We don't know why Malawi is poor(newsletter.deenamousa.com) |
We don't know why Malawi is poor(newsletter.deenamousa.com) |
Starting from a lower base as well as weak institutions, weak capital markets, and political instability during the transition to democracy lead Malawi to underperform.
Additionally, Rwanda received massive amounts of foreign aid to a degree that Malawi and other African nations never saw [1]
Unsurprising that this is an OpenPhilanthropy blog.
[0] - https://countryeconomy.com/hdi?year=1990
[1] - https://data.worldbank.org/indicator/DT.ODA.ODAT.GN.ZS?locat...
The thing is, most of Africa has been by default poor and dysfunctional for quite a while. A big factor is that a lot of Africans have been subsistence farmers for a long time [1]. A substance might actually be comfortable in some circumstances but they are outside the money since they produce the food and materials they need for survival (so they can live on "pennies a day"). However, the tendency in many third world nations has been that the arrival of Western medicine allowed substance farmers to have the ten-child families they imagine will make them rich and the result is acute poverty. Moreover, when most people are substance farmers, the elites/state/etc tend to gain their wealth through rent-seeking, squeezing the majority, rather than enterprise.
Development, which is honestly capitalist development, requires workers willing to leave their family farms and work for wages on things the world market needs. Elites have to be willing and able to profit from people leaving traditional agriculture rather than profiting from traditional agriculture. By this, the Rwandan genocide (sadly) was a logical event setting the stage for development (especially since a minority of the educated elites came, exacted some revenge and set to work ruling the country). The Black Death and the Enclosures were both important development
[1] Now, it should be note that so much Africa was subsistence farming by the 19th because the earlier slave/gun trade allowed the "Slave States" within Africa to wipe out many more organized/less cleptocratic societies.
What is the average IQ of Malawi? Literally nobody knows. Anybody who claims one is lying to you. In "IQ & The Wealth Of Nations" (the Ur-source for these kinds of claims), they got a number for Malawi by averaging Congo, Zaire, and Tanzania. In turn, the Congo numbers were based in part on general cognitive test scores taken from 40 rural children being treated for parasitic infections, projected out to the whole population, and then modified down to "correct" for the Flynn Effect.
Those are the kinds of numbers you're citing when you make these kinds of claims.
I would still guess corruption is a major reason. Sometimes the way it’s measured and how it’s reported is not accurate. People internalize corrupt practices as normal and stop viewing it as corruption. A bribe is a gift, a nepotistic appointment is “taking care of one’s family”.
It also doesn’t always make sense to compare only corruption with other countries. Some may be more corrupt but they have enough positive factors that they develop better despite the corruption.
It's more dependent on the press reporting corruption than of any other factor, for the extent that it measures anything real it focuses exclusively on small scale corruption, and it incredibly biased by cultural factors.
It's a mistake to use it to compare one country with another, and it's a mistake to use it to spot trends in a single place. AFAIK, it's a mistake to use it.
Such an exceedingly complex thing just seems improbable to take at face value, without an enormous amount of proof and well reasoned methodology backing it up.
But yeah, what you’re saying is also done. Usually something like an anti-corruption ministry is created. Their job is to find and prosecute corruption. Guess what the most “lucrative “ and cushiest jobs are now - that’s right, the anti corruption ministry itself. Anyone doing business now has to bribe them too in addition to whoever they bribed before. And corruption goes “down” officially, and it looks good on international external metrics.
- Malawi: tobacco (55%), dried legumes (8.8%), sugar (6.7%), tea (5.7%), cotton (2%), peanuts, coffee, soy (2015 est.)
- Rwanda: Gold, tin ores, coffee, malt extract, rare earth ores
I can easily see why one has a higher GDP than the other. Very little mistery to me.
When it comes to mining it looks like china has been screwing them over https://adf-magazine.com/2026/02/chinese-mines-openly-break-...
The fact that there is little mining of the natural resources in Malawi paints a picture of a government that might be less influenced by foreign money than others in the global south, moreso than any statement on poverty.
[0] - https://data.worldbank.org/indicator/DT.ODA.ODAT.GN.ZS?locat...
[1] - https://www.reuters.com/world/africa/rwanda-exercises-comman...
For the loan cases, the terms are often unaffordable, effectively handing effective control of the entire country to the entity who has the other end of the loan - it is the modern empire-by-debt.
