the words of mr b gaolathe, minister of finance and development planning in botswana : “ however, there is need to reflect deeply on the issue of independence of the central banks. while we all agree that there should be autonomy of central banks, those institutions are created by the state [ or legislators ] to serve an important public purpose, and cannot completely be de - linked from the policies and laws of the nation, especially those pertaining to promotion of economic development ”. it should be borne in mind that being independent does not imply not being accountable. no central bank can be totally independent in the sense that it not answerable to anyone. even the most autonomous central bank has to report in some form or another to the legislature, which in any case has the ultimate power to change the laws governing the central bank. independence also does not mean that there is a lack of dialogue between the government and the legislature as the political authorities on the one hand and the central bank on the other. it has become customary to distinguish between goal independence and instrument independence for central banks. once again, i would like to explain the difference by referring to south africa. our inflation target is set by government after consultations between the bank and the national treasury have taken place. thus the bank does not have autonomy in choosing the inflation target and as such does not have goal independence. the bank, however, has complete independence in making monetary policy decisions aimed at achieving the target. this is instrument independence par excellence. the autonomy entrusted to the bank in the use of monetary policy instruments implies that the bank has to be accountable for these decisions, and it should therefore ensure transparency. to this end, the bank publishes monetary policy reviews on a bi - annual basis, while regular regional monetary policy forums are arranged to provide a platform for discussions of monetary policy with a broader range of stakeholders in the country. more importantly, the bank ’ s annual report, which is submitted to parliament by the minister of finance, combined with the governor ’ s regular testimonies before parliament ’ s portfolio committee on finance, ensure that there is a democratic structure to enforce accountability and transparency. the explanation above should hopefully clarify the concept of central bank autonomy. it is a difficult paradigm shift for the political leadership. one of the major reasons for this autonomy was explained as follows by president mbeki in 2001 at a meeting of the association of african central bank governors : “ in our case this commitment is borne of the understanding that monetary policy should not be subjected to the

, there have been convincing signs that some of the advanced economies are well on the road to recovery, particularly the united states and the united kingdom. but even in these economies forecasts have been scaled down somewhat, particularly after the very weak first quarter in the us. nevertheless, growth next year is expected to be in line with, or to exceed, estimated potential output growth. labour - market developments in both economies have been favourable, with the unemployment rate falling to 5, 1 per cent in the us. nevertheless, there is still uncertainty about whether these trends will result in an increase in labour - market participation, which would cause the unemployment rate to increase. and while these economies are improving, it is unlikely that their recovery will be sufficient to take the rest of the world along with it, as the us is no longer the locomotive of global growth that it used to be. this positive prognosis is not generalised to all the advanced economies, with the euro area in particular still facing significant challenges. while there have been signs of a more sustained recovery in the region recently – particularly in countries such as ireland, italy and spain – growth in the german economy has disappointed. the greek debt crisis seems to have been averted for now, but the general view is that any re - emergence of the crisis is unlikely to have a systemic impact. the slow pace of recovery in the region is expected to result in a bis central bankers ’ speeches continuation, or even an expansion, of the monetary stimulus from the european central bank. the outlook for japan also remains quite uncertain. the favourable first - quarter outcome was followed by a contraction in the second quarter, and the economy remains dependent on monetary policy support as it battles to get out of its deflationary trap on a sustainable basis. while recovery in the advanced economies remains patchy but positive overall, the lack of synchronisation in the global recovery is even more pronounced when we look at the outlook for the emerging - market economies. the post - crisis view that emerging markets would replace the advanced economies as the epicentre of global growth has been shaken, despite their important initial role in leading the global recovery. central to the risks to the outlook has been the slowdown in china, where growth rates have declined persistently in recent years as the economy rebalances away from investment - led growth to a more consumption - led focus. the implications for much of the emerging market and the developing world have been profound, but given the increasingly important role