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Submitted by Jared Osoro on
Shanta; I am just wondering loudly: Are your arguments based on evidence that factors such as aid and debt relief have had a signficant contribution to Africa's "sustained" growth? Empirical work that I have come across by, for instance, Willian Easterly and others indicates that such relationship is at best not conclusive, otherwise dies nit exist. Tell me; why is it that the economies in Africa that have benefited fro HIPC ad ehnanced HIPC (e.g. Uganda, Zambia) are the ones that still remain debt-unsustaibale? Or I am confusing correlation with causation? Let's assume a Robinson Crusoe economy. How could it be hit by the the developments in the mainland where it is, at best, "least intergrated"? My simple answer could be that if Robinson Cruse is "worst hit", ingetration is narrowly defined. If instead of Robinson Crusoe you have Africa and for the mainland you have the developed world that authored the economic meltdown. It seems to me that for purposes of your analysis, integratio was restricted to that of the financial systems, not trade, remmitance flows, even aid! when you bring all these transmission channles to bear, then africa may not be as "least" integrated as youi portend; thus the "worst hit"consequence would be precisely expected. Giving credit where it's due, like you have done, Africa has avoided costly policy reversals that the crisis could have privuided an excuse for. But then , it should have not taken the global crisis for us to start questioning the "orthodox" economic policy prescritions. Don't you think that East Asia could still be playing in the same league as Africa had it not almost treated with contempt the "Washington Consesus" (read Orthdox economic policy prescritions)? I have seen recet review reports by IMF and World Bank staff praising those economies that have attempted to put in place stumulus packages (both fiscal and monetary) where either the absorption capacity is low (in the case of Uganda and its fiscal stimulus) or the authorities have not figured out the nature of the transmision mechanism (in the case of Kenya's stimulus via monetary policy). So it it a case of "Right Analysis, Wrong Concusions?"No. May be one of Wrong Analysis leading to Wrong Conclusions!