Our Comments On Pensions

The Reserve Bank is to be congratulated for taking the initiative of organizing a symposium to rethink the allocation of pension funds which are now more than one billions dollars worth. Pension funds have grown dramatically in Malawi and carefully allocated, they can significantly contribute to the growth of the economy.  Thus far the funds have been misallocated, being placed into short-term equities.  And in terms of infrastructure, the choice has been shopping malls, a wasteful practice encouraged by South African pensions funds such as Old Mutual.

In other parts of the world pension funds have been used to build railways, electrification, providing office space, housing, etc. We just have to look at the case of Singapore to see how we can go.

There is something perverse about Malawi sitting on huge amounts of money and apparently have no clue what to with the money.

Our Comment: Who is setting the debate agenda?

Many people have complained on social media that the Presidential debates have not addressed the fundamental issues facing Malawi:  The poor performance of the agriculture sector, stagnant industry, underutilized infrastructure such Nacala, missing structural change in the economy, urbanization without jobs.   Why the huge gap between the question raised by the organizers of the debate and the general public’s concern over economic failure?

First, follow the money. The debates have been funded by aid donors and it is clear they have steered the agenda, including the questions the moderator would pose.  

Donors stopped worrying about economic development in the 1980s. For much of the 1980s, their concern was stabilization. And they managed to stabilize African economies to near death as economic growth stagnated. In The 1990s, they shifted towards what is known as “post-development” issues – Gender, environment, sexuality Human Rights, Access to Justice, Good Governance, Rule of Law and Security, etc

In the case of Malawi, they chose to carry out their new agenda through NGO on whom they spend K500 billion Kwacha. Much of the money is spent on endless workshops and high salaries.  Had just half of this money be spent on infrastructure (roads, electricity, school building) we would be getting somewhere.

With this huge finding, the donor-NGO agenda has simply overwhelmed the national agenda which is still focused on problems of economic development and poverty elimination Donors are interest in “post-developmental” and our NGOs and media are trapped within dead-end agenda

These are obviously noble ideas but it is clear that they are only releasable if certain material conditions (including life) are met.  In Malawi, we still have to worry about production, structural change, infrastructure, etc. Indeed the greatest threat to our democracy and human rights regime is our inability to meet the substantive demands of our people.

The composition of the task force for the debate is telling. The task force consists of MISA Malawi, Malawi Broadcasting Cooperation (MBC), Times Group, Zodiak Broadcasting Station (ZBS) and Civil Society Organisations including Centre for Multiparty Democracy (CMD), Democracy Works Foundation (DWF), Civil Society Agriculture Network (CISANET). Catholic Commission for Justice and Peace (CCJP), Malawi Law Society (MLS), Public Affairs Committee (PAC), Voluntary Service Organization (VSO), National Initiative for Civic Education (NICE) Trust, and the National Democratic Institute (NDI).  The usual suspects.
There were no organizations from the productive sectors: no unions, no employers association, no cooperative. Donors do not usually like membership organizations.

e.

.

.

.