ABSTRACT
This chapter analyses the economic reform programme of the new Government in the political economy context of a fledgling democracy. The transition to democracy has brought tremendous opportunities to Malawi. To sustain democracy the new Government has pledged to strengthen democratic institutions and the participation of local people in political life to ensure respect for human rights, transparency and accountability. The chapter outlines the policy strategy of the United Democratic Front (UDF) Government. It assesses the economic reform programme in different sectors, namely, agriculture, industry, social sector, public sector, financial sector and trade and exchange rate regime. The chapter looks at macroeconomic performance under the new regime and the political economy context of reform. Economic performance picked up at the end of the 1980s under the International Monetary Fund's Enhanced Structural Adjustment Facility arrangement as growth recovered, private sector confidence gained momentum, inflation fell and improvements in public finances were consolidated.
