Global political economy is undergoing shifts and experiencing seismic ideological reconfiguration. The end of World War II in 1945 ushered in an era of dominance of international financial systems that were interlinked with global monetary regimes that largely reflected capitalist or Western-centric world views.

International finance institutions such as the Bretton Woods institutions were established. These comprised the International Bank for Reconstruction and Development (IBRD) which had, as one of its primary mandates, to help rebuild Germany after the country was devastated in the war.

The mandates of the IBRD were later readjusted to include functions for supporting poor countries or generally a category of states known as low-income countries (LIC) which are also closely linked to a category called least developed countries (LDCs). IBRD, therefore, paved the way for the establishment of the World Bank. Malawi belongs to both nomenclature as LIC and LDC. The International Monetary Fund (IMF) is another Bretton Woods entity, a twin institution with the World Bank.

Over the years, the global economy has experienced crises. Notably, the oil crisis of 1974 sent prices of petroleum skyrocketing. This resulted in the strengthening of the role Organisation of Petroleum Exporting Countries (Opec) dominated by some countries in the Middle East such as Saudi Arabia, United Arab Emirates (UAE), Kuwait and Qatar. Opec members strengthened their economies by taking advantage of high prices of oil and manipulated the economic forces of oil demand and supply.

The 1974 oil crisis resulted in developing countries such as Malawi, and a majority of oil importing nations to experience ripple effects and suffer economic crises through declining foreign reserves or forex as they quickly run out of dollars which were used to import oil. In the 1980s, developing countries continued to suffer further economic challenges, declining terms of trade, and structural bottlenecks in processing raw materials to access global markets. This prompted the IMF to intervene and provide support in form of a dosage of Structural Adjustment Programs (SAPs).

The package of SAPs included privatisation, deregulation, and other reforms of creating a minimalist State. Majority of State-owned enterprises (SOEs) were subject to commercialisation. However, IMF interventions in the 80s and 90s did little to rescue Malawi and other LDCs from economic stagnation. SAPs only helped to deepen poverty and push populations into deprivation. Malawi underwent the political transition in 1994 with a new democratic Constitution. Throughout the 1990s and 2000s, Malawi strengthened diplomatic ties with western allies and pursued liberalism ideologies. 

In contrast, Zimbabwe strengthened its diplomatic ties with eastern allies owing to sanctions that Zimbabwe has suffered from US, UK and western countries. South Africa also strengthened ties with the eastern block after the fall of the Apartheid regime in 1994, although RSA has pursued partnerships in both blocks. To date, the rise of China as a second global economic powerhouse threatens to destabilize the western-centric liberal global order.

Strong ties between China and Russia means that US global hegemony is under threat. This is more so in the context of emergence of Brics with Brazil, Russia, India, China and South Africa mobilising middle east Opec States and other countries, to join the block. The drive to abandon the US dollar as a reserve currency in global trade is a huge decision by Brics which may have serious implications on developing nations such as Malawi.

In the context of the war between Russia and Ukraine, western allies will grow apprehensive to anything around the Brics, which may be deemed as a grouping that is supporting the war. Malawi needs to avoid entangling itself in the Ukrainian war and global conflicts. On the other hand, Malawi can strategically benefit from Brics if the political leadership is wise.  

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