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Monte Zuma


       No I did not get Jacob Zuma to appoint Gill Marcus as the Governor

of the South Africa Central Bank. But I applaud the first woman to hold

the post. Ms. Marcus, 59, who is white and Jewish, had been deputy

finance minister under Thabo Mbeki some years ago, and then ran ABSA,

South Africa's leading non-state sector bank, controlled by Barclays of

Britain.


       Her appointment marks the Zuma government's commitment to continue

South Africa's inflation targeting monetary policy, despite the global

crisis, and despite the carping by left-wing demagogues from the unions

and the government's Communist allies that inflation targeting stifles

growth and does not address unemployment.


       Zuma resisted the siren calls. As argued by South African prof.

Stan du Plessis, dropping inflation argetting would expose the country to

higher inflation and no more growth, the burden of which would fall on

the poor.
 

       Du Plessis is a leading monetary economist who took issue with

Nobel Economics Laureate Joseph Stiglitz over Stiglitz's attack on

inflation targeting. Joe Stiglitz, whom I know, produced a broadside

attack on inflation targeting in indicting the International Monetary

Fund, where he had passed some frustrating years before quitting in a

huff.
 

      Joe wrote that raising interest rates “unless taken to an

intolerable level, by themselves cannot bring inflation down to the

targeted level.” Joe concluded: “most importantly, both developing and

developed countries need to abandon inflation targeting.”


        I reported on Joe's commentary at the time it came out. But I am

glad that he was not listened to in Pretoria.
          
         Ms. Marcus's appointment is also soothing to South Africa's

politically liberal Jewish community, many of whose members were strong

opponents of Apartheid, supporters of human rights, and some founders of

the ANC, now the government party. Last month Pres. Zuma worried this

community by going back on the Organization of African Unity ban on

Sudan's murderous military government head, Bashir, who risked arrest had

he come to Zuma's inauguration. I think Zuma had his own good reasons for

following the Qaddafi lead in removing the ban, some of which I will

discuss in the pending South Africa report I am writing.


       Anyway, the Rand rose on the appointment despite a new outbreak of

South Africa's most widely-practiced sport, striking for higher pay, in

this case by workers in chemicals, paper, and pharmacutical industries.

All these benefit from special government programs supporting them and

from import tariffs.