By Mabvuto Banda

LILONGWE, Aug 12 (Reuters) - The last time Malawi made headlines, U.S. pop star Madonna adopted a child from the impoverished southern African country.

Now Malawians are crying out for help as political wrangling delays state spending, and there are few signs the outside world -- or their government -- is taking much notice.

The opposition-controlled parliament has been boycotting debate on the budget until a row over the poaching of its members by President Bingu wa Mutharika's ruling Democratic Progressive Party (DPP) is resolved.

The proposed $1.2 billion budget, which should have been concluded by June 30, allocates more resources to poor rural areas, proposes salary increases for civil servants, and higher spending on health care and food production for Malawi's 12 million people.

Finance Minister Goodall Gondwe has warned the deadlock was depriving Malawians of medicines and the delivery of other essential services. "We never thought the boycott would take this long," he told Reuters.

Parliament is expected to reconvene on Monday but it is not clear if a breakthrough on the budget can be reached.

Donors have praised wa Mutharika for improving the country's financial health and offered it billions in debt relief. But Malawians, many of whom live on less than $1 a day, may not see their country as an African success story.

"We keep wondering why the politicians are fighting when we don't have enough food. Can't they pass the budget first and continue their fighting later?" asked Sampson Kadulira, who is unemployed.

Frustrations have been growing as the standoff deepens between the opposition coalition of the United Democratic Front (UDF) and the Malawi Congress Party (MCP) and the ruling DPP.

Thousands of people have held demonstrations over delays in the budget for the country bordered by Tanzania, Zambia and Mozambique.

Some of those angered by the crisis seem to long for the hopeful period of post-independence from Britain in 1964.

Protesting peasant farmers held a vigil at the special burial site of President Hastings Kamuzu Banda, founding father of the nation.

Fainesi Mataya, a grandmother, is acutely aware of Malawi's troubles. People like her stand the most to lose if services don't come soon. Floods washed away her crops in the Chikwawa district in southern Malawi.

"The rain was very heavy last year and although we planted twice, the gardens yielded little," said Mataya, 70, who is raising her four orphan grandchildren.

In hard times, Malawians in the area are known to risk crocodile attacks searching for food along the Shire river, far removed from the stalemate in the 193-seat parliament.

POVERTY AND CROCODILES

Overall, it has been a good year for the former British protectorate of Nyasaland, which relies on limited exports such as tobacco, sugar and cotton.

Inflation has fallen to single digits for the first time in four years amid a strong economic turnaround. Malawi is enjoying a bumper maize harvest for the second consecutive year.

But politics have clouded economic progress and reminded Malawians of their turbulent past.

Wa Mutharika won a 2004 poll, but it was marred by bloody riots and opposition allegations of rigging.

Then the former World Bank economist proved unpredictable.

He shocked the nation in 2005 when he walked out of the UDF, prompting opposition calls for his impeachment after he successfully lured UDF and MCP members to his new party.

Both sides appear to be digging in. Opposition lawmakers have ignored a presidential order to return to parliament. Police, meanwhile, have raided the house of the high court judge after he ruled against the president in the budget row.

But analysts seem more concerned about the economic costs and Malawians are left with the sense that they may have to fend for themselves, at least for now.

Aside from widespread poverty, AIDS is ravaging Malawi -- an estimated 14 percent of adults are HIV positive -- and the parliament freeze comes as the government struggles to put in place effective grassroots HIV-prevention programmes.

People like Master Bizali seem lost amid the uncertainty. His crops have also been washed away. "I sell roasted birds, maize and vegetables to support my family," he said.

Some people have high hopes for the country.

Clutching the young boy she chose to adopt in 2006, Madonna danced with Malawian children during a visit to an orphanage in April and urged them to "help themselves" instead of only heavily relying on a charity she helped found for orphans. (Additional reporting by Fran Phiri in Chikwawa)

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