A report by Oxfam says the austerity measures that are being implemented by countries in the Southern Africa Development Community (SADC) including Malawi, have potential to increase inequalities.
The report, ‘Crisis of Extreme Inequality in SADC, Fighting Austerity and the COVID-19 Pandemic’ was launched by Labour Minister Vera Kamtukule on Thursday.
Among others, the report has raised concerns on how Malawi and other governments within the region have ignored spending in public service and social protection because of austerity measures.
“Austerity is being encouraged in International Monetary Fund (IMF) Policy assessments and programmes, by providing advice to reduce overall spending during or immediately after the pandemic in order to achieve smaller deficits and reduce debt levels, rather than sharply increasing spending on health, education, social protection and food security to fight inequalities.”
“Within these cuts, efforts are being made within IMF programmes to protect core social spending, especially in some lower-income countries, but this is defined differently across countries and in many does not include social protection,” reads the report.
Speaking to journalists after the launch of the report, Lingalireni Mihowa Oxfam’s Country Director said if governments implement the planned austerity, the result is likely to be catastrophic for poverty and inequality.
“What we are strongly advocating for, is that we should avoid austerity because it is going to hurt the poor more and is going to result into more inequality.” Said Mihowa.
According to the report, the IMF’s own research shows that countries that implemented austerity measures during, and after the recent epidemics saw their income inequalities increase three times as much as countries that did not.
“In most countries in the region, the planned cuts exceed their annual health budgets; and in three countries (Malawi, Mozambique and Seychelles) they are twice as high. Avoiding such austerity would allow these countries to make massive extra investments in health and social protection initiatives to protect their citizens against future pandemics,” states the report.
On his part, Professor Winford Masanjala Principal Secretary in the Ministry of Economic Planning emphasized on the need to invest in public services such as education, describing the sector as the most unequal in the country.
Masanjala said there is need to invest in primary and secondary school education as most inequality is seen at these two levels.
But the labour minister defended the Malawi government, arguing that it is doing well in ending inequalities and poverty.
“We do understand the fact that there are inequalities in several sectors in terms of public service, including in health, education and many other sectors but government exists to deliver services to its people so we are not just sitting and watching. We are doing everything possible to reduce those inequality levels as we move ahead towards achieving the Malawi 2063 aspirations.” Said Kamtukule.
The Report by Oxfam, Development Finance International and Norwegian Church Aid has also pointed out inequality that has been brought by the COVID-19 pandemic and inequality levels in Extractive and Agriculture sectors.