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The Resident Coordinator's Office reports annually to the UN Secretary-General and the executive heads of UN organizations operations. This includes assessment of the performance of the RC and heads of UN Executive Committee agencies – UNDP, UNFPA, UNICEF and WFP – against the implementation of the UN Coordination Annual Work Plan. The UNCT compiles the Work Plan on the basis of the key development challenges and national priorities in the country, and is in line with the UN Development Assistance Framework.The achievements are reported in the UN Residen Coordinator Annual Report.
Summary
2005 was a politically turbulent year for Malawi, characterized by a food shortage-driven humanitarian crisis, and the still relatively new Government asserting greater fiscal management but being repeatedly distracted from advancing key elements of its own reform programme by political issues.
The UN country team was central to the effort by Government and development partners to avert famine, to ramp up mass treatment of HIV and AIDS, support capacity development and to ensure that political differences did not derail the national budget. The UN supported government efforts to develop a second generation Poverty Reduction Strategy Paper, the Malawi Growth and Development Strategy (MG&DS). It has deepened its efforts to promote ‘one UN’ at the country level including by committing to alignment of the UNDAF behind the emerging MG&DS as through joint UN programmes and common services.
In February 2005, the President quit the United Democratic Front (UDF), headed by the former President Bakili Muluzi, to form the Democratic Progressive Party. This had major ramifications thought out the year including efforts to impeach the President. Following the formation of DPP, 28 members of parliament defected to DPP, which included all cabinet ministers with the exception of three, including the Vice President Cassim Chilumpa. In February 2006, the President announced that he had ‘accepted the resignation’ of the VP on various grounds, including non-performance of his official duties. The constitutional implications of the dismissal of the VP and of the defection of MPs remained unclear, notably whether By Elections are required for MPs who have crossed the floor.
These political developments resulted in uncertainty and in gridlock in Parliament. The Budget was the only major business conducted and passed only after strong intervention by civil society, the United Nations and donors. This has a been busy year for lawyers. “Courts: where everything ended in 2005” was how one newspaper summarized it. By the end of the reporting period, the President’s success in fending off challenges by the official opposition, the Malawi Congress Party (MCP), to the legitimacy of the 2004 election results and the collapse of efforts led by the UDF to impeach him, increased the prospect of Government being in a much stronger position in 2006.
President Bingu wa Mutharika’s continued outspokenness on tackling corruption, strengthening Government, promoting economic growth and reducing Malawi’s poverty levels and dependence on ‘handouts’ continued to impress the public and maintain goodwill towards the Government among development partners. At the World Summit in New York, President Mutharika affirmed his government’s commitment to achievement of the Millennium Development Goals. However, progress has been slow in key reform areas such as public sector reform.
Concerns grew during the year that the political standoff between the three main political parties was causing a lack of focus on the country’s pressing development, governance and capacity problems. Some suggested that it was contributing to a democratic deficit characterized, among other things, by unruly scenes in Parliament and the unfortunate death of the Speaker, and the postponement of constitutionally mandated local government elections, whose dates had not been set by the end of the reporting period.
Malawi was the country worst hit by the food shortage-driven humanitarian crisis that affected southern Africa, with negative consequences, yet to be fully assessed, for millions of Malawians. A combination of erratic rainfall and insufficient access to agricultural inputs in the 2004-2005 growing season led to the worst food crisis certainly since 1994, one compounded by widespread poverty, chronically low levels of nutrition, and the prevalence of malaria and HIV/AIDS. By the end of the reporting period, up to 5 million Malawians were receiving food aid and other assistance in an effort led by government and supported by donors and the United Nations, notably DFID, the European Union, UNICEF and WFP.
The Government received generous donor support for its efforts to manage the growing crisis. In August 2005, with Government encouragement, the UN issued a flash alert with two tracks. Firstly, to seek additional funds both to support the immediate humanitarian response, covering food aid, health, education and protection against sexual and other exploitation and the secondly to minimize the likelihood of a further humanitarian crisis in the 2005-2006 growing season by seeking funds to buy essential agricultural inputs.
By the end of the reporting period (February 2006), of the approximately US$ 63 million requested for immediate humanitarian activity, and US$ 36 for emergency inputs, approximately US$ 49 million and US$ 7.5 million respectively, had been received. The request for funds for the second, agricultural inputs, track was suspended in October 2005 as the planting window of opportunity had closed.
