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Why is Malawi Poor?
Malawi is rich in democracy, peace, and spirit. But economically, Malawi is one of the poorest countries in the world. Why is Malawi poor? Hint: It’s complicated. To simplify, Orant has compiled a list of 4 main reasons.
1. Malawi is landlocked.
This means importing and exporting goods is hindered. Which means Malawi lacks access to global markets. In addition, each of Malawi’s surrounding countries indirectly affects it. When there are issues in one, Malawi experiences spillover effects.
2. 80% of the population depends on subsistence agriculture.
While farming for survival is a noble endeavor, it comes with challenges. Almost all of Malawi’s agriculture is rainfed. Depending on weather conditions, rainfed agriculture isn’t reliable. Not to mention that Malawi and other developing countries receive the brunt of climate change’s effects. Droughts and floods affect agricultural yield, which directly impacts food security.
There are also limited non-farming economic opportunities. Because of this, people don’t specialize. With a lack of specialized jobs and economic opportunities, the country has limited economic growth overall.
The Malawi Vision 2063 (from the United Nations and National Planning Commission of Malawi) points out that Malawi has challenges with over-regulations. Political interference and control limit market competitiveness, land accessibility, and even environmental sustainability.
4. Without global investment, Malawi struggles to grow its markets.
And because the markets struggle to grow, there is minimal investment. It’s a vicious cycle. To make matters worse, this cycle causes a lack of US Dollars, the world reserve currency. As such, Malawi is more susceptible to inflation and price changes.
In conclusion…
It’s complicated.
But there’s hope.
As the Malawi Vision 2063 states, Malawi’s best years are ahead of it. Youth development and empowerment will help Malawi’s future economy flourish. Malawi is in a perfect position to one day achieve in-country self-sufficiency.
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