The economic development of Malawi: a study in underdevelopment

DAKAR

. CONFERENCE ON

THE SOCIO-ECONOMIC TRENDS AND POLICIES IN SOUTHERN AFRICA

(DAR-ES-SALAAM,

29 N0V.-7TH DECEMBER,

1975)

THE ECONOMIC DEVELOPMENT OF MALAWI:

A STUDY'HI UNDERDEVELOPMENT.

BY

RWEIKIZA BAGUMA

Institute of Development Management-Muzumbe Morogoro, Tanzania

MARCH. 1976

THE ECONOMIC DEVELOPM dNT OF II IA T: .1 STUDY IN UNDERDEVELOPMENT,

by

Rweilciza Baguna

Malawi can safely be called a neq-colony par- excellence. Its economic structure very vividly

refracts what has been termed a 'dependent' ^economy.

Thus the thesis of this essay is to argue that both

the economic structure as well as her strategy for

economic development ^are fundamentally meant to further perpetuate the present position of dependency, and

that therefore, 'economic development' in real terms

is just not in sight. However,right from the start,

I should want to sound a cautionary note in that a distinction must be clearly made between 'economic development' and 'economic growth'. The former is

both a qualitative and quantitative measure,

the latter

is simply quantitative, reflected in the rise of

fall

of statistical aggregates, ^as Gunner Mydal defined it, development is the :,movement of the whole social system

1

upwards" i.e. it is the subtle qualitative change in

the life of the people and in the conditions of their

existence which is brought about by economic growth.

Economic growth on the other hand, is measured,

according to

Maurice

Dobb, "either in terms of G.N.P.,

N.N.P. or as income per capita, as from increase in

2

labour productivity," The case

of Malawi, taking

account of the colonial impact, shows

that

it is making substantial economic growth, given room

for

the fact that she started from a very low economic

base.

The essay starts with ^a

short treatise of

economic underdevelopment, since having

said that

Malawi is economically 'dependent' it

follows that

her economy has hecn

underdeveloped and/or is

underdeveloping; in this

regard special attention

is paid to the

factors, characterising dependent

economies. Thereafter the essay focusses on

Malawi's

economic structure and growth pattern before

independence;

then

we

look at her economic performance

between 1964 and 1969. I am aware that five years

is too short a period to provide a

fair and substantive

measure of her post-independence

economic performance,

however it -it least affords us insight of the strategy persued which will

form the base of

our

assessment

on whether Malawi economic strategy provide a firm

bese for eventual economic development. Besides

wherever data and some information are available we will stretch our focus beyond the 1969 horizon.

I

Economic development ,analysis has

often taken

two formss One has been a comparison of economic performance between nations and se

tes, usually

between developed and

under-developed in order to

establish how more or less developed one is than

the other, and also in order to

determine what the

less developed is doing or might do in

order to catch

up with the more developed ones.

At times comparison

is worked out of one country, on a time

dimensional

analysis in order to

determine whether

^any

economic

growth is taking place as

well

as

determine the rate

of change. At times both types arc

simultaneously

employed. However doth approaches rarely

indicate

development in its totality since they usually

contend with statistical rises and falls, which as far as the under-developed countries are

concerned

are

rather indicators of growth than of

development.

To really measure economic development one must go beyond the statistical average growths

(which

ere

very important

anyway),

and stretch the horizon

to

encompass economic policies, end wherever

possible

try to discern the rise in real standards of

living

of the masses of the people, arising from their

involvement in the economic activities of the nation,

he will attempt to do both in order to

justify

our

case of Malawi economic underdevelopment.

The concept of economic

underdevelopment is

a relatively new one still in its formative

stages, but

interesting research has ílready been done and

relevant literature is apparently not lacking. In

this essay it is being used on two levels,

themselves inseparably fused to form a unitary

tool

of analysis. -On the one hand

underdevelopment is

seen as "a process within a framework

of economic

rel tionships which reflects a rel-tive change

whereby,

the economic activities of the actors within the relationship are such that they render one

actor

increasingly worse off in comparison

with the

opposite actor, within the ^seme

rel tionship.

Converselyunderdevelopment

of

ono

actor is

a process

of development domination

for the opposite actor.

It is based on unopual terms of exchange

of the

proceeds of economic

activities. It is

a

relational

and for the same reason a comparative concept.

