A loud-sounding nothing. That’s what the annual International Monetary Fund (IMF) and World Bank meetings threatened to become as the chiefs of the global economy wound up their deliberations in Washington this week. Many developing countries and emerging economies are reeling from a world economic system gone wrong: unemployment, daily company closures and crashing currencies.
The only silver lining was the annual Washington meetings where the best economic brains around the world put solutions on the table: a tax on international transactions, a world watchdog to prevent the run on nations and other speed bumps to catch the fallout. But all they did was talk and promise that if things got worse, the Group of Seven (G7) leading industrialised countries would step into the gap. How much worse?
Now the talking must stop and the action must begin. The G7 and the Group of 22 ad hoc group of industrial and emerging market nations need to draw up an urgent plan to prevent the world from sinking into an avoidable economic crisis.
The meeting could hardly have happened at a worse time. Japan’s economy – the second biggest in the world – has started to implode while its politicians are frozen in indecision. East Asia is still contracting amid fears that China will be sucked into the black hole. Oxfam predicts the most dramatic reversal in human development the world has seen – destroying three decades of welfare gains. A paralysed Russian government can’t pay its bills and is about to throw away the fruits of six years of counter-inflation policy by letting the printing presses roll. Contagion has spread to South America, where Brazil is on the brink.
And in the chaos, Africa has fallen off the world map again. Too small and too poor to be a real player on the world markets, the African economies won barely a mention from the money mandarins. It is here that South Africa must act. As the continent’s leading economy it must seize the moment to take a leading advocacy role to win better debt relief for Africa. Minister of Finance Trevor Manuel took up the cudgels this week and he is well placed to continue. The much- vaunted heavily indebted poor countries initiative has only produced one debt relief in its first two years.
Short-term measures must include a matching European response to the reduction in United States interest rates. The US Congress must release the funds due to the IMF, which in turn must take a less cack-handed approach to countries in need.
More important, the IMF and all the international financial institutions must be reconstructed so they can control, monitor and temper the huge flows of footloose capital that globalisation has produced.
And back home, the South African delegation, buoyed by several kudos it won in Washington, must now exercise locally and continentally the leadership it has shown at the global table. And that means taking on board the view that recession with its attendant miseries of greater job losses and poverty is a bigger enemy than inflation.
We’re not talking about starting up the printing presses – just about stimulating growth and real investment by a judicious interest rate cut and even greater public investment in infrastructure and social spending. It’s a breather that will have a positive effect on the entire region.
Presidents can’t hide anymore
Elia Kazan’s film, A Face in the Crowd, told the story of a vagrant who became a broadcasting superstar. But the media which built him up cut him down in seconds when he ranted against his audience at the end of a show, not realising the microphone hadn’t been switched off.
President Bill Clinton’s equivalent of the microphone not switched off is the e-mails that were erased but which the FBI managed to reconstruct.
The Starr report admits that some of Monica Lewinsky’s statements about her relationship with Clinton were “contemporaneously memorialised” including “deleted e-mail recovered from her home computer and her Pentagon computer”, plus e-mail messages retained by two of the recipients.
The president has learned the hard way what geeks have always known – e-mail is less secure than ordinary mail. At least you can burn a postcard.
The Clinton crisis wouldn’t have happened in the way it did but for the intrusive technologies of the multi- media revolution. For a president, there is simply no escape from prying cameras, ever-listening tapes, video links, Internet publishing and e-mail – which has unleashed a subculture of intimate communication unknown a decade ago.
And it isn’t just presidents who are affected. Our activities are monitored more thoroughly than ever before – by detailed phone statements, restaurant bills, bank statements, street cameras, cellphone signals, microphones in supermarkets, swipe cards to enter the office and electronic fingerprints left all over the Internet.
Goodness knows what will happen when the Internet really gets into its stride and becomes the main medium for commerce, communication and home entertainment. Unless there is a reaction to the way things are going, future generations may look back on Clinton as the last president who enjoyed a reasonable degree of privacy.