War on Iran threatens global economy, but worse, rattles 'just world' ethic in places such as Malawi

Malawi, east of Lilongwe, looking toward Lake Malawi
RJ Peltz-Steele CC BY-NC-SA 4.0

Americans are suffering an affordability crisis wrought in large part by the Middle East war. But the impact of the conflict is global. And the lasting message to the world's poorest places might be less about economic setback, and more about the unreliability of western capitalism.

Driven especially if not exclusively by the Iran war, record fuel prices in the United States make local and national news every day and are sending ripples through the economy, worsening the affordability crisis that the White House alternatively grapples with and declares "fake."

It's easy to be self-absorbed in this crisis. I've lately lamented the $65 tab to fill my gas tank. Traveling to join family for an upcoming weekend wedding will cost my wife, daughter, and me more than $3,000. 

We're blessed; for now, we can absorb these costs. But as we consider our retirement plan with airfare inflation topping 23%, I worry about an impending need to decide what family we want to be close to in the States, presumably a parent or child, and to move there, understanding that we will rarely see other family again. 

It's like going back in time to when Americans moved west knowing they might never see their loved ones again. Shouldn't that be a forgotten era with modern transportation technologies? Both political parties purport to support the American family, but neither takes responsibility for our geographic fragmentation in the national labor market. We have no long-distance, high-speed trains, and we treat air travel like a free-market luxury.

Many Americans are in that bind already, tethered to work, if they can find it, and isolated from family. As Americans talk on the news about increasingly having to choose between fuel and food, it can be hard to remember how much better off we are than people elsewhere in the world. 

In May this year, I visited Malawi, a small country in southern Africa. The Iran war was then only a couple months on, but it reverberated worldwide already. I traveled overland from the Zambian border to Lake Malawi and back with Colby Mughogho, an entrepreneur, developer, and tourism operator. 

Drivers await a fuel delivery at a station outside Lilongwe.
RJ Peltz-Steele CC BY-NC-SA 4.0

Open fuel stations were hard to find. A station might get one delivery per day, then dispense fuel until the tanks went dry. At any station, a glut of trucks and motorcycles waited for hours in anticipation of a delivery. Petrol usually was delivered a few times per week; some areas were deserts for diesel, which we needed.

Colby worked the phone to call ahead to friends, sometimes to nail down the delivery time for a fuel station, or if we were lucky, to enlist someone to set aside a couple of liters for us. Police patrolled the main streets and watched fuel stations closely, enforcing a purchase limit of 15 liters (3.96 gallons) per customer.

With that limit, a fill-up would not get us the whole way. A pickup on Malawi's rough roads might at best get 9.3 km/L (22 mpg), so 140 km (87 miles) on a legal-limit fill-up. The distance from Lilongwe to our destination, Chembe, on Lake Malawi, was 216 km (134 miles), each way.

Motorcyclists queue for petrol at a fuel station outside Lilongwe.
RJ Peltz-Steele CC BY-NC-SA 4.0

At a fuel station, petrol cost about MK7,000 (Malawian kwacha) per liter (US$4.04/L). That's US$15.29 per gallon. Before the war, the fixed price had been about MK5,000/L (US$2.89/L), or US$10.92 per gallon.

If we were unlucky, we could leave the main road in search of scant and risky supplies of black-market fuel, sold curbside by men looking over their shoulders while they juggled ragtag containers. Black-market sellers commanded MK12,000/L, or US$26.20 per gallon.

The government blames black-market sellers, fairly, for amplifying scarcity and driving up prices. The quality of fuel also is suspect, possibly diluted, and tainted fuel can damage engines, a further drain on a fragile economy.

At the same time, black-market sellers disperse supply so that small-capacity users such as motorcycle taxis can continue to operate without losing productive hours in lines. A great deal of downstream commerce that depends on transportation is thereby protected, as well as beneficial noncommercial needs, such as health care, family connections, and schooling.

A billboard in Lilongwe touts the "Malawi 2063 National Vision."
RJ Peltz-Steele CC BY-NC-SA 4.0

For me, our fuel search was a "#FirstWorldProblem," a matter of convenience. I could have hitched a ride to the airport if I'd needed to. I was more worried about Colby making his way back to his wife and kids.

And I was more worried still about the impact of the shortage on people whose livelihoods depended on the fuel supply. No fuel meant no work for many, and no work meant nothing to eat. The food supply itself, for everyone, would be in jeopardy when fisherman and farmers could no longer fill the tanks of boats and tractors.