For both, around half of GDP is in the services sector. It doesn't matter that much what raw resources they export when it's a smaller portion of GDP (23% in Rwanda, 15% in Malawi). Also, almost all of those raw resources that Rwanda exports are stolen from the DRC by Rwanda-backed militias.
Foreign aid, and Rwanda's ability to position itself geopolitically as a trusted stable partner (which enables more aid and for it to get away with theft and murder) have more impact than maize vs gold.
And in the end, there are plenty of countries that have successfully developed and become less or not poor without having anything of serious value to export. From Bangladesh to the Balkans (I mean post-decolonisation Balkans, not post-Iron Curtain - it was mostly an area with subsistence farming as the main employment, disease, low rates of literacy and very low for higher education, frequent conflict and ethnic/religious tensions, few natural resources other than grain and some very limited amounts coal/minerals). If anything, it usually is the opposite, cf. the resource curse.
On the other hand while the people had nothing, they didn't seem terribly upset by it. Everyone just got on with their lives, there was (compared to the surrounding South Africa) very little to no crime or violence, it was a poor but not miserable country. Do you need to be well-off to be happy?
This sounds like an extremely bimodal distribution -- a 40% increase in the cut-off line only captures 5% more of the population, so only a small number of people are in this "poor but survivable" zone, with most well under and some well over, I assume. Does this map to the usual rural/urban divide?
Also countries where a large % of the population works in agriculture / fishing, and/or have high rates of corruption, tend to have significant informal economies.
From developed-country point of view that may appear as an almost non-existent economy, while in reality people are still growing / building / manufacturing stuff (be it low-tech / low-value mostly). And could be happy living so.
Not saying that's the case for Malawi. Just be aware that "$2/day" paints only part of the picture of how 'rich' people are.
A lot of Rwanda's success is overstated as well as I've pointed out before [1].
A better model from an LDC perspective would probably be Uganda.
[0] - https://data.worldbank.org/indicator/DT.ODA.ODAT.GN.ZS?locat...
Idk, this one doesn't seem super difficult to diagnose. The political system has been captured by a special interest with consolidated control.
Special interests, yes. Consolidation–as in a unified interest group representing a commanding majority of the economy–no. At least none that aren’t similarly stagnating.
I used to make the same error. Thing is in the natural sciences this looks like circular reasoning, but in the humanities quite commonly things just hang in thin air. Case in point, the banker looks at the poor farmer and denies credit because the guy doesn't have capital, and the farmer doesn't have capital because he can't get credit. Thing is, both sides understand that.
About 5M people, a fifth the population of Malawi, none the less are one of the top producers in the entire world for oats and barley. Not per capita... total. Wow. Note that only about 10% of the population farms which makes the ratio even crazier.
Finns as a whole somehow produce about 2x their entire countries body weight in barley per year which always freaks me out. The country is also one of the top 10, usually top 5, producers of oats in the entire world, and they're competing with giant countries like Canada and Russia. Giant Canada only produces about 3x as much oats as tiny Finland.
Finland climate isn't what you'd think of for tomatoes but they produce about three dozen tomatoes per capita every year, which is also weird to think about. Not just how do they grow that many tomatoes, but why? They like pasta sauce and pizza sauce that much?
However Finland is not massively wildly overpopulated with frequent famines like Malawi. Those conditions will annihilate a countries productivity, including ag productivity.
But Finland obviously has other economic sectors to rely upon than mainly farming.
1. https://scotthirwin.com/wp-content/uploads/2023/02/02212023_...
I have no idea if Rwanda and Malawi have difference there, but globally one can see clearly see the impact of culture. Just look at how well Japan did despite losing WW2 and having little natural resources, or how badly Russia has done despite its huge landmass and resources, because the political culture always seems to lead to really bad autocratic governance.
In my country (Finland) areas where Swedish speaking people are the majority do consistently better than neighbouring areas with Finnish speaking majority - lower unemployment, less health and social issues and so on. Some of that may be due to historical accumulation of wealth, but I'm convinced that mostly it's because of differences in cultural values and attitudes. Some studies indicate that the Swedish speakers tend to have better social life, which improves life outcomes in many ways.
https://www.heifer.org/our-work/where-we-work/malawi
Currently being matched 5 to 1.
That's the product they have most comparative advantage in producing. You're literally suggesting they should cut their income down, and try to get better at something else.
But as you say, at least in the interim, that means reducing income, which is a really hard thing to suggest.
