Restoring Central Banks' Credibility Will Require a Break From the Usual Playbook | [Daily Maverick] Central banks face tight constraints, which means that their response to the next recession may prove insufficient.

Restoring Central Banks' Credibility Will Require a Break From the Usual Playbook

Restoring Central Banks' Credibility Will Require a Break From the Usual Playbook

Restoring Central Banks' Credibility Will Require a Break From the Usual Playbook

Restoring Central Banks' Credibility Will Require a Break From the Usual Playbook

Restoring Central Banks' Credibility Will Require a Break From the Usual Playbook

Restoring Central Banks' Credibility Will Require a Break From the Usual Playbook
Restoring Central Banks' Credibility Will Require a Break From the Usual Playbook
  • By: allafrica.com
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Central banks face tight constraints, which means that their response to the next recession may prove insufficient.

Recent jumps in equity prices and bond yields suggest that recession fears are receding. But the global economic expansion cannot last forever, and when the next recession comes, central banks may not be adequately prepared to respond. Enhancing central-bank credibility to bolster the effectiveness of monetary policy is thus an urgent priority.

Before the 2008 financial crisis, central bankers could rely on slashing interest rates to spur consumption, investment, and employment. But that playbook no longer works as well as it once did. One reason is elevated uncertainty, owing to globalisation, societal ageing, changing consumer preferences, growing income and wealth inequality, rising healthcare costs, rapid technological change, and other factors. Even in the absence of recession, for many households and businesses, the future seems daunting and unpredictable.

This uncertainty will exacerbate the downturn when it comes. When uncertainty spikes, low or even negative real (inflation-adjusted) interest rates may not induce higher spending. Rather, savings may rise and investment may falter even as interest rates plunge. If governments are unwilling or unable to boost demand with fiscal policy, the result will be a prolonged...

Medics Root for Cheaper Hepatitis Drugs

Medics Root for Cheaper Hepatitis Drugs

Political will from governments to negotiate with drug manufacturers has been suggested as one of the ways that African countries can reduce prices of viral hepatitis drugs, and be able to save many lives lost to the disease.

World Health Organisation (WHO) data shows an estimated 257 million people living with chronic hepatitis B and 71 million people living with chronic hepatitis C worldwide.

WHO estimates that chronic viral hepatitis is now the second biggest killer after tuberculosis and in Africa, it affects over 70 million people (60 million with Hepatitis B and 10 million with Hepatitis C), and the disease affects the most youthful and productive Africans, causing catastrophic financial liability in the treatment of advanced liver disease and emotional distress and stigmatisation.

Treatment for hepatitis is still a challenge in Africa, costing hundreds of dollars in some countries, and medics and activists have called for governments to take steps in negotiating with drug manufacturers so that patients access the drugs at subsidized prices.

Medics gathered in Kigali for the International Conference on AIDS and STIs (ICASA) have said that the prices can go lower if political will is available for local, regional and global collaborations to reduce the prices.

Craig McClure, a director at the Clinton Health Access Initiative highlighted the importance of getting the lessons learnt from the fight against HIV and apply them into fighting viral Hepatitis, among which making effort to drag down the price of commodities, diagnostics and drugs.

He gave Rwanda as an example. Hepatitis C drugs in the country stand at 60 USD - having been reduced from high prices - at some point Hep C drugs used to cost about 8000 US Dollars.

"We need much more activism now for viral hepatitis from communities," he said.

Sharing Rwanda's experience, Dr. Sabin Nsanzimana the Director-General of the Rwanda Biomedical Centre, said that reduction of prices does not only require funds alone but partnerships and negotiations.

"The beginning for us was more of talking to people who had the medicine. We had the patients on this side, and they had the medicine on the other side. We were in-between so as that we make sure that the medicine gets to the people when they need it," Nsanzimana said.

"Our patients did not have the money; the government was not able to pay the funding. But we managed to come to reasonable costs that helped us to treat the first a thousand patients.

"It is not just the money, its part the partnerships and negotiation."

Kenneth Kabagambe, a board member on the World Hepatitis Alliance who is also a patient living with Hepatitis B, said that as measures are being taken for fighting Hepatitis, success will be registered if patients are put at the forefront

"Most of the successes registered in the HIV fight have come simply because the patients were put at the forefront of all the program. It should also be the same the same with viral hepatitis programs, we need to put the patients at the forefront.

A representative from Gilead Sciences an American Biotechnology company that researches, develops and commercialises drugs told the participants in the session that the secret remain for better access of drugs is "the political commitment,"

"I think we have two remarkable examples as Egypt and Rwanda," he said.