• Secondly,

underdevelopment is

seen as a

system

characterised by specific structural

blendings,

system reinforces and

pernetu tes

itself.

The two aspects of underdevelopment ^are complementary and

self-reinforcing. The nature of

economic rel tion ; give rise to the process

of

underdevelopment, which set in

motion the developing

of underdevelopment as a system.

Then within the

system there develops institutions

and structures

which accoler te the _process :iincreasing

simultaneously

inequality in productive capacity

and equiommt,

3

in rates of growth and in living

standards". The

following two diagrams attempt to

exaplain under¬

development as a process.

UNDERDEVELOPM IT >' A3 1 PROCESS

II

Time m years.

.. . .. - mmmtmm 3

A

Volume increasing in

time perspective Diagram I explains a simplified aspect

of

underdevelopment ^{as a} process arising from ^a

widening

gap between actors A and B, due

to unequal terms of

exchange. Within the process

actor

A receives

less

and loss per unit of produce as time goes on,

while

actor B, gets mor.e and more for every unit

of production

now, than before, assuming of course

that the quality

of the articles of oxch nge remain constant.

«

5

Diagram .II, explains another but rol. tod aspect

of underdevelopment as a process. It shows th t at

point X a given volume of commodities by ctor A, exchanged for an equal volume by actor B, ^or th-t

the value of a given volume of commodities from actor A carried the same value as an equal volume

of exchange commodities from actor B. But as time goes on the exchange value _{cha ges, so} that _{at point} 4, a given volume ^from A, exchanges for less volume of B's commodities. In absolute terms, A is better

off at point 4 than at point 1 in that ^now A can get

more of R's eo modities than before, however t ^a higher purchase cost.

This point has been aptly argued by Brebisch

as when he _says that;

"the terms of trade between the

industrial centres" and the

'periphery'

of the world economic system have behaved in the opposite way than one would expect from the competitive model.

In that model the faster technical progress in the industrial

centres,

relative to the periphery, ought to result in falling prices of industrial products relative to primary products.

However the market power of workers,

in pressing for higher wages and

of oligopolists in resisting a squeeze

on profits, in the industrial

centres is considerably greater than

the market power of capitalists;

workers and peasants in the periphery.

As a consequence, in the centres the incomes of entrepreneurs and of

productive factors increase relatively

more than productivity whereas in the

periphery the increase in income is

/

less than in productivity,"

Underdevelopment as a system manifests structures anel institutional establishments which

as aforesaid arc accessible to scientific analysis and justi icotion. Structurally it is characterised

by economic dependency of the peripheral states

on the industrialised métropole. Hence the

economic activities in underdeveloped economics, having been in most cases colonial economies, are not geared towards satisfying the domestic economic needs, nor even towards making .the most effective use of the domestic economic resources, except in ^as far

as they reflect economic interests, of the métropole.

Of course with the exception .of subsistence production which is an other important common

feature of underdeveloped countries.

The analysis of underdovolopmon I" ^{as a} system

may be affectively attempted ^on two levels. Within

a state's boundaries it is characterised b; a lack of integreted economic activities, internal

inequalities among people and regions, dominance within economic activities of a few primary export

commodities,\ an absence of an industrial base,

a low level of capital accumulation; a substantial proportion of the economic activities of the

majority of the people is geared towards subsistence production; -a small but

disproportionately

better

remunerated service sector, an absence of internal control over economic politicos and national

resources, /hich give rise to what Dudley Seors

has termed the open economy, with •" great reliance

on the export of primary commodities, with a currency backed and kept at parity wiuh and full

convertible into the currency of a major international

7

jo v/cr_, it has few quantitative restrictions on

imports,

and tarrifs arc

relatively low,5

^{These factors} _keep

on rcgreseivoly reinforcing each other to keep the

native

under-developed,

especially v/hen, aid as they

are in constant

interplay

with external factors.

One point which must be noted is that the above state of affairs is nob a natural order of

things out is a result of the terms aid pattern of

an enforced relationship between the under-developed countries, and the powers that"have underdeveloped

them. Hence it is necessary to look at characteristics of underdevelopment as a system within an international economic community.-

On the international level then the pattern

of economic activities, which give rise to the characteristics of underdevelopment ^{as a} global system arise essentially from the nature and terms of economic relations between the

underdeveloped

country am1 the métropole on the one hand, and from the pattern of relétions between differ _{out under¬}

developed countries on she other.

