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This book aims to improve readers’ understanding of the puzzle of Malawi’s development performance and identify ways for the country to achieve robust growth and stay on a stable growth path that helps the poor. The book places a strong emphasis on assessing Malawi’s growth experience since independence from a comparative international perspective. This book first discusses Malawi’s macroeconomic situation and challenges in fiscal management, reviewing and drawing lessons from the instability, slippages, and shocks experienced since independence. Second, it explores the current state of agricultural markets, given the critical role of this sector in poverty reduction. Third, looking at the factors that may constrain higher growth in the future, challenges in private sector development and job creation are discussed. Building on the analysis of challenges, the book concludes with a summary of policy recommendations to help Malawi to begin catching up with its peers.

The Malawi Economic Monitor (MEM) provides an analysis of economic and structural development issues in Malawi. The aim of the publication is to foster better-informed policy analysis and debate regarding the key challenges that Malawi faces in its endeavor to achieve high rates of stable, inclusive, and sustainable economic growth. Malawi’s economy is primarily based on agriculture and heavily reliant on its land resources to achieve social and economic development. The recently promulgated land acts have the potential to create multiple economic and social benefits for Malawi's citizens by improving investor confidence in the business environment, reducing the cost of documenting rights, supporting decentralization, improving land use planning, and protecting vulnerable groups’ land rights and livelihoods. The effective implementation of these critical land reforms will ultimately facilitate the attainment of inclusive growth, boost productivity, and generate additional revenue for the government. The MEM consists of two parts: part one presents a review of recent economic developments and a macroeconomic outlook. Part two focuses on a special selected topic relevant to Malawi’s development prospects.

Trade facilitation projects often assume indirect benefits for small-scale, cross-border traders. Recent studies have shown the challenges faced in Africa by this population, especially women, but it remains unknown in Cambodia and the Lao People's Democratic Republic, despite large trade facilitation investments. This paper fills this gap, thanks to an innovative mix of original qualitative and quantitative data from various checkpoints on the borders with Thailand and Vietnam. The quantitative data, collected in 2014, consist of an exhaustive list of trade-related border crossings during two to three days and a survey of 158 randomly selected small-scale, cross-border traders and brokers. The paper combines qualitative data and statistical techniques to shed light on the structure of the small-scale, cross-border trade economy, traders' and brokers' profiles, the challenges they face, and potential solutions, with a particular emphasis on gender. Key challenges pertain to taxation and poor infrastructures. Narrow roads, insufficient parking space, and restrictive border regulations on transportation means cause traffic jams and delays. These disproportionately affect women, who are more time constrained. Despite a rather moderate tax pressure, widespread informal payments erode traders' and brokers' willingness to comply with taxes. Women suffer from a higher tax rate and a tax schedule that deters them from upgrading to more profitable cross-border trade activities. Along with capital constraints, this finding may explain the lower share of women in small-scale, cross-border trade than among own-account workers and the self-employed, as evidenced by nationally representative data. The paper delineates policy implications and puts forward concrete steps.

The World Bank conducts investment climate assessments (ICAs) across the globe to analyze private sector performance and to determine principal constraints affecting the private sector in respective countries. The 2016 Malawi ICA focuses on supporting dialogue on investment climate by analyzing the challenges reported by private enterprises in the country. It is the second in a series, following the first one that was published in 2006. The 2016 Malawi ICA is based on the analysis of results from the World Bank enterprise survey conducted in 2014. Regression analysis on productivity levels of firms was conducted to present some insights into the competitiveness of manufacturing firms. The productivity analysis reveals that firms in Malawi have higher levels of labor productivity and capital intensity, but lower levels of capital productivity than their counterparts in neighboring countries. Unit labor costs are lower than in most comparator countries. The results are predominantly with respect to large firms, with medium firms in Malawi facing lower levels of labor productivity and capital intensity, but higher levels of labor costs than small and large firms. Apart from the foregoing measures of partial productivity, total factor productivity is lower than in most comparator countries.

