Speeches & Transcripts

Running Together in Malawi’s Poverty Race

December 9, 2015

Laura Kullenberg, Country Manager for Malawi Commemorating 50 Years of Partnership Between Malawi and the World Bank Lilongwe, Malawi

As Prepared for Delivery

Good Evening

It is tremendously exciting to be up on this stage at the 50 year mark of the World Bank Group’s partnership with Malawi and to have the opportunity to look both backwards and forwards. The World Bank and Malawi have been working together for half a century. We have enjoyed a very strong relationship and have done many good things together in pursuit of Malawi’s development.

Since its independence, Malawi can count many achievements. It has established a working democracy and sustained peace both internally and with its neighbors. It is making hard won progress in a number of areas of human development, including on several of MDG targets. The country has increased primary school enrolment and access to safe water, built road networks as well as institutions.

During this period the Bank has actively supported the country’s efforts. We have done so in three ways: first through lending, which has totaled about USD$4.3 billion. We plan to continue a strong program of lending in the future. I want to note here – because many aren’t aware—that roughly half of World Bank support comes in the form of grants (free) and the other half is in no-interest loans payable over 38 years with a 6 years grace period.

The second form of assistance is policy advice. As a multilateral institution our job is to provide objective, technically sound analysis to our member states drawing on global experience from our thousands of operations in 188 countries. And we have also provided technical support to help Malawi build its institutions.

Over the decades, we have also built relationships with many actors; many of you are represented here tonight. I am pleased to say that our primary relationship—with Government—remains strong and steadfast, with productive engagement and open dialogue across a wide range of issues. Together with the IFC and MIGA we work directly with the private sector, we also interact regularly with NGOs, civil society, the media, policy institutes and academia. We also fund programs jointly with other development partners.

So, on behalf of myself, our Director Bella Bird, our Vice President for Africa Makhtar Diop and our World Bank President Jim Kim, I would like to say thank you very much: to the Government and people of Malawi; to all of our development partners here tonight for being such good collaborators; and to all of the WBG staff who have worked so hard to assist Malawi over the last few decades and continue to do so every day.

I promise I will not stand up here and list all of the projects the World Bank has invested. But I can say with great conviction that we have been engaged intensively across the waterfront to support government programs that have really made a difference to people’s lives.

Our first project signed in October 1966 provided the funding for the design of the M1 from Zomba to Lilongwe, and the M4 from Lilongwe to Mchinji. Those roads have been there for a long time and are essential to Malawi’s economy, though very few people traveling on them today know they were originally financed by the World Bank.

I think that our investment in infrastructure counts among our main achievements. Beyond roads may I quickly just mention a few you may recognize:

  • In education - teens of the 70’s know the four national secondary schools we financed– Mzuzu Government, Lilongwe Girls, Dedza, and Blantyre Secondary Schools; We later supported 20 more in both urban and rural areas, plus thousands of primary school classrooms through MASAF;
  • In water - Mulunguzi Dam on Zomba Mountain now serving Zomba, and water supply schemes all over the country;
  • In agriculture –the rehabilitation of the four major national irrigation schemes – Muona, Nkhate, Likangala and Limphasa.

The other area of deep engagement has been in the macroeconomic arena. For many people macro policy is rather dry and abstract and it can be hard to imagine how it affects poor people out in the villages, but the truth is it has an enormous impact. High inflation drives up prices and hurts the poor most—high interest rates, currency instability discourages investors which means fewer jobs, and exports. Macroeconomic stability always and everywhere lays at the heart of development --without it, it is very hard to achieve growth needed to reduce poverty, which is why we are engaged in this “heartbeat” area.

And finally, the World Bank has been able to come in with emergency support in times of crisis, such the $80m we provided in the aftermath of the floods this year, along with $75m for social safety nets to help the flood affected.

We are fortunate in the fruitful partnership we have built over the past half century, and tonight, at this anniversary milestone, we renew our commitment to help the country eliminate extreme poverty and achieve growth and shared prosperity, with the utmost conviction and sense of urgency.

Now, looking forward, the main challenge before us is the persistence of poverty—Malawi is just not winning this battle yet.

Today Malawi is one of the world’s poorest countries with a GNI per capita of $250. According to World Bank estimates, almost 70 percent of the population are projected to live below the poverty line in 2015. That is living on less than $1.90 per day.

Clearly, this is no time for complacency. Not for Malawi nor for its development partners.

Indeed at 50, Malawians all over the country have been reflecting on how far the nation has come since independence. Opinions vary about how and why Malawi is where it is today, and what should be done next. But the common theme seems to be a thirst for transformation – a sense that Malawi needs to step on the accelerator so as not to be left behind and address the political, economic and institutional barriers that have prevented greater progress.

