The World Bank and this year's budget

One new feature of World Bank involvement in local affairs or what they themselves like to call “openness’s” or “transparency” is the running comments on government policy. A recent example of the this new approach are the comments on the budget. The World Bank country economist Khwima Nthara, while describing the budget as a “bold one”, informs us that the increase of duty on agricultural products may not augur well with principles of liberalisation. At a time when neoliberalism is being buried in the developed countries and at a time when many governments are nationalising banks and industries, subsidising national industries, insisting onthe  reservation of certain large scale projects to national institutions etc Mr. Nthara informs us “The era of protectionism is long gone” . He does not us tell whether the measure is good or bad or will serve the intended purposes of encouraging certain industrial activities but that it does not augur well for an ideology. He then adds that the budget has ignored the consumer: “I would rather buy cheap tea from outside the country than expensive local tea”. It does not occur to Mr. Nthara that most consumers in Malawi are also producers and that more productive farmers (due to subsidies) would rather work and buy the more expensive local tea than be unproductive and rely on crumbs of cheap imported tea. But even more depressing is that Mr. Nthara seems completely unaware that his masters in Washington DC have moved away from their dogmatic opposition to any industrial policy. In World Bank doublespeak one does not, of course, talk about “industrial policy” (that is still off limits) but, as John Page (of the World Bank) now calls it “policies for industrialisation”.

Mr. Nthara praises the budget for not adopting “populist” policies in light of the fact that DPP run a populist campaign. That is a weird observation. Were DPP inclined towards populist policies they would have pursued them BEFORE the election when they needed to woo voters. If any praise must go to DPP it is precisely that they did not go on a "populist" spending binge in the run up to the elections.