Ex-Fed chief fails to dazzle leadership delegates

Healthcare giant Discovery paid top dollar to ensure that former US Fed chairman Ben Bernanke headlined its annual leadership shindig this week, but Bernanke was completely outshone by the all-star cast preceding him on stage.

The Johannesburg event was one of three speaking engagements across the globe this week for Bernanke in his first set of public appearances since leaving the Fed.

The few hours on stage at three events earned him more than the $200000 (R2.1-million) he was paid by the US government for his work last year.

Bernanke's 40-minute speech in Abu Dhabi on Tuesday reportedly scored him $250000, before he jetted into Johannesburg for another presumably large cheque.

Discovery executives said Bernanke didn't come cheap, but wouldn't say quite how much he was paid.

"Contractually we're not allowed to disclose that," said investor relations head Duke Malan.

Bernanke might have been a big name, but on stage in Sandton he provided few new insights into what the Fed did to keep a lid on the crisis, while being interviewed talk-show style by Discovery CEO Adrian Gore.

Perhaps most interesting was Bernanke's defensive response when Gore asked him if the Fed had simply ignored the impact on emerging markets of "quantitive easing", the policy of buying assets to ease the impact of the financial crisis.

This is an important issue, considering that the scaling back of quantitive easing has knocked the currencies and markets of a number of emerging markets, including South Africa, Turkey and Argentina.

He responded: "There is sometimes a suggestion that the Fed didn't consult with emerging markets.

"I find it a very strange suggestion ... I don't think that's a fair statement."

The truth, he said, was that at least six times a year all the central bankers met, and the developing countries made their views on US monetary policy abundantly clear - and the Americans had listened.

But Bernanke warned: "This is not a one-way street. There are things that emerging markets can do to help the situation." This had clear resonance for South Africa, which has made itself vulnerable by having both a large budget deficit (mainly to finance social spending) and a large current account deficit.

While it was fascinating for South African executives to get up close with the man who held the keys to global monetary policy, there wasn't much new in what he said.

The other speakers, including Nobel Prize-winning economist Joseph Stiglitz, Minister in the Presidency Trevor Manuel and Gore, provided arguably greater insights into leadership and the state of South Africa.

Stiglitz, for one, was more fiery, slamming inflation targeting as an outdated way of managing an economy. This was significant, considering that Gill Marcus's Reserve Bank has been using interest rates to keep inflation within a band of 3%-6% a year.

But Stiglitz said central bankers who focused only on inflation often missed "far more important" things, such as putting in place policies to address unemployment, especially when the main reason for inflation rising is the price of fuel, which depends on global oil prices.

He said: "Does increasing interest rates do anything about the global price of oil?"

His criticism will be music to the ears of Cosatu, which has long criticised Marcus for hiking rates without considering the wider harm to the economy .

Stiglitz highlighted South Africa's main challenges as high levels of unemployment, youth unemployment and high levels of inequality.

"The strength is over the last 20 years there has been a relatively high level of stability. But unemployment and growth and macro-performance have been disappointing," he said.

Still, he said, the development of a new African middle class - with almost 60million households with incomes of $5000 or more - helped prop up growth.

Another factor helping African countries was the movement of manufacturing jobs to this continent as wages in countries such as China were rising sharply.

Manuel's message echoed that of Stiglitz, pointing to the need to foreground important issues, such as creating jobs and eradicating inequality, rather than the tired ideas emanating from institutions such as the International Monetary Fund.

"We've got to put those in the front and centre of what we do," he said, speaking of his National Development Plan, which is a blueprint for how to expand the economy, which has run into stiff political opposition from the ANC's alliance partners.

"It is not a government plan, it's a national plan - and it has to be an all-in," he said.

Gore spoke of how leaders feared loss more than they appreciated gain, performing better if they believed they had something to lose