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USAID in Malawi
March 22, 2010, 3:02 pm
Filed under: Uncategorized

USAID in Malawi: Questions for the Future

USAID’s 2010 budget includes a $26mil (£16.5mil) increase from $76.3mil (£45mil) in 2009 to a new level of $132mil (£79.5mil). UK’s DFID is still Malawi’s largest donor at £120m ($200mil) but USAID’s increase is giving the agency a considerable degree of control over the future of Malawi’s development.

While the increase in funding is certainly welcomed, those concerned with long-term solutions might question the choice in funding priorities. Microfinance came in last of all areas, with $1.5million (£0.9mil) in funding.

If USAID and the international donor community really want to tackle poverty and promote sustainable long-term policies, more attention will have to be given to microfinance.By ignoring enterprise at the grass-roots level, development agencies are going to have a tough time turning assistance into opportunity. Targeted microfinance subsidies present a great opportunity to compliment agricultural assistance to rural areas to develop local markets in tandem with yield increases.

With the looming food crisis, donors have brought the discourse back to long-term solutions to food security. Yet the lack of real commitments at this year’s FAO summit in Rome is worrying. If donors continue to neglect rural poverty and devote only token sums to microfinance, it will be difficult to see the end of this downward spiral for the world’s poorest.


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