The relationship with the developed métropole,

is characterised by a reliance by the underdeveloped

on the developed _country, as a source of industrial goods as well as markets of their prim ry goods,

which gives rise•to structures of dominance of the

periphery by the centre, which is then perpetuated by inbuilt institutions within the system.

As Gultung argues;

"The basic keys to structure of dominance and its opor-tion is dependency.

Dependency...

moans that the centre supplies something

that the periphery

(1)

thinks is indispensable, and

(2)

thinks it

cannot obtain elsewhere. And this is highly related to identification:

the Periphery thinks those things

are indispensable because it has been taught to think so, because it has

boon adopted to the calturc- of the center. Thus, once the gospel of

technical-economic development according to the Western model is accepted very much is immediately

defined indispensable,

Again closely related with ^{the above} is that the relationship between the centre and the periphery,

is characterised, and indeed is kept running, not only by the ne.ture of the tre.de patterns but, also by an established division of labour. G-ultung, rc-fering specifically to the relationship between the

European Community ana Third rorld Countries, ^argues

that a "vertical division of labour in maintained,

both in the field of capital

(centre

provides

investment, periphery provides market); in the field of 1 hour (cc-ntro provides know-how, research,

periphery provides unskilled labour) some of it locally,

in tho Periphery, ^somo of thorn Frendarbeitor in the

Centre; and in the 'land' factor

(periphery

provides goods at a much lower level of processing than the center,".7 The resultant relations arising from both

the vertical division of labour, leadin; to the

Dilaterai dependency of the periphery on the centre,

further perpetuates the domestic situation as aire .dy noted, and moreover, creates ^a vertical division

between different peripheral states: so that as much

as there are disintegration of economic activities

9

within the peripheral internal environment, there

is also disintegration of economic activities between peripheral

states,

indeed in no t cases there is what

Wu may call 'economic detachment'. Diagramatically the

situation _{looks like the} following;-

UNDERDaiyhhQPMhRl AS

_A

SYSTEM

' —

— ~

— —

-ia =|

lllll.' I'll1

_'

'

!

1 ' 1 1

"1

1 1

2

•A1' 1

3

!

__

j?

,'ilj ,!

.1" I

'

B11 11 'íi1!

I^I1

₂

. i i , i

II'

i'J/.1

₃

pq*3-

PA PB

Key; C; Centre; PA; Periphery A; PB; Periphery B.

i

la-pl'I

^; Modern sector

[jjj [

^•

jJ

^;

Mon tary activities linked

with centre through

peripheral modern sector;

; suhsit.nce activities; '"1,

ul;

economic subsectors

V/ithin the periphery there is a small modern

sector compos d of indiginous potty bourgeoisie,

involved mainly in service activities, though occassionally

in assembly and construction.

This sector forms the

link with the centre, and makes

the economic

policies and

development strategy, usually on the

advice of planners from

the centre.

Below this small sector,

substantial economic

activities are geared towards

production of cash

crops, which are often

exported in, their

raw or

seni-

processed form to the

métropole to exchange for

manufactured goods mainly consumer ones.

Below

a

substantial

part'of

the

economic activities

are

geared

towards subsistence production, be

must note that

there are no horizontal links between the

different

economic'subscctors nor any links between PA and

PB.

Of course this is .perhaps an

over-simplified

ideal model of the channels of comninication and

economic interaction of an underdeveloped system

par excellence.,

"since it

c n

bo assumed th txthe

^....

*

barriers between sectors one

peripheral,states

arc not as closed, as the lines in the diagram indicate,

Nevertheless such is nearly the oa.se.

The last point we have to take

note of is the

development strat gios

often undertaken by

underdeveloped countries.

Given the relational

framework in which underdevelopment functions, development strategies have

meant either

or

both

of the following.

(1);

To increase

production

of the primary produce in the hope

of gaining from

an increase in the volume of exports

(2)

attempts

are made to produce import

substitutes of

consumer goods, often. of a luxurious or

scni-luxurious

nature; rarely some attempts are nade to produce producer goods e.g.

fertilizers, and in almost all

cases without exception no attempt is made to

embark on basic industrial

establishments.

