Africa

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By Nwabueze Chibuzor and Mighulo Masaka
ABUJA, Nigeria / NAIROBI, Kenya, Apr 22 2026 (IPS)

In many countries across Africa, people have recently lined up to vote. But in country after country, there has been no real choice on offer. As CIVICUS’s 2026 State of Civil Society Report documents, what has frequently been on display is a procedural ceremony of democracy, orderly enough to satisfy observers, but hollow enough to leave those who hold the reins of power untroubled. Laws and structures that were supposed to promote democratic decisions have been manipulated into compliance checks, ticking all procedural requirements while lacking democratic substance. In too many cases, the ballot box has become a public relations exercise.

Tanzania offered a stark illustration. Once seen as one of the continent’s rising democratic hopes, it held one of the most deeply flawed recent elections. Ahead of the October 2025 vote, President Samia Suluhu Hassan disqualified and detained most opposition figures and imposed a nationwide internet blackout. When people protested, they were severely repressed. Security forces fired live ammunition, killing over 700 protesters, and arrested thousands. Around 240 people, including children, have since been charged with criminal conspiracy and treason.

Uganda’s President Yoweri Museveni, in power since 1986, followed the same script: the 2026 presidential election as marked by widespread rigging, suppression of the opposition, internet outages and a lethal crackdown on protests. These shows of force were also an admission of weakness: governments with genuine popular support do not need them to stay in office.

In Kenya, election outcomes have increasingly shifted from the ballot box to the courtroom and the streets. While legal challenges and judicial oversight can be signs of a healthy democracy, there’s been growing normalisation of post-election uncertainty about whether results will be respected, with the state framing any challenge to outcomes as a threat to national security and stability, and responding to post-election protests with violence.

Further north, Tunisia exemplifies the slow-motion dismantling of a once-promising democracy. Its 2024 presidential election saw the incumbent face only token opposition. President Kais Saied has systematically removed democratic checks and balances, jailed opponents and vilified critics as agents of foreign powers. The country that once kept the democratic promise alive in North Africa has become a cautionary example of how quickly gains can be reversed.

In West Africa, military rule is being normalised. Burkina Faso, Mali and Niger are now led by military juntas, while in Guinea a carefully stage-managed December 2025 election enabled the military leader to retain power with a varnish of legitimacy. Elections in Côte d’Ivoire in 2025 and Togo in 2024 fell far short of competitive standards.

Senegal offered a rare exception: when President Macky Sall attempted to postpone the 2024 presidential election just days before voting, widespread protests and sustained international pressure forced the polls to proceed. Opposition candidate Bassirou Diomaye Faye, released from jail only days before the vote, won a shock victory — proof that electoral integrity remains worth fighting for.

In Central Africa, military rulers have simply changed into civilian clothes. General Oligui Nguema, who ended the 56-year Bongo family dynasty in a 2023 coup, retained power in an April 2025 election marked by the absence of a credible opposition and the abuse of state resources, making the outcome a foregone conclusion. Chad’s Mahamat Déby followed the same path, transitioning from military council head to elected president through a vote held under severe civic space restrictions and minimal competition.

In October 2025, Cameroon’s Paul Biya, at 92 the world’s oldest head of state, extended his 42-year rule through a highly performative election. In both the Central African Republic and the Democratic Republic of the Congo, recent elections have been undermined by the state’s inability to control its territory amid ongoing conflicts, disenfranchising vast majorities and producing winners whose legitimacy is in permanent doubt.

Southern Africa offers a more encouraging picture. South Africa’s 2024 election ended almost three decades of unchallenged African National Congress dominance, with new political parties reshaping the landscape and forcing the formation of a coalition government. Elections in Botswana, Malawi and Namibia were competitive, with power changing hands for the first time since independence in Botswana. These results are a reminder that elections can still serve their democratic purpose.

The pattern across most of the continent is unmistakable. As civic space comes under intensifying attack, Africa’s citizens, institutions and international partners must resist the temptation to confuse orderly processes with democratic substance. Elections must offer genuine opportunities for accountability and be allowed to produce results that disrupt established power, if that is what voters want. Anything less risks normalising the appearance of democracy while hollowing out its content.

Chibuzor Nwabueze is the Programme and Network Coordinator of the Digital Democracy Initiative at CIVICUS.

