One type of argument concerns the fact that many central banks cut their rates as far as possible in connection with the crisis and were forced to go on to more unorthodox and untried means of conducting monetary policy. When monetary policy was delegated to independent central banks, this was during a period when there was in principle only one instrument – the policy rate – at the central bank’s disposal. Unlike, for instance, taxes, the policy rate was regarded as something that could be delegated to “technocrats” who have not been popularly elected. But with the monetary policy conducted by a number of central banks after having cut their policy rates as far as possible, the situation has become much more complicated. Many of the measures implemented are considered to border on fiscal policy and then it is less evident that the central bank can act entirely independently of the political system. Some people say that the financial crisis led to a “creeping politicization” of monetary policy.3 Another type of argument focuses on the expanded role that many people assume central banks will gain in future, and in some areas have already gained, with regard to attempting to prevent future crises – in the new policy area known as macroprudential supervision. According to law, the Riksbank is to “promote an efficient payments system”, but this very general wording is not linked to any specific instrument that can be used for this purpose.
The sub-region came into the new millennium with a combined gross domestic product (GDP) of $ 80 billion, representing about 10 percent of the GDP of Spain and against a backdrop of high unemployment, it is not surprising that income per capita averages 386 US dollars for our sub-region one of the lowest in the world. In addition, virtually all the countries are burdened by a huge debt overhang. Indeed, only two of the 15 countries of ECOWAS are not classified among the highly indebted poor countries (HIPC). Ladies and Gentlemen, I do not intend to spoil your day with depressing statistics about the economic performance of the sub-region as this would be tantamount to showing you only one side of the coin. The more pleasant face of this coin shows a sub-region parading some of the world’s leading exporters of crude oil, diamonds and gold, as well as abundant maritime resources. Many of our countries also perform well in the global market for other commodities, including cocoa, cotton and groundnuts. However, when the abundant resource-endowment of the sub-region is set against its pandemic poverty, we see a development paradox that challenges scholars and policy makers alike. Several reasons have been advanced for this state of affairs. They include inappropriate macroeconomic policies, weak institutions, weak executive capacity, weak legal institutions, and severe exogenous and endogenous factors. Time will not permit me to dwell on the relative contribution of each of these factors to the overall poor economic performance.