Re­sent­ment of Chi­nese in­flu­ence over­shad­ows vote in Malawi.

Pres­i­dent prom­ises to stop for­eign­ers from driv­ing out lo­cal mer­chants

The Washington Times Daily - - FRONT PAGE - BY HENRY KIJIMWANA MHANGO

LI­LONGWE, MALAWI | At 7 a.m., hun­dreds of women, teenagers and chil­dren flood the main streets of the north­ern Malaw­ian city of Mzuzu, wait­ing for the Chi­nese-run shops to open an hour later.

Nearby, one of the city’s main mar­kets, of­fer­ing sec­ond­hand cloth­ing shops, fruits, veg­eta­bles and food stalls, is nearly de­serted: A lone cus­tomer wan­der­ing through the aisles dis­tracts the bored ven­dors as they scram­ble to lure him to buy.

Dozens of lo­cal ven­dors say they used to sell tex­tiles and house­hold goods be­fore “the for­eign­ers” came and killed their busi­ness. Al­most 80% of the tex­tile and house­hold goods shops in this city be­long to the Chi­nese.

“We are clos­ing down our shops be­cause we can’t com­pete with the for­eign­ers. They are more fa­vored by the gov­ern­ment than us,” said Jonathan Jere, pres­i­dent of Mzuzu Ven­dors As­so­ci­a­tion, who sells rice and beans at the mar­ket. “We want them out of the coun­try be­cause they are de­priv­ing us [of sales].”

It’s a case study of the in­roads Chi­nese mer­chants have made on the con­ti­nent, bring­ing bar­gains and va­ri­ety to lo­cal shop­pers but also giv­ing Bei­jing an in­flu­ence on the lo­cal econ­omy that wor­ries the tra­di­tional mer­chants and the Trump ad­min­is­tra­tion.

Ad­dress­ing these com­plaints is a main part of the plat­form of the rul­ing party, with Pres­i­dent Peter Mutharika up for re­elec­tion for a sec­ond five-year term in Tues­day’s vote.

Tar­get­ing for­eign­ers is not un­usual for a politi­cian run­ning for re­elec­tion any­where in the world, but Mr. Mutharika’s plan is un­usu­ally se­vere. The 78-year-old in­cum­bent said he will stop most for­eign busi­ness from op­er­at­ing in Malawi to en­sure that do­mes­tic small busi­nesses get a fair shake.

“It has been a ten­dency for for­eign in­vestors com­ing in our coun­try with a mean­ing­less cap­i­tal,” said Mr. Mutharika. “Such in­vestors only de­prive the coun­try’s grow­ing busi­nesses and in our man­i­festo we say all for­eign in­vestors with less than $250 mil­lion [to in­vest] shall not be al­lowed to run busi­ness in the coun­try.”

Fac­ing com­pe­ti­tion from his vice pres­i­dent, Sau­los Chilima, who formed a new party in Novem­ber, and Lazarus Chak­w­era of Malawi Congress Party, Mr. Mutharika re­mains the front-run­ner.

The other lead­ing can­di­dates are not shying away from the for­eign blame game. Mr. Chak­w­era and Mr. Chilima prom­ise vot­ers that they will re­claim land and busi­nesses that the gov­ern­ment has given to for­eign­ers through cor­rup­tion.

Be­cause Malaw­ian elec­tion law does not call for a runoff be­tween the top can­di­dates, Mr. Mutharika could claim a sec­ond and fi­nal term with barely a third of the vote.

The in­flu­ence of for­eign — par­tic­u­larly Chi­nese — busi­ness and in­vest­ment has be­come the hot topic of the elec­tion.

Many African coun­tries have seen an in­flux of Chi­nese traders dom­i­nat­ing lo­cal mar­kets. In Malawi, the process started af­ter the gov­ern­ment cut diplo­matic ties with Tai­wan in fa­vor of China in 2007.

China, crit­ics say, used Malawi’s lack of in­fra­struc­ture de­vel­op­ment as a way to per­suade then-Pres­i­dent Bingu wa Mutharika — Peter Mutharika’s brother — to dump Taipei for Bei­jing. As a re­sult, the Chi­nese built roads, a sta­dium, a new par­lia­ment build­ing and ho­tels. Along with those projects came hun­dreds of Chi­nese na­tion­als.

Strings at­tached

The U.S., backed by some de­vel­op­ment of­fi­cials, warn that China’s gen­er­ous trade and in­vest­ment deals come with sig­nif­i­cant strings de­signed to sad­dle de­vel­op­ing coun­tries with large debts and a de­pen­dence on Chi­nese sup­pli­ers.

Many of these new ar­rivals from China have cre­ated large busi­nesses. Oth­ers, how­ever, have turned to selling chick­ens, home goods and tex­tiles or veg­eta­bles.