Malawi at 50 is simply too vulnerable. Let me paint a picture of what I mean here by vulnerable. An economy dependent on rain fed agriculture and a few commodities; weak integration with the regional economy; high dependence on foreign aid; and elusive macro-stability. In the longer term, climate change and uncontrolled population growth constitute perhaps the greatest threat to Malawi’s future generations. We have already seen the devastation of the flooding this year, and more climate uncertainty is expected.

None of this is breaking news to anyone in the room. These are chronic challenges Malawians have been grappling with for decades. To solve these problems is not easy, otherwise it would have already happened.

However, there is no “natural state” or reason to conclude that poverty should remain so high in Malawi. The country, your country, has so many advantages from land and water resources, freedom from conflict and civil strife, to the natural talent of its people. Other countries in the region are achieving high rates of economic growth and impressive poverty reduction. And so can Malawi.

To leverage the country’s potential requires institutions that work, are not plagued by corruption and inefficiency. Malawi’s civil service was once a source of national pride and can be so again. Reform efforts are underway and these deserve support.

Cashgate was a harsh a wakeup call. But it is also an opportunity to get basic systems working again. In a young democracy episodes like cashgate can be a defining moment and a chance to set things on a better course, permanently.

Making it easier for businesses to operate and invest can unlock the considerable potential of the private sector, as can investing in human beings-human capital to equip the next generation to compete in the global economy.

And there are several opportunities for regional integration that Malawi could seize right now within Africa; greater regional connectivity and trade can help Malawi deal with shocks. Irrigated agriculture offers great potential for take-off growth-in the Shire Valley for example. There is a lot of dynamism in the neighborhood that Malawi could leverage - the SADC market is very close by and very large.

So, it is indeed possible for Malawi to make a quantum leap forward in the fight against poverty—It is not an easy fight and requires all forces going to battle in the same direction; with creativity, energy, focus. The Government can lead but it can’t wipe out poverty alone, the Bank can’t do this alone, nor can the DPs, or NGOs or individuals acting alone.

But together it can be done, it has been done--we have global evidence that the needle on poverty can move when you have a clear development vision, one in which long-term goals trump short-term interests, a national vision which has unwavering commitment from leadership, and is embraced by citizens, and supported by friends and partners in which everyone brings their best game forward.

I was having lunch recently with a very successful businessman in New York. Because he was well known people kept interrupting him with requests. I asked later why he so politely allowed these interruptions. He gave a simple answer I will never forget: “you never know where a good idea will come from.” And I realized that much of this person’s enormous success came from listening to a lot of different people even when it wasn’t convenient.

It occurred to me that this message is highly relevant today in Malawi’s fight against poverty. Ending poverty needs the wisdom and experience of the older generation and it needs the energy and restlessness of the youth. It needs innovators and new thinking. So it makes sense to keep minds, ears, hearts open to hear all the voices. You never know where good ideas will come from!

And that is why we launched this competition. There is the famous young Malawian who constructed the village windmill. But there are many other invisible heroes out there, walking all over the country today, trying to make things better. People who refused to be defined by poverty or despair and are out there, trying to make a difference. We need to hear from them.

Let me say a word about the special role of youth and artists in the fight to end poverty. These days we hear a lot about the need for a “change in mindset”; from political leaders and citizens alike. And who influences mind set more than artists?

Throughout history art and artists have played a catalytic role in shaping society and social progress. Artists can be change agents—who use their influence and talent to challenge, provoke, inspire. A single photograph can replace a thousand policy papers and propel people to action. Artistic expression can create jobs, drive tourism and commerce and not just in rich countries. Artists and youth are not often part of the discussions about poverty and development, yet they have such a contribution to make.

And youth - they will inherit the consequences of decisions made today. They therefore need to be inside the conversation. It is in this context that we thought of having a special category for these young people below the age of 40 in this poverty competition.

I hope you enjoy the evening as we present the prizes. I also encourage you to mingle with the winners and judges during the cocktail—they would be happy share their experiences of this process.

Let me conclude by saying that Malawi at 50 faces fierce challenges but enormous opportunities. The nation has already accomplished many things—against difficult odds---and these gains should be recognized and protected. Poverty has proven itself a stubborn enemy but change is possible, big changes. As you heard the great Nelson Mandela say, since so many development problems are man-made they can also be addressed by the actions of men (and women) with strong vision and a shared line of sight.

It is within the power of everyone sitting in this room today to be co-creators of a better future, of turning dreams into reality. As the WBG, after 50 years, we stand ready to continue our long partnership and walk with Malawi, no, run with you, to a place we hope is not too far in the distance, where citizens have grabbed hold of their future and changed their destiny, where Malawi is on the move and has left poverty behind.

Thank you very much.