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Saturday, July 29, 2006


I put this as a comment on Iain Dale's blog in response to a piece about a speech by the Tory aid spokesman Andrew Mitchell calling for the creation of a tariff free pan-African trade zone.

Available on pdf here.

This is all entirely good liberal Adam Smith stuff & shows a degree of thoughtfulness of the real problems sadly lacking from most of those who say the answer is just more western aid.

In reply to this & to a few comments which pretty much implied that Tory spokesmen shouldn't be trying to do stuff in Africa when there are still things wrong here so I commented
I see nothing wrong with a Tory making remarks about how to make Africa more successful. Improving Africa this way (as opposed to just spending money) doesn't hurt Cornwall - economic growth is NOT a zero sum game.

I would also suggest that we should encourage the growth of a single currency, backed by us but run on non-inflationary rules. Some years ago John Major proposed that all EU countries should allow each other's currencies to flow freely (in the optimistic hope that the £ would see off all the foreigners). We are in a position to insist that an AfroThaler be allowed to circulate freely. Since so many African countries have triple digit inflation I think the competition would be slight. This would, in turn, allow ordinary Africans to accumulate savings - thus making real capitalism possible.

I think this is a feasible idea which is worth somebody pursuing. It is also something which can only be done by somebody with financial credibility & no personal axe to grind. Thus it would be impossible for the African leaders on their own to set up a continental scale currency & have it accepted as believable. This is exactly the sort of thing that international aid donoring states can usefully do.

PS The Thaler was a historic European coin made originally from silver from the Joachimsthaler (Joe's valley) mine. When the US wanted a currency with a credible name they used the anglicisation of this ie dollar (naming of currency is always conservative because everybody wants to advertise its respectability). Thus naming it the AfroThaler would adopt a respected name, please Americans & Europeans while still reminding the former that they didn't invent everything.

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