This case study examines Malawi as an example of a low income oil importing country from the perspective of its vulnerability to shocks in oil price and supply.1 In 2010, Malawi was among the world’s 10 poorest countries according to the IMF. The 2009 UN Human Development Report indicated that 73.9% of the population lived below the poverty line of USD1.25 per day, and 90.4% lived on less than USD2 per day (Europa 2012:761). The country currently has no known sources of oil, and is thus entirely reliant on other countries for this form of energy.
The case study is organised according to five subsystems of the socio-economic system, namely: energy; transport; agriculture; macro-economy and society. Each of the first four major sections includes a brief overview of the subsystem, an analysis of its oil dependency, and a discussion of the likely impacts of oil shocks under business-as-usual policy environments. Section 5 analyses Malawi’s social vulnerabilities to oil shocks. The concluding section provides a summary of key strengths, vulnerabilities and likely impacts of oil shocks in each of the five subsystems.