When i first perused SOS Jaata's Budget Speech, the first thing that came to mind was how well Jaata reads? I wouldn't be surprised if the answer is in the negative: Jaata is not a card-carrying economist and his ministerial chores aside, deep throat has it that he acts also as Jammeh’s intellectual minder - he handles the president's sophisticated paper-work for him as well as being a personal adviser. Anyway, if he is an avid reader of contemporary economics and tries to lay his hands on every development economics literature in print, he probably would have heard of or even read the Peruvian development economist, Hernando De Soto's exciting new book, The Mystery of Capital: Why Capitalism Succeeds in the West and Fails Everywhere Else. [New York: Basic Books, 245pp, 2000, $27.00]. The more I wade through Jaata's vapid prose and its flair for florid understatements, the more I became convinced that De Soto's central theme in his new book is all the more important in development economics - especially in Africa. In The Mystery of Capital, De Soto forwarded the argument that in developing countries, there are two economies: the real/formal economy - which gets accounted in a nation's books and the shadow/underworld/informal economy which exists but is considered illegal and thus never accounted, overlooked or added to the nation's books. Now there is nothing new in this - this is fairly conventional wisdom and an on-the-face-of-it-evidence. What De Soto added to this fairly conventional wisdom is to argue very persuasively that the shadow economy that officially doesn't exist is depriving the real economy of far more investment than the foreign investment/capital, we are made to believe as the be-all and end-all of invigorating developing economies. Most of these internal investments - according to De Soto - is tied up in the form of capital inherent in informal property rights - arranged on informal customary laws which have not fully been instituted into the law proper and thus depriving the economy as a whole of much needed investment.

In his review of the De Soto book, the Newsweek and Washington Post syndicated columnist, Robert Samuelson, sums up De Soto's findings this way: "According to De Soto, clearly defined property rights generate what economists call positive externalities or benefits shared by everyone. Not only do property rights help people borrow more easily, because property can be pledged as formal collateral, they also create information needed by markets. If property rights are recorded, for example utility companies easily deliver power and bill customers more easily. But without such rights, markets are untapped and commerce is disconnected from much of the legal system. People deal only with those they know and trust or through informal associations that substitute for formal law. Extralegal arrangements flourish because they are essential for survival. Some of these arrangements are ethical, but others are corrupt. In Peru, for example, bribes raise the cost of running a small business by 10 to 15 percent. Aside from depressing economic growth, the denial of property rights destroys any constituency for popular capitalism." Implicit in De Soto's broadside vis-à-vis "popularising" capitalism and eradicating poverty is the knock-on effect the rule of the law has on not only in attracting foreign capital but also harnessing overlooked local capital. Even though I have respectfully taken issues with the sweeping optimism of De Soto's property rights theory and their lack thereof in developing economies, I bring it to the attention of people because:

1.) De Soto's dichotomy of two economics within one economy in developing economies will be very useful to understand what is happening in the Gambia.

2.) The most disingenuous statement in SOS Jaata's sodding Budget Speech was his cheap and hoary slogans - like "good governance", "poverty reduction", "accelerated growth", "liberalisation of the economy" and the endless empty gimmicks of the new economy speak - on how far he and his gov't had gone in poverty eradication and sustaining good governance in the Gambia. [Indeed, the 2001 Budget Speech is entitled: Good Governance for Accelerated Growth and Reinforced Poverty Reduction.]

In introducing 2001's Budget Speech central theme, Jaata observed that: "Drawing from the prevalence of acute poverty across a broader section of our populace and the dire need to alleviate it, the theme of the year 2001 budget speech continues to centre on Poverty Reduction with particular emphasis on the importance of good governance for accelerated growth and reinforced poverty reduction." Splendid. On the same brazen length and in lieu of the aforesaid, Jaata then informed us that: "However, the attainment of sustained poverty reduction requires the existence of a good governance environment, which is found to be a prerequisite for successful participatory poverty alleviation programme. Good governance facilitates poverty reduction through promoting opportunities, facilitating empowerment, and enhancing security with the cumulative effect of increasing confidence in the Gambian economy."