Mighulo Masaka is the Project Officer, Host Liaison of the Digital Democracy Initiative, working closely with civil society in the global south for election-related activities.

 

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A woman sits in a public space in Kabul. Under new Taliban laws, a wife who visits her relatives without her husband's permission faces up to three months in prison. Credit: Learning Together.

By External Source
KABUL, Apr 21 2026 (IPS)

The Taliban have announced new laws that effectively legalise domestic violence against women and children. Afghanistan’s supreme leader, Mullah Hibatullah Akhundzada, signed a decree introducing a new criminal code in January. It contains three parts, ten chapters, and 119 articles that legalise violence, codify social inequality, and introduce punitive measures widely condemned as a return to slavery.

“The laws are yet another attack on women and they blatantly violate human rights,” says Mitra (name changed for privacy), a women’s rights activist based in Afghanistan.

The laws, which were leaked to the public by various organizations and media outlets, have left people, especially women, in shock. Yet they are unable to act or even raise their voices. Under the new code, opposing or speaking negatively about Taliban rule is considered a crime and can lead to criminal punishment.

According to Article 32 of the Taliban’s penal code, husbands have the right to physically discipline their wives and children. As long as no bones are broken and no visible bleeding occurs, man’s actions are not considered a crime and carry no criminal punishment.

Even if it is proved in court that violence inflicted on a woman has caused visible injuries or broken bones, the man faces a maximum sentence of only 15 days in prison.

This Taliban law has effectively legalized domestic violence and blocked women’s access to justice.

According to Article 32 of the Taliban’s penal code, husbands have the right to physically discipline their wives and children. As long as no bones are broken and no visible bleeding occurs, man’s actions are not considered a crime and carry no criminal punishment

According to Article 34 of the Taliban’s penal code, if a woman repeatedly visits her father’s home or relatives without her husband’s permission and does not return to her husband’s house, this is considered a crime for both the woman and her family members. The punishment can be up to three months in prison.

A husband has the right to violently assault his wife if she disobeys, according to the new law.

This Taliban decree forces women to remain in their homes under all circumstances, even in the face of threats and domestic violence. Women can no longer seek protection or shelter in their own family homes.

According to documents from the human rights organization Rawadari, the Taliban’s penal code, was signed into law by Mullah Hibatullah Akhundzada on January 7, 2026, and subsequently distributed to provincial judicial institutions for implementation.

The decrees issued by the Taliban are usually kept secret within their judicial institutions and communicated to the public only through mosques and community elders. The public learns of them only when the media and rights organization gain access and publish them.

Taliban rule has effectively divided Afghan society into four classes, with punishment for a crime determined not by the nature of the crime but by the offender’s social status. At the top are religious scholars, who receive advice and caution rather than criminal punishment.

Next comes the elite, which includes those in the ruling class, such as village elders and wealthy merchants. They are subject to a lighter punishment scale and usually avoid prison sentences, for example.

The middle class faces more severe punishment. At the bottom of the ladder is the lower class whose punishment can include public flogging and harsh prison terms.

The new law also employs a term referring to slaves as distinct from free people. Slavery was officially abolished in Afghanistan in 1923. Under the new code, treating people as slaves is back to normal practice. For example, a master has the legal right to discipline his subordinate and a husband his wife. It effectively dismantles the principle of equality before the law.

Mitra says these Taliban laws are a clear attack on women and violate all their human rights. By enforcing these rules, the Taliban have confined women to the four walls of their homes, forcing them to endure any kind of abuse in silence.

“What the Taliban have stated in Articles 32 and 34 makes your hair stand on end. The Taliban see women only as sexual objects. These laws legitimise all forms of violence against women, and they cannot even seek justice or take refuge in their father’s or brother’s home. In effect, this officially imprisons women under the full weight of domestic violence,” she says.

All these provisions were drafted without discussion and have come into force with little discussion and no public input. Their existence only became known when the human rights organization Rawadari obtained the laws and published them on its Pashtun language website. Soon after being signed, they were immediately sent to the provinces to be processed by Taliban-run courts.

As Maryam, a resident of Ragh District in Badakhshan, points out, once the Taliban’s laws are announced in mosques by the local mullahs, they are immediately enforced in districts and villages, and all cases are judged under those rules.