The President and Minister of Finance were directly engaged in management of the response to the food crisis; this included the President’s launch of ‘Feed the Nation Fund’ to seek support from Malawian citizens and companies not least to make the point that Malawi needs to help itself.
Government leadership and collaboration with the development community including the United Nations family ensured that widespread deaths from starvation were averted. However, the experience also revealed underlying problems in developing and implementing a consistent food security policy. Agriculture and food security remain highly politically contested areas with differing views in key areas between the development fraternity and the Government. Contested areas include the wisdom and effectiveness of input subsidies, the sale of maize at subsidized prices through Agriculture Development and Marketing Corporation (ADMARC) stores and the respective roles of government and the private sector in importing, distributing and sale of basic agricultural items.
Malawi continues to be a marginal player in the global economy. Its status as a landlocked and primarily agricultural country dependant upon a few major crops (such as maize, tobacco, tea and sugar) makes it particularly vulnerable to external shocks such as oil prices and weather. The private sector remains small and many steps remain to create an environment favourable to business and to foreign investment. High transport costs, unreliable power, water and communications, security issues and concerns about political involvement in privatization, exemplified by the lengthy process in 2005 regarding Malawi Telecoms, have all affected the investment climate.
The degree to which economic growth benefited the poor or resulted in greater or less inequality is not clear. Anecdotal and available evidence suggests that there has been little improvement in the distribution of wealth in the last decade; the food shortage will have disproportionally affected the poorest. Optimistic forecasts about economic growth reaching 4.6% in 2005 were blown off course by the food crisis and the increase in oil prices; the figure was closer to 2.1%. For similar reasons, the inflation rate increased during the year from approximately 11% to 16.5%. Management of domestic debt remains a major challenge for the Government, but has improved, and arrears are no longer accumulating. Foreign exchange reserves remained very low and rarely exceeded one or maximum two-month’s import cover. More than US$ 400 million of foreign aid remained critical to the economy, representing over 80% of the development budget and approximately 45% of the total national budget.
Efforts led by the Minister of Finance to restore fiscal discipline bore fruit during 2005; there is every prospect that subject to IMF approval, Malawi will reach HIPC decision point soon, and thereby benefit from cancellation of its multilateral debts. Ministries respected the 2004 and 2005 budget parameters to a degree unseen for over a decade.
A major development in 2005 was the preparation of the Malawi Growth and Development Strategy (MG&DS) to replace the Malawi Poverty Reduction Strategy that expired in mid 2005. The MG&DS represents a nationally owned strategy intended to boost economic growth through the productive sectors while maintaining and improving the efficiency of spending on the social sectors. Major development partners were invited to comment and contribute to various drafts and have committed themselves to aligning their programme activities with the MG&DS. However, internal coordination within government and with development partners by Government remains weak. Government still lacks an empowered and unified budgeting and planning unit, raising concerns as to whether the MG&DS can yet serve as investment and planning instrument, even though it could provide the framework for the 2006/7 budget, for donor investments and for further detailed needs assessment and costing work with a view to achievement of Malawi’s Millennium Development Goals.
2005 saw further shifts by donors to the use of budgetary support as a means of supporting government, using the Common Approach to Budgetary Support (CABS) group as the apex forum for coordination with central Ministries. In early 2005, the UN was invited through UNDP to be observers at CABS, along with the Bretton Woods institutions. A number of donors remained outside, raising concerns about the universality and quality of coordination among development partners, especially as the Government has not been leading in this area.
Commitment to the Paris Declaration and the simplification, harmonization and alignment agenda is strong. This, along with the shift to budgetary support, pose some dilemmas and many challenges to the UN, and has raised questions as to whether it is able to adapt in a rapidly changing aid environment. Weak government capacities in human resource and financial management, aid coordination and monitoring and evaluation represent a major challenge but also an opportunity for the UN to step up its support to Government in key areas. This remains a central issue for the UN in 2006.
The Country Team remains committed not only to alignment of UN activities behind national priorities but to advancing the realization of ‘one UN’ at the country level – whether through joint programmes, the development of common services and through more symbolic measures. In anticipation of your directive in December 2005, the UN prepared the establishment of a joint UN team on HIV and AIDS, in line with recommendations of the Global Task Team on Reform for a more effective multilateral response. At the beginning of the year, the President encouraged the RC to co-locate the UN family; the government has identified a plot in central Lilongwe and planning has now begun. The Minister of Finance attended a UN Country Team meeting, and recognition of the RC role appears to be slowly increasing.