Maybe the population doesn't feel like it needs to be productive, if they're continuing to receive such generous largesses. Isn't that the goal of UBI for developed nations? People should be able to pursue their passions and not have to worry about the necessities of life?
It's the combination of factors that make up the environment to work in: geography, politics, education, healthcare, culture, etc.
Seems like Malawi is stuck in a kind of "local minimum" where the direction to get unstuck is a political no-go area. A charismatic (and competent!) leader with a long-term vision might help. Maybe that is what's lacking?
And yes, debt can be 'good'. But just as for people, if you are poverty stricken, debt will almost invariably not be.
Who actually benefited from taking on the debt?
There isn't much in Africa especially in the part of Malawi. They are not even coastal (they are landlocked) which makes their situation even worse.
>The economic growth and so-called advanced economies (think Germany, The U.S, Japan, etc. What's been referred to as the “Global North”) relies by a large proportion on a significant net appropriation of resources and labor from the “Global South” (think Kenya, Peru, the Philippines, etc). This appropriation reaches astronomical levels. In 2015 alone, the north appropriated 12 billion tons of embodied raw material equivalents, 822 million hectares of embodied land, 21 exajoules of embodied energy, and 188 million person-years of embodied labor; worth [a total] $10.8 Trillion in northern prices. Enough to end extreme poverty 70x over.
Imperialist appropriation in the world economy: Drain from the global South through unequal exchange, 1990–2015 | https://www.sciencedirect.com/science/article/pii/S095937802...
However, there are a multitude of problems that have resulted in us being where we are. Now mind you, I am just a software engineer not a development expert (but for some credibility, I was the first engineer at Malawian owned Credit Reference Bureau and built most of the software there and I have worked with Social Cash Transfer program before as a consultant).
* Infrastructure is a big problem, we have poor road infrastructure, almost no rail or airline industry though those are picking up as of recent years. Very few Malawians have access to electricity, I believe some reports indicated less than 10%. Most of our population lives in rural areas. Internet penetration is growing but even cell tower coverage is not yet there - our TELCOS have about 3-4 million subscribers max, we are a population of about 20 million people (maybe 40% under 19?) and yet our largest bank only has about 2 or 3 million customers.
* We have low literacy rates and high dropout rates especially in rural areas. This is worrying for a population with almost half being youth/children. Our school infrastructure is also not that great, it is not strange to find a class of students learning under a tree in some rural and peri-urban areas.
* Corruption and mismanagement of funds - this is a big problem here. A lot of the money in the government programs and NGO/Donor programs finds it's way into individuals' pockets. Some of the initiatives are well meaning but because of corruption and pilfering of funds the impact isn't always felt at the level that's expected.
* Mismanagement of Natural resources - we have deposits of gold, rutile, uranium and other materials - we have companies from Australia/China and the likes setting up and possibly benefitting without giving much back to the country besides some veiled Corporate Social Responsibility activities, with parts of the funds going into people's pockets - we need to do better to control our resources but the low literacy rates and lack of awareness of some of these things affects how we as citizens react.
* There's lots online about our agriculture, so I won't spend too much time there - only to say we need to do better to mechanize and not rely too much on the rain cycles. I'm saying this as someone who has gotten into farming recently and is frustrated by how... manual it all is :)
There's a lot more I could say but I hope this give somewhat of a picture.
I should just mention, Malawians are some of the brightest most hardworking people you will ever meet but also trustworthy and loyal. You will probably meet a Malawian doctor in any part of the world and our software engineers are getting there too, we just need the exposure and opportunity to prove ourselves. I help moderate a community of developers and I can tell you we have talent and we do come cheap (even as low as $25/hr ;)
If you are ever in the market to try working with some Malawians, contact is on the profile :)
at times a strategic leadership is needed, with idealogical & succession planning.
Malawi has had neither.
> 'The unit of analysis for "why is X poor" may be the political coalition, not the country.'
So maybe the real question here is not about the absolute poverty, but the derivative: "Why hasn't Malawi seen meaningful growth for 30 years?" — And the answer could be surprisingly related to first-world countries like Finland that also have experienced decades of stunted growth.
Like Malawi, Finland has functional and stable multiparty politics. Like Malawi, Finland's politicians have spent decades locally optimizing for minor benefits towards their preferred flavor of the median voter (right wing cuts taxes a bit, left wing improves benefits a bit, nobody offers anything transformative).
Too much stability at the wrong time might be a slow curse.
