All hail to deregulation

Last week saw the beginning of electoral campaigns with the different presidential candidates trying to advertise themselves and their manifesto in as many of the thousand hills as they can get to before August 9th.

Monday, July 26, 2010

Last week saw the beginning of electoral campaigns with the different presidential candidates trying to advertise themselves and their manifesto in as many of the thousand hills as they can get to before August 9th.

I have a bone to pick with some of the campaigners for their conduct on the road and taste in music although I shall refrain from mentioning any names lest someone accuses me of attacking anyone’s campaign.

Being cited in a Human Rights Watch report is not an ambition I hold very dear.

After less than a week of campaigning, as far as I can tell, the Liberal Party’s candidate, Prosper Higiro, is focused on family planning and accelerated economic growth; the Rwandese Patriotic Front’s candidate, President Paul Kagame, is preaching continuity on the road to Vision 2020 and achieving all the objectives set out in this vision; the Party for Progress and Concorde’s candidate, Honourable Alivera Mukabaramba, is selling a combination of gender progress [just think, a woman in Village Rugwiro! Only Liberia can claim that distinction on our continent] and creation of employment through an emphasis on technical and vocational training; while the Social Democratic Party’s candidate, Damascène Ntawukuriryayo, seems focused on issues of improved quality in healthcare and education.

Good luck to all of them and may the best man or woman win.

Naturally, given the punishing campaign trails that the candidates have to undertake, they have not been unable to give their views on all subjects in depth. The one subject that caught my imagination this week was on the question of financial regulation given pending legislation in Washington DC on the matter of financial reform.

American voters want to ensure that the financial crisis of September 2008, which was signalled with the collapse of Lehman Brothers Holdings Inc., will never be repeated and that they will not have to pay for the sins of the greedy investment banks.

The politicians are simply riding this anger for what its worth while training to ensure that none of the blame is stuck on them.

I read an article on MSN.com [Chinese Lesson: Better Red than Fed] that was advocating for less reliance on increasing the powers of the regulators and instead following a policy that aims at three things – monetary stability, ensuring that bubbles are kept in check and predictable, easy to calculate taxation.

All inspired by policies currently in place in China and Russia. The irony of taking capitalism lessons [the article called this ‘Behind the Irony Curtain] from a current, nominally at least, communist state and a country that was, 20 years ago, part of the USSR, is worth noting[the article called this ‘Behind the Irony Curtain].

The implementation of these policies may not be perfect, accusations of manipulated data and a rigged currency keep dogging the People’s Republic of China while corruption and general lawlessness bedevil the businesses in Russia, but at least they both appear to have the right idea.

Here in Rwanda, the regulators appear to have immense powers, sometimes they can even be accused of a certain level of arbitrariness.

Focus Rwanda wrote on several instances about the frustrations that investors and land developers have faced from the Rwanda Environmental Management Authority (A body that has said more about carbon emissions than soil erosion in a pre-dominantly agrarian country with low levels of industrialisation and electrification).

This country has always had a tradition of big government and a small struggling private sector, although private business is currently growing, so perhaps the idea of deregulation and common sense pro-business policy is one that is a bit ahead of the realities as they stand today.

Additionally, with barely 20% of the nation’s capital being held in financial institutions, the question of financial legislation and monetary policy is not one that pricks the public’s conscience very often.

However, it is one that should pre-occupy our leaders and legislators [rather than loud pronouncements on compulsory voting and bans on smoking] in the medium to long term.

Between them and the media, perhaps the debate on over-regulation will be one that is of interest to many Rwandans within the next 7-year mandate.

okabatende@gmail.com