Two UN joint programmes were further developed during the course of the year – HIV and AIDS and monitoring and evaluation. In both cases, the objective was to ensure a truly collaborative approach by the UN family, based upon pooled skills and resources, to supporting government priorities. A priority in 2006 will be to explore the possibility of joint programming in the area of food security and will necessitate the UNCT having stronger policy and coordination capacity, which would logically be hosted by FAO.
Regarding HIV and AIDS,
Malawi is in the forefront of efforts to provide ‘joined up’ UN support to Government, notably the National Action Framework (2005-9). The year saw the completion of an Implementation Support Project by the UNCT, supported by the inter-agency Regional Directors’ Team, which sets out strategic actions in eight priority areas (including prevention and behaviour change, care treatment and support, impact mitigation, mainstreaming, research and development), plus a roadmap for joint monitoring and evaluation. Division of labour within the UN was determined based on available capacity to move ahead on specific priorities – capacity building, ARV procurement and supply chain management, HIV prevention among young people, and food security/nutritional support for people living with or affected by HIV and AIDS. Remarkable progress was made in 2005, in the scale up of ARV provision from 13,000 in at the beginning of the year to more than 37,000 by December.
Regarding monitoring and evaluation, a basket fund managed by UNDP, to which agencies including FAO, UNAIDS, UNDP, UNFPA and UNICEF as well as the EU have committed, was established to support Government with a national monitoring and evaluation framework. A joint programme on support to national monitoring and evaluation systems was signed. This lays the basis for common work plan, funding arrangements and reporting on national monitoring and evaluation activities, as well as the basis for monitoring the MG&DS and progress towards achievement of the MDGs.
Work was also proceeded on a joint programme on gender equity. The objective is to support Government through the Ministry of Gender, faith-based and non-governmental organizations as well as the National Assembly to address gender disparities, notably rising levels of violence against women – levels exacerbated by the food shortage. The UN joint programme will support the national Gender Programme and Plan of Action whose preparation was supported by the UN, notably UNFPA and UNICEF.
UN agencies collaborated on a wide range of other activities, including in education, water and sanitation, orphans and vulnerable children, school feeding and capacity building. Particular programming highlights included the review of the education act and the UN role in the education SWAP, the development of a sanitation policy, provision of education and safe drinking water in the refugee camps, implementation of joint school feeding programmes, and capacity enhancement programmes in health care and several ministries. The UN Theme Groups on HIV/AIDS, Disaster Management and Health, as well as the fortnightly UN Country Team meetings, which usually included representatives from the International Monetary Fund and the World Bank, coordinated much of this collaboration.
The country team consulted throughout the year on how the UN could best support the review of the Malawi Poverty Reduction Strategy and the development of the MG&DS. It was agreed that the UNDAF be delayed by one year to ensure full UN alignment behind the MG&DS, and that the Common Country Assessment would be replaced by a needs assessment and costing of what it would take for the MG&DS to result in progress on the Millennium Development Goals. The Government requested the UN’s support to undertake the needs assessment and costing. The UN plans to respond in partnership with the World Bank, drawing upon relevant expertise locally and internationally, including from the UN’s Millennium Project.
Progress was also made in the area of common services. A workshop for operations staff was held at the beginning of the year and resulted in the definition of task forces and action plans in a number of areas, including the UN Resource Centre, the UN Common Premises, UN dispensary, joint procurement, joint travel arrangements and the Emergency Response Team (ERT).
A central challenge is to ensure that the UNDAF is fully aligned and responsive to the MG&DS, due to be completed by Easter 2006, and ensure that the UN is able to help Government fulfil its ambition, consistent with the outcome of the UN World Summit in September 2005, to orient the growth and development strategy with the Millennium Declaration. Getting this right will not be easy but if successful could be highly innovative.
While much progress has been made regarding UN reform, there remain concerns expressed in particular by donors that the pace remains slow. The ability of the country team to move ahead, not least in complicated areas relating to shared human and financial resources, operational and financial arrangements, depends not only upon the RC being empowered with sufficient staff and support to facilitate the process, but also upon individual agency heads in Malawi receiving explicit instructions, encouragement and professional incentives from their respective Chief Executives.
To the degree that the UN system is looking for some pilot or ‘laboratory’ countries in which to ‘push the envelope’ on UN reform, the Malawi team presents itself to you, Sir, as a willing candidate.
Yours sincerely
Michael Keating
Resident Coordinator
UN System in Malawi
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Malawi and the MDGs
The Political Scene