Prosecutors Urged to Collaborate in Fight Fighting Cross-Border Crimes

Prosecutors Urged to Collaborate in Fight Fighting Cross-Border Crimes

Justice Minister Johnston Busingye has called on the African Prosecutors' Association to always move fast - and with efficiency - in helping combat cross-border crimes.

Without addressing issues of speed and efficiency, he noted, whatever else "we are planning" will always be years behind crime and criminals.

Busingye, who is also the Attorney General, was addressing a meeting of prosecutors from 17 African countries in Kigali.

The world, he said, was increasingly becoming a global village and that "when it comes to cross-border crime and the combating thereof it becomes a real small village."

One crime planned in any of the countries, he noted, easily spreads to all countries simultaneously or faster than each individual country can contain it.

"The need to collaborate effectively and fast becomes more urgent each day. While our governments get stuck in 30-year-old red-tape practices, spend forever negotiating and never concluding cooperation agreements, MoUs and extradition treaties, it is clear to all of us that crime is fast and furious and criminals conclude their collaboration agreements in minutes," he noted.

The prosecutors gathered in Kigali seeking to strengthen their collaboration in combating crime and ensuring accountability for transnational crimes.

Genocide fugitives

One of the aspects of the theme for the meeting was fighting genocide.

African prosecutors have previously voiced commitment to work with Rwanda to extradite and or prosecute fugitives of the 1994 Genocide against the Tutsi.

The Genocide claimed more than one million lives and caused devastating consequences to the country and its citizens.

Busingye recalled legal consequences caused by the Genocide, stressing that the challenge at hand which requires collective attention is to bring to justice perpetrators.

"These fugitives are in countries on this continent, probably including some represented here. Rwanda has sent indictments and extradition requests to the countries concerned. Rwanda is yet to receive sufficient cooperation," he said.

Countries like South Africa are yet to execute arrest warrants for fugitives on their territories - which were issued by Rwanda or the United Nations tribunal set up to prosecute key players in the Genocide.

Among others, Protais Mpiranya, one of the three most wanted Genocide fugitives dubbed the 'Big Fish' by the UN, is believed to be in South Africa.

Mpiranya was the commandant of the notorious presidential guards, known for their viciousness in killing people during the Genocide.

Minister Busingye also recalled that genocide is a culmination of a way of thinking of a people, an ideology that promotes hate, dehumanisation, discrimination, results in a "we versus them" reality.

"This ideology is thought out, propagated and spread by people who do it deliberately with intent that it results in a genocide. This ideology is criminal. A number of countries have criminalised genocide ideology, hate speech and so on," he noted.

"Let us, on our continent beware. Let us be on our guard. If such ideologies crop up anywhere let us know how to spot and confront them."

He implored the delegates to create an effective permanent forum for cooperation and coordination among their institutions regarding the gathering of information and pertinent investigations, in addition to creating ad hoc joint task forces to handle specific issues.

"Let us endeavour to facilitate the tracking of fugitives and investigation of crime across our different jurisdictions. Africa should not accept to be a safe haven for suspects of organised criminality," he said.

Reluctance and lack of cooperation among African administrations only creates safe havens for fugitives, he observed, and "ultimately threatens the continent's social fabric, particularly delayed justice for victims and, eventually, impunity and failure to deliver any kind of justice."

China's 'Palate Democracy' May Not Be to Continent's Taste

China's 'Palate Democracy' May Not Be to Continent's Taste

China's government likes to describe its economic system as 'socialism with Chinese characteristics'. Which sounds a bit like a euphemism for 'state capitalism'. One doesn't hear Chinese officials referring to their country's political system as 'democracy with Chinese characteristics'. But that would be an adequate label for the descriptions some Chinese officials provide.

This week Professor Fang Ning, Deputy Director of the Institute of Political Science at the Chinese Academy of Social Sciences (CASS), coined the expression 'palate democracy' to characterise China's political system.

To explain this he offered a gastronomic analogy. Western democracies were like Western restaurants where you could order only one style of food - e.g. pizzas in Italy - in each, he explained. Chinese restaurants by comparison offered a variety of cuisines. Likewise the Chinese political system offers a variety of democracies for its people to choose from, to suit every taste.

Maybe something got lost in translation because on the face of it, the analogy suggests the Chinese have greater political choice than Westerners, which seems rather far off the mark. Certainly the one thing not on the menu at the Chinese political restaurant is any party but the Chinese Communist Party (CPC).

