ADMINISTRATOR POWER: Good morning, everybody. Thank you so much for being here. And let me just thank the Malawian people, the Malawian President and his team for the incredibly generous welcome that they have given me and my team from the United States.
I'm away from my two kids who are 13 and 10, and that's always hard. But when I tell them that I gave a press conference and there were zebras at the press conference, it's all going to be worthwhile. They are going to be absolutely amazed by this.
I've just had the chance to meet President Chakwera for the second time. We met in Washington, D.C. in March, and I wanted to share with all of you just a few brief reactions and thoughts about our very productive, lengthy discussions on the challenges facing Malawi, but also the opportunities for this great country to enhance economic opportunity and prosperity for its people. I had the chance, with the President here today, to reinforce something I've said publicly many times and had the chance to say to him in March, which is that the world has been really inspired by Malawi – by the way in which the Malawian people rose up to claim the democracy that is theirs, insisting that elections be free and fair, that votes be counted, demanding that corruption be fought.
I had the chance, also, to put what's happening in Malawi in the global context, where sadly around the world we see countries going in the opposite direction, backsliding in terms of their democracy, closing the space for civil society and the media to work, arresting journalists who write critically, taking advantage of economic difficulties to consolidate power and to weaken checks and balances. That's what's happening in many, many parts of the world. But it is very encouraging to see the Malawian people and the commitments from the Malawian government to fight corruption, to strengthen checks and balances, and in so doing, to improve the climate here in Malawi, for investors to come and create more jobs, help grow the export potential of this country. So, again, against a backdrop of global backsliding, it's very encouraging to see efforts to strengthen democratic institutions and to rid this country of the corruption that has impeded its economic growth for too long. President Chakwera, as we all know, is a man of deep faith, and the people of Malawi have put their faith in him to deliver, to deliver on a bold vision for the immediate future and for the next 40 years outlined in Malawi 2063. We talked about the economic challenges and headwinds that this country faces and frankly, that all countries are facing now with increases in food, and fuel, and fertilizer prices.
We know that this is affecting the Malawian people day to day and that this is a very challenging time. The United States, today, is making a series of new commitments to this country in order to help the people of this country push forward this reform agenda, fight corruption and also weather the economic difficulties upon you. We have a series of announcements here to make that we hope will strengthen again these democratic efforts, supercharge Malawi's agricultural development, boost nutrition, help Malawians deal with food price spikes; and improve literacy, which is such an important investment for the long term among the country's children. So let me run through those announcements for you here today.
We plan, first, to invest nearly $27 million in strengthening Malawi's democratic institutions. That includes a $15 million investment to improve public service delivery in eight districts across the country. It also includes $11.7 million in support of efforts to strengthen Parliament from aid in legislative analysis and drafting, to the support of inquiries, depositions and public hearings. We all know that our governing institutions need to be transparent and accountable to the people and we hope that these resources will help strengthen the legislative body here.
Second, we are hereby announcing a raft of support for Malawi's agricultural economy, given that 80% of the country's workers are employed in this sector. Rising prices, exacerbated by the war in Ukraine, have triggered these increases in food and fertilizer prices across the country. To help meet immediate needs, we will invest $12 million to help households manage price shocks and give smallholder farmers access to seeds, fertilizers and supplies that are currently out of reach. We are also committing $35 million in additional support for the country's economic recovery with a specific focus, and this is something the President has really emphasized in my meetings with him, on expanding agricultural commercialization. We will invest in rural economic hubs, supporting companies that, themselves, support smallholder farmers or helping process their goods for export.
We also want to invest in Malawi's longer term agricultural development. Earlier this week, you may have heard President Biden announce that Malawi is going to become a target country for Feed the Future, which is USAID's and the United States's landmark flagship agricultural development program. This will mean an intensification of our efforts to strengthen food security, poverty reduction and agricultural growth in the country.
Additionally, we are launching a new five year initiative to support Malawi's nutrition policy. USAID will invest $23 million with a goal of mobilizing an additional $23 million from the private sector. The goal of this initiative, which will be called Let Them Grow Healthy or Tiwalere, is to provide quality, nutrition and maternal and child health, especially in the golden window of a child's first two years, where quality nutrition is critical for lifelong growth and development. This effort is going to build on tremendous gains already made by Malawi in combating child mortality. A 50% reduction in under-five child mortality since just 2010.
And finally, to continue the support for Malawi's children, we are committing $74 million over the next five years to focus on early grade reading instruction and literacy milestones in all of Malawi's 5,700 public primary schools. This project, entitled NextGen, will partner with the government of Malawi's National Reading Program to provide young Malawians, especially girls, with the skills that they will need for a lifetime of learning, reading and education – the foundations of an equitable future.
Together, these commitments demonstrate something I expressed to President Chakwera just now, that whenever a leader is working to strengthen democracy, to respect the rule of law, and to crack down on and weed out corruption, thereby extending dignity to the people of their country, the United States will be there every step of the way to support them. With that, I look forward to your questions.
