well managed government investment in key domestic industries, is not always a something that should be dismissed with derogatory terms like "statist"
 
Malawi is smart. A country should always maintain food production capacity, regardless of the hollow 'comparative advantage' arguments. Self sufficiency trumps economic zealotry.
 
The World Bank's own internal auditor recognized that forcing neoliberal "free market" theology down the throat of Malawi was causing ruin and destitution.

In a withering evaluation of the World Bank’s record on African agriculture, the bank’s own internal watchdog concluded in October not only that the removal of subsidies had led to exorbitant fertilizer prices in African countries, but that the bank itself had often failed to recognize that improving Africa’s declining soil quality was essential to lifting food production.

“The donors took away the role of the government and the disasters mounted,” said Jeffrey Sachs, a Columbia University economist who lobbied Britain and the World Bank on behalf of Malawi’s fertilizer program and who has championed the idea that wealthy countries should invest in fertilizer and seed for Africa’s farmers.
 
There are not simply just two choices in the world: either adhere to the neoliberal "free market" policies dreamed up by some ivory tower geeks at the World Bank; or follow the idiotic Soviet collectivist model for agriculture. That seems to be the black and white world view of many ideological libertarians.

There are always hybrid choices and middle ground. Prudent and well managed government investment in key domestic industries, is not always a something that should be dismissed with derogatory terms like "statist"

Malawi leans heavily away from economic freedom. Many industries are controlled by government, they have a very burdensome inflation tax and they suffer under regulation and corruption.
 
Malawi leans heavily away from economic freedom. Many industries are controlled by government, they have a very burdensome inflation tax and they suffer under regulation and corruption.


Not sure what that has to do with the topic of the thread: whether african farmers should try to buy fertizler on the "free market" with zero government help; or whether its in Malawi's interest to have the government invest in fertilizer and agriculture.
 
Malawi is smart. A country should always maintain food production capacity, regardless of the hollow 'comparative advantage' arguments. Self sufficiency trumps economic zealotry.

You are an idiot. A small country such as Malawi cannot support a diverse enough food supply. They require the comparative advantage and trade or they are going to have severe malnutrition.
 
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