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Abstract: A major concern for developing economies is a dependence on commodities when their prices are volatile as a major change in the international commodity price can have important implications for economic growth. While some cross‐country studies exist, there is lack of country specific studies that take into account the different characteristics of low‐income economies. This paper contributes to the growing literature by considering the case of Malawi and the macroeconomic impact of price shocks in its major export crop of tobacco. Using a structural vector autoregression (SVAR) approach on quarterly Malawian data from 1980:1 to 2012:4, the paper establishes that a positive tobacco price shock has a significant positive impact on the country's gross domestic product, decreasing consumer prices and inducing real exchange rate appreciation. The results are robust to alternative specifications of a SVAR on difference stationary data and cointegrating VAR. The cointegrating VAR confirms the existence of a long run‐relationship among the variables and causality that runs from tobacco prices. [ABSTRACT FROM AUTHOR]

Malawi is the most densely populated country in southern Africa, and its economy and the livelihoods of the vast majority of its people are dependent on agriculture. Rural land is, therefore, a critical resource. Malawi is divided into three Regions and during the colonial period, such economic development as did occur tended to be concentrated in the Southern Region. The Northern Region was often characterised, by contrast, as the 'dead North'. Levels of economic development in the Central Region fell between the other two regions. At independence in the 1960s, internal migration patterns reflected this, with net in-migration to the Southern Region and net out-migration from the Northern. In the 40 years since, there have been marked changes in these patterns, and in the last intercensal period, 1987-1998, the Northern Region was experiencing net in-migration from the Southern Region, and was the fastest growing region. This paper traces these changes over time through analysis of census data, and relates them to increasingly serious land shortages in the south and the geography of tobacco estate development since independence. This analysis is further supported by a range of other surveys and research which indicate the depth of land shortage and rural poverty in the south of the country. The paper concludes that rural-rural migration, although under-studied, particularly in southern Africa, is a vitally important aspect of rural livelihood change and positive adaptation in sub-Saharan Africa which deserves more attention. [ABSTRACT FROM AUTHOR]

Microeconometric evidence reveals high private returns to education, most prominently in low-income countries. However, it is disputed to what extent this translates into a macroeconomic impact. This paper projects the increase in human capital from higher education in Malawi and uses a dynamic applied general equilibrium model to estimate the resulting macroeconomic impact. This is contingent upon endogenous adjustments, in particular how labour productivity affects competitiveness and if this in-turn stimulates exports. Choice among labour market assumptions and trade elasticities results in widely different outcomes. Appraisal of such policies should consider not only the impact on human capital stocks, but also adjustments outside the labour market. [ABSTRACT FROM AUTHOR]

This paper discusses contested issues in development related to Indigenous knowledge, and conventional development practice and theory. Drawing on findings from field research, this paper argues that although development aims at improving the quality of life of people concerned, the understanding of such improved life quality is different between local people and development experts. Experts emphasise economic growth as measured by per capita income, which is sometimes inadequate in explaining local people's understanding of development. The findings of the study lay bare the underlying values of local farmers in northern Malawi that contribute to improving quality of life and living standards. Indigenous knowledge developed by farmers shows that progress is understood in terms of adequate food, fresh, tasty value-laden food available for consumption and utilising more than one part of the crops grown, and not just adequate income. [ABSTRACT FROM AUTHOR]

This paper reviews relations between government and the private sector in Malawi from independence to the present. The analysis charts the changing emphasis that official policy has attached to the role of the private sector throughout the transition from dictatorship to democracy; and from a PRSP that effectively ignored the role of the private sector in national development, to the current more balanced approach that recognises the private sector as the ‘engine of economic growth’ and the best means of achieving poverty reduction. However, in spite of progress, Malawi's private sector remains fragile and while the rhetoric from the highest levels of government towards the private sector has evolved, the enabling environment for private sector development is still inhospitable. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper deals with some aspects of practical experience in the implementation of regional planning in developing countries in sub-Saharan Africa, particularly Kenya and Malawi. It is also specially concerned with the role in pursuing regional planning policies of physical planners. After some discussion of general experience with physical planning's role in regional planning in Africa the experience of Kenya is discussed in some detail, a country with more commitment than most in elaborating such policies but still limited success in implementation. The main emphasis is on the analysis of the experience of Malawi, a poor and very crowded country whose development in several ways parallels that of Kenya, while in other respects being very different, especially with its even more limited resource base in any economic activities other than agriculture. The limited effectiveness of physical planning is discussed in some detail, both within particular projects, and generally in rural areas, with particular reference to the administrative machinery within which it operates. Malawi's experience underlines the need, if physical planning policies are to be successfully implemented, for them to be consistent with regional planning activities of other Government agencies, as welt as other macro-economic policies including those for agricultural pricing and other policies affecting the relative success of the estate and smallholder sectors. [ABSTRACT FROM AUTHOR]

