Discussion%20of:

1

• Discussion of
• Which policies
• can reduce the cost of capital
• in Southern Africa?
• OECD Development Centre Seminar
• "Cheaper Money for Southern Africa - Unlocking
  Growth"
• 7 October 2004, Paris

Torsten Sløk (OECD Economics Department, Paris)
2
Discussion of Which policies can reduce the cost
of capital in Southern Africa?

• This is very interesting and well-written paper
  which goes directly to the heart of the policy
  issues.
• Two reactions
• 1) The relationship between inflation and the
  cost of capital.
• 2) To what extent are the costs of capital
  conditions facing South Africa different? Will
  look at
• a) Government sector
• b) Corporate sector

3
Discussion of Which policies can reduce the cost
of capital in Southern Africa?

• Calculated the principal component of EMBI
  spreads in nine emerging markets. It explains 89
  of the variation among the series.
• Uniqueness
• Nigeria 0.073
• Poland 0.049
• Turkey 0.264
• Argentina 0.392
• Russia 0.058
• Brazil 0.041
• Egypt 0.042
• Morocco 0.062
• South Africa 0.062

4
Discussion of Which policies can reduce the cost
of capital in Southern Africa?