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
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