In 1998, the CBC was ranked 25 among 60 countries, while reaching the first place in the world ranking in 2004, holding this place in the subsequent years (figures 13-14). 4. Conclusions  Macroeconomic conditions have improved significantly in emerging economies since the early 1990s. Emerging economies show major progress in fiscal responsibility and sustainability; adoption of a framework of central bank autonomy, monetary regimes based on IT, and larger exchange-rate flexibility; and achievement of financial system strength. Adoption of more flexible exchange rates and an IT regime has contributed to lower output and inflation volatility, and stronger credibility of central bank policies. Macroeconomic stability is often accomplished gradually. Chile adopted the IT regime in two distinct phases and implemented a solid macroeconomic framework based on central bank autonomy with a clear focus on price stability. This was supported by a solvent, responsible, and predictable fiscal policy and a solid and well-regulated financial system. Chile’s good record of attaining inflation levels close to the target has strengthened private sector confidence in the CBC and raised MP effectiveness and credibility. Low inflation and a credible monetary policy represent an essential macroeconomic achievement. By improving its policy framework, supported by strong transparency, accountability, and communication, the CBC has laid a major foundation to Chile’s macroeconomic stability. Yet the conquest and predictability of inflation are not guaranteed. The CBC will remain vigilant, improving its policy framework as needed to continue delivering high levels of macroeconomic stability.

The Government has in fact been able to draw on its PRGF resources to compensate for the shortfalls in Government revenues over the first half of 2009 that I have alluded to earlier. However, when all is said and done, Africa still needs to mobilize both foreign and domestic sources of finance that provide sustainable sources of investment. How can Africa best arrest the recent reversal of FDI inflows generated by the global financial and economic crisis and encourage domestic resource mobilization i.e. boost domestic savings rates? In my view, ensuring that we retain our focus on consolidating macroeconomic stability is a critical element of Africa’s response to the current crisis. For many of our economies, inflation has been pushed beyond the single digit level, and we must all therefore work hard to re-establish low levels of inflation as soon as possible. The ability to attract FDI inflows is also a function of the supporting infrastructure and the existence of a business environment that supports innovation, initiative, and hard work. In this regard Africa must not relent on efforts to improve infrastructure development, and lower the cost of doing business. This is a process which is being actively pursued in Zambia, where great strides have been made to reduce the number of business licenses required and to streamline licensing procedures, in addition to the establishment of an organisation, the Zambia Development Agency, to spearhead and support FDI flows and domestically financed investment.