2230Re: [ujeni] Economist
- Apr 3, 2001I guess my main objection to the article was that I don't think the notion of using property as collateral makes any sense for Malawi. The amount of land each family has is tiny and dwindling with each generation, such houses as exist are worth nothing whatsoever to a bank or other lender. The picture heading the article didn't reflect reality in any way. And if a bank wanted to foreclose on a tiny house in the middle of a village, wouldn't there be major trouble?
I also think there is huge risk: the economy follows the price of tea & tobacco, meaning that a small-timer who takes out a loan to start a grocery is likely to lose everything s/he owns next time the big tobacco multinationals find a slightly cheaper source. IMHO, control of the land would flow inevitably to the elite. There is no social safety net, so what happens to the dispossessed?
But, Eric, you've certainly made me think more about it. I guess I can't have any objection to giving out permanent land title, but the idea that small-holder Malawians would suddenly become savvy capitalists as a result seems a bit far-fetched to me.
Eric Bone wrote:
> I thought the rest of the article made a lot of sense, but maybe that's
> because my understanding of economics is not sophisticated enough. What do
> others think about the idea that overhauling the property laws will go a
> long way toward making Malawi's economy more functional?
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