3 October 2012

Malawi: Presidential Pay Cuts and Austerity


There has been widespread praise for Joyce Banda's decision to slash her own presidential salary by 30 percent and an equal amount of shock and surprise (particularly, I would guess, from her presidential peers in southern Africa who know an alarming precedent when they see one!). Needless to say, it is almost entirely symbolic since she still has State House and all Malawi's presidential expenses to live off. But symbolism is important - especially when you are pushing through austerity measures on a population that is already battling to cope with acute poverty, high unemployment, non-existent services, soaring inflation and alarming food shortages.

And it's also good politics with elections due in 2014. But amid all the praise - and attendant cynicism - everyone seems to have missed the point that it's excellent politics for another reason. Hacking her salary down to US$42,000 (in a country where the majority live on less than US$730) has diverted attention away from the austerity measures.

Every report talks about her acting in solidarity with the people during this time of austerity. And then focusses on the salary cut - and whether cabinet ministers will face the same terrible fate. There is no debate about the austerity measures themselves or about whether they are necessary for Malawi's resurgence.

No talk about Europe and its failed austerity. No talk about whether austerity measures are right in the Malawian context - remember this is a country with deep, structural poverty and very few industries and where donors provide 40 percent of the budget. And no talk about why the President's Economic Advisory group is so dominated by business leaders and believers in the old, market-based, Bretton Woods consensus - and in the importance and righteousness of austerity.

It is great that President Banda has taken a pay cut. But it would be worth a lot more if she allowed for a genuine debate on the best economic way forward for Malawi - and did not simply agree to everything that western donors, the IMF, the World Bank and the austerity junkies from big companies and big business suggest. Maybe her pay cut could be used to fund an expert in more sustainable, pro-poor economic options - to provide an anti-austerity alternative.

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