QUESTION: So when will the country begin to see these commitments available? That's my first question. And then the second question is about corruption. You know, too many countries are trying to root out corruption. Obviously, Malawi is one of those countries that is experiencing [inaudible]. As you said, you have so many programs in Malawi. Are you not worried that the corruption that is going on here may jeopardize your programs?
ADMINISTRATOR POWER: That's – both excellent questions. So on the first question about the timing of the flow of funding, we really appreciate the urgency of the situation facing the Malawian people now. Again, a pre-existing food crisis, the COVID pandemic as well, pre-existing, and then Putin decides to invade Ukraine, blocking the grains and the sunflower oil, and other resources, holding back fertilizer that could be put out on the open market. Fertilizer is not a sanctioned commodity from Russia, but held back in Russia and thus driving up the prices globally. So the $12 million I mentioned that is about meeting immediate needs and helping blunt the shocks, will flow as soon as we sit down and can identify the right partners here in Malawi. Some of the programs I mentioned, for example, agricultural commercialization, the investments from the Feed the Future program, those are going to take longer. Those are about bringing first rate, cutting edge mechanization technology to bear, making sure that farmers have access to loans, access to capital so that they can make investments in extending their exports. So we would hope those, again, that money to begin to flow here in the coming months but many of them are multi-year commitments that are going to take time to actualize. The same is true, of course, with these longer term literacy programs and efforts of that nature. But we are very, very aware of the urgency of the food needs.
The other thing I will say is, as you know, the government is engaged in detailed negotiations with the IMF to try to obtain or relaunch a credit facility. And we are very engaged in supporting the government and using our role at the IMF to try to encourage that process along because that is also a critically important next step to unlock resources in the short term for the people of this country. On the question of corruption, let me make sure that I was clear actually in my opening comments because actually what is remarkable and sad, is that there aren't that many countries fighting corruption in this way. There are very few countries in the region but in the world that have independent corruption bodies like the anti-corruption bureau, that have the powers to investigate, the powers to prosecute, the powers to hold accountable officials at all levels of government, officials out there in communities, local officials, you know, people of that nature. I think this strengthening of this body and seeing this body use its enforcement tools and powers is something that actually people in other countries and all around the world are taking note of and are asking themselves, “Hey, why don't we have an anti-corruption bureau in our country with these kinds of powers able to crack down when officials are stealing from the people? Why don't – why doesn't that kind of authority exist here?” So, please, just know I know many of you are very close to the news and to developments here in this country, and you're familiar with your institutions, but just know that they actually – that level of enforcement, authority, and independence, which needs to be respected, is something that has drawn the notice of the world, and that's one of the reasons that I have come to Malawi, because it's so important for us to support institutions like that and countries like that, that are willing to to respect the independence of anti-corruption bodies of that nature.
In terms of our own assistance, I think we have been working in Malawi for many decades in the health sector, in the education sector, obviously trying to support smallholder farmers well before these initiatives that I've announced today. I think we have confidence in the partners that we have worked with. We have chosen our partners very deliberately in order to ensure that the money – that is so precious and so necessary – the resources that we spend, go to good use, that they are actually meeting the needs of the Malawian people rather than being stolen, like so much of the natural wealth of this country has been stolen in the past. So, I think our safeguards are strong. But it's another reason that the anti-corruption agenda of the Malawian people, as instantiated by President Chakwera and his team is so important, is that it's not just donors that need to have that kind of confidence, it's also the private sector. You know, American companies that might be intrigued by your mining sector, for example, we have laws back in the United States that would send them to jail or have them pay very, very heavy fines if they're involved – these American companies or American businesses – are involved in any way in corruption. And so that is an impediment to unlocking Malawi's potential unless and until the rules are, here, enforced in a transparent way, it is a barrier to investment. And we also talked about the importance of creating an investment climate that is very welcoming for outside investors and for American companies. So, that includes rooting out corruption, but also just making it easier to do business here. And so that entails some legislative and regulatory reforms as well, which, again, the president and his team seem very seized with. So, I think we feel good about the resources that we're expending, the partners we have the safeguards in place. But, the further these anti-corruption reforms can progress, the more you will see an infusion of resources and really what Malawians want more of all is not aid but trade and direct investment. And that is what we, at USAID, want as well. We want to fuel economic growth and economic opportunity that doesn't depend on some grant from the United States but is rooted in unlocking the vitality of the Malawian people.
QUESTION: What are the recommendations you make in terms of how Malawi should use the funding or the investment that is coming in? But another question still stands out, at what point is our line for us to look out for to say that this investment is indeed really working in accordance to how we intended to generate money? Or how it intended to assist Malawi? At which point, should we probably say in five years time, we want to ask people in authority whether or not [inaudible]?