The Malawi Economic Monitor (MEM) provides ananalysis of economic and structural developmentissues in Malawi. This edition of the MEM waspublished in October 2016. It follows on from thethree previous editions of the MEM, and is part of an ongoing series, with future editions to follow twiceper year. The aim of the publication is to foster better-informed policy analysis and debate regarding the key challenges that Malawi faces in its endeavors to achieve high rates of stable, inclusive and sustainable economic growth. The MEM consists of two parts: Part one presents areview of recent economic developments and amacroeconomic outlook. Part two focuses in greater depth on a special, selected topic relevant to Malawi’s development prospects.In this edition of the MEM, the focus of the specialtopic is on poverty and vulnerability. At a time when Malawi is experiencing a second successive year offood insecurity, the special topic focuses on the key factors that have led to persistently high povertyrates in rural areas, with these factors contributing significantly to vulnerability to the impact of climate shocks. The special topic also identifies and describes potential pathways and reforms thatcould help Malawi improve its level of resilience to better manage the impact of future shocks.

The Malawi economic monitor (MEM) provides an analysis of economic and structural development issues in Malawi. The aim of the publication is to foster better informed policy analysis and debate regarding the key challenges that Malawi faces in its endeavors to achieve high rates of stable, inclusive, and sustainable economic growth. The focus of the special topic is on the effectiveness of public spending on primary education and the means by which this can be improved. With more than half of Malawi’s population under the age of 18, the country faces significant challenges in its efforts to provide quality education to a growing population of students. Malawi also faces ongoing fiscal pressures, so there is a need to find ways to maximize the development impact within the limits of the finite resources available for investment in education. The MEM consists of two parts: part one presents a review of recent economic developments and a macroeconomic outlook. Part two focuses in greater depth on a special, selected topic relevant to Malawi’s development prospects.

The World Trade Organization’s new Agreement on Trade Facilitation has the potential to significantly reduce East Asia’s trade costs along the entire supply chain, increasing regional gross domestic product (GDP) by 2.7 percent and employment by 1.2 percent. At present, the region’s developing economies suffer from trade costs well above those of the newly industrialized countries and of developed economies, owing to the large number of inefficient border and behind-the-border procedures. Countries have been adding to their stock of nontariff measures, which now account for as much as 90 percent of (non-transportation) trade costs. The ATF defines a new reform agenda for East Asia with potentially far-reaching effects on private sector development, especially for small businesses that need greater transparency and simplification of procedures to enable them to readily access regional and global value chains.

This paper explores a rich dataset of monthly firm-level data on the population of exporters of Lao PDR from 2005 to 2010. The survival analysis uses a discrete-time logistic model based on firm-product-destination triplets while accounting for unobserved heterogeneity. It looks in detail at the role played by two important and related determinants of survival: experience and networks. These are particularly relevant for developing countries, where relevant export experience in firms is likely to be limited and networks leveraging it all the more important. The analysis reveals the positive impact of having prior experience with the export product and destination, experience with importing, as well as using a developed neighboring country as launch platform. Networks are found to be most relevant when they are most specific -- the largest impact comes from province level aggregations of firms selling the same product in the same market during a particular month. A competing risks model was also investigated to discern the impact of these determinants on the likelihood of experiencing an upgrade to a superior product versus termination when a trade contract ends.

This paper analyzes previously unreleased firm-level customs transaction data from the Lao PDR in order to assess the determinants of cohort survival among exporters. The authors find that export flows in value terms are dominated by the intensive margin, with large firms continuing to supply the same products to the same markets. On the extensive margin, new export spells for firms, products and firm-product-destination units are very small and short-lived, suggesting that although there is significant experimentation and discovery by firms, there is only limited capacity to stay in markets once an entry is made. Regression analyses of the factors that influence survival past the first year reveal that this is positively correlated with the initial dollar value (starting big makes a difference) and is helped by the firm's experience with the product and the destination, but hindered by a lack of focus. Agglomeration of exporters in the same destination with the same product is beneficial, an effect analogous to external economies of scale. The authors conclude by recommending that the focus of export promotion activity should be on helping existing exporters find and stay in new markets.

