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Globalization - Countries
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IMF – Malawi - The International Monetary Fund has denied allegations that it was partially responsible for the gathering famine in Malawi. The Washington-based institution has been blamed for putting pressure on President Muluzi to sell off maize reserves to save money on storage and to repay foreign debts at the very moment when the harvest failed. Aleke Banda, Malawi’s Agriculture Minister, and Western aid agencies, including the Save the Children Fund, have claimed that the IMF and Western donors pushed Malawi into selling the reserves. The row has thrown a spotlight on to the seemingly irreconcilable goals of sound financial discipline required by the IMF among developing countries in exchange for financial assistance and the need to maintain expensive food surpluses to avert sudden food crises. The United Nations’ World Food Programme estimates that three million people will need emergency food assistance in Malawi alone between July, when existing maize stocks run out, and March, when the next harvest is due. The IMF said yesterday: "The allegations are wrong." It said that it had merely advised the Government to reduce the strategic grain reserve to 60,000 tonnes, which would have provided a sufficient buffer stock for emergencies. It did not suggest that the Government sell off the maize reserve entirely. At no time did the IMF "insist that Malawi reduce its food stocks as a condition of lending, nor did the IMF pressure Malawi to make any sales from the buffer stock," the statement added.
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