I rooted around in wikipedia and Malawi has FAR more people than the land can support. They have a top down demand they must grow maize although the land and climate are very unsuited for maize. Why? Unsurprisingly they have had severe recent famines unlike Rwanda. If they had capacity they could survive a minor shortfall in rain but they have more people than the land can support so the famines are very rough. They have about 3x the agricultural land as Rwanda but its not suited to maize but its demanded they grow maize. Maize will only grow with massive fertilizer imports which they cannot afford and occasionally politically/economically manage to totally screw up, alongside Maize is traditionally dependent on very reliable rainfall or post industrial era advanced irrigation which they don't have.
I would estimate the geography of Rwanda will support about 20M people, luckily they have about 14M. They can coast thru some rough agricultural times and they've developed enough industry and trade that they can import their way thru short term minor local problems.
On the other hand Malawi can only support maybe 15M people reliably, unfortunately they have about 22M. When the rains don't come or the politicians screw up the fertilizer imports, they die.
Its very difficult for them to "advance" beyond subsistence ag without enough to feed everyone and ag policies seemingly intended to be self destructive.
I don't know why they "have to" grow maize despite it resulting in starvation. Historically this type of thing is caused by someone making a huge profit or attempting to maintain control. Regardless of cause, until they can eat, they will not advance.
After eating dinner tonight they can dig a mine or build a factory. Oh wait there is no dinner tonight. Well then. And so they remain very poor, permanently.
The country, as a plot of land, is quite wealthy. $22B is a lot of money. If they had, say, 3M people as a population they'd be in position to become the next Taiwan. Taiwan's GDP per capita was about there in the mid 80s before they really took off. But they have over 20M people probably 30M soon, so they'll live in poverty, permanently.
In Rwanda an unusually good harvest means a new mine can be opened and they will "permanently" be richer. In Malawi an unusually good harvest means the people who would have starved to death this year now won't starve to death until next year. There will be no permanent improvement of anything in Malawi.
In fact I see the article doesn't mention malaria but most places you go they say oh yeah there were some cases a year ago twenty miles ago but in Nkhata Bay when I was there it was like a thousand cases in the village and a backpacker went the the loos the previous night and was found dead beside them in the morning.
There have been two gigantic continent-wide wars over the Congo, for fuck's sake.
Are you implying that a dictator would lead to Malawi becoming wealthy? Seems like a disturbing argument. If that’s not what you are implying then what are you implying?
Your examples of Russia and Japan are easily explained by geopolitics. Indeed, Japanese individuals don't tend to excel out of Japan while many Russians do.
And people define victory in different ways. Having many children is how some people define victory. Having no children and a diploma on the wall is how some people define victory.
I've traveled a fair amount across Africa. I've seen a lot of NGOs trying to "help" in the most clueless ways.
It's like, did you even _talk_ to anyone there about these plans?
A few times they notice that fighting against corruption is known to increase the index at a footnote somewhere. But that's rare.
To lead a country to prosperity is as simple as letting a nation vote and counting their votes and then giving power to the guy they voted for?
Now maybe somebody could come in here and say that perhaps that dictator just wasn’t good enough or something….
But I still think arguments like this are disturbing. Throughout the 20th century so many horrors have happened because someone stood up and demanded absolute power be given to them. That democracy wouldn’t take the nation to the greatness it deserved. And again and again we have seen the dark road this takes a nation toward.
I mean come on now. We have all learned about the horrors of Hitler, Stalin and Mao. Even then we see comments like yours being negative towards democracy?
If a large portion of the state budget is spent on a fundamentally unproductive thing - subsidies to enable subsistence farming to be sustainable - yes.
I've often thought there's something wrong with the way we put a simple dollar figure on poverty. Less than $3 dollars a day with or without easy access to land, shelter, and fresh water?
so clearly who does better has nothing to do with the language but with the economy and who has the better resources and is more adaptable to serve the current needs.
Saying language had no influence on who did better is inaccurate.
but what i meant to say is that language does not have an influence in an absolute sense in that say dutch speakers would always do better than french speakers or something like that because of the language somehow giving them an advantage. the advantage comes from being part of the group that is in power.
They’re both good people with pride in their work, but they are from poverty and have little in the way of skills except for manual labour jobs.
They came to South Africa, like so many from nearby countries, as our significantly more developed economy offers far better earning opportunity.
Not relevant to your comment, but want to also mention this creates xenophobic tension with the section of the local population which is in poverty as they feel their jobs are stolen. While there are certainly cases where people illegally employ immigrants to pay them less than locals, in cases where pay is at least equal, Zimbabweans and Malawians tend to have reputation of being more honest and hard working than the indigenous population.