That was then. Now the war drags on and is expanding in Yemen and Saudi Arabia.

The New York Times reported last week that rising fuel prices have touched off furious protests around the world, "from Indonesia to Guatemala to Syria." The Times reported on work stoppages with insufficient fuel for boats, tractors, and factory machinery, and people responding angrily with marches, horns, and burning tires.

Malawi managed to cut fuel prices later in the summer. With fixed government pricing, petrol has held steady at US$3.24/L, or $12.26 per gallon, and diesel has closed in toward that number, about 12% higher. That's still an increase for petrol of 122% over the price a year ago. And I know that the official price says nothing about availability on the ground. Authorities say demand is being met, though in "good times" in 2024, an NGO reported Malawi fuel retailers operating at only 30% of capacity.

Boys play football beside their school in Chembe.
RJ Peltz-Steele CC BY-NC-SA 4.0

The Iran war is not the only reason that fuel shortages hit hard in Malawi, where fuel already was expensive and in short supply. Part of the problem is simply geology and geography. Malawi has no oil reserves and no domestic fossil fuel production. The landlocked country depends on imported oil products, though finds some relief by blending in domestic ethanol.

Other key factors in Malawi's fuel pain, predating the war, are economic: a foreign currency deficit and stubborn price fixing (e.g., BBC). People I talked to in Malawi were quick to blame their government, observing that surrounding countries were better managing the latest crisis. 

There's truth to that. In the long term, Malawian politicians have been unwilling to make unpopular choices to get a grip on the economy. But in fairness to Malawi, its economic woes are less a result of misfeasance than of the seemingly insurmountable poverty cycle that plagues developing countries in the contemporary global economy. 

With reinvested revenues, hard-won grants, and a great deal of grit and hard labor, Colby and his brilliant better half, Violet, have been developing tourism infrastructure in Malawi, especially in the north, around Mzuzu, the capital of the northern region and the country's third-largest city. Mzuzu is superbly located as a base for Malawi tourism, because it affords ready access to the small country's stunning range of landscapes, from iconic Lake Malawi to wildlife safariing, and to trekking through plains, forests, and mountain ranges. Colby and Violet have built camps and miles of trails and employed hundreds of Malawians in the process. 

Near Lilongwe: Some modes of transportation require no petrol.
RJ Peltz-Steele CC BY-NC-SA 4.0

The problem now is getting people there. Besides fuel prices, the Iran war is tanking tourism in Africa. Airline routes have been reduced, and demand for travel services has fallen off. The retreat of U.S. foreign aid from Africa is destabilizing governments, spilling red ink across the continent on the travel advisory map, spooking travelers. Malawi and its neighbor Mozambique are hanging on to their "level 2" status (travel with caution), though neighboring Tanzania, home to Kilimanjaro, has slipped to "level 3" ("reconsider travel"). (Neighboring Zambia boasts a remarkable "level 1" ("normal precautions"), though the rating system seems suspiciously aligned with a U.S. appetite for African resources; read more.)

I had not intended to come home from Malawi to write about fuel woes and war effects; rather, I wanted to write about the Mughoghos' investments in "community tourism" through homegrown enterprise, admirably independent of the foreign quid pro quo that haunts so much of the African economy. The latter is still an important story. Tourism is the bellwether of foreign investment that will be essential to bolster the Malawian economy and give the people a fighting chance at socioeconomic mobility and a healthy, middle-class standard of living.

Right now, though, it's hard to see the road to that prosperity. Like many countries and many peoples in the developing world, Malawians are captive to an emerging geopolitical catastrophe that they had no hand in making. What for Americans is a crisis of affordability means, for people elsewhere in the world, development paralysis, and worse: a betrayal of the western economic promise, the "just world hypothesis," that hard work will pay off.

If you are inclined go to Malawi, please do. It is safe and open for business. Flights are available; Ethiopian Airlines hedges against economic downturn with a diversified fuel supply. Please consider planning your time in Malawi with Adventures with Colby; Colby and Violet reinvest proceeds in communities. They'll store fuel if they know you're coming. (Nothing received for this endorsement.)

Western dollars and a little bit of faith are needed to help Malawi, "the warm heart of Africa," to weather this storm, and to get back on its feet.

Let's hope that the current strategy in U.S. foreign relations has not completely undermined the just-world hypothesis in places such as Malawi. Because if it is has, there are other nations with less benevolent intentions waiting in the wings to export a very different worldview.