THE WASHINGTON ECONOMIC (PRESCRIPTION) CONSENSUS, THE INGETRATION OF GLOBAL ECONOMY AND THE JONATHAN TRANSFORMATION AGENDA AND THE ECONOMIC RESULT IN NIGERIAN NATION BY ABBATI BAKO,psc The expert in political economy and an author of the book titled “The Global Political Economy, New Jersey, US, 2001,Pp 77” Professor Robert Gilpin says that, “ Whereas economics is primarily concerned with efficiency and the mutual benefits of economic exchange, international political economy is interested not only in those subjects but also in a broader range of issues.” So, this means that other issues related to political economic inter-play of the world economy must be taken into cognizance especially the world politics (and domestic politics) surrounding the political economic situations. The term Washington Consensus has been used to capture the general shift towards free market policies that followed the displacement of Keynesianism in the 1970s. In this broad sense the Washington Consensus is sometimes considered to have begun at about 1980.[9][10] Many commentators see the consensus as having been at its strongest during the 1990s, particularly if interpreted in the broader sense of the term. Some have argued that the consensus ended at the turn of the century, or at least that it became less influential after about the year 2000.[5][11] More commonly, commentators have suggested that the Consensus survived until the time of the 2008–2009 global financial crisis.[10] Following the strong intervention undertaken by governments in response to market failures, a number of journalists, politicians and senior officials from global institutions such as the World Bank began saying that the Washington Consensus was dead.[12][13] These included former British Prime Minister Gordon Brown, who following the 2009 G-20 London summit, declared the old Washington Consensus is over.[14] Williamson was asked by the Washington Post in April 2009 whether he agreed with Gordon Brown that the Washington Consensus was dead. The consensus as originally stated by Williamson included ten broad sets of relatively specific policy recommendations:[1] 1. Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP; 2. Redirection of public spending from subsidies (especially indiscriminate subsidies) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment; 3. Tax reform, broadening the tax base and adopting moderate marginal tax rates; 4. Interest rates that are market determined and positive (but moderate) in real terms; 5. Competitive exchange rates; 6. Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs; 7. Liberalization of inward foreign direct investment; 8. Privatization of state enterprises; 9. Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions; 10. Legal security for property rights. In Williamsons own words from 2002: More specifically, Williamson argues that the first three of his ten prescriptions are uncontroversial in the economic community, while recognizing that the others have evoked some controversy. He argues that one of the least controversial prescriptions, the redirection of spending to infrastructure, health care, and education, has often been neglected. He also argues that, while the prescriptions were focused on reducing certain functions of government (e.g., as an owner of productive enterprises), they would also strengthen governments ability to undertake other actions such as supporting education and health. Williamson says that he does not endorse market fundamentalism, and believes that the Consensus prescriptions, if implemented correctly, would benefit the poor . The reforms did not always work out the way they were intended. While growth generally improved across much of Latin America, it was in most countries less than the reformers had originally hoped for (and the transition crisis, as noted above deeper and more sustained than hoped for in some of the former socialist economies). Success stories in Sub-Saharan Africa during the 1990s were relatively few and far in between, and market-oriented reforms by themselves offered no formula to deal with the growing public health emergency in which the continent became embroiled. The critics, meanwhile, argue that the disappointing outcomes have vindicated their concerns about the inappropriateness of the standard reform agenda.Among other results of the recent global financial crisis has been a strengthening of belief in the importance of local development models as more suitable than programmatic approaches. Some elements of this school of thought were summarized in the idea of a Beijing Consensus which suggested that nations needed to find their own paths to development and reform. I understand that the result of removal of oil subsidy in Nigeria had led to what we call in political economy “stagflation” (combination of high unemployment rate, high inflation, economic stagnation and low production” (no measures has been taken prior to subsidy removal to cushioned the pains) . The question one may ask; what can you read on the faces of Nigerians today? Can economy develop in a nation that corruption has eaten deeply in to the fabric? Can economy develop in a nation without population control? Can economy develop in an unsecured environment? Can economy develop in a nation without huge FDI? Can economy develop without stable democratic system in a nation; especially at this globalization era? In my candid view our nation must re-consider its economic policy based on Beijing consensus--- pure and simple. Also corruption must be eradicated and FDI/foreign investors must be invited and security improved. Otherwise the issue of transformation agenda (especially on economy) will be a mirage. May God save Nigeria and Nigerians. Abbati Bako,MA,psc,bsis,mti,Kent,UK (Political Strategist)
Posted on: Thu, 26 Jun 2014 10:49:18 +0000
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