Let us look at the merits of both strategies as attempts

to undo underdeveloped.

11

The first strategy of

increasing

production

of primary production is plausible on at least two

accounts, firstly in so doing it ^moans that at least the country has taken r cognition of the availability

of dormant economic _resources in terms of land, capital and/or unemployed labour ^{which if} _{put to} productive work _nay and often do bear some fruits, secondly the hoped for increase in .absolute income from increased _{sales may} afford the country increased investments for even more

production,

or help in the provision f essential social services, ^or just

increase consumption. Indeed there is 110 way what—

so-ovcr for the peripheral countries to develop except by stepping ^up production of primary produce, if they

have to accumulate sufficient invcstiblc surplus to inject in other essential _economic sectors. _However what must be emphasised is that absolute increase

cither of production or income or both does hot negate,

nor oven alter the _process of underdevelopment, as

long as the structure of production and exchange takes place within the structural framework which uphold and perpetuate the system of underdevelopment.

lloroover reliance on increased rrimary exports depends on the expansion of the external market, in

which the peripheral countries have ^no control, and which form the available data is not expanding fast enough to absorb rapid increases in primary products.

G. Arrighi has calculated that while the rrcducts from Tropical Africa ^roso about 55 _per cent between 1950 and 1955, it ^rose only 15 per cent between 1955 and 1960.S Hence increased exnorts of primary

production may be taken as a short-term measure, but the

market may reach saturation ^at anytime.

Of course another re son for undertaking

progresses of inc::cased, xnort commodities, other

than the mere need of increasing exports, is the¬

reod to introduce the whole population to the ^money economy, and in so doing bring 'civilization' closer

to homo. As Terence Hopkins argues, those who take

over now--r rt independence identify the economy

of the area with its modern sector and :iits developnen

with two kinds of change 'in that

sector,

first the

modern sector as presently organized is to be extended

into the hinterland and to encompass in due time the remaining subsistence areas; second it is to be

incorporated still further into the economy of the metropolitan power or into the particular interna-

Q

tional economy this power takes part in,"

The second strategy noted above is import substituation, for African countries in.particular

industrialization has for thorn meant assembling, or

establishing of potty plants to manufacture simple

articles'of consumption. The main setback to

industrialization has boon, or is claimed to bo,

lack of investible capital

and/or

skilled manpower.

Therefore industrialization which has taken pi ^ce

at all, has always depended on private foreign investors. This has had a number of effects on

development, which inversely has gone some length

to strengthen the structural and institutional

links between periphery and centre and to perpetuate underdevelopment.

On the ^one hand most industrial establishments

have had ^{none or} little impact in accelerating

economic integration of the recipient state.

Since foreign industrialistsare profit motivated, they bring sophisticated, capital-intensive machinery,

13

which usually need ^- -'cry little unskilled labour ^-

a resource to be found in abundance in almost all

underdeveloped countries. Hence, usually this type

of industrialization has little impact on 1 hour structure, secondly almost invariably no

investment is in the production of c ..pital goods,

the result, being a negative impact on rural development, is .irrighi argues;

"the sectoral distribution of such investments embrances the dependence

of agriculture on world m ricet for its expansion. The bias against

capital goods sector not only restreins

... the growth of the internal market

but also increases the supply of the capital goods necessary for the

transform tion of tradition:1

agriculture. This transformation cones therefore to bo subject to balancè- of-payments constraints which are

likely to become increasingly severe." 10

à third impact of foreign investments especially private investment in commercial or industrial sectors is the siphoning off of suprlus, in terms of profits,

which would otherwise be reinvested. Dobb has

aptly concluded with regard to foreign investments

that 'Economically foreign investments

(in

under¬

developed countries) has tended to go into mining

and plantations, and raw material processing, or into the development of export industries, detached

from the rest of the colonial economy, both seeking

its markets abroad and sending its profits abroad".1 1 The above strategies which ore strikingly apparent in Malawi planning and economic police,

cannot in the least lead ^a country towards development.

They only help to further ^oner ich a country in

the system of underdevelopment. To develop therefore, o country has to take measures which

are consciously geared towards replacing economic

structure and production relatione wc have seen to

characterise underdevelopment. H0wcver since our

concern will be to look at Malawi's economic policy

and performance from the joint of view of ./hat

it

is rather than what it ought.to bo, the need docs not

arise for us to delve in any detail on the process of economic development.