“Most people in our village are illiterate, and even those who are educated or know about women’s rights cannot say anything out of fear. If they even utter one word, the local people turn against them, and trouble follows. Women are forced to accept whatever their husbands say because they have no other choice,” she says.

Since the Taliban took control of Afghanistan, they have been issuing and enforcing decrees and laws that have consistently violated human rights, confining women to the four walls of their homes. But this time, they have gone further, granting legal legitimacy to all forms of violence against women.

Mitra is calling on all human rights organizations and the international community to stand against the Taliban’s actions and not allow them to drag women into a system of slavery from the early centuries. She warns that if the world does not stand with Afghan women, they will be pushed toward destruction and face a major humanitarian catastrophe.

Excerpt:

The author is an Afghanistan-based female journalist, trained with Finnish support before the Taliban take-over. Her identity is withheld for security reasons

Midtjylland midfielder Alamara Djabi is in a stable condition having been seriously injured in a stabbing in Denmark, his club says.

Injured civilians, having escaped the raging inferno, gathered on a pavement west of Miyuki-bashi in Hiroshima, Japan, at about 11 a.m. on 6 August 1945. Credit: UN Photo/Yoshito Matsushige

By Alon Ben-Meir
NEW YORK, Apr 21 2026 (IPS)

It is hard to exaggerate the dire implications of Trump’s April 7 post on Truth Social, stating that a civilization will die tonight, never to be brought back again,” if no deal is reached with Iran. Such a damning statement implies that he would use ‘weapons of mass destruction,’ i.e., nuclear, to execute his threat.

Obviously, he cannot destroy such a huge country and annihilate a population of 95 million with conventional weapons. Even though Trump was unlikely to carry out his threat, what he said was not taken lightly by either Iran or much of the international community.

International Outrage Over Trump’s Threat

Trump’s outrageous statement has drawn an extraordinary wave of condemnation, from Tehran to the Vatican to international rights bodies.

Amnesty International’s Secretary General denounced Trump’s screed as an “apocalyptic threat,” warning that his vow to end “a whole civilization” exposes “a staggering level of cruelty and disregard for human life” and should trigger urgent global action to prevent atrocity crimes.

Pope Leo XIV called the language “truly unacceptable,” and UK Prime Minister Starmer condemned Trump’s threat, stating that “they are not words I would use — ever use — because I come at this with our British values and principles.”

Together, these reactions, among many others, underscore that Trump’s rhetoric is not being treated as mere bombast, but a genocidal threat that shreds basic norms of international law.

Iranian Officials’ Reaction to Trump’s Statements

The Iranian Embassy in Pakistan mocked the idea that Trump could erase a culture that survived Alexander and the Mongols, insisting that civilizations “are not born over a night and will not die over a night.”

Trump’s vows to “bring [Iranians] back to the Stone Ages” and to let “a whole civilization…die” have, indeed, landed in Tehran not as an outburst. Iranian leaders are treating this language as an open admission of an intent to commit war crimes—and they are already treating it as a narrative of existential struggle with Washington.

In the hands of the Revolutionary Guard, the “Stone Age” threat becomes a propaganda gift: it is proof, they claim, that the United States does not merely oppose the regime, but dreams of erasing an entire people.

The IRGC’s response has been defiant rather than cowed, promising “stronger, wider, and more destructive” retaliation and signaling that any American escalation will be met in kind.

To be sure, many Iranian leaders see Trump’s posts as desperate brinkmanship—a schoolyard bully bluffing nuclear annihilation he cannot deliver. That interpretation may calm nerves around the country, but it might also tempt Tehran to call his bluff, raising the risk of miscalculation.

Under any circumstance, Trump has provided Iran’s rulers the opportunity to claim that any concession wrung from Washington under such apocalyptic pressure is not capitulation. Still, Iran’s millennium-old history attests that these proud people with the richest civilization will not succumb to any threat.

The Iranian Public’s Reaction

Trump’s promise to “hit Iran extremely hard” also operates as psychological warfare against an already exhausted society. They place the threat of physical destruction on top of years of sanctions, economic meltdown, and repression.

