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All eggs in one basket : A reflection on Malawi’s dependence on agricultural growth strategy

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  • Droppelmann, Klaus
  • Makuwira, Jonathan
  • Kumwenda, Ian
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    Abstract

    Recently, there has been a resurgence of interest in the study of structural transformation. However, Africa has received little attention despite the fact that its rural areas seem to be very poor and unproductive relative to urban areas. This case study provides a reflection on challenges faced and development strategies adopted by successive governments in Malawi. Malawi is a country with a complex history of rural-urban transformation. On one hand, Malawi has long been, and still is, a predominantly agrarian economy that has seemingly undergone relatively little rural-urban transformation. Malawi is still predominantly rural, most migration is rural-to-rural, and its economic base is heavily dominated by the production of maize (largely for domestic consumption) and tobacco (largely for exports). In this paper we analyze the macroeconomic policy situation and document patterns and trends in Malawi‘s rural-urban transformation in a systematic manner. To that end, we focus on a number of dimensions of this transformation, including urban population growth, migration patterns, employment trends, and a spatial analysis of agglomerations and connectivity to major urban centers. We then turn to explain these patterns, largely in terms of colonial, post-independence, and more recent history of agricultural policies. We also examine migration patterns (both rural-urban and rural-rural), and constraints on the development of the nonfarm sector. In conclusion it becomes apparent that Malawi must diversify its economy to sustain poverty reduction and economic growth. However, it is not clear whether Malawi has an obvious comparative advantage in any sizeable nonfarm sector and how exactly the economic diversification process is to be achieved.

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    Bibliographic Info

    Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 1177.

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    Date of creation: 2012
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    Handle: RePEc:fpr:ifprid:1177

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    Keywords: agglomeration; agricultural sector growth; Rural-urban transformation;

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    References

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    1. Benin, Samuel & Thurlow, James & Diao, Xinshen & McCool, Christen & Simtowe, Franklin, 2008. "Agricultural growth and investment options for poverty reduction in Malawi:," IFPRI discussion papers 794, International Food Policy Research Institute (IFPRI).
    2. Alwang, Jeffrey & Siegel, P. B., 1999. "Labor Shortages on Small Landholdings in Malawi: Implications for Policy Reforms," World Development, Elsevier, vol. 27(8), pages 1461-1475, August.
    3. Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
    4. Lall, Somik V. & Wang, Hyoung & Munthali, Thomas, 2009. "Explaining high transport costs within Malawi - bad roads or lack of trucking competition ?," Policy Research Working Paper Series 5133, The World Bank.
    5. Paul A. Lewin & Monica Fisher & Bruce Weber, 2012. "Do rainfall conditions push or pull rural migrants: evidence from Malawi," Agricultural Economics, International Association of Agricultural Economists, vol. 43(2), pages 191-204, 03.
    6. Ellis, Frank & Kutengule, Milton & Nyasulu, Alfred, 2003. "Livelihoods and Rural Poverty Reduction in Malawi," World Development, Elsevier, vol. 31(9), pages 1495-1510, September.
    7. Takane, Tsutomu, 2007. "Gambling with Liberalization: Smallholder Livelihoods in Contemporary Rural Malawi," IDE Discussion Papers 117, Institute of Developing Economies, Japan External Trade Organization(JETRO).
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