"Sub-Saharan Africa's economic gains came under threat this year, but public demands for good governance to address the continent's problems holds promise for the future"
-Shanta Devarajan, The Guardian, Dec 25, 2011 http://www.guardian.co.uk/global-development/poverty-matters/2011/dec/21/africa-economic-year-living-dangerously
Yet another insightful article on from the folks at The Guardian's Development Blog.
The crux of the argument here: key progress has been made in macroeconomic policy in many African nations, the case in point being the tightening of monetary policy in response to inflationary pressures across East Africa this year (politically difficult); the ability to make a politically difficult decision amidst global economic downturns can be a sentiment to a number of factors: growing authoritarianism and a lack of concern of popular discontent (as can certainly be the case in Ethiopia) or a general delinking and independent growth cycle (as can certainly be the case both in Ethiopia as well as Kenya and Tanzania); but moreover, a sense of optimism for the future, of a longer-term time horizon being used by the leadership and planners in these nations. Time horizons are the critical element here that will differentiate ruinous, short-sighted policy, with sensible, growth-oriented, progressive policy that will gradually impact the majority of a society over the short term elite vested interest drives (that we have seen in the US, for example). These factors breed optimism in the growth trajectories for many African nations.
A main point made by Devarajan has been the impact of cash transfers to the poor as a key method for weathering the global financial turmoils and domestic economic and agricultural crises. These direct cash transfers, though they necessitate a certain level of technological and bureaucratic infrastructure to enable transmission, as well as the concern for graft and opportunities for graft they might introduce, have been seen as more effective in introducing personal empowerment into these situations. This harkens back to Amartya Sens' entitlements and empowerments arguments; if people have the economic and social ability to obtain entitlements, famine and destitution can be averted (subsequently, most famines are not due to lack of food, they are market failures caused by a lack of these entitlements). Thus, the combination of macroeconomic foresight and long-term stable planning with short term entitlement distribution might be the key recipe for many moving forward.
-Shanta Devarajan, The Guardian, Dec 25, 2011 http://www.guardian.co.uk/global-development/poverty-matters/2011/dec/21/africa-economic-year-living-dangerously
Yet another insightful article on from the folks at The Guardian's Development Blog.
The crux of the argument here: key progress has been made in macroeconomic policy in many African nations, the case in point being the tightening of monetary policy in response to inflationary pressures across East Africa this year (politically difficult); the ability to make a politically difficult decision amidst global economic downturns can be a sentiment to a number of factors: growing authoritarianism and a lack of concern of popular discontent (as can certainly be the case in Ethiopia) or a general delinking and independent growth cycle (as can certainly be the case both in Ethiopia as well as Kenya and Tanzania); but moreover, a sense of optimism for the future, of a longer-term time horizon being used by the leadership and planners in these nations. Time horizons are the critical element here that will differentiate ruinous, short-sighted policy, with sensible, growth-oriented, progressive policy that will gradually impact the majority of a society over the short term elite vested interest drives (that we have seen in the US, for example). These factors breed optimism in the growth trajectories for many African nations.
A main point made by Devarajan has been the impact of cash transfers to the poor as a key method for weathering the global financial turmoils and domestic economic and agricultural crises. These direct cash transfers, though they necessitate a certain level of technological and bureaucratic infrastructure to enable transmission, as well as the concern for graft and opportunities for graft they might introduce, have been seen as more effective in introducing personal empowerment into these situations. This harkens back to Amartya Sens' entitlements and empowerments arguments; if people have the economic and social ability to obtain entitlements, famine and destitution can be averted (subsequently, most famines are not due to lack of food, they are market failures caused by a lack of these entitlements). Thus, the combination of macroeconomic foresight and long-term stable planning with short term entitlement distribution might be the key recipe for many moving forward.