Edi­son Bakali said he had to close his tex­tile shop in Limbe Town­ship in Blan­tyre in the south of the coun­try two months ago be­cause he sold hardly any­thing.

“The com­ing of Chi­nese traders has com­pletely killed our busi­nesses,” he said.

De­spite the pop­u­lar un­ease, how­ever, Ben Kaluwa, an eco­nomics pro­fes­sor at the Univer­sity of Malawi, warned that Mr. Mutharika’s pro­posal would have se­ri­ous reper­cus­sions for the coun­try’s econ­omy.

Malawi ranks among the world’s least de­vel­oped coun­tries, and its econ­omy is heav­ily de­pen­dent on agri­cul­ture. More than 50% of its peo­ple live un­der the poverty line, and the av­er­age in­come is $1,180 a year, ac­cord­ing to the World Bank.

Mr. Kaluwa said for­eign busi­nesses in Malawi are be­com­ing ma­jor em­ploy­ers of youths, who ac­count for al­most 70% of the pop­u­la­tion. Each Chi­nese shop, he said, em­ploys up to six work­ers, mostly those lack­ing ed­u­ca­tion or lengthy job ex­pe­ri­ence. Lo­cal traders usu­ally don’t em­ploy other work­ers.

Mr. Kaluwa ar­gues that in­stead of chas­ing out for­eign busi­ness, the gov­ern­ment should pro­mote ex­ports and re­duce taxes to help lo­cal busi­ness. At the same time, the mea­sure is likely to sti­fle the kind of in­vest­ment Malawi needs to grow.

“For­eign in­vestors, es­pe­cially Chi­nese shop op­er­a­tors, have brought com­pe­ti­tion, es­pe­cially in the tex­tile and elec­tronic in­dus­tries. Peo­ple are now able to buy clothes and other goods from Chi­nese shops at cheaper price due to high com­pe­ti­tion.”

That’s ex­actly why Mzuzu res­i­dent Tionge Kumwenda said he wants the Chi­nese to re­main.

“I pre­fer buy­ing in Chi­nese shops be­cause they are lo­cated along the [main] road, and I’m able to buy dif­fer­ent things such as clothes, plates and shoes within one shop at cheaper prices than those of­fered by lo­cal traders,” he said.

Mr. Kaluwa pre­dicts the pres­i­dent’s ploy to win votes will back­fire. “You can’t achieve [eco­nomic growth] with­out for­eign busi­nesses — that’s a to­tal lie,” he said.

Lu Juang, a Chi­nese na­tional who runs a shop in Li­longwe, said a crack­down on non­do­mes­tic en­ter­prises would force most for­eign busi­nesses out of Malawi.

“We are al­ready pay­ing huge taxes and rentals, re­gard­less of the scale of our shops,” he said. “The busi­ness en­vi­ron­ment in Malawi is tough, and we are not mak­ing profits be­cause we spend more to im­port the goods.”

Mean­while, Isaac Kapena, a ven­dor trad­ing in hard­ware prod­ucts at Blan­tyre flea mar­ket, said Mr. Mutharika would at­tract more votes if he tar­geted cor­rup­tion and not op­po­si­tion party sup­port­ers, who are reg­u­larly beaten at ral­lies. In Novem­ber, the pres­i­dent was forced to re­turn a $200,000 “do­na­tion” from an Asian busi­ness­man fac­ing a cor­rup­tion case in a mul­ti­mil­lion-dol­lar kick­back scheme in­volv­ing a con­tract to sup­ply food to the Malawi po­lice.

“We have never heard Mutharika or­der­ing the ar­rest of his youths walk­ing with ma­chetes and other weapons along the streets, threat­en­ing or in­jur­ing sup­port­ers of other par­ties or caus­ing vi­o­lence at op­po­si­tion ral­lies,” Mr. Kapena said. “And have you seen the pres­i­dent fir­ing our gov­ern­ment and party of­fi­cials in­volved in high-pro­file cor­rup­tion? These are the is­sues peo­ple will look at when de­cid­ing whether to re­elect him or not.”

PHO­TO­GRAPHS BY KIJIMWANA/SPE­CIAL TO THE WASH­ING­TON TIMES

Jonathan Jere, a Mzuzu-based ven­dor in Malawi, said he had to shut down his cloth­ing shop be­cause he was los­ing sales, and he blames for­eign busi­ness op­er­a­tors. “We want them out of the coun­try be­cause they are de­priv­ing us,” he said.

A woman was at­tracted to elec­tron­ics from a ven­dor em­ployed by a Chi­nese busi­ness op­er­a­tor that was skirt­ing rules against selling wares along Malwi roads.

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