More generally, throughout the continent we are witnessing the formation of expert teams that are giving careful thought to the economic policies of their respective countries. Rather than giving free rein to liberalization without regard to the consequences, these specialists are committed to providing greater opportunity to the most disadvantaged members of their societies. Success or failure are determined by how boldly and steadfastly these three issues are addressed. First, the exchange rate. It is the key to ensuring that prices reflect economic realities.
Nothing is more damaging than an over-valued exchange rate.
Conversely, a correct exchange rate affords the opportunity to reach out to the outside world, and holds the key to ensuring appropriate income levels for farmers. Next, inflation must be curbed without resorting to price controls. The key here is to reduce the budget deficit and the deficits of public enterprises, and to ensure appropriate budgetary decision-making. Budgetary choices that favor meaningful investment in human needs, such as health and education, as well as in roads in areas where producer access to markets is a chronic problem. This difficult but essential fiscal consolidation process smooths the transition to an indirect system of credit control and ensuring adequate returns on savings.