For many Iranians, especially parents and the elderly, hearing a US president casually warn that “a whole civilization will die tonight” converts abstract geopolitics into an intimate dread they can imagine and quantify: hospitals without power, children without food and water, people starving to death, and cities lying in ruins.

This deepens their anxiety, concerns, and a sense that they are being collectively punished for decisions made by a mad authoritarian whose genocidal tone hardens a defensive nationalism. Even the Iranians who despise the regime still view the threat as an assault on a 3,000-year-old culture. They would rally around the flag, as they see their own lives as expendable in a struggle where the alternative, as Trump himself spells out, is civilizational extinction.

On the Iranian street and in the diaspora, one hears echoes of Trump’s rhetoric triggering a volatile mix of fear, fury, and contempt that the regime can readily weaponize. For some Iranians, talk of a “civilization” dying reopens the psychic wounds of crippling sanctions and war, making American threats feel dreadfully real, not figurative.

For others, it’s an insufferable insult to an ancient culture that predates the United States by millennia, reinforcing national pride and engendering support even among critics of the clerics.

Trump’s Fitness to Command American Power

These Iranian reactions rebound into US politics because a president whose threats are interpreted abroad as genocidal, unhinged, or clearly insane is not projecting resolve but publicizing volatility and strategic incoherence.

This inevitably undermines deterrence and hands Iran both a recruitment tool and a pretext for escalation if they must.

On the home front, the perception of a man on the loose feeds directly into already fierce debates over Trump’s mental fitness to command American power—arming critics who argue that his apocalyptic language is not just morally repugnant but operationally unthinkable.

This led even some Republicans and national security conservatives to ask whether a commander in chief who casually talks of destroying a “civilization” and whose finger is on the nuclear button can be trusted with the judgment, discipline, and national security on which the US ultimately depends.

When a president of the United States threatens that a whole civilization will die, the world must listen—not because the threat is necessarily credible, but because it exposes the peril of letting unrestrained rhetoric shape global realities.

Trump’s words are not the tantrum of a man out of power; they echo a worldview that wields extinction as diplomacy and gambles civilization itself for theatrical dominance and projection of raw power.

Trump’s declaration that millions might perish is not merely the ravings of an unbalanced mind—it is a chilling testament to how easily words can imperil peace when uttered by one who commands the world’s most formidable military.

His invocation of civilizational death transcends political recklessness; it reveals a moral collapse that renders him ominously unfit to wield influence over American power and global order.

There seems to be no level of disgrace that Trump will not embrace. One day, he threatens to wipe out a whole civilization and exterminate 95 million Iranians; the next, he portrays himself in an AI-generated image as Jesus Christ-like savior healing the sick—a blasphemy that only Trump can commit, debasing the exalted and sublime values of Christianity only to feed his sick soul.

What was once dismissed as bluster must now be recognized for what it is—a warning that when dangerous mendacity meets bottomless ego, humanity itself becomes collateral. The world cannot allow a madman’s narrative to become the language of statecraft.

Dr. Alon Ben-Meir is a retired professor of international relations, most recently at the Center for Global Affairs at NYU. He taught courses on international negotiation and Middle Eastern studies.

IPS UN Bureau

 

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North Korea’s ballistic missile. Credit: Wikipedia

By Thalif Deen
UNITED NATIONS, Apr 21 2026 (IPS)

The ongoing military conflicts in the Middle East—involving the US, Israel, Palestine, Iran and Lebanon—have indirectly bolstered North Korea’s plans to expand its nuclear arsenal.

North Korean leader Kim Jong-un is quoted as saying the American attacks on Iran justified his decision to strengthen his military power and would eventually make his country safe in a world shaped by President Trump’s foreign policy.

The headline in a New York Times article last week read: “North Korea Tests New Weapons, Drawing Lessons from War in the Middle East”.

Among the weapons tested were missiles carrying cluster munition and graphite bomb payloads, much like weapons that have appeared in the Middle East, the Times said.

The testing signals that North Korea is trying to learn from the Middle East war.

Responding to President Trump’s interest in meeting with him, the North Korean leader has said he would agree to a meeting, only if the US formally recognizes his country as a nuclear power—and argued that leaders of Iraq and Libya would have survived US attacks if they possessed a nuclear deterrent.

“I don’t see any reason not to get along well with the United States if it withdraws its hostile policy towards us and respects our current (nuclear) status”, he said in a speech last February.