We have Nigerians come here too and by contrast they tend to be super scetchy.
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I live in North Texas and my gardener happens to be Mexican, as was a gardener my parents had when I was growing up.
They’re both good people with pride in their work, but they are from poverty and have little in the way of skills except for manual labor jobs.
They came to North Texas, like so many from nearby countries, as our significantly more developed economy offers far better earning opportunity.
Not relevant to your comment, but want to also mention this creates xenophobic tension with the section of the local population which is in poverty as they feel their jobs are stolen. While there are certainly cases where people illegally employ immigrants to pay them less than locals, in cases where pay is at least equal, Hondurans and Mexicans tend to have reputation of being more honest and hard working than the indigenous population.
We have Floridians come here too and by contrast they tend to be super sketchy.
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I read your original comment and was struck by how well it fits the situation here in Texas. You could've made the same comment about South Africa 40 years ago and it would still translate to the situation in Texas.
I don't know how you feel about people coming to South Africa for a shot at a better life but have to say that I have the highest respect for those men and women who have left their homes and families across the border for an uncertain future here in the US despite knowing that it is quite true that in many jobs they will be paid less than locals who do less actual work. All of this while being gamed by employers who know that they are illegally in the country and who work closely with Immigration Officials to identify people who can be quickly rounded up and sent south to pad some politician's resume or to distract the public from some other more significant issue. The employers never suffer consequences though they are the ones who created the opportunity and actively assisted in concealing immigration status for many of the workers.
It is a complex issue that should be solvable but as long as there are powerless people to heap the blame on we will probably see this continue.
And yes, it’s a complex issue for sure.
I’m convinced that the way out of poverty here is through education and sadly there is just a huge amount of apathy (when not corruption) at all levels here by the people who are supposed to be making it happen, from pupils, their parents, teachers, etc, all the way to the minister of education.
Meanwhile people like me pay huge amounts of tax and still need to pay for private schooling for my kids, private security and medical aid.
Essentially, most of the money I pay for tax is a charity intended for the poor, but due to apathy/incompetence/corruption, not nearly enough of it gets used effectively.
On the other hand, Kagame's execution on economic reform has been a failure when compared against Uganda, as Uganda [0] has a significantly more complex (ie. higher value) economy than Rwanda [1] despite also suffering a severe civil war in the 1990s and dealing with the Idi Amin's kleptocratic rule in the 1980s.
[0] - https://atlas.hks.harvard.edu/countries/800/export-basket
[1] - https://atlas.hks.harvard.edu/countries/646/export-basket
& that is a great website...
A lot of foreign aid is direct things like food, medicine, doctors, AIDS prevention programmes, vaccines for specific things, maternal care, containment of an Ebola epidemic, etc.
Do you really think that e.g. Kenya is voting alongside EU members because the EU paid for a part of a highway between two cities in Kenya?
Then yes, there are loans and grants for infrastructure things.
> For the loan cases, the terms are often unaffordable, effectively handing effective control of the entire country to the entity who has the other end of the loan - it is the modern empire-by-debt.
That's not true. The rates are very public, and while sometimes they are on the higher end, unaffordable is a stretch, and that's how loan rates work. It is inherently risky to give loans to a developing country with high corruption rates. That's why there are also lots of direct grants or direct physical aid with stuff instead of money.
The IMF also sometimes gives loans with strict requirements on market reforms, which can be controversial. Notably in the former Soviet/Warsaw pact bloc, economic shock therapy under instruction of the IMF had some devastating short term consequences, and in some countries led to mass dubious privtisations. In most though, it paid off and led to rapid and sustained economic and social growth.
I'm honestly disheartened by how much HN has degraded into Reddit now.
Please don't post comments saying that HN is turning into Reddit. It's a semi-noob illusion, as old as the hills.The wrong people capturing the resources that were earmarked for useful purposes and using them to enrich themselves.
When my mother was doing community service at a clinic some years back (required by law for people who get medical degrees before being allowed to practice privately), the clinic failed to spend their allocated budget.
The money was made available, it just wasn’t used, this despite people like the speech and hearing therapists applying for things like hearing aids for patients from week 1 of the annual budget period.
I suppose it’s a product of corruption/nepotism, people get into positions of power and focus their time on “stealing” and perks rather than the job they are being paid for and supposed to be doing.