Thursday, 18 December 2008

The Global Financial Crisis … as the markets tumble, Africa cannot afford to stand aside

CI's Cathy Rutivi recently attended an OSISA policy seminar on the Global Financial Crisis - she writes from Johannesburg:

'The Open Society Initiative of Southern Africa (OSISA) hosted a policy seminar on the 14 -15 November 2008 in Johannesburg in South Africa on the Global Financial Crisis and its Implications on Southern African Economies.

Consumers International and its member organisation, the National Consumer Forum of South Africa, were part of a diverse group of over 40 participants from the Southern African region who attended the seminar. The presenters, who were drawn from high institutions of research and learning from the region, delivered well researched and interesting presentations that enriched the debates.

The meeting sought to make sense of the crisis by looking at the people-level impacts. It looked at the impact of the global economic meltdown on working class people, on consumers, rural farmers, small traders and ordinary citizens, depositors and companies.

It also debated on the political economy of globalization, the limits of market fundamentalism, the impact of government policy and the role that civil society can play in mass education, in policy analysis and in engaging states on the character, content and nature of economic policy options that Southern African governments are taking and the impact of those choices on poverty.

The discussions centered on the evolution of the crisis from early days beginning with the high commodity prices of fuel and food, sparking the food riots across the globe, right through to the US financial crisis which brought about the current crisis.

Some of the reasons for the meltdown discussed were unregulated markets and free market promotion resulting in some institutions being own guardians and custodians with lack of transparency and accountability measures; inadequate competition and inadequate regulation; some elements of corporate greed, complex derivatives products and Wall Street greed; and continuous wrong assumptions that these derivatives could diversify risk. Some of these products were coined ‘weapons of financial mass destruction’ by Warren Buffet, who is among some of the richest people in the world.

The presentations delivered a diagnosis of what had happened in the past till now and assessed the responses to the global crisis so far and discussed some of the options including a Third World response to the crisis, providing lessons for Africans, policy advocacy and research, and robust ideas with alternative to neo liberalism.

The urgency of the matter was over emphasized amid the G20 summit that was taking place around that time while most African nations felt that they had been sidelined, the message was that Africa will no longer stand aside and watch.

The effects of the global financial crisis have been felt the world over and the Southern African region was not spared with big markets like the South African market economy quickly responding to the crush. Though it appears as if Africa was insulated at the beginning, because of not being a big player in the global markets, the negative impact on its citizens and consumers will be felt more and for much longer, long after the main architects of the crisis have recovered and moved on.

For more information on the seminar please contact OSISA www.osisa.org'

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