A MASTERPIECE. You might humbly declare that this is NOT an exhaustive prescription, but i can tell you that it sure would go a long way to resuscitate a SICK economy. Thank you very much for your contributions. I shall study this further and get back to you. KB >From: Hamjatta Kanteh <[log in to unmask]> >Reply-To: The Gambia and related-issues mailing list ><[log in to unmask]> >To: [log in to unmask] >Subject: Some Policy Recommendations For The Alliance >Date: Fri, 7 Sep 2001 16:03:41 EDT > >Timeless verities don't come very often with economics; especially when it >comes to translating intellectual advancements into policy recommendations >that will renew and resuscitate dilapidated economic structures and >outlooks. >Certainly, this philosophical shackle was what greatly hindered the >creeping >revival of a reformulated, rethought and exciting but cautious Keynesianism >- >or the economics of QWERTY as it is popularly referred to - in America's >academia in the mid- to late 1980s. Partly, this obstacle to translate this >Keynesian intellectual advancement into policy application is a reflection >of >the dangers involved with the reckless translation of intellectual >developments into brash policies that have resulted in not only policy >disaster but also intellectual cul-de-sacs. As Paul Krugman commented on >this >intellectual dilemma: > >"The rise of the economics of QWERTY felt like an intellectual revolution >to >those who participated in it; phrases like "paradigm shift" were used >routinely. Yet when it came to actual policy applications, the professors >were cautious. There were at least three reasons for that caution. One is >that while an acknowledgment of the importance of QWERTY refutes the >near-religious faith of conservatives in free markets, it is not all easy >to >decide which direction the government should pursue. We've already seen how >subtle the issue of strategic trade policy becomes once one tries to deal >with real-world complications. So unlike, say, the rational expectations >school, the new economic theorists did not find that their theory >translated >readily into policy recommendations. That does not devalue the significance >of the theory: it is unreasonable to expect each intellectual advance to be >ready for immediate policy consumption. Nonetheless, the failure of QWERTY >to >yield easy policy conclusions has been a real disappointment." [Paul >Krugman, >Peddling Prosperity, pp 243-4, W.W. Norton & Company, New York, 1995] > >We need not despair like Krugman but we mustn't be brash about the >intellectual arguments that prove our case vis-a-vis the current state of >the >Gambian economy. Indeed, in translating what amounts to the intellectual >advances we have made thus far in the struggle to rescue the Gambia from >the >economic freefall she is inevitably doomed to teeter precariously in the >event of another Jammeh maladministration there is a need for caution. >Therewith, the watch word in every policy recommendation for the revival of >the Gambian economy is that of caution and the avoidance of what Krugman >called "near-religious faith" policy recommendations and or applications. >That concession is not to say that with the intellectual advancement we've >made thus far, there are no timeless economic verities with which the >Gambian >economy can be resuscitated with. Rather, we mustn't act injudiciously and >brashly in policy recommendations and or applications. But, above all, we >must be exercise restraint and tread very cautiously in what policy we >ultimately recommend and apply to the resuscitation of the Gambian economy. > >To the extent that this is true, i will in my policy recommendations >exercise >caution and recommend conditionals and transitional phases in cases that >require some degree of eventual shelving out. If the Alliance believes, as >i >certainly do, in liberal and bourgeois economics, then the ultimate task of >the Alliance is to begin an initially cautious but eventually a radically >liberalising of all economic structures of the Gambian polity. Should this >be >the case, then here i shall briefly enumerate some key policy >recommendations >for the Alliance: > >1. An Independent Central Bank of the Gambia: The Alliance should >reformulate >the current Central Bank from its current anachronistic and politically >malleable structures to one of independence from the meddling of the >political class ala the Federal Reserve, the Bundesbank et al. The legal >remit of the Independent Central Bank should be one of a constitutional >guaranteeing of the independence of the Bank to carry out its mandate >without >the interference of politicians. The economic remit should be one of a >monetarist thrust that religiously adheres to stated inflationary targets >and >any such liberal economics that aids monetary stability. There should be a >modicum of democratic values in some of the deliberations of the Bank >especially its Open Market Committee or Monetary Policy Committee which >shall >be responsible for setting of interest rates and monitoring of inflationary >trends of the economy. Such