malawi-flag.jpgIf you haven’t picked up a copy of Naomi Klein’s The Shock Doctrine yet, please do so. It not only explains what the Chicago-School-educated dictators and their US backers have been doing around the world to destroy government programs that actually help the poor and working classes — it also shows how the people, especially in Latin America, have been fighting back and winning, blowing off the free-marketeers of the IMF and World Bank and other like-minded entities. To the growing list of nations that are fighting back and winning, we can add one more: Malawi.

As recently as 2005, Malawi’s leaders had obediently followed the dictates of the free-market gospel spreaders. They cut back their government subsidies, especially for seeds and fertilizer, and watched as harvest after harvest failed. Yet the free marketeers kept giving Malawi prescriptions for more of the same: No government interference. Besides, why should your silly people bother with being able to feed themselves, when they could be growing cash crops for export!

In 2005, after the worst harvest in a decade, Malawi’s leadership said: Enough.

Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have periodically pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers. But after the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached.

Stung by the humiliation of pleading for charity, he led the way to reinstating and deepening fertilizer subsidies despite a skeptical reception from the United States and Britain. Malawi’s soil, like that across sub-Saharan Africa, is gravely depleted, and many, if not most, of its farmers are too poor to afford fertilizer at market prices.

“As long as I’m president, I don’t want to be going to other capitals begging for food,” Mr. Mutharika declared. Patrick Kabambe, the senior civil servant in the Agriculture Ministry, said the president told his advisers, “Our people are poor because they lack the resources to use the soil and the water we have.”

The country’s successful use of subsidies is contributing to a broader reappraisal of the crucial role of agriculture in alleviating poverty in Africa and the pivotal importance of public investments in the basics of a farm economy: fertilizer, improved seed, farmer education, credit and agricultural research.

Of course, it would be nice if Malawi’s leaders had had the support of the US and other "free-market" nations in working to keep their population within sustainable limits so that their land and soil hadn’t been so depleted in the first place:

Malawi, an overwhelmingly rural nation about the size of Pennsylvania, is an extreme example of what happens when those things are missing. As its population has grown and inherited landholdings have shrunk, impoverished farmers have planted every inch of ground. Desperate to feed their families, they could not afford to let their land lie fallow or to fertilize it. Over time, their depleted plots yielded less food and the farmers fell deeper into poverty.

But the US, the "donor" nation that most heavily pushed gutting government fertilizer subsidies, also has spent the past few years not only actively fighting the groups that promote birth control, but forcing nations like Malawi to gut contraception subsidies and to charge their people for birth control methods — which of course means that the poorer the woman (and the vast majority of Malawis are very poor indeed) the less likely she is to be able to get contraception. Result: More and poorer people.

The irony is that you’d think that the business-minded World Bank and IMF would heartily approve the Malawi government’s fertilizer subsidies, as they have more than paid for themselves in cash terms as well as in terms of keeping people alive:

Malawi’s determination to heavily subsidize fertilizer and the payoff in increased production are beginning to change the attitudes of donors, say economists who have studied Malawi’s experience.

The Department for International Development in Britain contributed $8 million to the subsidy program last year. Bernabé Sánchez, an economist with the agency in Malawi, estimated the extra corn produced because of the $74 million subsidy was worth $120 million to $140 million.

“It was really a good economic investment,” he said.

But then again, what with the insistence of free-market worshipers to hew to their failed model even in the face of repeated catastrophe, you have to wonder if they’re just seriously deluded, or are deliberately working to create disasters as described by Klein in her book:

In a withering evaluation of the World Bank’s record on African agriculture, the bank’s own internal watchdog concluded in October not only that the removal of subsidies had led to exorbitant fertilizer prices in African countries, but that the bank itself had often failed to recognize that improving Africa’s declining soil quality was essential to lifting food production.

“The donors took away the role of the government and the disasters mounted,” said Jeffrey Sachs, a Columbia University economist who lobbied Britain and the World Bank on behalf of Malawi’s fertilizer program and who has championed the idea that wealthy countries should invest in fertilizer and seed for Africa’s farmers.

The lesson is clear: Listening to the Chicago Schoolers brings pain and disaster. Giving them the back of your hand brings prosperity — in Malawi, as in Latin America and elsewhere around the world. The shock’s wearing off, indeed.

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  4. Something Rotten in the State of Denmark
  5. Public Option More Important Than The Level Of Subsidies