Malaria and underdevelopment are closely intertwined. Over 40% of the world’s population live where there is risk of contracting malaria. The disease causes widespread premature deaths and suffering, imposes financial hardship on the most marginalized communities and impedes economic growth.

Malaria risk is geographical with severe malaria confined to the tropical and sub- tropical zones. Countries situated in high malaria risk areas are almost all poor with some exceptions such as Oman and Gabon, which owe their wealth to oil. Forty-four of the 150 countries with populations of over one million have severe malaria, thirty-five of these forty-four are in Africa. The average purchasing power parity GDP per capita in 1995 for malarious countries being $1,526 compared to $8,268 for countries without malaria. Of the 119 poorest countries in the world, all but twelve have some incidence of malaria, the 31 countries with the highest wealth are malaria free.

Cross-country regressions for the 1965-1990 periods confirm the relationship between malaria and economic growth. Taking into account initial poverty, economic policy, tropical location and life expectancy among other factors, countries with severe malaria grew 1.3% lower per year, and a 10% reduction in malaria was associated with 0.3% higher growth per year. The direct and indirect economic cost of malaria in Africa is estimated at US$12 billion a year and includes cost of health care and decreased productivity among others. In some countries with high malaria transmission, malaria accounts for as much as 40% of public health expenditure and up to 50% of inpatient admissions.

While there is a strong correlation between the presence of malaria and the lack of economic growth, a factor often overlooked in the analyses has been the political climate in which the disease is found. Countries do not become prosperous by controlling malaria alone. The political and economic climate within the country has to be conducive to investment. For example, consider the post-eradication growth experiences of Taiwan and Jamaica compared with Mauritius. Taiwan and Jamaica successfully managed to eradicate malaria in 1961 and 1958 respectively. Both countries substantially improved their levels of economic growth but these improvements cannot entirely be attributed to the eradication of malaria.

In contrast, Mauritius managed to eradicate malaria in 1963 but its growth remained negative until 1973. At this point Mauritius began to pursue more liberal, open economic policies and became one of the fastest growing economies in the world. This growth was primarily achieved through the introduction of export processing zones, policies which Mauritius in large part ‘borrowed’ from Taiwan. Thus although the elimination or successful control of malaria may be a necessary component to stimulate economic growth, by itself it is not sufficient to promote sustained economic growth. Arguably, it is far more important for countries to have sound economic policies that are supportive of the rule of law and economic freedom. If Zimbabwe were to eliminate malaria tomorrow for example, it will surely not reverse its current negative growth rates – this will require a fundamental shift in economic policy to return it to its former growth path.

The best way to move from poverty to prosperity, as Adam Smith noted 200 years ago, is to reduce barriers to trade. Trade is the engine of economic growth. Integration into the world economy has proved to be a powerful means for countries to promote economic growth and development and to substantially reduce poverty. No country in recent decades has achieved economic success, in terms of substantial increases in living standards for its people, without being open to the rest of the world.

There is considerable evidence that more outward-oriented countries tend consistently to grow faster than ones that are inward-looking. Malaria endemic countries that have opened their economies in recent years, such as India, Vietnam, and Uganda, have experienced faster growth and poverty reduction. More specifically, on average, those developing countries that lowered tariffs sharply in the 1980s grew more quickly in the 1990s than those that did not.