Buenaventura among world’s top 4 central bankers

Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura received an "A" rating from Global Finance Magazine, one of only four central bankers to get the top rating for "guiding their economies through turbulence.

Australian central bank chief Ian MacFarlane was among the top-raters, along with Sweden’s Urban Bäckström and Sir Edward George of the United Kingdom.

According to Global Finance analyst Dan Keeler, 2001 was a bad year to be a central banker, but 2002 could only be described as "terrible."

"As always, the price for failure is high, and heads have rolled˜notably in Argentina and in Russia," Keeler said. "But this year a few bankers have shown remarkable skill in guiding their economies through the turbulence."

"Australia’s Ian Macfarlane has continued his extraordinary run, while the Philippines‚ Rafael Buenaventura has joined the top stream with a great performance in all the key areas of the central banker’s role," Keeler added.

US Fed Chairman Allan Greenspan, in comparison, got a "C" rating after a year in which Keeler said he "could do nothing right".

Greenspan, according to Keeler, seemed to have lost his golden touch and a spate of interest rate cuts failed to inject new life into the struggling US economy. "His words no longer move markets the way they used to," he said. "Despite his remarkable track record, Greenspan is in severe danger of being perceived as just another crony of an administration that neither knows nor cares about how to fix the mess the US economy is in."

Japanese central banker Masaru Hayami received an even lower "D" rating for failing to "fix Japan." After near-zero interest rates failed to stimulate the economy, the central bank tried boosting money supply, Keeler said.

Keeler said the policy achieved considerable success in this respect: Money supply grew by 30% over the past year. But its impact has been minimal. Consumer prices continue to fall, and unemployment is still rising.

Keeler said Buenaventura, for his part, was an unexpected member of the top stream.

"He worked hard to protect his country‚s economy from some pretty fierce shocks," Keeler said. "Showing a high degree of self confidence and independence, Buenaventura skillfully manipulated interest rates and money supply to support the currency and promote growth in an extremely difficult market."

Keeler said Buenaventura’s policies snatched the economy out of recession and last year turned in a respectable 3% GDP growth for 2001.

"Even the notoriously hard-to-please IMF had to admit the central bank was doing a great job and applauded the bank’s "carefully balanced monetary policy." High praise indeed," Keeler said.

According to Keeler, central banks and their governments were adopting inflation targeting as a core monetary policy, with interest rates serving as the primary weapon. This, he said, was leading to a general improvement of economic management as it imposes discipline on countries that otherwise might have a more haphazard approach to the management of their economies.