Abstract
How can section 25(5) of the constitution be redrafted to protect gender equity? What are the implications for communal land? This chapter presents evidence showing that nationally, women constitute only 23 per cent of land redistribution beneficiaries. We argue that this can be achieved by clearly defining, stating and being explicit in section 25(5) of the constitution as to what is meant by and what constitutes equitable access. What about the criteria set out in 25(3) of the constitution to decide what is fair, just and equitable compensation? Is there a case to redraft and expand criteria in making decisions about the trade-offs? We argue that by specifically and explicitly including the market value of the property as one of the criteria or variables to resolve the trade-offs involved in solving the problem of what is fair, just and equitable compensation, the constitution has legitimised and constitutionalised the market forces as one of the key pillars that can solve the problem of land reform and redistribution in South Africa. We argue that the constraining factor in the application of discretion and judgement has to be anchored by justice, the need to reform landownership patterns and nation-building.
How then does the country quantitatively measure, evaluate and monitor the progress of developing the rural financial system, food security and affordability, and job creation? We argue that in order to align and coordinate policies, and quantitatively measure, evaluate and monitor the progress the South African Reserve Bank (SARB) will have to play a much more meaningful role. In the current form, the price and financial stability mandates of the SARB “exist in order to exist” and are not anchored on other broader social welfare objectives. This has implications for the mandate and the monetary policy framework of the SARB. In its current form, section 224(1) must change and the monetary policy framework under which the SARB operates must also change.
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Notes
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See for further reading buff.ly/2xaxqpw.
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We explore in detail the role that accelerated land redistribution can play in reducing poverty and inequality in earlier chapters.
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This is consistent with Aliber’s (2015) conclusions that the majority of participants in the Summit rejected the notion that the land reform process should be based solely on the notion of “willing seller: willing buyer”.
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In fact, Borio et al. (2018) argue that the mandates enshrined in the central bank law are typically written in very general terms and provide plenty of scope for interpretation. They tend to be very vague and are largely a product of the time when they were written.
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Thus, the aspect of affordability over and above food security is well captured in the price stability mandate, and can be enforced and evaluated.
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The assessment of the inflation target range suitable for the domestic economy conducted in Ndou and Gumata (2017) provides robust empirical evidence beyond the normal argument to the effect of aligning the domestic inflation target to our key trading partners. Furthermore, in earlier chapters we presented the argument for the inflation targeting monetary policy framework and a lower inflation target range.
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See for further reading https://www.ecb.europa.eu/pub/pdf/other/ecb.futurecentralbankingcolloquiumconstancio201812.en.pdf.
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See also the constitutional mandates of the Bank of New Zealand, Unites States Federal Reserve Bank, Bank of Canada, Reserve Bank of Australia, Norges Bank and Sveriges Riksbank among other central banks.
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Resilience is about the structural side of the financial system. The intention is to make sure that the system is resilient enough to withstand shocks. See for further reading https://www.ecb.europa.eu/pub/pdf/other/ecb.futurecentralbankingcolloquiumconstancio201812.en.pdf.
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The case of being explicit on the use of macro-prudential tools is further strengthened by empirical evidence showing that the use of monetary policy and the leaning against the wind (LAW) approach tends to be costly. Evidence shows that the case for leaning against the wind is limited, as in most circumstances costs outweigh benefits. See for further reading https://www.ecb.europa.eu/pub/pdf/other/ecb.futurecentralbankingcolloquiumconstancio201812.en.pdf.
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Nonetheless, it is possible that such aspects fall within the National Credit Regulator, in which case there will have to be co-ordination and information-sharing.
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For instance, the Bank of Canada mandate is explicit about how it views the external value of the national monetary unit and to mitigate the influence of its fluctuations in the general level of production, trade, prices and employment. See also Bank of Brazil for the manner in which it implements the exchange rate policy and how banks’ reserve requirements are used as a monetary and macroprudential tool to contribute to the financial system’s liquidity, capital flows during capital flow surge episodes and the financial stability mandate https://www.bcb.gov.br/conteudo/homeen/FAQs/FAQ%2011Central%20Bank%20of%20Brazil%20Functions.pdf.
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Calls for a coordinated federal effort to attain full employment https://amp.businessinsider.com/civil-rights-movement-had-major-impact-on-us-economic-policy-2017-7.
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The objective of monetary policy can be expressed as price stability and full employment, without prejudice to the objective of price stability. Possible alternatives to “full employment” are “maximum sustainable employment”, “minimum sustainable unemployment”, “maximum sustainable output”, “full resource utilization”, “real stability” and so on, which, with the appropriate explanation, will have the same meaning for practical purposes. See for further reading https://www.ecb.europa.eu/pub/pdf/other/ecb.futurecentralbankingcolloquiumconstancio201812.en.pdf.
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A similar realisation became evident during the 2007 global financial crisis, namely, that low and stable inflation can mask the build-up of severe and systemic financial imbalances and risks. Hence, the decision to explicitly state the mandate of financial stability, redesign institutions and regulations in order to appropriately measure, monitor and evaluate financial risks and make appropriate policy interventions thereof.
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See, for instance, a recent speech by Kganyago on how monetary policy and selected channels of transmission such as borrowing costs, asset prices, employment growth, output growth and inflation impact income and wealth inequality https://www.resbank.co.za/Lists/Speeches/Attachments/530/Nelson%20Mandela%20University%20Public%20Lecture%2001%20August%202018.pdf. See also Furceri et al. (2016), Domanski et al. (2016) and Mersch (2014) amongst others.
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See Poverty Trends in South Africa: An examination of absolute poverty between 2006 and 2015. Statistics South Africa (2017) for further reading http://www.statssa.gov.za/publications/Report-03-10-06/Report-03-10-062015.pdf.
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Alternatively, the socioeconomic conditions.
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Gumata, N., Ndou, E. (2019). The Interaction Between the Financial Sector Regulatory Framework, Property Rights Clause and the South African Reserve Bank Mandate. In: Accelerated Land Reform, Mining, Growth, Unemployment and Inequality in South Africa. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-30884-1_31
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