USAID's Strategy in Malawi

Malawi's political and economic development is impeded by its landlocked condition, poor transportation network, dependence on a single cash crop (tobacco) for the bulk of export earnings, poor incentives for foreign and domestic investment, a strong legacy of authoritarian leadership, high population growth rate and low human capacity levels. In December 2000, Malawi was approved under the Enhanced Heavily Indebted Poor Countries Initiative, which will reduce the average annual debt service of about $50 million over a five year period.

The United States' national goals in Malawi are: the promotion of market-led economic growth, support for stable democratic governance and conflict avoidance and containing the HIV/AIDS pandemic. Malawi emerged from decades of one-party autocracy to a multi-party democracy in 1994. Fundamental economic liberalization and structural reforms have accompanied this political transformation, although they have been fragile and halting. HIV/AIDS affects 16 percent of the adult population, and continues to threaten the country's future development. Further economic reforms are needed to ensure stability and democratic consolidation in the run-up to the 2004 elections.

Malawi is a strong U.S. ally within the region, and has demonstrated relative political and economic stability in an unstable region. Malawi supports U.S. interests in regional development and political issues, and recently played a critical role in crisis prevention and conflict resolution efforts in Zimbabwe, Angola and the Democratic Republic of Congo, while its president was chair of the Southern Africa Development Community. U.S. foreign policy objectives of promoting broad-based, private sector-led economic growth and democratic governance will contribute to a more stable country and region.

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