Can Malawi deal with a British aid freeze?

In the wake of the diplomatic row between Malawi and the UK over a leaked memo criticising Bingu Mutharika, the UK has suspended all aid to Malawi. Jimmy Kainja, over at the Guardian blog, notes that Mutharika suddenly looks a little more willing to compromise:

However, Mutharika announced on Monday that “genuine dialogue and consultations have been initiated” between the two countries. He was confident that “new modus operandi will be agreed to the mutual regard” of Britain and Malawi’s “shared common vision and interests”.

“With regard to Malawi’s bilateral relations with the United Kingdom, I wish to assure this august house that both Malawi and Britain are committed to strengthen such relations in all aspects … we expect our development partners to continue to support us,” Mutharika said during the Malawian parliament’s budget session.

This seems to suggest that Mutharika was never entirely serious, or perhaps misunderstood the full ramifications of expelling the British high commissioner. DFID has historically been a major contributor to Malawi’s fertiliser subsidy program, so this aid crunch has the potential to do a lot of political damage to the current government.

Many consider the aid freeze to be too harsh. This is one of those big, unanswered questions – how should we weigh the “aid shouldn’t incentivize bad governments” against the “cutting aid will hurt the poor argument”? This might be strongly determined by how much you discount future suffering versus suffering today.

Kainja argues that we can have it both ways, if DFID would only re-route its aid through NGOs and civil society organisations. This is problematic for two reasons: Firstly, a large hunk of DFID’s aid is a combination of general budget support and sectoral budget support. They give money to the Malawian government to do things, like run hospitals and buy fertilizer. It would be extremely difficult for DFID to fund similar operations in the NGO sector, especially in the short term.

Finally, rerouting the aid, if successful, doesn’t really do much to `punish’ the Malawian government. This row isn’t over corruption or theft of aid, it’s over creeping authoritarianism. If the average Malawian sees no change in access to aid-funded resources, it will be unclear exactly what a rerouting would accomplish.


3 thoughts on “Can Malawi deal with a British aid freeze?

  1. Ranil Dissanayake

    May 26, 2011 at 11:52am

    Not to mention that it would massively increase the number of TWACIB-style NGOs operating in Malawi, which is already massive.

  2. Ranil Dissanayake

    May 26, 2011 at 12:00pm

    having reviewed that appalling sentence, I just thought I should say massive once more. ‘Massive’.

  3. Jon

    May 27, 2011 at 2:16am

    Hah. Not following African politics that closely, having some vague memories of Bokassa, and being quite tired I thought for a second “Oh no, that’s not the President of Malawi is it?”

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