Trump met with the North Korean leader three times during his first term in office (2017–2021), including summits in Singapore (June 2018) and Hanoi (February 2019), followed by a brief meeting at the DMZ (June 2019), where Trump became the first sitting U.S. president to enter North Korea.

Meanwhile, the Washington-based Stimson Center points out that despite stringent international economic sanctions imposed primarily through the UN Security Council, North Korea’s progress in nuclear and missile development as well as in its nuclear doctrine has been remarkable, particularly since negotiations with the Trump administration stalled in 2018-19.

North Korea’s position that denuclearization is non-negotiable was again emphasized at their most recent Party Congress held in February 2026.

Dr M.V. Ramana, Professor and Simons Chair in Disarmament, Global and Human Security, Director pro tem, School of Public Policy and Global Affairs at the University of British Columbia, Vancouver, told Inter Press Service the attacks by the United States and Israel on Iran are unprovoked and further add to the incentive for countries to acquire nuclear weapons.

“There is no way to be sure that such acquisition would shield such countries under all circumstances, especially when military powers like the United States act with such belligerence”.

But rather than go down that direction, he pointed out, “our efforts should be focused on ensuring that countries do not resort to military violence and attacking other countries, and differences are settled through peaceful and diplomatic means.

While the current leaderships in many countries might not be inclined to act in such ways, it is up to civil society and social movements to help steer governments in a more peaceful direction, declared Dr Ramana.

North Korea has made “very serious” progress in its ability to produce more nuclear weapons, the head of the UN’s nuclear watchdog has said, in another sign that the regime is seeking to use its nuclear arsenal to ensure its survival, according to the London Guardian.

North Korea is thought to have assembled about 50 nuclear warheads, although some experts are skeptical of its claims that it is able to miniaturize them so they can be attached to long-range ballistic missiles.

Speaking during a visit to Seoul, Rafael Grossi, the head of the International Atomic Energy Agency (IAEA), confirmed reports of a rapid rise in activity at North Korea’s main nuclear complex, Yongbyon.

Grossi said work had intensified at Yongbyon’s 5MW reactor, reprocessing unit, light water reactor and other facilities, and the country was believed to possess several dozen nuclear warheads.

In an interview with IPS, Alice Slater, who serves on the Boards of World Beyond War and the Global Network Against Weapons and Nuclear Power in Space and is also a UN NGO Representative for the Nuclear Age Peace Foundation, told IPS “once again, North Korea is being singled out as a rogue state for complaining that its plans to strengthen its military capacity is justified given the US destruction of Iraq and Libya which never made any effort to go nuclear as North Korea did.”

It was widely unreported, she said, that North Korea was the only nuclear country to support a vote in 2016 at the UN First Committee that authorized negotiations to go forward on a treaty to ban nuclear weapons which resulted in the 2017 adoption of the Treaty for the Prohibition of Nuclear Weapons.

Every single nuclear state as well as the states sheltering under the US nuclear umbrella, she pointed out, boycotted the meeting (except the Netherlands which was ordered to attend the UN meeting by a vote of its Parliament).

Which ones were the real rogue states? she asked.

While the news, dominated by what has been described by Ray McGovern founder of Veterans Intelligence Professions for Sanity as part of the MICIMATT (the Military Industrial Congressional Intelligence Media Academic Think Tank complex), is now trumpeting the new nuclear dangers and the frightening prospects of potential proliferation of nuclear weapons to additional nations, no attention is being paid to the opportunities to put a halt to the burgeoning nuclear arms race and the US race to weaponize space, characterized most recently by US plans for a “Golden Dome” estimated to cost 1.5 billion over the next years.

“There is a clear connection,” said Slater, “between maintaining space for peace and the willingness of Russia and China to negotiate for nuclear disarmament, going back to the time when Gorbachev proposed to Reagan that the US and Russia eliminate their nuclear arsenals provided the US gave up its plans to dominate and control space in its Vision 2020 document.”

While Reagan liked the idea of nuclear abolition, he refused to give up his Star Wars plans. Russia and China tabled a draft treaty in the consensus-bound UN Committee in Geneva in 2014 and 2018 which the US blocked, refusing to allow any discussion.