democratic values should help in offsetting >some >of the dangers associated with discretionary nature of the deliberations of >independent central bankers. The three recommended democratic values are >relative transparency, probity and accountability as and when they are >appropriate and when they will not the efficacy of the Bank. > >2. Fiscal Conservatism: By fiscal conservatism, we refer to it to mean >fiscal >discipline which reflects responsibility and caution in government >expenditure and borrowing. Unsustainable and profligate fiscal imprudencies >shouldn't be tolerated and expenditure and borrowing - be it domestic or >external ones - should primordially reflect stated and sustainable fiscal >targets. > >3. Free Enterprise, Market And Trade: The economic philosophy of the >Alliance should be one that grants as much economic freedom as is >economically feasible. The Alliance should promote an economic milieu that >aids free enterprise and trade and where undergirds its economic >liberalisation programme, privatise those public corporations and >parastatals >that have been empirically determined as economically feasible for >privatisation. Free trade should attempt to free the economy of >un-necessary, >inimical and nefarious government activities or interventions as in cases >like the dubious attempts at distorting the free market operation of >foreign >exchange markets. > >4. Less And Less Foreign Loans, More And More Foreign Investment: Although >the originator of this economic mantra in the region, the Liberal gov't of >Wade has, as of yet, to show signs of actuality in the pursuit of a gradual >shelving of loans, aid and grants for inward foreign and domestic >investment. >It certainly remains the case that as a long term economic plan and with >the >current unsustainable nature of the Gambia's debt portfolio, the Alliance >is >better off critically studying the modalities of such a policy that seeks >to >shelve out dependency on grants, aid and loans as means to economic >development. This should overall reflect an intent on the part of the >Alliance to introduce an economic philosophy of economic and freedom >independence. > >5. A Free Market For Agriculture: The Alliance must help our poor farmers. >As >an interim measure, the Alliance must guarantee our poor farmers that >before >the structural problems associated with the marketing of agricultural >yields >are sorted out, their yields will not lie around idly whilst they are in >need. The Alliance must intervene with a pro- poor marketing programme that >will guarantee the sale of agricultural yields. Where it is vital to rural >economics and life, agriculture ought to be subsidised to help in its >revitalisation. This is by no means a declaration for long-term statist and >collectivist agricultural economics. This is but a transition phase which >will eventually be shelved as soon modalities exist that support a free >market for agriculture. > >6. A Council Of Economic Advisers: Because of the disastrous nature of the >economy the Alliance is going to inherit, they are definitely going to need >a >lot of technical and seasoned economic advice on how to sort out the >nation's >finances, policy applications and the diagnosis of potential economic >pitfalls. The Council of Economic Advisers should be constitutionally >legislated to offer independent advise, recommendations and diagnosis of >the >economy for the president; and their deliberations should at an appropriate >period be made available to the public. A modicum of democratic values like >accountability, transparency and probity should be incorporated to the >Council's deliberations where appropriate and be expected of the Council >and >members of the Council. > >These recommendations are by no means exhaustive and most certainly not a >panacea for all of the Gambia's economic woes. I strongly believe that with >caution, clarity and, above all, commitment these policy recommendations >will >greatly enhance the efforts of the Alliance to build a Gambia of liberal >tolerance, decency and progress. > >Hamjatta Kanteh > >---------------------------------------------------------------------------- > >To unsubscribe/subscribe or view archives of postings, go to the Gambia-L >Web interface at: http://maelstrom.stjohns.edu/archives/gambia-l.html >You may also send subscription requests to >[log in to unmask] >if you have problems accessing the web interface and remember to write your >full name and e-mail address. >---------------------------------------------------------------------------- _________________________________________________________________ Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp ---------------------------------------------------------------------------- To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface at: http://maelstrom.stjohns.edu/archives/gambia-l.html You may also send subscription requests to [log in to unmask] if you have problems accessing the web interface and remember to write your full name and e-mail address. ----------------------------------------------------------------------------