Running head: APPLICATION OF FOREIGN AID IN MALAWI 1

Application of Foreign Aid in Malawi

Institution:

Date:
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Funding by the World Bank

In the current global economy, people may argue that there exist only a few nations

that are developing. The above viewpoint is based on the fact that monetary growth is not

understood through observing the financial stability of a given nation. For instance, most of the

developed nations such as America offers fiscal aids to undeveloped states hence helping their

economies to grow and advance in an effective manner. The researchers show that there are

about 137 developing countries in the entire world and they have an average Gross National

Income of $11,905. However, this paper will provide a comprehensive understanding of one of

the developing nation called Malawi (Rosenthal, 2017).

Explore Whether or not Funding From International Lending Institutions Like the World

Bank and the IMF are Helping or Hindering the Social, Economic, or Political

Development of the Country That You Have Selected. Support Your Response with

Examples

Malawi represent is a Sub-Saharan Africa nation representing developing nations and it is

bordered by Mozambique, Tanzania, and Zambia. The administration in this nation puts lots of

emphasis on lakes and national parks. In particular, this country is landlocked though it contains

few resources hence it relies on the neighboring nations for imports such as fuel (Moosa, 2018).

Because Malawi is more interested in natural resources, in September 2011, Surestream

Petroleum was awarded an exploration license to be managing the two blocks in Lake Malawi’s

Rift Valley. However, the collaboration between International Monetary Fund (IMF) and World

Bank has supported the above program to ensure that this country is not encountering huge

liabilities through the application of debt reduction package. For instance, both IMF and World

Bank are using Heavily Indebted Poor Countries (HIPC) plan to help Malawi on boosting its
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economy. In a single instance, the above strategy has offered relief fund, boosted social

consumption, and minimized debt service as well as leading to effectiveness in the management

of public debt (Marty, Dolan, Leu & Runfola, 2017).

However, corruption was initially affecting Malawi and it, therefore, leads to suspension

of foreign aid because of mismanagement of provided cash. Fortunately, the leadership in

Malawi had put lots of efforts on ensuring that the provided money is put into the right use. For

example, President Joyce Banda has made numerous changes in the trial of ensuring that the

available resources are applied effectively. Banda focused on restoring the financial situation in

Malawi to making the donors to have confidence in her country. Eventually, she revived the

national economy through employing IMF to modify exchange rates hence enabling the country

to obtain donor aid. Indeed, this was amid the greatest achievements which Banda has made

since the needy individuals are receiving financial aids equitably. Though Malawi is still

depending on the IMF’s support, the initiated recovery program will help its economy to grow

and develop into an extent of helping other underprivileged countries (Rosenthal, 2017).

Discuss, With Examples, At Least Four (4) Substantive Ways in Which a Healthy

Population Strengthens the Economy of the Country That You Have Selected

There are numerous substantive ways in which Malawi is strengthened by its healthy

population. For instance, this nation has ensured that its population is healthy hence ascertaining

that its foreign aids are not used on purchasing drugs. Indeed, the government in this nation tends

to allocate its capital on profit earning projects hence managing to grow economically.

Moreover, the administration in this country uses the foreign funds on ensuring that the

community is healthy through observing diet and sanity. On the other hand, the healthy

community offers maximum labor where necessary. Since most of the residents in Malawi are
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strong, the companies and manufacturing organizations are getting enough workers hence

attaining the maximum production in an effective and efficient way. As a result, the

administration receives lots of revenues from the operation institution and also managing to

export some of the locally made goods hence growing economically. Because of observing

wellbeing of the citizens, the life expectancy rate in this nation is very high hence the country do

not loss industrious and energetic people through deaths. Eventually, the country is capable of

remaining competitive in the view of proficiency and quality production. As a result of being

concerned about health, Malawian population subscribes to insurance services hence creating

jobs for the staffs working in these organizations. These insurance companies also offer revenue

to the government hence leading to economic growth and development (Moosa, 2018).

Ascertain the Degree to Which the Leadership of Your Chosen Country has Used Foreign

Aid to improve its Health Care System. Support Your Response with Concrete Examples

Indeed, the leadership in Malawi is confirmed to use the provided foreign aid properly in

advancing the healthcare system. For instance, some of the granted cash is applied to update

equipment and infrastructure. As a result, this nation has managed to purchase modern

equipment that facilitates treatment of chronic diseases. For example, the healthcare sectors are

currently having apparatus for handling diseases such as cancer, health ailments, and kidney

problems among other issues (Rosenthal, 2017). Moreover, the health sector has put lots of

emphasis on educating the community about suitable ways of preventing and treating various

diseases. In this case, the administration has established learning institution and initiated

programs where the physicians advance their medical knowledge whereas the residents are

taught about healthy living. Additionally, some funds from foreign aids are used for buying
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drugs. Conversely, the healthcare sector has utilized lots of money in the fight against HIV/AIDS

(Marty, Dolan, Leu & Runfola, 2017).

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References

Marty, R., Dolan, C. B., Leu, M., & Runfola, D. (2017). Taking the health aid debate to the

subnational level: the impact and allocation of foreign health aid in Malawi. BMJ global

health, 2(1), e000129.

Moosa, I. A. (2018). Has the IMF Outlived Its Usefulness or Gone Past Its “Use-by” Date?.

Management and Economics Research Journal, 4(1).

Rosenthal, A. (2017). Health on Delivery: The Rollout of Antiretroviral Therapy in Malawi.

Taylor & Francis.