This past May 2025, on the 80th Anniversary of WWII, they issued a stunning proposal calling for global cooperation, supporting the “central coordinating role of the UN” and asking for a number of steps that could increase “strategic stability”

In particular, they criticized the US Golden Dome program, urging the need for the early launch of negotiations to conclude a legally binding multilateral instrument based on their draft treaty on the prevention of weapons and the use of force in outer space. They even pledged to promote an international commitment “not to be the first to deploy weapons in outer space”.

“Were the peace and arms control movements in the world to take up this extraordinary call and opportunity to reverse the disastrous course we appear to be plummeting towards—and demand that our governments enter negotiations on a treaty to guarantee that we will maintain a weapons and war free environment in space, there is little doubt that a new path will also be opened to finally ban the bomb”.

Time to give peace a chance, declared Slater.

Meanwhile, States Parties to the Nuclear Nonproliferation Treaty (NPT) will be meeting at the United Nations for the 2026 NPT Review Conference April 27-May 22.

The Review Conference comes at a time of increased nuclear threats arising from armed conflicts involving nuclear armed States, in particular the Russian invasion of Ukraine and the US/Israel invasion of Iran.

“This will make the deliberations and negotiations in New York very difficult, but also extremely important”, according to Parliamentarians for Nuclear Non-proliferation and Disarmament (PNND).

The PNND says it will be actively involved in the Review Conference – in conjunction with activities in parliaments around the world – to support the NPT by advancing nuclear risk-reduction, nuclear arms control, common security and the global elimination of nuclear weapons.

IPS UN Bureau Report

 

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By Anis Chowdhury
SYDNEY, Apr 21 2026 (IPS)

The global economy, is at the precipice of “stagflation” – growth slowdown and higher inflation – due to the energy price shock following the illegal US-Israel war on Iran. The International Monetary Fund (IMF) has recently termed this as a “textbook negative supply shock”. For the first time since the 1970s, the prospect of stagflation seems real.

Anis Chowdhury

What can central bankers learn from the 1970s stagflation?

Prospects of global stagflation

The IMF simulated three possible macroeconomic scenarios depending on the duration of this conflict and the extent of damages to energy infrastructure in the region. These range from a marginal drop in this year’s forecast global growth rate – from 3.4% to 3.1% – to a moderate decline to 2.5% and a sharp decline to 2%. The projected spikes in “headline inflation” – covering all goods and services, including volatile items, e.g., energy and food – range from 4.4% to 5.8% in 2026.

The IMF rightly doubts whether inflation can be checked with monetary tightening without causing substantial increase in unemployment. But it does not offer any solutions; instead advises the central banks to remain ready “to act decisively to maintain price stability”.

The IMF’s overall policy advice is conservative. However, it acknowledges the need for monetary and fiscal policy to support economic activities if the if financial conditions tighten sharply and global activity deteriorates markedly.

Inflation phobia and policy over-reaction

Ben Bernanke and his co-researchers found that the recession in the 1970s did not result from the oil-price shocks “per se, but from the resulting tightening of monetary policy”. Bob Barsky and Lutz Kilian found “that the oil price increases were not nearly as essential a part of the causal mechanism generating the stagflation of the 1970s as is often thought”. Ed Nelson blamed central banks’ “faulty doctrine” for the 1970s stagflation.

So, it was not inflation that caused output to decline, but rather, inappropriate and draconian efforts to curb inflation that inevitably repressed growth, and produced world’s first stagflation. This may happen again if central bankers overreact and tighten the financial conditions to kill the current “textbook supply shock” inflation.

The problem is the central bankers’ dogmatic group-thinking despite contrary empirical evidence. For example, the fear of unhinged inflation expectations and wage-price spirals do not have any empirical basis as reported in IMF research and the Australia’s Reserve Bank.

Yet, the central bankers and the IMF favour monetary tightening fearing the risk of “unhinged” inflation expectations and wage-price spirals.

Revisiting the inflation target

The central bankers’ group-thinking bias insists on an inflation target of 2% – a figure “plucked out of the air”, yet became “global economic gospel”. Don Brash, the acclaimed former Governor of the Reserve Bank of New Zealand, who was the first central bank governor to adopt a 2% inflation target admitted that it was based on a chance remark by then New Zealand Finance Minister Roger Douglas “during the course of a television interview”. It became “the mantra, repeated endlessly” as Brash and his colleagues “devoted a huge amount of effort” to preaching his new gospel “to everybody who would listen – and some who were reluctant to listen”.

