Resentment of Chinese influence overshadows vote in Malawi.
President promises to stop foreigners from driving out local merchants
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.
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.”
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.