MUTHARIKA TOUTS RURAL GROWTH, ESTABLISHES DONOR

UNCLAS LILONGWE 001114

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SUBJECT: MUTHARIKA TOUTS RURAL GROWTH, ESTABLISHES DONOR
DIALOGUE



1. Summary: President Mutharika summoned heads of mission to
thank them for their support and to air his views on key
policies. He discussed his plans for rural poverty
alleviation, the GOM's move to Lilongwe, and promised to have
regular meetings with donors to establish a policy dialogue.
End summary.


2. President Mutharika convened the heads of diplomatic
missions and donor organizations, along with most of his
cabinet, on December 6 to thank donors for supporting his
administration during its first six months in office.
Mutharika observed that the GOM is now "back on track" with
donors after the difficulties created by the previous
administration. He promised to keep public expenditure under
control and vowed that the GOM will "not slide back, but will
move forward."


3. Mutharika wants Malawi "to shift from being a consuming
country to a producing country, creating wealth and creating
employment." He said the key to economic transformation lies
in empowering the rural poor, and he observed that lack of
capital and lack of training are what keep rural people
economically depressed. To address this integrated rural
development, he promised to revive a dormant GOM policy of
creating "rural growth centers" that would enjoy all of the
services that cities have, in terms of roads, electricity,
water, telecoms, banks, etc. He said that this would
encourage people to stay on the land and stimulate the growth
of regional areas.


4. The president commented on the difficulties of
implementing his two current rural poverty initiatives, the
"Targeted Input Program" (TIP) to deliver seed and fertilizer
packages to poor families, and a broader fertilizer subsidy
program. The TIP rollout has been delayed, he said, because
of the logistical challenge of packaging and distributing 62
million kilos of fertilizer and seed in small packages. He
cited problems with transport, but promised that he had now
mobilized the Malawi Army to complete the distribution. On
the fertilizer subsidy, he attempted to clarify confusion
about the program, saying that it was intended only for those
who could not afford fertilizer, and that the GOM did not
wish to distort the commercial market.


5. Turning to his other major topic, the move of the GOM to
Lilongwe, Mutharika stated that he would be moving into the
New State House "as soon as possible." He denied media
claims that he was spending lavishly to renovate the
building, and said that his staff had only done cleaning and
repairs and were moving the old furniture from the former
Blantyre residence to save money. He promised to continue to
share the building with Parliament temporarily, but he was
emphatic that Parliament must find a new permanent home.
With that, he asked donors to contribute to the construction
of a new Parliament building.


6. The president then opened the floor for questions and
comments, to which several of representatives responded.
Most thanked him for the information and the opportunity for
dialogue. A few cautioned him about the need to communicate
policies clearly, for example on the role of Parliament in
Malawi's young democratic system, and in the setting of
publicly announced targets for development projects.


7. Finally, Mutharika expressed his desire to meet regularly,
perhaps quarterly, with the diplomatic/donor heads, in order
to establish a policy dialogue. With that, he adjourned the
meeting and invited the group for tea and further informal
discussions.


8. Comment: If instituted as advertised, this forum will
provide a useful vehicle to communicate donor concerns
directly to the head of state. Donor reps had suggested to
the new GOM as early as August this year that such a forum be
established. In conversation with the Charge after the
meeting, the president expressed his wish that the regular
sessions be used to discuss policy issues in-depth, and said
that he hopes for an honest dialogue where donors will give
him feedback. He mentioned that for the same reason, he had
enthusiastically enlisted Malawi in the African Peer Review
Mechanism, in order to get honest assessments of the
country's policies.
GILMOUR