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
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
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
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.