II

THE COLONIAL IMPACT

Malawi was declared a British pro'tectoratc in 1891, and this narks the introduction of that country

into the system of underdevelopment. Colonialism

has often been called a nixed blessing by some

apologists of 'imperialism, it has been said for

example that through colonialism Africa, the

dormant

giant, was at last introduced to the world civilisation. It is not our intention to take

up this debate, out it suffices to say

that

colonialism

had nothing to

do with, civilizing the African. If the

African was introduced to the Mcstern economic system

as we will soon see, it was not for the inter'.ion ;

of upraising his standard of living but for the

express purpose of exploiting him. The aims of

colonialism have been woll-apraisod by Lugawd who

sail that the growing population ôf Europe together

with its industrial expansion "'led to the replacement

(L. "P. »

¥

15

of agriculture by nanufacturing industry, with

the

consjouont necessity for nev/ markets for the product

of the factory, and the importation of raw

materials for industry, 'nd food to

supplement

the

decreased homo rroduction and feed the increased

12 ' '

population." He further argued th t '"The backward

condition of the people, and their preference for

•agricultural pursuits, offer the prospect of

continued markets for manufactured poods. The

tropics produce in abandunco a class of raw materials

and food staffs which cannot be grqwn in the temperate

zones and are so vital to the needs of civilized

man ih t they have in ^very trutv 1 ^came essential

to civilization. It was the realisation of this fact.,, which led the nations of loiircre to compete

-f ia

for the control of the African tropics,".,. The above quote from a British Colonial official, does not need

any elaboration. It puts it clearly th t colonialism

was only called for by the expanding needs of a

developing capitalist system in the métropole. The

African nations were pulled into th t system in

order to supplement it and keep it running. To

the extent that the African countries contributed

to the development anA strengthening capitalism abroad,

to a similar extent did the métropole

countries contribute to the underdevelopment-of-

the colonised countries, and Malawi played its

own part, small, but substantial. Thus the year

1891, for Malawi marks, the beginning of the process of underdevelopment, and in no time she was

unwittingly entrenched in a. system in which sh., now finds

herself embroiled and, incidentally, not.making

any attempt to undo it.

The nechani': i of introducing Malawi into the underdevelopment system took

two different 2r-t

intercalated and reinforcing forms; namely to

re ctrn 'turc Malawi 's economic activities townrds production for the métropole o rkots, under

the terms

set "by, and producing one

goods" m-'dad in, the

metropolis or sub-notropolo, and at

the sametine

conditioning Malawi domestic market to import

manufactures

of the colonial industrialists. Thence the specialisation of 1 .hour ^{as we} awe a on in the introductory s ction was set, ^an Malawi

started to

grow as on aopendage of the

Métropole,

The strategy transforming of Malawi

into

capitalist production relations

took throe specific

forms; namely

(1)

The Colonial power

annexed part

of the most fertile regions of Malawi and turned

thou into plantations, owned "by foreigners,

hut

mainly worked by Malawians,

(2)

The

introduction of cash

crops which were in demand in the

Métropole in

parts of Malawi

that

were

suitable for the

crops,

but not regarded as suitable

for colonial settlement,

(3) The introduction of wage

employment firstly in

Malawi, but increasingly in the

neighbouring states

of Rhodesia and South ifrica, and thus

institutionalizing

migrant labour for which Malawi is so

famous. The

bait that was effectively used to attract the

people in

the

labour

market

was

the introduction of

the money nexus, mainly through the

imposition of the

tax system. In the present section ^we

will look at

each of the sub-strategies and their consequences

to Malawi's over-.all economic development during the

colonial period.

The process of annexing the land

started

even

before Malawi was officially declared a British protectorate in 1891 because

by th t time there

alrea.dy were 57 European planters in

Malawi; by

1 A

1896, this number had

increased to 200.

