1.1 Recent Changes in Malawi's Political and Economic Situation


 Table 1 provides an overview of some political and economic changes that have occurred
in Malawi in the last ten years. As can be seen, the extent of change is profound. These changes
provide the foundation for the establishment of an effective market-based economy within which
to deal with food security in the country. New options and possibilities for both the household
and the national economy are now available.

 Besides changes in the political and economic situation in Malawi, other events in Malawi
also influence achievement of a market-oriented food security strategy. In a rain-fed agricultural
economy, drought is an ever present danger. Two of the last four years have seen droughts or
significant drops in rainfall in Malawi, with resultant drops in food production. While slowly
being improved, transportation links to international commodity markets from Malawi are still
very expensive. The Beira and the N'cala rail links through Mozambique represent the best long-\
term possibility for affordable linkages to international markets. These rail lines and port facilities/
are only just beginning to operate after repairs to the damage caused by the civil war in
Mozambique.

1.2 Food Security in a Market Economy

 Since the fall of the Soviet Union and its command and control economic structure,
market-oriented paths to economic development and planning have become almost universally
accepted by both government officials and academics. In the agriculture sector in Malawi, for
example, a recent government statement noted that "the role of government has been transformed
from that of the main actor in the centrally regulated economy to that of the facilitator of
development in the market-oriented economy" (MoALD 1995). The reasons for this shift to the
market as the source of growth are well documented. A properly functioning market is the most
efficient way of allocating resources in an economy. The market oriented economies have also
had the strongest economic growth and have been best able to provide the greatest well being to
their people. In addition, markets are the economic equivalent to liberal political democracy, an
ideal that is also gaining widespread acceptance.

 While there is general acceptance of a market-oriented approach to development, how this
approach is actually carried out in a daily manner varies. Markets are not perfect. While moving
from a centrally regulated to a market economy, many "dislocations" occur. This is an economicK
euphemism for unemployment or lack of access by a household to resources necessary for its basic
livelihood. How to mitigate these problems, while not hindering the basic move toward a market'
economy is difficult and programs attempting it have to be well conceived.