Malawi (Hansard, 28 November 2002)

§ Mr. Paul Marsden
To ask the Secretary of State for International Development what financial assistance her Department is giving to Malawi to(a) treat and (b) prevent HIV/AIDS. [83190]

§ Clare Short
My Department is providing support for the National HIV/AIDS Strategic Framework by means of a £25 million sexual and reproductive health programme. A further £10 million supports the provision of sexual and reproductive health services by a local non-Governmental organisation (Banja La Mtsogolo).
The UK is contributing £300 million to the Global Fund for AIDS, TB and Malaria, and Malawi was recently granted $200 million from this fund to be utilised over the next five years.
DFID has also been involved with Government and other donors in the development and establishment of the National AIDS Commission (NAC). NAG operates as a trust, relatively independent of Government, and is responsible for the preparation of a national strategy and action plan, which aims to improve prevention, care and support and impact mitigation. DFID will be strengthening its support to the Government of Malawi through NAC, the Ministry of Health and Population and other Ministries which are improving their responses to HIV in the workplace and the communities they serve, and to a stronger national Civil Society response.
All DFID programmes now include sector specific activities to help address HIV/AIDS.

§ Mr. Paul Marsden
To ask the Secretary of State for International Development when she expects Malawi to achieve the Millennium Development goals. [83191]

§ Clare Short
Malawi ranks as one of the poorest countries in the world with a per capita income of US$170 in 2001. An equally low UN Human Development Index indicates that progress towards achievement of the Millennium Development Goals (MDG) will be slow.
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Specific challenges include attainment of the MDGs for poverty reduction and gender equality. There have been gains in achievement of universal primary education, but this is marked by concerns regarding the quality of education and participation rates for girls. Progress in achievement of MDGs for child mortality and maternal health has been poor; maternal mortality has doubled to 1,120:100,000 since 1992. There are indications that the high incidence of HIV/AIDS (currently 16 per cent.) and its coincide with the present food crisis, will lead to further increases in mortality. Life expectancy has already dropped below 40 years of age. There are also growing problems with governance standards.
Malawi launched its Poverty Reduction Strategy Paper (PRSP) in April. PRS monitoring will be linked to MDGs. My Department is providing support in partnership with other donors, to ensure this is appropriately robust.

§ Mr. Paul Marsden
To ask the Secretary of State for International Development if she will make a statement on(a) the level of debt interest payments made by Malawi and (b) the effects on poverty eradication in the country. [83194]

§ Clare Short
According to the Reserve Bank of Malawi, in 2001, external debt service was Malawian Kwacha 6.4 billion (US$78 million) and of this (30 per cent.) Malawian Kwacha 1.9 billion (US$23 million) was in respect of payments.
Malawi remains eligible for interim debt relief under the Enhanced HIPC (Heavily Indebted Poor Countries) Initiative (US$91.4 million in total). In 2001 Malawi benefited from US$27 million of this. In 2002, the position is different. Although Malawi could have received a further US$50 million in debt relief, this amount has not been forthcoming because of the Government's unsatisfactory economic and financial management performance during the year. The country is currently off track with its IMF programme and has serious problems of corruption. The Minister of Finance has promised to announce a number of remedial measures this next week and the IMF is expected to return to Malawi in mid-December to discuss progress against these. Assuming Malawi can get back on track with the IMF in the near future, the Government could still be on schedule to reach its HIPC completion point by mid 2003. At that stage, all of the debt covered by the HIPC initiative would be irrevocably cancelled. In addition, Malawi would be reimbursed for the relief it is currently losing. HIPC debt relief should be used for increased spending on health, education, and other social priorities.
Domestic debt, which stood at MK20.2 billion (14 per cent, of GDP) in July 2002 and the rising domestic interest bill is also a concern. This underscores the importance of Government implementing the necessary remedial actions to restore fiscal stability and thus reduce the need to borrow domestically.