1

During

17

the 8. il o short neriod

(1891-1396)

the est: te acreage, all situated in the fertile ana highly popul~tod

south, increased from 1600 to 5700 acres. In 1966

whites c ntrolsd about 15 _per cent of the total land

and water area of Malawi. Moreover the relative

numerical percentage does not give the full impact of

land alienation. In.order to appreciate the full

extent -f the 15 percent of tin land alieno

tod,

one has. also to take stock of the fact that .root of this land was in ft ^cuthem p ats, -,/hich ^wore highly populated, ant nost fertile. Thus on the one h nd

more • o vol^o were turned cut 0f land ownership, in

nost productive areas. The latter idea has been

expressed by L.S. Norman in the following words that:

"Nyasaland, being a.snail, densely populated country, the area of land

available is.not largo, up to the present

(1934)

the individual buropcan settlor

has been content with much smaller

holdings than is usual in South Africa

or Rhodesia. An. average-sized holding

in Nyas-land is from 700 to 1000

acres, t ough some Government leaseholds ^run

as low 500 to 500 acres. The

reasons for thin are that normally

every acre is usable, water is plentiful...

It is not necccsary as elsewhere,

to take up 3000 acres of 1 uid in order to include a supply of water,

nor to take up

3000

^acres out of which only 500 are

fertile."1^

Land alienation is important in understanding

economic development of Malawi because to -.large

extent it explains the pattern of development that

was to take place during the colonial, period, and to

a good extent, it has a direct impact on the present

economic policies. With land alienation, end due to

the absence of other économie avenues-espocially

in terms of mineral deposits, I? lawi started off

as an agricultural country, and hv.neo ^m exporter

of raw agricultural product to the métropole market.

However to effectively play its economic role, the

colonial administration imposed both the poll and

hut tax. The immediate explanation has I ^• ai that • the people had to ^co tribute to the,cost of

administr -tian; however, a more ration 1 ex laivtion

is that tax was the most

appro-priate

moans the

colonialist could us, to tap for their own ends, the

African labour; ^as Rosberg quotes Oliv.r Johnston,

"A gentle insistence that the native should contribute his fair share to the revenue of the

country by paying his hut-tax, is all th t is necessary

on our part to secure his taking that share of life's labour which no human being, should evade."1 5^. Or as

Cadrington put it, "the natives are able to pay three shillings hut tax. It would prove ^... a means of getting a certain amount of work out of the natives,

and would in this manner greatly assist transport

difficulties."^

Thus the introduction of pi citations and the

institution of ^a hut tax must be soon as a complementary exercise, geared at introducing a specific typ'c of

economic activities and an economic status within

a broader capitalist framework. On the one hand

Malawi was on a firm path to develop as a periphery

statc producing agricultural crops for export and importing manufactured goods, on the other hand the

role of the Africans within the configuration of economic activities wis determined - he was to provide the

necessary labour to create the necessary we Mth

without claiming ^a fair return.

19

The process of African invplMermnt in the capitalist system must he carried ^a. step further 'in

order to underscore the causes of yet another

factor ^- namely the evolution of migrant labour.

To .clearly gasp the causes of nigr nt labour, wo have

to recall that lane, ali

nvtion/tcolc

place mostly

in the high"'y popul— d areas of the uth, wis the con, o-uur..- that _many families were disovmo'd

from land oweiirship, Mow the Africans were

faced.wifch complex problems, on-the one hand they

no longer owned land, on the other hand they

had to pay tax. Thus a system was instituted, that

if a. man failed to pay the

3/=u

tax ho ^was called upon to work for one month, either in the government

serviço or in the plantations for a monthly pay of 3/=. However, it was soon realized that est people paid their taxes promptly in order to evade labour conscription, Mow as the size and number of

plantations grew and expanded, it was realized that

the planters suffered from shortage of paid labour.

Thon, new noa. sur es were devised, the ^. fricans in

the alicnted lands could no longer soil their own -oreduce except to the proprietor of the estate, to whom

also they could only soil their labour. Thus,

people in the alienated ^areas wore chained to their landlords. Soon the levels of taxation _{went up,}

beyond the levels that oven those outside appropriated

lands could afford to raise from their 'own

subsistence activities. They were therefore forced out of their rural hones to find p;-ii -employment in

plantations,

urban centres, and very soon they

trickled out of their own country to find paid employment in nines in South Africa., Rhodesia and later lambia.