QUESTION: I just want to [inaudible], the President has a vision of mega farms. I think we’ve got an amount during the meeting. If supporting more small farmers or mega farms, are you giving investments towards that?
QUESTION: What mechanisms have been put in place to make sure that the funds are also made available, considering the fact that different organizations have their own policies in terms of when to provide and how to provide resources? We've seen some budgets being taken longer because of processes, they have to find out the mechanisms that have been put in place to make sure that the funds or the funds, both from the USAID and the other partners, are provided within the period and that it needs to be implemented.
ADMINISTRATOR POWER: Thank you. Thank you. So, let me work backwards. So, I'll start with the last question, if I may. I think it's incumbent on us at USAID to make it easier to work with USAID. It is complicated to access USAID grant financing. This is, again, in part because remember that we have to answer to our legislature, to our taxpayers, and make sure that the money is well spent. So there's a lot of paperwork. There are a lot of requirements to show how the money was spent. But as Administrator of USAID, a position I've been privileged to hold for 14 or 15 months, I am leading an effort to try to streamline our contracting process, our grant making process, to try to reduce the paperwork requirements, and especially for smaller grants to try to make the agency more nimble. So, I don't know if that's part of what you're talking about. And then, you mentioned, I think you were referring to the program where we provide $23 million and then we get the private sector to do the same. You know, I think, rest assured, that we are going to make those investments no matter what. But in our experience, both in Malawi and globally, we have a private sector hub at USAID where when we invest a dollar, we try to use that dollar, for example, to lower the risk burden for a private sector actor that is not motivated necessarily by economic development, but maybe motivated by wanting to earn money on a deal. Maybe we can bear some of that risk and then get that capital to flow in, in support of what we are doing.
So, I think the devil will be in the details as we implement this. But I think, you know, you being part of the free media here in Malawi, you know, feel free to hold us accountable and to come back to us and get out there, if you can, and describe how these projects are working in the real world. Again, we believe in these checks and balances also to apply to us and our programs here in Malawi. So, appreciate anything that you learn in the field about how things are actually working. And this relates as well to the question about mega farms. You know, I think what the President mentioned was a very ambitious agenda for agricultural modernization, agricultural commercialization, excuse me. I think the $35 million program that I mentioned, which will be over a number of years, but is – will have as one component, an emphasis on what it will take to move from small scale farming with mainly subsistence objectives to something that would link Malawian producers and growers, farmers, to regional export markets, to taking advantage of being land linked and finding comparative advantages for Malawian goods in the neighborhood but even further afield. And of course, to produce at scale, whether it's mega farms, which I'm not informed enough to have a view on, or bringing mechanization to bear just to be able to get harvests at scale and crop yields at scale. All of these kinds of investments are what we will be looking at through this $35 million investment and through the Feed the Future program.
Then, the last question in terms of, it's a broad question about kind of what to look for in five years. You know, I think in light of the way in which this administration came into office, you know – namely after a period where there was massive fraud in the first version of the election back in 2019, where the election had to be rerun, where it was rerun not because any particular individual wanted to give up power, but because the people just would not allow fraudulent election results to stand – I think that democratic momentum, that bottom up ownership over Malawi's democracy is really important context for your question. Because I think one of the things, of course, economically that we want to see in five years and these investments are oriented as are those by other international financial institutions.
We want to see more jobs for young people. We want young people, you know, who have the skills to start their own small or medium sized enterprises, who want to take their family plot of land and turn it into something bigger. We want them to have economic opportunities, to be sure, but we also want the democracy that Malawians have built over these years and have reclaimed in recent years to be stronger than it is today.
And the two points I've just made really go together because the kind of economic opportunity that every Malawian citizen wants to unlock cannot be unlocked if the democracy does not get stronger. You know, if you do not remain a free press holding all public officials accountable. It will be stronger, you know, the more authority and independence the anti-corruption bureau has in doing its work. It will be stronger when the legal landscape changes and the assets of public officials are made transparent. And so, in making those political changes, those legal changes, in strengthening the checks and balances, that is the investment in the brighter economic future that Malawians seek.
I think that’s the five year picture, in the short term, it’s no secret, this is a very, very difficult time – for Malawi and for many, many countries in Sub-Saharan Africa and all around the world – with the increase in food prices. You know, it is very bad luck, in a way, that a government that came into office pledging to rid this country of corruption once and for all, now has to manage these interlocking storms of Russia’s war on Ukraine, the COVID pandemic, which seems to never go away; the climate shocks, which intensify every year and that produces either too much water or too little water, it seems never the right amount of water for farming and agriculture. So, this is a very, very difficult time. And, I think a guidepost for each of us – for the United States and Malawi – is, in this time of trial, does our relationship grow thicker and stronger? Do we look back on this time and see that all the decades of friendship between our two countries also produced crisis collaboration that help your people weather the storm? And that’s a task that we are taking on for ourselves and I know the Malawian government is taking on for itself as well.