US embassy cable - 05LILONGWE166

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, Economic, President 
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 
------------------------ 
 
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 
------------------------------------- 
 
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