Ah "empowerment"! That hoary slogan that African despots shamelessly rehearse in their sodding speeches whilst asphyxiating the body politic of whatever we call civic culture - a conditional ingredient of "empowerment" we have. And so how did Jaata's gov't "empower" Gambians and increase "confidence in the Gambian economy"? Ditto Jaata in Section I. paragraph 9 of the 2001 Budget Speech: "Mr. Speaker, facilitating empowerment involves the reform of the public administrative system (which is firmly

entrenched in our Local Government Reform and Decentralisation Program). This will make the delivery of public goods more RESPONSIVE ACCOUNTABLE and EFFICIENT through the ACTTVE and DIRECT PARTICIPATION of the citizenry. It would also involve the STRENGTHENING OF AN INDEPENDENT LEGAL SYSTEM as well as the removal of all barriers that borders on gender, ethnicity. regional, regional or social status. [All emphasis mine.]

It must be Krugman - I'll have to check this later when I’m freer - who cogently wrote that: sometimes you have to give points for sheer chutzpah." I hate to do this but I really have to pause here and duly give Jaata 10 points for his sheer nerve to remind us first hand what it is exactly we find opprobrious about this gov't. Now it is not out of boyish spite I laugh and spit in Jaata's above statement. There is a delicious irony and conceit in all the emphasised words and or phrases above, specifically the "strengthening of an independent legal system." Shortly before I came online, I did take a peek at my mails and the breaking news was - especially in the form of Brother KB's incisive commentary/analysis - of Jammeh throwing the "independent legal system" into further disarray by sacking several senior figures of the judiciary with Justice Lartey, the Chief Justice topping the list. Surely, if Jaata informs us in his sodding Budget Speech that the mess that is Africa can only be revamped into better by "empowering" her citizenry and diligently reminds us that: "facilitating empowerment involves the reform of the public administrative system (which is firmly entrenched in our Local Government Reform and Decentralisation Program). This will make the delivery of public goods more RESPONSIVE, ACCOUNTABLE and EFFICIENT through the ACTIVE and DIRECT PARTICIPATION of the citizenry. It would also involve the STRENGTHENING OF AN INDEPENDENT LEGAL SYSTEM as well as the removal of all barriers that borders on gender, ethnicity, regional or social status" we weren't only expecting him to talk the talk but more importantly, to walk the walk. All the things that Jaata cited above as the ingredients for "facilitating empowerment" has been grossly violated and abused by his gov't. At the time of writing this, Jaata’s gov't had violated the basic tenets of "strengthening of an independent legal system": Jammeh's sacking of the Chief Justice and some of his colleagues have turned the judiciary topsy-turvy. As for "the delivery of public goods more RESPONSIVE, ACCOUNTABLE and EFFICIENT through the ACTIVE and DIRECT PARTICIPATION of the citizenry"', folks can just throw their hands up in exasperation: The gov't is forwarding pieces of legislative junk they wilfully call constitutional amendments that will roll back the frontiers of the already raped "good governance" tools like "accountability", "local empowerment", "probity", "transparency" and the rest of the shallow slogans Jaata was busy rehearsing. Oh and how could I ever forget this? The long awaited local gov't elections are still stuck in a time warp. All the basic principles that make up a gov't have been flagrantly abused and thrown into a cataclysmic overrun by Jammeh.

Since they have violated all the basic tenets of good governance", must it surprise anyone then when Jaata informs - and this is to his credit - that in fact they have failed in alleviating poverty: Instead under their supervision, poverty is on the lurch. As he puts it: "From 60% overall, in the ILO study of l999 the proportion of Gambians subsisting below the poverty line has increased to 69% in 1998." But then a gov't that breeds on lying to the public just can't itself even if it for once tells the truth; like a kid in a candy store, Jaata couldn’t help but parade this silver-ware to deflect attention from his frankness over their dismal record on poverty alleviation: "Over the past year much have been devoted to this fight and one of the fruits borne out of this, is the improvement in the UNDP Human Development ranking which improved from 163 out of 174 countries in 1999 to 161 out of 173 in 2000." Need anyone point out to Jaata that virtually all the states at the bottom of the UNDP Report are failed states embroiled in civil or other sorts of war - Sierra Leone, most of the countries in Great Lakes Region of Africa, the Horn of Africa, Sudan, Afghanistan, Liberia, etc. etc. are countries and regions that come to mind without checking them out. Talk less of the crucial point that the UNDP Report - whilst it remains the best around this end for measuring Human Development - is arguably afflicted with intellectually simplistic, sweeping, generalising and even misleading itinerary a ration is supposed to have taken during the period under review. If - and as Amartya Sen, who laid down the intellectual foundation of the Human Development Index, himself, puts it - human development is defined "as expanding the choices people have over of things they can do", is there any doubt about the manifest deterioration of things in the Gambia and how far farfetched it is for Jaata to claim any progress in reversing the rising tide of poverty in the Gambia'?

