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| A CEA debate in progress(Photo by Hope Manyawa) |
Note: This is a featured article, the views expressed therein are not necessarily those of Kasha's Pen, and some opinions may not be entirely reported as intended.
The Malawian economy has recently been in crisis, as seen by growing inflation, devaluation of the Malawian Kwacha, and the most recent energy crisis. Several events, notably the Russia/Ukraine war, have been identified as the root causes of these economic hardships. The CTC Economics Association (CEA) hosted a debate to determine whether it is true that this war is a likely cause of Malawi's economic woes. Some of the issues raised are summarized here. Let us walk you through the journey of everything that happened.
It all started in the first round, when speakers from both sides were given the opportunity to share their perspectives on the subject. The following are the proposed points, followed by those provided by the opposition.
Proposers
⦁ The first argument made was that it might be correct because Russia produces commodities that Malawi's economy has not been able to access due to the wars, such as fuel and fertilizer.
⦁ The second point raised was that the Malawian economy has been unable to import commodities from Russia, such as wheat, and the local bread manufacturing industries have not been efficient, resulting in lower tax revenue for the government.
⦁ The third line of contention was that since the beginning of the war, sanctions have been imposed on Russia and its citizens, and their assets have been frozen, causing prices for Russian resources to rise.
⦁ The last argument also emphasized the sanctions, stating that since the commencement of the war, Russia has been excluded from the global market, which has had an influence on Malawi by impeding its access to such resources.
Opposers
⦁ The opposition first argued that the issues affecting the Malawian economy are solely the fault of Malawians. The Affordable Inputs Programme (AIP) was mentioned in the point as an example of how bureaucrats are mismanaging resources and inappropriately establishing priorities.
⦁ The second argument mentioned the "Mercantilism" theory, according to which the current economic crisis—rather than the war—is the outcome of the Malawian economy's negative trade balance, which causes a scarcity of foreign currency.
⦁ The third reason cited by objectors is that Malawi has what is known as "Dependency Syndrome," but Malawians can rely on easy alternatives found locally to those imported resources, such as bio fertilizer and ethanol for fuel.
⦁ The opposition' final point is that the Malawian government has massive debts and a forex deficit, which has left it more susceptible; they gave the denial of the Extended Credit Facility (ECF) as an example.
In the second round (The battle round), speakers from both sides were given the opportunity to ask and critique the points stated by their counterparts in the previous round.At this point, the discussion heated up and became more fascinating. Here's how the round went down.
⦁ The first suggestion came from the affirmative side, alluding to the "Small Country Model," claiming that the war has harmed the Malawian economy in one way or another, because Russia is a large country.
⦁ The second to speak up was from the opposition, who emphasized that as Malawi has not yet begun ordering agricultural supply from Russia or other countries for AIP, it is illogical to attribute the current economic situation to the conflict.
⦁ The third speaker was from the affirmative side, and he questioned the opposition's first argument from the previous round, "How are Malawians themselves to blame?" "Which priorities are we discussing? If we're talking about priorities, perhaps we should concentrate on Vision 2030."
⦁ The opposing side raised another issue (possibly to support the dependency syndrome idea), claiming that this is a typical problem among African nations, using Nigeria as an example of a country that produces crude fuel but then imports it in a refined form. As a result, the Malawian economy is suffering because local measures to strengthen the economy have yet to be implemented.
⦁ Another viewpoint raised was the devaluation of the Malawian Kwacha during the conflict, which was intended to make Malawian exports competitive on the international market; hence, the war may have played a role.
⦁ The opposition side raised a last issue, challenging the affirmative side on the assertion that the AIP is for the country's food security and should still be a priority: "Has the Malawian economy been food secure since the AIP's inception in 2020?"
Conclusion
That was all there was to the CEA debate today. We hope you found this post informative and intresting. If you have any other thoughts, please leave a comment below; we'd love to hear from you. We'll catch up with you in our next post. Thank you very much.