This Time It’s Different
IMF Blog, March 12, 2010
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Bibliographic details
- Authors: Dominique Strauss-Kahn
- Published: March 12, 2010
Context and visit
- Author: Dominique Strauss-Kahn, Managing Director of the International Monetary Fund
- Date: March 12, 2010
- Final destination of visit: Zambia (town hall with civil society, students, and the media)
- Key snapshot: Zambia growth was 6.3 percent in 2009 and the outlook for 2010 appears positive.
Major themes from Africa visit
- Theme 1 — Improved macroeconomic resilience
- Many African countries pursued sound economic policies over the past decade or so.
- Those policies helped buffer Africa from the worst of the global crisis, even though the crisis still affected the continent.
- Recommendation implied: strengthen the sound policies that reduced vulnerability.
- Theme 2 — Governance and civil society
- Governance emerged prominently in public discussions across Kenya, South Africa, and Zambia.
- Civil society in Africa "has found its voice" and calls for:
- accountability
- transparency
- action against corruption
- Distinction noted: talking about governance versus taking action on governance.
- Policy implication: governments should heed civil society to improve moral/political standing and governance effectiveness.
- Theme 3 — Africa’s global linkages and external relations
- Africa’s relationship with the world is increasingly important in the 21st century.
- Africa was described as an “innocent victim” of the crisis: weak initial financial linkages limited early exposure, but deeper effects arrived via investment, trade, and aid reductions.
- Lesson: no country is immune from global shocks.
- Specific point on China:
- The role of China in Africa arose in discussions in all three visited countries.
- Zambia’s relationship with China dates to the 1970s and the building of the TAZARA railroad.
- More recent intensification: Chinese investment in Zambia and in Africa primarily in the mining and construction sectors.
- Assessment: Chinese investment is to be welcomed, but all foreign investment should "make economic sense from the African perspective—and be fair."
IMF role, actions, and recommendations
- Perceptions and recent IMF actions noted:
- The stereotype of the IMF as “the bad guy” persists in some quarters.
- Recent IMF changes highlighted:
- the tripling of our lending to sub-Saharan Africa, at zero interest rates, to help them weather the crisis
- the streamlining of conditionality
- the emphasis on countercyclical policy and the preservation of public spending, particularly for the social sectors
- Two forward-looking needs for the IMF:
- the IMF needs to strengthen even further its policy advice in Africa
- it must communicate and engage even more to counter the outdated image of the Fund, and to build a better understanding of who we really are today—and that the IMF is Africa’s institution
- Overall judgment: the IMF has "a way to go" in strengthening its partnership with Africa but the journey is well under way.
Key statistic
- Zambia GDP growth: 6.3 percent in 2009
Source: This Time It’s Different — Dominique Strauss-Kahn, March 12, 2010.