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Economic pathways for Malawi's rural households

Report on preliminary research conducted in Malawi in October 2003

by Caroline Pinder
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Work in Progress - Discussion Document

SARPN acknowledges permission from Michael Drinkwater for the posting of this paper.
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The recent food crisis has drawn attention to the fact that Malawi's poverty is deep-rooted and structural. Provision of temporary humanitarian relief and sustained safety net provision may alleviate the symptoms of chronic poverty but such interventions are not adequate as ends in themselves: they will not prevent similar crises occurring in the future, or develop the kind of resilience that households and communities need to be able to cope with crises.

The objectives of the Economic Pathways research study were:

  • To develop an improved understanding of trends relating to the economic aspects of rural livelihoods in Malawi.

  • To focus, in particular, on developing an understanding of factors associated with the heightened vulnerability of households and individuals, as a result of the decline or failure of their principal survival strategies.

  • To identify the nature of any opportunities that might constitute the backbone for the construction of economic pathways that have the potential to reverse current trends of increasing rural poverty.
Whilst it is clear there is a general commitment amongst the international donor community to supporting GOM in its National Safety Nets Programme, what is less clear is what happens beyond safety net provision: how will safety net provision evolve into long-term livelihood development? how will the transition from 'hand out' to 'hand up' take place? As will be seen from the findings of this research study, this transition is fundamental to moving poor people in Malawi away from a dependency mindset - a dependency on donors and government handouts in substitution of capacity for self-reliance to develop resilient livelihoods.

The food crisis has destroyed most rural households' resource base and their capacity to survive any further shocks, even if they should manage to get over this one. Nor is the crisis over: since many households said they have nothing to plant this year, it can be expected there could very easily be a repeat of the food shortage next year.

Three interrelated issues are critical to the extent to which any long-term economic development strategies can be effective in resolving Malawi's state of chronic poverty:

  • how will safety net provision evolve into long-term livelihood development?

  • the impact of social unravelling as a result of the HIV/AIDS pandemic, and

  • does the institutional capacity exist at local level to deliver the policies of the Government's Poverty Reduction Strategy (MRPS)?
In reviewing its strategy for the future, with the object of building resilient livelihoods that can withstand natural and institutional shocks in the future, principal challenges for CARE Malawi will include:

  • Conceptualising and effecting the transition from delivery of emergency relief to safety net provision, and then to production enhancement activities; also influencing, facilitating and supporting others concerned to effect this developmental transformation

  • Effecting a change in the dependency mindset of poor rural people towards external organisations such as CARE and donors; also effecting a change in people's perception of themselves, from subject to citizen, through integration of empowerment and rights based approaches

  • Seeking to influence and negotiate change in social and cultural structures which are constraining long-term development and poverty reduction, and causing the structural poverty Malawi
Five central issues related to economic pathways emerged from the research:

  1. Ganyu is an economic trap leading to exploitation and reduced capacity of poor rural people to develop long-term livelihood strategies based on agricultural production.

  2. There is need to review assumptions about the types, usage and relevance of agricultural inputs; also present delivery mechanisms of resource transfers.

  3. Markets are weak in Malawi, but even if these were strengthened through standard macro-economic growth strategies, poor people are unlikely to benefit because of the unequal power relations in existing market structures and practices.

  4. The dependency mindset of many poor people is the result of outdated and corrupt traditional leadership and institutional structures. This has led to many poor people accepting their position as subjects of patronage rather than as citizens of a democratically governed state in which they have rights that it is the duty of the government to fulfil.

  5. Any capacity for change in governance, markets and perception of human rights will be influenced by the devastation that HIV/AIDS can be expected to bring to households for at least the next generation.
Brought together, these conclusions lead to two fundamental structural issues which need to be tackled in any future economic pathways model:

  1. Economic exploitation, particularly of women, related to people's lack of basic human rights, unequal power relations in market based growth strategies and the inadequacy of traditional social protection measures

  2. Weak governance as evidenced by corruption and failure of traditional institutional structures to move from a system of patronage to recognition and fulfilment of people's rights as citizens
Resolving these issues in terms of programmatic design requires analysing CARE's programming approach, and moving towards a more deeply integrated rights based approach which tackles the reasons why people stay poor through examination of power relations.

Existing livelihood models of development therefore need to pay greater attention to power relations and human rights issues. What is needed is a broad and cohesive framework for an Economic Pathways approach in which rights based approaches are the starting and end points of programme strategies.

Development of a new Economic Pathways Model or framework has to begin with questioning assumptions, in particular

  1. the definition by aid agencies of rural households primarily as agricultural producers is no longer valid for the majority of Malawi's rural population.

  2. given the irrelevance of this definition (which remains the basis for most aid agencies approaches to livelihood programmes) it is necessary, to develop a clearer understanding of how the Malawian countryside has been transformed by the food crisis, and into what can it feasibly be transformed.
Tactically, ie in terms of its operationalisation, any new model needs to address:

Asset creation (and protection of what's left)
Use of those assets in more intensive production activities (ie which generate greater returns to labour and other capital assets than present activities)
Improved livelihood outcomes, as defined in terms of the basic entitlements (rights) required to live with dignity

Maximisation of assets depends first on protection and then on opportunities to develop them in new ways that will increase returns to the household. This entails ensuring that mechanisms used to transfer resources to poor rural households will be more equitable and better managed than has been the case in the past.

Asset re-building strategies also need to be based on productive diversification and intensification, probably involving changes in farming systems that will enable individuals and households to improve their returns on labour and other inputs. However, in pursuing such options for product diversification and intensification, care has to be taken that the most vulnerable groups are not further exploited, and that social differentiation is not deepened.

This means that improved livelihood outcomes need to go beyond a food security that is dependent on systems of patronage and exploitation. They need to be based on development of a decent livelihood that results from people's full participation as citizens in a modern democracy in which they are able to exercise their human rights. This requires the development of more inclusive governance structures through which the concepts of rights and entitlements are promoted and achieved.

At this stage no suggestions for specific forms of programmes are being made as it is felt the first need is to clarify the model. This document should therefore be regarded as a discussion document in the process of developing that model rather than as a final product.

The following recommendations are therefore very general at this stage and mostly relate to the next stage in the process:

  1. That the framework and components described in Section 7 of this document be used as the basis of further debate within CARE Malawi.

  2. That further research be undertaken into:

    • Impact of HIV/AIDS on the economic potential of Malawi's youth. If economic pathways are to be developed for the future it is important to know more precisely what is likely to be the effect on the upcoming generation of young adults and their capacity to participate in sustainable economic development of their country.
    • Social disintegration caused by long-term food insecurity: The constant lurching from one food crisis to another is likely to be having deeper and more complex impacts on social, economic and institutional structures than has yet become evident. Again, more needs to be known about these impacts and their relationship to economic development.
    • Social disintegration caused by HIV/AIDS. It is understood this is to be studied further in the Social Pathways Assignment. The findings of that research need to be brought together with the findings of this research study, in order to get a clearer picture of the links between the impact HIV/AIDS is having on both social and economic structures.
    • Structure and sources of informal loans. At the moment it is not clear who is lending to whom, and on what terms and conditions. Since improvement in credit to rural producer households is a policy of the government under the MPRS, it would be useful to know more precisely what is happening at the moment, why past credit schemes have failed and what type of loans are needed in future that do not lead to deepening of debt and poverty.
    • Existing farming systems and mechanisms for change. Farming systems need to change to take account of the fact that many rural households are no longer net producers but are more often casual employees of large commercial farming enterprises. How can farming systems change to enable greater diversification and intensification that will produce greater returns on poor people's labour, land, savings and other inputs?

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