Iceland’s journey from poverty to prosperity a model for Malawi’s own – Chakwera

President Dr Lazarus Chakwera says Iceland’s journey from poverty to prosperity is a model for Malawi’s own aspirations.
President Chakwera made the remarks at the State Banquet at the Kamuzu Palace in Lilongwe in honor of the Prime Minister of Iceland Bjarni Benediktsson who is in Malawi for bilateral talks.
Iceland has the lowest poverty rate in the OECD. Just 4.9% of the population are below the poverty line (Figure 13.9). This is despite spending only 10.9% of GDP on social protection, less than the OECD average of 13.3%.
Critics maintain that the government overstates the U.S. poverty level because it counts people as impoverished who in generations past, would be considered as not living in poverty. The highest poverty rate on record was 22% (1950s).
Generally speaking, poverty is low in Iceland. There is a high level of education, and access to healthcare is subsidized by taxpayers. Unemployment and homelessness rates are low, even if they are growing. That doesn’t mean that poverty doesn’t exist in Iceland.
Strong trade unions and wage bargaining have helped promote income equality, which has kept poverty rates down and maintained inclusiveness, even in times of crisis.
About 70 percent of Malawi’s population currently lives below the $2.15 international poverty line with about 46 percent of its national income being held by the top 20 percent of the population.
On 27/11/2023, to what the government says to help address macroeconomic challenges, the Reserve Bank of Malawi devalued the national currency, the Malawi kwacha, by 44 percent in early November 2023; as of 24 November, the Malawi kwacha was trading at MWK 1 685/USD 1, compared to MWK 1 116 in late October.
The Government Negotiating Team (GNT) and Civil Servants Trade Union (CSTU) have agreed to hike salaries for civil servants by an average of 12 percent effective 1 April 2024. This was agreed on Wednesday during the meeting between the two sides in Lilongwe.