The article discusses the effect of innovations on patterns of rural development and in particular on output per acre and on labor input per acre. Data from a sample of 240 smallholdings in five different areas of Malawi are examined. The article indicates that the existence of differing patterns of rural development in these areas. It discusses the implications for rural development policy. The article shows a bias among the smallholders in favor of innovations and a skepticism about the viability of yield increasing innovations.

Jayne et al. make a valuable contribution to emerging empirical evidence on agricultural input subsidy programs in Africa by examining the effects of corrupt "diversion" of subsidized fertilizers on the displacement or crowding out effects of farmers' purchases of subsidized fertilizer on purchases of unsubsidized fertilizer. Unfortunately, their estimation of the effects of this on economic and financial benefit cost ratios (BCRs) is methodologically flawed and, for Malawi, is also undermined by problematic use of data. This comment presents a consistent methodology for revised estimates of both economic BCR and fiscal efficiency for the Malawi program. This shows that the underlying economic BCR of subsidized fertilizers in Malawi has been higher than estimated by Jayne et al. and is largely unaffected by diversion and displacement, but that the fiscal efficiency of investments in the program is strongly affected by diversion and displacement in program implementation. [ABSTRACT FROM AUTHOR]

Responds to Carr and MacLachlan's commentary to an article concerning work, organizational and national development in Malawi. Misconception on the importance of basic need satisfaction to organizational development; Criticisms on the methodology used in the article; Clarification of the inquiries peened in the commentary.

This study analysed the impact of foreign debt on economic growth in Malawi using time series. Data for the period 1975-2003 from the Reserve Bank of Malawi, the IMF and the National Statistical Office was regressed in basic time series analysis. The dependent variable was economic growth and independent variables included level of foreign debt as the main variable. Other variables considered are the inflation rate, exchange rate and the prime lending rate, private and public investment. The results show a statistically insignificant and negative relationship between foreign debt and economic growth for the case of Malawi. The country should strive to provide incentives to local manufacturers who would want to export rather than relying on borrowing for growth inducement. Of interest was the relationship between inflation and economic growth which was positive. [ABSTRACT FROM AUTHOR]

Focuses on the improvement of the gross official reserves of the Reserve Bank of Malawi in Malawi. Assessment of the economic indicators detailing the improvement of the import cover of the banking sector; Impact of the food inflation to the economy.

This article presents the development of a set of programming models describing the major features of different rural livelihoods and of the informal rural economy they together make up in Malawi. The models allow for differentiated responses by different household types to change and for the partial equilibrium effects of consequent supply, demand, and price adjustments in labor and grain markets. The models provide insights into the relations between own-farm and nonown-farm activities in different households' livelihoods and in the informal rural economy as a whole, and are used to investigate possible impacts of increasing cash crop prices and of a more open rural economy. Impacts of these changes on the poor are found to be critically dependent upon supply and demand elasticities in labor and grain markets, but the poor could potentially suffer significant losses from increased openness of the local economy leading to increased expenditure by less poor households on imported goods and services. [ABSTRACT FROM AUTHOR]

The article reports that Malawi cut its diplomatic ties with Taiwan and established ties with China. According to Malawi's Foreign Affairs Minister Joyce Banda, the decision was made after considering the benefits that it would bring to their country. Moreover, Lilongwe and Beijing had formalized its diplomatic ties last December 27, 2007. China's government and its companies have invested in Africa in a bid to build political influence in the developing country, and others. Meanwhile, Banda claimed that projects funded by Taiwan won't be affected by the change in their diplomatic relations.

Reports that the World Bank has disbursed an International Development Association credit of 25 million dollar to support a program of fiscal management and growth acceleration by the government of Malawi.