ABDOULAYE WADE  IS MAKING  HEADLINES AGAIN

The President of Senegal purchased ad spaces in major newspapers around the World to publish his “Bouquet for Obama”. In the message Wade is proposing broad solutions to fix the broken International monetary system. This is not the first time Me Wade came out to news outlets to advocate alternative solutions to major crisis.

All this high level “PR” exercises, made me believe that the current President is positionning himself for a role in an International organization post retirement from the Presidency in Senegal (If that ever happens).

Nevertheless, the second part of his “bouquet” of ideas are strategic solutions for Africa. On the surface, these points are the same being brought for the last two decades, but never get implemented. At least he’s speaking out and should be commended for it.

Here is the second part of his message to Obama on Africa:

Strategic position of Africa

Africa offers a unique and strategic solution for avoiding the recurrence of the global economic crises.  Africa could absorb a significant part of the massive speculative capital mainly responsible for inflation as recently noted in the soaring prices of oil and agricultural products.

Exceptionally endowed with natural and human resources, Africa should be developed briskly following the 19^th century American model by opening up to private capital, specifically the scientific community devoted to the economic levers within a newly-created continental organization, namely the United States of Africa.

 Abdoulaye Wade

S/ce: FT

Although, I haven’t seen all the evidence- So i’m not 100% certain this applies everywhere- it seems that Insulated Economies are going to do better while recession hits the rest of the West. African and Middle Eastern economies that are relatively less reliant on the G7 for growth should be OK ( apparently..)

As of now, countries without heavy foreign investment in their stock exchanges are still up for the year. Does it means that Insulated Economies are better off ? It certainly indicates that Insulated markets in the face of a global recession can be less affected.

But it should be noted that Insulation during global prosperity hampers growth, and can possibly put a country at a stand still while everyone else is leaping.

In other words, pick your poison.

The IMF trough Dominique Strauss-Kahn  said some time ago that decoupling theories wouldn’t work. If the assessment was made after analyzing the curve of the downturn this year, I think that’s an obvious conclusion to make in the face of a recession in the West.

I think decoupling as I advocated it here works as another diversification strategy during slowing growth or relative stagnation. But the idea that Decoupling was going to continue to provide the same returns on equity (on a strict % basis) during periods of recession or depression in the US & Europe, is simply not feasible to begin with. As we know during hard times like these, the access to credit and capital becomes expensive and by simple math, given the expected lower growth out of emerging markets, it wouldn’t make sense to promote an all out Decoupling strategy in these conditions.

So i agree with DSK and OZ for now, let’s just say it’s a wrap until the next Bull period when the markets once again want to balance risk and diversify through emerging economies. But how long before that happens again?