Maravi

African Central Bank governors urge pro-poor macroeconomic framework

COMMENT - Poorly regulated financial institutions in developed countries? Try nearly three decades of neoliberal deregulation, which gave us a nearly endless list of financial crises - from the junk bonds of the 1980s, to the Saving and Loans Crisis, to this mortgage crisis today and all the collapsing economies in the developing world from Chile to Russia to Indonesia and Malaysia - privatisation, deregulation and structural adjustment have left behind a path of 'creative' destruction.

It is time for a return to demand side economics.


African Central Bank governors urge pro-poor macroeconomic framework
By Kabanda Chulu
Thursday October 16, 2008 [04:00]

AFRICAN Central Bank governors have called for policy actions that aim at improving economic infrastructure and strengthening the macroeconomic framework to shelter poor countries from the global financial crisis.

Addressing the 18th International Monetary and Financial Committee meeting on behalf of the IMF group one constituency that includes Zambia, South African Reserve Bank governor Tito Mboweni stated that the global economy has been weakened by the financial crisis as a result of poorly regulated financial institutions in developed countries.

He stated that economic growth outlook in sub-Saharan Africa might worsen if the global economy experiences a prolonged slowdown, hence the need to address the medium and long-term implications of the crisis.

“We need to manage the welfare impact on our citizens while at the same time making policy interventions in support of our growth and development,” Mboweni stated. “In this regard, greater flexibility with regard to fiscal and monetary policies will be required in order to soften the impact of external shocks, even as we consolidate the gains of better macroeconomic frameworks.”

He noted that authorities in advanced economies have provided fiscal stimulus and liquidity support to the struggling mortgage and financial institutions in an attempt to avoid systemic collapse.

“While these policy responses are commended, they have exposed the weaknesses in global economic governance and underscored the need to build sufficient institutional capacity to manage rapid, coordinated and genuinely global responses,” he stated.

Mboweni also called for the strengthening of the International Monetary Fund (IMF)’s governance framework.

The IMF Africa group one constituency comprises central bank governors from Angola, Botswana, Burundi, Eritrea, Ethiopia, the Gambia, Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia, Nigeria, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

Labels: BANKING

posted by MrK @ 4:02 PM