Yet, if political mismanagement by the Jammeh gov't had seen the Gambia lurching towards further economic malaise, what is it exactly had this situation done to the economy in real terms? First we need to try - if we can - and piece together what constitutes Jammeh's economic philosophy. Jammeh's Gambia is a tale of two economies: There's the shadow economy administered by Jammeh and what I shall call the Jammeh Cartel and the real economy that still is a continuity of the Jawara years

and administered by mandarins at the Dept. of State Finance and Economic Affairs and whatever directives come from the Fund and the World Bank. From the AFPRC to its metamorphosis into the APRC economic logic and or practice was largely rooted in this two-pronged approach: The economic continuity of the IMF and World Bank imposed panacea that they the AFPRC inherited from the PPP and there's the Peter Pan economics which is more or less Jammeh's own perception of how to stimulate growth and sustain it - now I’m having a good laugh at this assuming Jammeh can think that deep. But hey, seriously there was something called Peter Pan economics which holds that: borrow as much money as you possibly can, then pump it all into constructing public infrastructure and, well, you will be stimulating economic growth and - hallelujah praises are to "Allah's World Bank" - you would have done what Jawara failed ever to do in well over three decades: Job creation, improvement and radical increment of public infrastructure, ambitious renewal of some derelict projects that were fraught with cash, white elephant structures etc, etc. And so in an unprecedented manner, "projects" began sprouting all over the country to the amazement of the many who were predicting a cash strapped AFPRC to go bust in less than a year.

Why on earth did Jammeh embark on such a radical and unprecedented launching of "projects"? Aside from the weird idea that the role of gov't is to just take money from people through taxation and throw them into building schools, hospitals, roads, bridges, etc, etc, Jammeh’s rationale is more to do with political expediency in strengthening Ins position especially legitimising himself in the eyes of those who view his regime as illegal. But how were these "projects" simply going to do to that? At the heart of Jammeh Peter Pan economics, is a simpleton's logic: Seeing is believing; people easily believe what they see not what they are told to believe by cynics and critics. Soon after these "projects" began to take shape, it easily won for Jammeh the propaganda war that he had been engaged with Jawara for much part of 1994 and 1995: As far as Jawara is concerned, the public had switched sides and the era of Jammeh Musa had really begun. What surprised me about this whole thing, is how supposedly sophisticated people couldn't see through this scam and began heaping praises on Jammeh for his efforts in rescuing the Gambia from the clutches of oblivion the ancien regime of Jawara had thrown the Gambia into. However, pork barrel politics was not all this Peter Pan economics was about - if any thing it was really a very convenient way of killing two birds with one stone. Apart from winning public support, Jammeh was able with these "projects", to enter into business with new associates like Pierre Kujabi, Amadou Samba, Tariq Musa, his Kujabi cousins and any other shadowy figure in for a quick killing that could be trusted. Thus all these "projects" were never tendered and everything went to the Cartel Jammeh created together with Kujabi, Samba, Musa and his Kujabi cousins. Any pie that is hot in the Gambian economy and between them, they've got their fingers into it. Whilst ordinary business men and women complained about the rapid deterioration of the general economic situation, members of the Jammeh Cartel were busy lining their pockets and from a poor soldier, Jammeh quickly transformed - perhaps more speedily than Mobutu - as the richest Gambian ever. So Jammeh got his millions and managed to fool people that his is a decent and new era for the Gambia - but at a price.

