A political storm has been brewing in Malawi. Since April, Parliamentarians had been unable to reach a final decision on the nation’s US$ 1.2 billion budget, due to a variety of problems that may not be solved as easily as one might think. Despite a deadline of 30 June 2007, debate on the budget was resumed on 15 August 2007, after much wrangling and bitter infighting among lawmakers, and only finally approved on 11 September 2007. The reasons for and consequences of the long-delayed budget vote are perhaps indicative of a deeper problem in Malawian politics - one that may yet play a significant role in the country’s future.

The first problem came in May 2007 when the First Lady of Malawi, Ethel Mutharika, passed away. The second major obstacle came in June when Supreme Court proceedings that had been instituted resulted in a ruling authorising the Parliamentary Speaker to expel 41 Members of Parliament for defecting from the parties for which they were elected in 2004, out of a total of 60 defectors. President Bingu wa Mutharika himself was one of the defectors, having moved from the United Democratic Front (UDF) to a new party established by himself, the Democratic Progressive Party (DPP).

The move resulted in the ruling UDF being effectively “demoted” to opposition party status, and leaving UDF Parliamentarians understandably incensed. While President Mutharika’s seat and office were expressly excluded from the Supreme Court ruling, an injunction obtained by Yunus Mussa, a legislator faced with expulsion, prevented the Parliamentary Speaker from acting on the earlier Supreme Court ruling. A political standoff ensued - John Tembo, the leader of the Malawi Congress Party (MCP) that is now the largest opposition party alongside the UDF, simply refused to discuss the budget until the injunction obtained by Mussa was lifted.

The political deadlock had paralysed the budgetary debate. On 24 July, the DPP lost a motion designed to allow a budget vote to go through despite the pending legal actions. Matters came to a head on 13 August, when President Mutharika threatened to close Parliament completely, telling lawmakers that they were “abrogating their responsibility” towards the budget vote.

At this stage, the country was in crisis. Large-scale public demonstrations took place, and serious financial consequences looked set to flow from the impasse. Malawi relies on foreign aid for half of its budget, and the ongoing dispute threatened to seriously erode donor confidence, with possible dire results for the already poverty-stricken nation. Britain, as Malawi’s largest bilateral donor, urged the political leaders to arrive at a compromise as soon as possible.

Besides the possible loss of donor confidence and reduction in donations, other serious economic repercussions were brewing. A lower currency value, predicted to happen if the deadlock continued, would mean a lower purchasing power for essential commodities such as fuel and fertiliser, potentially seriously damaging for a state where 90% of the population rely on subsistence farming and 38.6% of GDP and 80% of exports originate from the agricultural sector. By 30 August, there was a real risk of the country’s largest hospital, Queen Elizabeth Hospital, running short of medicines, along with many other medical facilities that rely on government funding for purchases of medical supplies. If emergency funds were not released in August, there would have been a possibility that 120,000 civil servants would not have received their monthly pay. The Malawian Government is the biggest employer in the country.

On 15 August 2007, two days after being threatened with closure by the executive, Parliament resumed the budgetary debate. Opposition Members of Parliament reportedly did not contribute to the debate, preferring to remain quiet whilst in the House. Finally, on 11 September 2007, nearly two and a half months after the deadline set for the passing of the Budget, the measure was finally approved. Despite the unanimous approval, signs of continuing political struggle are evident - two state broadcasters were denied funding by opposition MP’s, accusing them of acting as political platforms for the Government.

The long-term effects of the heated political conflict are of concern to investors and donors alike. In October 2007, the World Bank is set to release another US$ 20 million, and a like amount will be donated by Great Britain. The serious nature and near-paralysis of the Malawian Government during this crisis brings the entire political balance and dispute resolution mechanism into question. The precarious nature of the country’s politics do not seem to have stabilised since European Union observers declared that there were serious inadequacies in the 2004 elections. It is further a strong indicator that deep political divisions exist within and between the leading parties - divisions that have a real potential to derail the political and Parliamentary process, with problematic consequences for an already-struggling economy.

Recent developments seem to indicate that further political problems may be underway. Barely a week after the approval of the budget, civil society organisations such as the Public Affairs Committee (PAC) and the Human Rights Consultative Committee (HRCC) branded President Mutharika as showing traits of dictatorship and a propensity for authoritarianism. Other civil society leaders have urged Mutharika to uphold and protect the Constitution as he promised in 2004, while accusing him of allowing dilution of the democratic process by encouraging “floor-crossing” by Parliamentarians for the benefit of his own Democratic Progressive Party.

It seems that while the current crisis has been averted, with the most serious consequences narrowly avoided and donor funding secured for the time being, the continuing political disagreements and divisions may yet recur to cause further deadlocks and impasses in the future. In that sense, the crisis may be over, but only for now.