Olivier Blanchard, the IMF’s former Chief Economist, questioned the wisdom behind the 2% inflation target and argued for a higher, e.g., 4% target following the 2008-2009 global financial crisis. IMF research also advocated for a long-run inflation target of 4%. Such a moderately higher inflation should widen policy space.

Joe Gagnon and Chris Collins argued that “the case for raising the inflation target is stronger” than it is usually thought. Their research revealed that “the benefits [of a higher inflation target] clearly exceed the costs”.

Thus, one should not be surprised when The Financial Times says, “It is time to revisit the 2% inflation target”.

Rethinking inflation

Almost all central bankers see inflation as an outcome of excess demand, caused by either an increase in aggregate demand or a decrease in aggregate supply at a given price. Prices rise to eliminate the excess demand.

A common view is that higher prices lead to demand for higher wages which in turn cause higher prices, thus generating wage-price spirals. Therefore, central bankers focus on containing demand by raising interest rate regardless of the sources of inflation.

On the other hand, optimal policy-mix differ when inflation is seen as the result of a distributional conflict or disagreement. Guido Lorenzoni and Iv´an Werning analysed the impacts of supply shocks arising from “non-labour” inputs, such as energy under the different relative bargaining powers of labour and firms where the non-labour input price is perfectly flexible, and goods prices are more flexible than wages.

They found that the optimal policy response to a supply shock coming from the scarce non-labour input is to “run the economy hot”, i.e., to allow demand to exceed supply capacity and higher inflation. Their findings imply that it would be more efficient to reach the adjustment with the help of higher price inflation than through lower price inflation and deeper wage deflation by causing higher unemployment.

David Ratner and Jae Sim analysed the trade-off of anti-inflationary measures considering inflation as an outcome of distributional conflict. They found that restrictive anti-inflationary measures are more costly in terms of unemployment.

Interestingly, their finding corroborates the IMF’s observation that the aggregate supply curve has become flatter making restrictive anti-inflationary measures more costly in terms of higher unemployment. Unfortunately, the central bankers’ anti-inflation group bias dismisses the higher unemployment or growth declines due to restrictive policies as “short-term pains for long-term gains”.

Recent IMF research revealed permanent scars of recessions, including those arising from external shocks and macroeconomic policy mistakes; they all “lead to permanent losses in output and welfare”. The Lancet reported “substantial effects on suicide rates”. The Body Economic: Why Austerity Kills, investigated the human cost of austerity policies during economic crises to emphasise that health indicators can significantly deteriorate.

Optimal policy response

In light of the above, the central bankers should reconsider their hawkish anti-inflationary policy-setting.

The governments around the world are trying to ease fuel-price impacts by fiscal measures such as a temporary reduction of fuel excise duty, subsidies and price caps. The mainstream commentators, including the IMF, argue that these measures may have significant fiscal costs if the crisis lingers on, and would put extra-burden on central banks, which are focused on controlling inflation.

Significantly, the optimal policy-mix should include tax revenue raising measures. Governments should consider enhancing tax progressivity. In particular, an excess profit tax should be imposed on the beneficiaries of higher interest rates and fuel prices, such as banks and fuel companies to fund cost of living support measures.

Dr. Ken Henry, Australia’s former Treasury Secretary has recently argued that a 100% tax on windfall profits from gas would be “socially optimal”. Tony Wood held “A windfall profit tax may be the least-worst solution to the gas crisis”.

Research based on US data reveals that an excess profit tax reduces existing racial and ethnic inequalities and inequalities between groups with different educational attainments. It can also accelerate renewable energy transition when increasing geopolitical tensions and climate impacts threaten continued volatility in fossil fuel and gas markets.

Anis Chowdhury, Emeritus Professor, Western Sydney University (Australia). He held senior UN positions in Bangkok and New York and served as Special Assistant to the Chief Advisor for Finance (with the status and rank of State Minister) in the Professor Yunus-led Interim Government. E-mail: anis.z.chowdhury@gmail.com

IPS UN Bureau

 

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