From wh.it his been s le' above it should ho clear th.it the ocononic pattern of Malawi, is shaped by the colonial s.t'.ation, manifested the following

three distinct features.

firstly

there was c.

numerically small but economically dominant pi liter economy, secondly there vrs a numerically strong

but economically dependent '-group of ifricah

agric:. ltural wage labourers. Thirdly a substantial

sector of the a ••••pio ^were migrant labourers working

outside Malawi, Ylh•'1 needs to bo added is a fourth

feature, vis, that another sub.st -itial sector was later introduced to cash crop^± f ,r> ina^m• w Inly in ^areas

which wore not dominated by plantation economy,

otherwise most economic activities were geared towards

subsistence farming. In 1.9Q9 there were exports worth

£100000 almost exclusively from estates. In 1946

there were 173,000 people or some 49,000 families living

as tenants on priv to estates, with the result that

out of _.a total labour force of 134,300 people in wage

ernloyn ait, 43,000 were employed in the agricultural

sec lor mainly by the planters• Those working outside

Malawi were estimated to be arouryl J-2,000 in

1956.

By 1964 the situation had changed somewhat in that

out of export, valou d at £11 million small holders ^-co anted for £6,'1 million while estate products accounted for

£4.9 million.

Having sail^{v-i <} this lot us look at the» actual•

economic, growth of Malawi during the coloni .1 period.

In so doing however it must be .made quite clear that

we arc embarking or a risky exercise, mainly because

the available indicators of growth are both incomplete and highly suspect. Therefore it is

only for ccnvenienoosake that wo are using two typos

of measurement perimeters of growth i.e. the G-.l.P.

» v

21

growth wherever we have

the relevant data, and the

value, of exports, he arc aware of the pitfalls in

the use of t'a latter as an indication of growth, it

however has oil. advantage over others, namely that

besides being easy to quantify, it is a measure of

the

oxtent to which the economic activities of a colonial country have become

monitized,

bearing in mind the

fact that in a colonial country most economic

production activities are geared towards

satisfying

the external market.

Indeed in the colonial countries there is on the one side can inverse correlation between subsistence

production.and export value, i.e.

the

more

primary exports

a country registers, the higher is the share of

the

exports as a proportion of 'J.N.P. and.

G.I).P., -end

the loss proportion of G.B.P. and G.N.P. is

subsistence

activities, on the other hand there is a direct

correi-: tier, between increases in the export of primary

commodities and the rise in the per capita income.

This is of course explained by the fact that

the economic activities of .the colonial countries

are not.integrated, i.e. they are singularly

outward

oriented.

Let us further illustrate the above point.

In 1954 for exannle, Gross Domestic Product was

£34.3 million, Gross Domestic monetary Product

stood

at $16.2 million or 47.5 per cent of G.D.P. At tho

same.timo exports'accounted for £7.2 million or 44.4

por cent of the total G.D.M.P. It should, bo noted

also th t by then total Ifrican personal income stood

at

$9.3

million, i.e. slightly moro than 50 per cent

of the G.D.M.P. Moreover even this sum was unevenly

distributed if one takes account of tho fact that

£4.7 million v/ent• to only 132,000 peonlc in wage 18

employment. By

1964

tho Gross Domestic Monetary

Product stood rit £27.5 or 69 _por cent above tho 1954 level, the exports stood t £11.0 million or some 50.7 _per cent above the 1954 1 .vol, accounting

for 36.3 _per cent of the total Cr.D.M.P. The

percentage decline of tho export value relativo to the G.P.M-.P. was mainly due to an unproportional

upward rise in the incomes of the -service sector, whereby the total ^wage bill rose from £7.3 million

in 1954 to 15.1 illion in 1962, a M&e of ^more than

100 aor -cent,

^

^{• •—}

The economic growth of Malawi during the

colonial period has had three rather distinctive phases. The period between 1891 and 1943, is mainly

characterised by the emergence of a cash crop economy. This, period saw tho introduction of the major cash crops,

namely

tobacco, tea, groundnuts,

and tung, which in

1962

accounted, for 98 per cent

of Malawi's domestic exports valued at

$10,16

million Coffee, tobacco and tea were the first to bo"

introduced, and developed mainly ^as estate crops.

Before .1948 however, growth \r~\s slow, as the following

table shows.

Table 1— EXPORTS

Year "Value

1909 £100,000

1914 ' £200,000

1945 £2r000,000

After the first world war there was a rapid growth,

both as world.demand of agricultural produce was

high, and consequently as more Africans got involved

in cash production ^as independent peasants, "xmorts

rose from £4.1 million in 1948 to £7 million in 1953. Thon