Wednesday, February 26, 2014

Blessings Hospital and Malawi's Economic Tsunami

Economics, the course I found most difficult to comprehend in my studies at Harding University, is having a devastating impact on Blessings Hospital. But, there are some pretty simple economic truths that did make sense and stick with me until this day, most of which my Daddy taught me before I got to Harding.

  1. You can’t spend money you don’t have.
  2. Loans cost more than savings earn (bankers have to make a living too).
  3. When the government prints more money, it is relatively worth less.
And now, a brief summary of the economic chaos which is Malawi today.  For some years Malawi has been very dependent on outside donors for the normal operations of government, not just special projects.  Forty percent of normal budgetary operating expenses are paid for by outside donors, with England leading the way.  In August or September, while the president was out of the country, a high-ranking budgetary official was shot in the face about midnight one night as he was waiting for the gate to his house to be opened.  Other high-ranking officials were accused of being involved in this attempted murder.  

Shortly after this a series of low and high-ranking officials were found to be in possession of rather large amounts of cash, extravagant houses, or other things far above their means  for which they could not account. Now, after some weeks of international forensic auditing, it has been announced that $34,000,000 either disappeared (half of it) or was grossly misused by government officials in the six months ending in the shooting.  England and the European Union cut off all aid to the country in anticipation of this result, gutting that 40% of the country’s operating budget.  

The value of the Malawian currency, the Kwacha, has plummeted, going from a fixed rate of 150 per dollar to a depth of 430 per dollar in less than 2 years.  The troops in the trenches were pressed as salaries decreased in buying power.  Some non-governmental international aid organizations (NGO’s) were able to make salary adjustments to the extent their income was in dollars, but government no longer had such a luxury.  Even the cost of corn soared as the fuel to transport it and grind it climbed in price. Workers became very restless.  Something had to be done.  So, the government gave all its employees a 50% raise.  

This eased the cries of the proletariat, but . . . where did the money come from?  Within a few months reports began to leak out.  A friend working in a government clinic told me that at their site, the only medicines which are available are contraceptives, malaria medicine, and meds for HIV, all of which are supplied through special projects mostly administered through NGO’s without the government touching the money.  Other departments reported workers sitting in their offices unable to do their usual work due to no tools or ability to take a departmental truck into the field.  The one department that seems to have increased activity is the Malawi Police Force:  I have never seen so many police on the highway handing out fines newly increased from MK 3000 to MK 5000.

The effect on competition for workers with the private sector has been devastating.  Due to chronic shortages, the government and mission hospitals have not quit hiring medical personnel.   Mission hospitals (called CHAM hospitals for their membership in the Christian Health Association of Malawi) have been relatively protected because their clinical personnel are paid mostly by the government.  One large mission provider recently reported that 40% of its income comes from the Malawi government, 40% from donations from outside the country, and 20% is generated from church contributions within the country and from hospital revenues.    

Blessings Hospital is in trouble.  We are running out of nurses, and are unable to hire others at our current salary level.  The administration is working hard to become a CHAM member, but it is estimated that the process will take 2 years.  Most of our operating revenue comes from the care we deliver.  Our census is rising.  The number of people we are helping is going up.  The number of babies born in our facility is increasing.  By the grace of the Sara Walker Foundation we are visiting an increasing number of villages with a mobile clinic, villages that are far from medical care whose only transportation is a bicycle.  The same vehicle makes it possible for us to carry patients who need it to a higher level of care. 

Our biggest acute problem is personnel salaries.  We need to give our workers a generous raise.  We need to hire others.  Desperately.  We are living off per diem nurses who earn less, mostly government workers who are willing to double on their vacation days.  But, the time when most people take vacation is about gone, and our needs are increasing as our nurses leave.  

If you would help us raise a nurse’s salary up to a minimum level, or even explore a partnership like that for one or two years as we process our CHAM papers, please contact me at  We will be happy to share further details with you and explain how to process your tax-deductible contribution so that it can be used most effectively.  Learn more about Blessings Hospital through her Facebook page, or for a tour of the hospital, click here.

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