Democratic consolidation and donor activity in Malawi

UNU-WIDER / Aug 2012

On April 7 2012, following the death of President Mutharika, Joyce Banda was sworn in as Malawi's new president. Addressing parliament, President Banda made it clear that she intended to shake up Malawi, suggesting that she would repeal anti-homosexuality laws and take economic steps to improve Malawi's donor relationships. By the time this article was written she had devalued the national currency by 30 per cent and Britain, a country heavily critical of Mutharika, has already provided an additional 33 million pounds to help Banda repair the economy, they are also urging other donors to restore funding.

Malawi's relationship with the donor community has long been characterized by alternating periods of close collaboration and mutual distrust. Whether donor's initial positive reaction to President Banda signals a long term change remains to be seen. Whatever the case, now is a good time to assess how Malawi's relationships with its donors has shaped the country's democratic trajectory. In the WIDER Working Paper ‘Two Steps Forward, One Step Back: The Limits of Foreign Aid on Malawi’s Democratic Consolidationk’, Danielle Resnick does just this.

Resnick argues that democracy assistance to Malawi has improved the conduct of elections and provided training for parliamentarians. However inconsistent programmes, an over emphasis on funding at election time and an unwillingness to fund political parties has diminished the size of the long term impact of such aid. Furthermore development aid provided in the form of budget support has contributed to the side-lining of the Malawian parliament and provides the incumbent party with a strong electoral advantage.

There are three key domains in which foreign aid has helped to shape democracy in Malawi that are addressed in this paper; strengthening parliament, supporting competitive party systems and encouraging respect for civil liberties.

Strengthening parliament

The legislature is one of the key institutions for ensuring that the government can be held to account. However Resnick argues that Malawi's parliament lacks many of the tools needed to perform this job effectively. MPs have little time to adequately research policy, insufficient flows of information, and do not sit for long enough to allow for substantial debate, a point demonstrated by a two hour sitting in 2010, during which six bills were passed.

While donors do recognise the parliament’s limitations, Resnick points out that the donor attitude towards parliament in the mid-2000s was more about increasing efficiency than capacity and effectiveness. This is well illustrated by the passive donor reaction to President Mutharika’s unexpected move of leaving the UDF to form his own party, the Democratic Progressive Party (DPP). This led the major parties of the opposition to call for the speaker of the parliament to invoke a rule which would have declared all the seats occupied by MPs who had crossed the floor to Mutharika's new party vacant and attempted to force this by blocking the budget. Donors were unable to release aid funds until a budget was in place. Thus, in a clear case of putting development goals ahead of strengthening parliament, they wrote to opposition parties requesting an end to the blockage.

Further to this Resnick points out that MP’s inability to understand budget documentation, and an under supply of policy relevant information undermine the ability of parliament to hold the executive to account.In her paper Resnick recounts howin 2007 one MP complained that MPs are only given details of foreign loan arrangements ten minutes before they are due to debate them. Furthermore a majority of Malawi's foreign aid is delivered as grants rather than as loans, in these instances parliamentary approval is not needed at all. In the case of budget support all the resources and decisions are centralized in the Ministry of Finance, making it particularly difficult for parliament to judge whether the resources have been used effectively and thus hold the executive to account.
Overall, Resnick argues, the lack of opposition MPs with enough capacity to challenge the government, inconsistent funding to strengthen parliament over time, and the continued emphasis of budget support donors on interacting primarily with the executive arm of the government have severely limited the ability of the Malawian parliament to enforce accountability.

Competitive party systems

Political parties that represent genuine alternatives, and put forward distinct policies, are essential to the proper functioning of democracy. Furthermore, in order for a party system to become truly competitive and institutionalized, parties need mechanisms of internal democracy, adequate financial resources, and an electoral system that provides a level playing field.

Donors recognize that many of these elements are missing in Malawi, and have been important supporters of the electoral process. In the run up to the 2004 elections donors contributed approximately US$5.5 million to support the Malawi Electoral Commission (MEC). This money was used for voter registration, updating the electoral roll, equipping polling stations, providing election observers, and supporting NGOs, and the media, to enhance voter education. Similar support was provided during the 2009 election.

However Resnick argues that the effectiveness of this funding in terms of long term capacity building is limited by its cyclical nature. Funding for governance work tends to be overwhelmingly focused around the electoral period with funding dropping off considerably in the year following an election. Moreover, however much effort is put into ensuring elections function properly; it will be wasted if elections never actually take place, as was the case when local elections due to take place in 2005 were initially postponed until 2010 and are now not due to take place until 2014.