Over much of the last two decades, the economy of Malawi has been characterized by economic turbulence and uncertainty that has done serious damage to the private sector. Rapid liberalization exposed an unprepared private sector to potentially damaging forces. This paper draws upon the most comprehensive enterprise survey carried out in Malawi in recent years to assess the current state of private sector investment. We find the following key results: (1) low labor productivity is explained primarily by lack inputs per worker, rather than insufficient capital employed; (2) foreign competition in either domestic or export markets encourages reinvestment of current earnings; (3) firms with monopoly power are less likely to invest in increased capacity; and (4) high interest rates encourage Malawian firms to invest incrementally and using retained profits.

Background The medical "brain drain" has been described as rich countries "looting" doctors and nurses from developing countries undermining their health systems and public health. However this "brain-drain" might also be seen as a success in the training and "export" of health professionals and the benefits this provides. This paper illustrates the arguments and possible policy options by focusing on the situation in one of the poorest countries in the world, Malawi. Discussion Many see this "brain drain" of medical staff as wrong with developed countries exploiting poorer ones. The effects are considerable with Malawi facing high vacancy rates in its public health system, and with migration threatening to outstrip training despite efforts to improve pay and conditions. This shortage of staff has made it more challenging for Malawi to deliver on its Essential Health Package and to absorb new international health funding. Yet, without any policy effort Malawi has been able to demonstrate its global competitiveness in the training ("production") of skilled health professionals. Remittances from migration are a large and growing source of foreign exchange for poor countries and tend to go directly to households. Whilst the data for Malawi is limited, studies from other poor countries demonstrate the power of remittances in significantly reducing poverty. Malawi can benefit from the export of health professionals provided there is a resolution of the situation whereby the state pays for training and the benefits are gained by the individual professional working abroad. Solutions include migrating staff paying back training costs, or rich host governments remitting part of a tax (e.g. income or national insurance) to the Malawi government. These schemes would allow Malawi to scale up training of health professionals for local needs and to work abroad. Summary There is concern about the negative impacts of the medical "brain-drain". However a closer look at the evidence for and against the medical "brain-drain" in Malawi suggests that there are potential gains in managing medical migration to produce outcomes that are beneficial to individuals, households and the country. Finally we present several policy options.

Upper Cretaceous carbonaceous shale, lignite, and coal deposits of the Aguja Fomatlon are exposed on the southwest £lank of Rattlesnake Mountain in western Big Bend National Park. These deposits represent accumulation in delta plain marshes and swamps. Variations in depositional environment ranging from prograding delta plain marsh sediments to well-drained swamp deposits are distinguished among the lower, middle, and upper shale members of the Aguja. Llthologic analysis, clay mineralogy, total organic carbon analysis, stable carbon and oxygen isotopic analysis, thin section petrography, and palynology are employed to differentiate facies. On the basis of this facies analysis prograding delta plain marsh environments are interpreted for the lower and middle shale members. The upper shale member is proposed to represent deposition in a well-drained swamp environment. Lithologic variations and a relationship between kaolinite and total organic carbon indicates cyclicity in the lower and middle shale members. The lower shale member overlies the progradational basal sandstone member of the Aguja, and represents deposition in a delta plain marsh with crude cyclicity apparent in the facies found. Lignitic layers cap the marsh cycles, and kaolinite enrichment is found below the lignites. The middle shale member overlies the transgressive Rattlesnake Mountain sandstone member, and is similar in lithology to the lower shale member. The middle shale member consists of carbonaceous shale and lignite, and may represent marsh progradation over the Rattlesnake Mountain sandstone. The upper shale member overlies the Terlingua Creek sandstone member, and represents a departure from marsh deposition. Ijn situ stumps, logs, and sparse organic material in the shale indicate deposition in a well drained swamp, perhaps in a proximal deltaic environment.