PRESIDENT PRESSES DEVELOPMENT AGENDA

UNCLAS SECTION 01 OF 02 LILONGWE 000166

SIPDIS

SENSITIVE

PRETORIA, MAPUTO PASS A/S CONSTANCE NEWMAN

STATE FOR AF/S, AF/EPS
USAID FOR AFR/SA
TREASURY FOR INTERNATIONAL AFFAIRS/AFRICA/LUKAS KOHLER

E.O. 12958: N/A
TAGS: ECON EFIN EAID KMCA MI
SUBJECT: PRESIDENT PRESSES DEVELOPMENT AGENDA

SENSITIVE BUT UNCLASSIFIED - ENTIRE TEXT


1. Summary: President Mutharika last week launched a new
series of regular meetings with donor heads of mission, and
used the occasion to amplify his vision of Malawi's
development. The president emphasized economic growth,
rural development, performance evaluation, and the need to
mobilize all available talent to contribute to Malawi's
development. End summary.

Growth is Key
--------------


2. President Mutharika met with Charge, USAID Director and
other donor heads of mission on February 14, in the first of
what will be a regular series of quarterly meetings. The
president opened the meeting with an overview of his
development strategy, emphasizing the need for economic
growth. Lamenting that Malawi had made very little progress
in 40 years, he said he is "alarmed" by a recent UNDP report
on the state of poverty in the country. Declaring that
Malawi "cannot reduce poverty unless it grows" the president
said it is necessary to "increase the supply side" so that
the country will "have something to distribute." He
emphasized that the Malawi Economic Growth Strategy (MEGS)--
which he himself put forward when he was economic planning
minister-- is the guiding document for the GOM's development
effort, and that the current poverty reduction strategy will
become a "pillar" of that plan.

Private Sector Must Lead
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3. To our satisfaction, the president called attention to
the work of the National Action Group (NAG) as an essential
forum for raising development issues of national importance.
NAG is a unique government-private sector-donor dialogue
forum of about 40 key national players that meets bimonthly
to discuss how to improve the business and investment
climate. Mutharika asserted that the private sector is very
important for growth, and for that reason he had added
"private sector development" to the portfolio of the trade
minister and had appointed a businessman to that post in his
cabinet reshuffle earlier this month. Similarly, he noted
his appointment of a businessman as the new reserve bank
governor, to more effectively respond to the needs of the
business community. He talked of the need for new ideas to
promote exports, and said that, for example, he would like
to declare all of Malawi to be an export processing zone.


4. Stressing the need for rapid growth with a stable
macroeconomic environment, the president said "we must bring
inflation way down, and bring interest rates down and keep
them there." Barring unforeseen circumstances, he expressed
optimism that Malawi would have at least six percent growth
"within two years."

Grow, But Don't Forget the Rural Poor
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5. Mutharika stated unequivocally that Malawi's development
plan must "bring large numbers of rural poor into the
growing economy." He proclaimed that rural development is
"near and dear to my heart" and said that he is a strong
believer in integrated rural development efforts where
government would increase the building of infrastructure in
rural areas. He condemned as "a mistake" the forced removal
of Asian businesses from the countryside during Hastings
Banda's time, and said that the policy had left a negative
impact on rural development. Mutharika stressed the need
for economic empowerment of women, saying that some seventy
percent of agricultural commerce in Malawi passes through
their hands. He pronounced himself very pleased at having
recently launched his one billion kwacha rural loan scheme,
and said that he wished for "a billion more" to help the
rural poor. The president spoke of these issues very
passionately, and cited his experience working in Kenya as
proof that rural development schemes can be effective.

How to Mobilize Malawi: Be More Like the Americans
-------------- --------------


6. The president spoke enthusiastically about the need to
mobilize all Malawians to participate in the country's
development. Sounding his pet themes of hard work and self-
reliance, he declared that Malawians must take
responsibility for their own development. He said that his
countrymen should emulate the optimism and forward-looking
perspective of countries like the USA, and that like
Americans, they should learn to "laugh at themselves and
survive."


7. He touted a new plan to involve Malawi's 8,000-person
army in infrastructure projects such as construction of
bridges and dams, and said that he would like to invite
expatriate Malawians with professional expertise to return
home for short sabbaticals to help build the country. He
spoke of the need to "retrain, reorient, and remotivate" the
country's civil service. His message to civil servants is
"If you don't want to work, go home!" Mutharika declared
that the government needs a sound monitoring system,
benchmarks, timeframes, and reporting of results. Note: the
minister of economic planning told us this week that he has
been charged with developing a strategic planning framework
and results reporting for all GOM ministries. End note.

Comment
--------------


8. From this meeting and many other encounters, we are
increasingly impressed with President Mutharika as a man of
vision who has loads of ideas. During the course of this
meeting he floated several big ideas covering everything
from technology to tourism. He has a vision for where he
wants Malawi to be, and he makes it clear that he wants to
have some solid achievements to look back on when he leaves
office. He is also a man in a hurry, and he recognizes his
limited window of opportunity for action.


9. To accomplish his agenda, Mutharika faces two challenges.
First, he has to form concrete plans to bring his economic
growth strategy into reality. To date, he has yet to flesh
out the details of his plans to invest in growth, and donors
are concerned about the possibility of a "big project"
approach to development spending. Second, and perhaps most
important, Mutharika has to impart his enthusiasm and sense
of urgency to his subordinates, who must do the work to make
his vision a reality.
GILMOUR