Monday, February 19, 2007

World Bank Develops $340 Million Program for Malawi

World Bank Unveils US$340 Million Support Program for Malawi

Last week, the World Bank announced a new pledge of $340 million for a four-year support program for Malawi. This plan comes just seven months after the Bank and the IMF cancelled over 90 percent of Malawi’s previous debt, which amounted to nearly $2.6 billion.

This new support program, which will last until 2010, will help fund the implementation of the Malawi Growth and Development Strategy (MGDS). The MGDS is the country’s new economic development plan, which replaced the country’s previous Poverty Reduction Strategy. The MGDS will act as the government’s main tool for budgeting and resource allocation.

According to Timothy Gilbo, the Bank’s country manager, “The bank program aims to support [Malawi] government's efforts to achieve broad-based growth and poverty reduction…and also seeks to improve coordination and cooperation with Malawi's other development partners.”

Specifically, the plan’s goal is to improve the country’s economic growth by supporting and improving upon the economy’s main contributor—agriculture. The Bank also intends to use the funds to improve infrastructure, as well as reduce corruption in the country’s government and the impact of AIDS/HIV has had on households.

Questions: How can the World Bank ensure that its funds are being used in Malawi for the intended purposes? What steps should the World Bank take to ensure cooperation with its plan?

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