The price of Jammeh's adventures at the expense of the taxpayer, is to deplete the Gambia's reserves whilst lying his head off about manna from the sky – "Allah's World Bank" - and plunged the Gambia further into the debt trap. Logic dictates that at some stage the dough he borrowed to fund his adventures had to be paid back to his lenders and its knock-on effects on the economy was to see debt-servicing gobbling more than a third of the annual budget. As Jaata informs us in his sodding Budget Speech, "The Gambia's total debt stock which stood at US$390 million in 1990 has by 1999 reached $566 million representing a 45% increase in nominal value terms. Of this, 75% is external and 25% domestic debt this translates into US$425 million and US$141 million respectively. The external debt burden is expected to reach US$439.5 in nominal value terms by year ending 2000." Now I hope people will appreciate why I said earlier that Jaata's gloating of climbing two places up in the UNDP's league table is bit of a tongue-in-cheek when one looks at the whole picture. Here he informs us that the debt situation is depleting whatever they have to expend on human development but is brave enough to tell us that they are doing great! Jaata then launched into a pitiful lamentation of the debt situation: "The burden of debt is no longer sustainable and is seriously stifling our poverty reduction efforts as we devote ever 30% of our budget to debt servicing. The domestic debt burden which, until recently was manageable, is now of great concern as it negatively impact on the interest rate and subsequently crowd-out private sector investment in the economy." This is perhaps Jaata's most honest statement. Explicit in the above, Jaata is admitting the knock-on effects of Jammeh's Peter Pan economics on the real economy as whole: The money borrowed to fund the silly Arch 22 and to line the pockets of Jammeh and members of his Cartel is now adversely affecting the real economy thus: "negatively impact on the interest rate and subsequently crowd-out private sector investment in the economy" Could someone please inform Jaata that it is payback time - as you sow so shall you reap?

The real and principal dangers dogging after the heels of the Gambian economy is lack of a productive base to sustain the spending spree Jammeh embarked on in the early days and the knock-on effects they have on the declining purchasing power of both producers and consumers thus unleashing what Milton Friedman once memorably called "unlegislated taxation" - inflation. This situation didn't come out of the blues: It had its roots partly in reckless public expenditure in silly "projects" and its concomitant effects on what Jaata labelled as "negatively impact on the interest rate and subsequently crowd-out private sector investment in the economy." As I write this, talk is of hyperinflation and not inflation: Prices of basic commodities had increased by 100% and the situation is largely reminiscent of the Gambia of 1981 shortly after Kukoi's ill-fated putsch. Yet, Jaata's sodding Budget Speech spares only a scanty four-line paragraph to such a grave concern as inflation! This is what I read in his sodding speech: "The rate of inflation as measured by the weighted current consumer price index (CPI) is 0.9% between January and December 2000 compared to 3.8% 8% in 1999. The Food Drink and Tobacco" component rose b~ t) 20/0. accounting for a 15.1% rise in the overall index while the "Non-food" component registered a 2% rise, accounting for 84.9% of the overall rise in the index." This deserves nomination for understatement of the year! If we accept that Jaata is indeed right and "the rate of inflation as measured by the weighted current consumer price index (CPI) is 0.9% between January and December 2000", then any sane and rational being would question why we are heading towards a situation in which we might as well say the Gambia is on throes of experiencing hyperinflation barely a month after we are informed that inflation stands at barely 1 percent? The answer is quite easy. You see Jaata already informed us in that give-away and frank statement that indeed debt servicing is making him lose sleep because "The domestic debt burden which until recently was manageable is now of great concern as it negatively; impact on the interest rate and subsequently crowd-out private sector investment in the economy." So the little foreign exchange that is circulating is in effect being gobbled up by debt servicing Jammeh's adventures and thus depriving importers of the necessary foreign exchange to import the basic commodities we are seeing igniting Gambia's worst inflationary fear since the early 80's. The broadside is inescapable here. So "Allah's World Bank" that Jammeh had such a good fortune in discovering - which more pious Muslims never discovered - does in fact charge punitive interests and penalties! Need anyone tell this moron that as he had sown so shall he reap? Time has finally caught up with Jammeh and his Peter Pan economics.

As things stand, it would not be farfetched to speculate here that to rescue the situation, the Gambia is very likely to be thrown into a deep recessionary and inflationary lurch - stagflation. With the Dalasi depreciating daily against the major trading currencies, prices of basic commodities on the rise, the economy without the productive base to resuscitate the decline power of consumers and producers, a virtually non-existent private sector investment, the gov't steeping further in the debt trap and political mismanagement the order of the day - the abyss seems not far off for the Gambia. If not, I expect another high profile APRC mission with begging bowls to Washington, where it turns out - guess what? - "Allah's World Bank" is really located. The joke is on them.

Hamjatta - Kanteh