Global Policy Forum

The International Monetary Fund (IMF) and World Bank forced policies onto the Government of Malawi that were responsible for turning a food shortage into a famine, concludes a report released today by the World Development Movement (WDM). Seventy per cent of rural families faced starvation earlier this year, following floods in 2001.

The report details a catalogue of disastrous IMF enforced policies that have undermined Malawi's ability to feed its people. It blames the ongoing privatisation of the food production and distribution system (notably the Agricultural Development and Marketing Corporation - ADMARC), removal of agricultural subsides to small farmers and deregulation of price controls on staple foods such as maize - policies that have enabled Malawi to avoid famine in the past. The price of maize increased 400% between October 2001 and March 2002 as a result of these policies.

The House of Commons International Development Committee, which last week returned from a fact-finding visit to Malawi, today hold their first evidence hearing into the famine. Entitled ‘Structural Damage: The Causes and Consequences of Malawi's Food Crisis', the report also reveals evidence that the IMF, World Bank and EU were heavily involved in the disastrous decision to sell-off Malawi's grain reserves at the height of the famine, something they have repeatedly denied.

The authors also condemn international lenders for insisting that the heavily indebted Government of Malawi continues to make debt repayments to rich countries and the IMF and World Bank, despite the humanitarian crisis. Malawi will spend $70m, over 20% of its national budget, on debt repayments in 2002 - money desperately needed for health and education.

Director of the WDM, Barry Coates today condemned the IMF and World Bank for applying a one-size-fits-all, ultra free-market approach: "This is Jurassic economics, the policies of the Reagan and Thatcher era. They should be kept in a museum, rather than trampling all over desperately poor African countries." Pointing out that Gordon Brown is the chair of the IMF and Clare Short sits on the governing body of the World Bank. Mr Coates continued: "The UK bears particular responsibility because of our influence over these institutions."

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