It's tempting for Africa, still stuck in deep poverty and inequality, to seek inspiration from China

Put less analogously, however, Fang says Chinese democracy is about adapting the form of democracy to the underlying development needs. It's about consultation and consensus, about consulting different groups for different purposes. By comparison, Western-style elections lock people into one party and government for five years. Quite a few South Africans in the room seemed to agree with him.

Fang was speaking at a seminar in Pretoria on 'Governance and socioeconomic development in China and Africa', organised by South Africa's Human Sciences Research Council and the China-Africa Institute (CAI) based in Beijing. Chinese President Xi Jinping announced China's intention to establish the CAI at the Forum for China-Africa Cooperation (FOCAC) last year and the institute was launched in April 2019.

'The CAI aims to enhance mutual learning between Chinese and African civilisations and to strengthen exchanges of their experience in governance and development to provide intellectual support for the Belt and Road construction collaboration and to build the China-Africa community with a shared future,' the Chinese embassy in Pretoria said. The CAI is sponsored by CASS, the well-known centre of Chinese study about Africa.

As in all programmes of 'cooperation' between Africa and the rest of the world, mutuality was emphasised. But it would appear that in fact China's aim for this initiative is mainly to improve governance in Africa. And that in turn is aimed mainly at facilitating the Belt and Road Initiative. This ambitious project sets out to construct a modern Silk Road, by land and by sea - a twin-pronged development corridor connecting China to Europe via Africa and central Asia.

China's ambassador to South Africa Lin Songtian said at the seminar that there were two questions to answer: Where are China and Africa going? And what's the best way of getting there?

One thing not on the political menu in China is any party but the Chinese Communist Party

It's clear that Africa would love to get to the same place China has reached today via its phenomenal economic growth over the past 40 years. That has taken it from GDP per capita of US$35 a year in 1949 when the CPC took over the government, to US$156 a year in 1978 when Deng Xiaoping began his 'opening up' economic reforms, to the current US$10 000 a year.

In 1978, more than 97% of Chinese lived in poverty; now more than 97% had escaped from poverty, Lin said. So it's obviously tempting for African countries, still stuck in deep poverty, inequality and unemployment, to seek inspiration from China. To add appeal, Chinese officials never stop reminding African leaders and pundits that they have no history of colonialism in Africa, and therefore should be trusted with their advice.

Lin has been quite critical in the past about the South African government's management of state-owned enterprises. He said at the seminar that despite an abundance of natural and human resources in the country and Africa as a whole, poverty remained a major problem. Why? Governance was the answer, he suggested, both to China's success and Africa's failure.

That may be true but it's one thing for China to offer Africa lessons in better governance - if that means more effective and less corrupt government to underpin more productive economies. It's quite another to suggest that Chinese palate democracy, with no elections and no choice of governing party, is necessarily the best route to such improved governance for African countries.

How China has managed to grow so stupendously is something of a mystery, but there are possible explanations other than its political system - for instance its deep culture, nourished over thousands of years. The formula doesn't necessarily translate well into Africa.

Africa has a lot to learn from China about efficient administration, clean government and hard work

In The future of democracy in Africa, Jakkie Cilliers, Head of African Futures and Innovation at the Institute for Security Studies, examined the complex relationship between democracy and development on the continent. Although he found that the many ersatz (my word) democracies in Africa had done little or nothing for development, real democracy did tend to boost development, especially in countries already further up the development path.

Likewise in their book Democracy Works: Rewiring Politics to Africa's Advantage, Greg Mills, Olusegun Obasanjo, Tendai Biti and Jeffrey Herbst found after a survey of African governments that real democracy - not just regular elections but also the rule of law, separation of powers, checks and balances, and leadership in government and civil society - did empirically correlate with greater economic growth and development.

A Westerner noted after the seminar this week that, 'Those Chinese are so incredibly good at soft diplomacy and adapting their message. Here they speak about communism, socialism and anti-colonialism to attract their prey. And in more liberal contexts, they would put forward free trade and free markets. Obviously China struggles with implementing the Belt and Road Initiative in Africa because of bad governance, so they create an institute to research about it. How clever!'

Indeed. And Africa surely does have a lot to learn from China about efficient administration, clean government, hard work, even sacrificing oneself to the common good (as Lin proposed) - but not to the point of erasing the individual altogether. And not in favour of palate democracy where everything on the menu is fine - as long as it's always the same ruling party.

Peter Fabricius, ISS Consultant

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