I have explained a lot of political theory, but I feel it would be interesting to look at the way things would work out if we had real political parties with an ideology. Today I start with the Liberal Party of Malawi. What would a really liberal party want to do in Malawi?
ACCORDING TO THE IMAGINARY LIBERAL PARTY OF MALAWI (Not according to John K Black!)
- Economy: we need private sector lead growth. In Malawi there is not enough capital available, and international business is the best anyway. So we need to attract direct foreign investment by improving the business climate in Malawi. We need to overhaul the regulatory framework: less regulations, only those that we really need. And those need to be enforced religiously to create a level playing field for the business community. We need the judiciary to be quick in its work, no more delays in verdicts. Judges who do not deliver will be fired.
In order to make the economy run smoothly and enable the private sector to create jobs we need to relax job security. If an employer knows he can never fire someone again, he will be very afraid to hire someone, which negatively impacts on job creation.
The government needs to take a step back in its involvement in the economy: less regulation, more freedom, and faster service to the private sector.
- Government: The civil serviced needs to be overhauled. Civil servants need to work hard. We need to limit the number of civil servants. Only those that perform well can stay, the others need to be laid off. We need performance contracts with all government departments. Those managers that miss their targets will be laid off. Because there is less regulation, less civil servants are needed. The policy of private sector lead growth will grow the private sector which will enable it to absorb the laid of civil servants.
- Education: the education sector in Malawi is not in good shape, mostly due to underfunding. The cost of education is weighing too heavily on the tax payer. School fees should be incrementally raised w little every year, so we slowly manage to make school self financing. This will enable parents to choose the level of investment they want to make in their children’s education. In the long term all schools will be privatized. The role of government will be limited to standardizing certificates, degrees and diplomas.
- Health: like education, the health sector is too expensive for the tax payer to keep financing. We need to introduce user fees, which will incrementally be raised to the level of cost, so all hospitals can be privatized. All inhabitants of the country will be requested to take health insurance. The free market approach will improve standards of health care. The role of government will, in the long term, be limited to securing that all health workers and facilities are properly certified, health staff will be privately employed.
- Tobacco: Tobacco is the major export product of the country, and for the time being it needs special attention from government. Again here government needs to step back: more licenses for auctions need to be issued. Regulation will be eased so the free market principle can regulate itself according to the invisible hand of Adam Smith. Contract farming will be made fully legal: the grower and the buyer will be free to enter into any agreement they like. Government will not interfere in pricing, the free market will regulate pricing by itself.
- Security: this is a core task for government. We need a well trained, well paid, well equipped police force. Regulations in many areas will be relaxed so the police service can concentrate on its core business of fighting crime. Police will get far going legal facilities to prevent and fight crime. Security can be provided by private security firms and community policing so we can cut down on the cost of police.
- International trade will benefit both our economy and the economy of our trading partners. We will liberalize trade. Import and export need to be facilitated. Non tariff barriers will be removed. Tariffs will be incrementally lowered to facilitate trade. Red tape (paper work) will be limited to the absolute minimum, so traders are empowered to grow the economy.
- A key area of government involvement is infrastructure: we need better roads, like the Lilongwe Bypass Road. This will improve trade and grow the economy.
- Because we have less civil servants, and less corruption the cost of doing business will be lowered, the economy will grow, and tax levels can be lowered, which will again promote the economy. With this virtuous cycle we will enter the group of middle income countries, and later high income countries.
- Land: all land should be privatized. It is better for a farmer to own the land than to work communal land. When the farmer owns the land, he can do long term improvement of the land, or grow tree crops that need many years to get to their top productivity (like macadamia and cashew) the land can be used as collateral for a loan for farm inputs which will make the land more productive and grow the economy. Land can be freely bought and sold. This way the most talented farmers can grow their business and create jobs for all, large scale farming will grow the economy.
- The private sector can run businesses more efficiently than government, so most government para-statals need to be privatized: Escom, the water boards.
- Subsidies distort the market and weigh too heavily on the tax payer. The Malata subsidy will be abandoned immediately, the FISP will get an exit strategy within 3 years. Farmers will be enabled to compete on the international market with high value crops. The free market is more efficient when subsidies are abandoned and lower taxes empower the private sector to improve the economy.