Parliament begins budget debate

After weeks of political bickering, Malawi's members of parliament (MPs) have started deliberating on the 2007/08 national budget, but commentators warn that any further delays could affect donor confidence.

The impact of the national budget's postponement is already being felt in sectors such as agriculture, education and health, according to economic analyst Mabvuto Bamusi, who is also the National Coordinator of the Human Rights Consultative Committee, a network of non-governmental organisations.

"Government needs a legal provision to spend, and without one there can be no meaningful development: development programmes are postponed, and no donor can release any funds to support the budget until the budget is passed into law," said Bamusi.

He urged legislators to bury the hatchet and work for the common good of the poor masses by prioritising the budget debate.

The budget vote was suspended on 24 July after opposition parties - the United Democratic Front (UDF) and the Malawi Congress Party (MCP), who hold the majority of seats in parliament - refused to debate the budget until a standoff over the defection of their members to the ruling Democratic Progressive Party (DPP), led by President Bingu wa Mutharika, had been resolved. The government is being funded from a monthly skeleton budget.

The DPP had welcomed 60 defectors into its fold, bringing its tally of members in parliament to 80, but in June Malawi's Supreme Court granted powers to the Speaker of Parliament to expel defecting lawmakers, a decision that would affect the strength of the ruling party.

Donor confidence

Charles Kumbatira, executive director of the Malawi Economic Justice Network, a coalition of more than 100 civil society organisations, said the country risked losing donor confidence and support if the political standoff was not resolved in time.

"Our leaders have allowed political considerations to override economic justice for Malawians; we are in a situation where the common citizen of this country has been taken to ransom on a political matter," he said.

The coalition warned that investments would not be forthcoming in a country that was not politically stable. The Malawi Confederation of Chambers of Commerce and Industry has expressed fear that the delay in passing the budget would have a negative impact on the economy.

The Catholic bishops of the Episcopal Conference of Malawi (ECM) warned in a statement that the recent calls for by-elections and the impeachment of the president would shift government's attention from the development agenda to political matters, at the expense of the poor.

"Should we all lose the gains from debt cancellation by financing the impeachment processes or by-elections, at the expense of pro-poor expenditure areas like education, health, food security and mitigation of HIV and AIDS?" said bishops.

A pro-Mutharika group called National Voices on the Budget threatened "to deal with" opposition legislators for frustrating government business in parliament. The organisation solicited signatures from people across the country to petition parliament to pass the budget.

"We don't want to see Malawi going into the drain. It is unfortunate that our politicians have not lived up to people's expectations, and we are saying that we have had enough," said Ben Phiri, national coordinator of the group.

John Tembo, leader of the opposition in parliament and president of the MCP, said the Speaker should be allowed to declare vacant the seats of legislators who defected from their parties.

He said it was a constitutional requirement that MPs who crossed the floor should seek a fresh mandate from constituents via the ballot box. "It would take the Speaker less than 10 minutes to read out the names of defectors, and immediately the budget would be passed," Tembo maintained.

Last week, Mutharika threatened to shut down parliament if the legislators did not prioritise debate on the budget.

Mwanawasa to launch joint rail link

Lusaka - Zambian President Levy Mwanawasa will host his Malawian and Mozambican counterparts this week for the launch of a rail project that will link his landlocked country to the coast, state media said on Wednesday.

Lameck Mangani, the cabinet minister in charge of eastern affairs, told the Zambia Daily Mail that Mozambique's President Armando Guebuza and Malawi leader Bingu Wa Mutharika would join Mwanawasa in the town of Chipata on Friday for the official start of building work on the 26-kilometre link.

The project, whose cost is estimated at around $12-million, will link Chipata to the Malawian town of Mchinji, where existing track leads the Indian Ocean port of Nacala in Mozambique.

Malawi Expo Delegation Seeks U.S. Investors

"Malawi wants U.S. firms to invest in its country." This was the main message of Chauncy Jere Executive Chairman of Malawi Exposition and business leaders who are Organizing MalawiExpo 2008 on an investment promotion mission. The delegation met with U.S. business representatives in Las Vegas, Los Angeles, San Francisco and Phoenix to discuss opportunities in agribusiness, manufacturing, and tourism in Malawi.

During the Press briefing meetings, Chauncy highlighted Malawi's attractive investment climate, which allows for import duty exemptions; few restrictions on profit repatriation, import payments, and debt servicing; generous tax exemptions and deductions; and 100 percent foreign ownership.

Chauncy Jere brought more information on new investment projects in the tourism, timber and paper, mining, manufacturing, and food and agricultural processing sectors for which it is seeking foreign equity capital, technical expertise, marketing know-how, and equipment. Specific projects include hotel construction, fish farming, fruit processing, phosphate extraction, gemstone mining, plasterboard manufacturing, ethanol production, furniture assembly, and glassware production.

In addition, Chauncy provided details on Malawi government's plans to privatize several existing companies. These companies include operations in oil extraction and refining, maize and wheat milling, livestock product development, and tobacco and maize production. Some companies can take advantage of this privatization program and purchase a majority interest.

Chauncy is confident that these investment opportunities will be profitable. Malawi receives duty-free access for its products to markets in Southern Africa, Europe, and the United States. With the opening of the Nacala railway line and Zambezi Waterway project and also availability of air cargo facilities, Malawi's exports are assured relatively cheap transportation to their various markets.

For more information on investment prospects in Malawi, contact: www.MalawiExpo.com

Forest dependence and participation in forest co-management in Malawi

What makes people participate in the forest comanagement (FCM) programme in Malawi?

Using data from Chimaliro and Liwonde forest reserves in Malawi, this paper investigates how forest dependence influences households' decision to participate in forest co-management programme. The key question of this paper is: What makes people participate in the forest comanagement (FCM) programme in Malawi? In particular, how does forest dependence (share of forest income) affect households’ participation decisions?

The authors find that where forests primarily have a gap filling or safety net role in Chimaliro, high forest dependency induces higher rates of participation. However, with more commercial forest uses and a more heterogeneous social context as in Liwonde, high forest dependency reduces the incentives for participation.

The findings point to the need to design parallel interventions alongside the forest co-management program in order to provide supplementary income sources to participants and increase the incentives for participation.

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