Resnick feels that if long term electoral competition is to be achieved then parties, as well as the electoral system, need to be strengthened.  As in many other recipient countries, donors have on the whole been reluctant to intervene to strengthen political parties in Malawi. Two of the largest democracy and governance donors DfID and USAID actively pursue party strengthening projects in other African countries, but do not do so in Malawi. Their reasoning for this is that they do not have a sufficient understanding of the political environment to be able to intervene effectively. Both the Konrad Adaneur Foundation and the UNDP have implemented some policies aimed at strengthening political parties but, as with much governance aid, these have largely been focused around election time.

Even more worryingly, it may not be simply that donors are not doing enough to foster party competition. Resnick suggests that they may be indirectly making the situation worse. Given the need political parties have for funding, the incumbent party is given a huge advantage due to its access to state resources including Malawi public media broadcasters. Resources given for key development programmes can be manipulated to the incumbent’s advantage. For example, one of the most important programmes in Malawi is the Farm Input Subsidy Program (FISP), which provides vouchers with which farmers can buy fertilizer for maize production. This programme ,while initially funded entirely by the Malawi government, now relies on donor support for its survival.Naturally then the highly politicized FISP been used by President Mutharika to consolidate support for DDP; this is illustrated by the fact that FISP costs were highest in 2009 when elections took place.

Respect for civil liberties

Civil liberties and in Malawi have undoubtedly improved since the country’s transition away from a one party state, but they are still ranked as only 'partly free' by Freedom House, and the country’s rating on the Press Freedom Index slipped between 2008 and 2010. While there is a plethora of civil society organizations present in Malawi, their diverse nature means they struggle to act together, and present coherent demands to the government.

Recent years have seen the government engage in a number of activities that present a clear threat to civil liberties in Malawi. In 2010 a gay couple were arrested for performing a traditional engagement ceremony.Given that homosexuality is illegal in Malawi, the couple faced up to fourteen years in prison. In the same year a church leader was arrested for voicing opposition to President Mutharika's decision to change the national flag, and promote his brother to leader of the DPP. At the beginning of 2011 the government prohibited planned protests over fuel shortages and prices. However the most controversial event during this period was undoubtedly the passing into a law of a bill that extended the criminalization of homosexuality to women and granted the Minister of information the ability to ban any publication critical of the government.

The main action that donors can take to prevent such infringements is to threaten to withdraw their aid contribution. However, while France, Germany, Japan, Iceland, Ireland, the US, and the UK all signed a statement condemning the amendments, only Germany, a relatively small donor, actually withdrew aid as a response. It is interesting to note that many donors had withdrawn aid by late 2011, but that this was in response to deviations from IMF agreements rather than threats to civil liberties.

Resnick points out that the donors who withdrew aid due to these deviations from IMF agreements have consequently made political, as well as economic, reform a condition for aid resumption. However, due to an increase in non-traditional donors such as China, and the discovery of uranium, Mutharika had greater leverage to ignore these demands. Nevertheless uranium prices are volatile, and aid from non-traditional donors is substantially smaller than from Malawi's traditional bilateral partners, thus traditional donors, if they take concerted action, could still use their influence to improve the civil liberties situation in Malawi.

Policy Implications

Resnick draws four main policy implications from her paper. First more consistent donor funding, less focussed around election time, would ensure that key aspects of democratic consolidation, such as the MEC, NGOs that support voter education, and the media, are constantly reinforced. Second political parties need more support. In particular they need training on key policy issues, help establishing suitable funding bases, and guidance in creating democratic party structures. Third, donors need to identify more channels through which they can communicate with parliament. Important in this regard is finding ways to provide MPs with more information about disbursement criteria for budget and project support to allow them to properly assess whether it is the government, or donors, who are to blame for any delays in aid the country receiving aid Fourth, greater coherence regarding aid disbursement criteria is needed amongst donors to allow for a concerted approach when threats to democratic consolidation arise. Further, if both secure and conditional funding for development projects was introduced in addition to budget support, donors would be able to react forcefully to threats to democratic consolidation while at the same time providing predictable long term funding.

This report by James Stewart summarizes UNU-WIDER working paper no. 2012/28, 'Two Steps Forward, One Step Back: The Limits of Foreign Aid on Malawi's Democratic Consolidation' by Danielle Resnick.

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