The South African Reserve Bank (SARB) hosts the Inaugural Tito Mboweni Memorial Lecture, 4 June 2026

Good afternoon, ladies and gentlemen. On behalf of the South African Reserve Bank, I extend a warm welcome to our guests of honor. His Excellency, President of the Republic of Singapore, Tharman Shanmugaratnam. His Excellency, Former President Kgalema Motlanthe, the Honorable Minister of Finance, Enoch Godongwana, His Excellency the High Commissioner of the Republic of Singapore, Zainal Arifin Mahamad, Deputy Ministers of Finance, Members of Parliament, Chairperson of the Group of 30, Raghuram Rajan, Group of 30 members. Let me also take this opportunity to acknowledge the Mboweni family who shared Governor Number Eight with South Africa for so many years. My name is Fundi Tshazibana, Deputy Governor at the South African Reserve Bank, and it is my absolute pleasure and honor to open the inaugural Tito Mboweni Memorial Lecture.

This lecture series has been established by the South African Reserve Bank to celebrate the legacy of a visionary policy maker and an unwavering public servant. It is our wish that this lecture series reflect a life committed to the people of South Africa. May it also offer an opportunity for us to relish in the parts of life that our eighth governor found great joy in: good company, the sharing of ideas, and lively debate.

We have established this lecture series as a flagship initiative of the bank to honor his remarkable contribution to the South African economy and to the building of effective and accountable institutions as a key architect in the new South Africa's macroeconomic and labor policies, an advocate for central bank independence, and a champion of reforms that continue to pay dividends even in the present day. Tito Mboweni's role is undeniable. Please join me in reflecting on this legacy with the following video.

Tito Mboweni's story began in Tzaneen in Limpopo. Born to Nelson and Peggy Mboweni on 16th March 1959. He dreamed of becoming a doctor, but his path would lead him to contribute to the liberation of his beloved country and shape its economic future.

I didn't even know there was a reserve bank when I was growing up. Actually, I wanted to be a doctor.

His political consciousness was sharpened at Turfloop, now the University of Limpopo. A year later, he went into exile in Lesotho and joined the African National Congress. There he studied economics and political sciences at the National University of Lesotho, graduating in 1985. This served as a foundation for his emergence as a key political and economic strategist for the party.

One day I asked him, 'Dad, how do I get to where you are?' And he says to me, 'Well, honestly, I don't know.' Didn't quite know exactly what was going to come next. I just knew that, you know, we were living under this incredibly oppressive system and I needed to take part in the struggle against apartheid. But if I could say something, I would say it took hard work, sacrifice, focus, and discipline. And those were the gifts that he gave.

Mboweni went on to obtain a master's degree in development economics from the University of East Anglia in 1987. We were laying the foundations to transform our country into one that would finally be home to all the people of South Africa. Tito understood that economic reform and transformation would be vital to this project.

In 1994, he became the youngest member of President Nelson Mandela's first cabinet as Minister of Labor. In this role, he led landmark reforms that transformed the workplace, strengthened collective bargaining, and redefined relations between labor, business, and the state.

In 1998, Mboweni became advisor to the Governor of the South African Reserve Bank, Dr. Chris Stals, serving a year in preparation to take over as the central bank's first black governor. Markets were initially skeptical, questioning his ability to resist political pressure despite his resignation from ANC duties. When he revealed the first bank notes with his signature, a journalist asked:

It's the first black signature that appears on a South African bank note.

I never thought my signature was a black signature. I just see it as a signature.

As Governor of the SARB, Mboweni will go down in the annals of history for introducing inflation targeting.

In this context of an inflation targeting regime, monetary policy became more transparent, more credible, more predictable.

The late Governor Mboweni started the process of having a formal committee of the bank having to set monetary policy, then decided to start monetary policy forums across the nine provinces. And it was a very, very important thing because it is important that you are transparent and accountable to the people that you serve, in this case, the South African public.

He left the SARB in October 2009, leaving behind a legacy of effective monetary policy implementation and having laid the foundation for the institution's transformation. Between 2009 and 2018, Mboweni pursued his private interests in academia, arts, and business. In 2018, he returned to public service when President Cyril Ramaphosa appointed him as Minister of Finance. South Africa will always be in debt for his vision and fortitude in conceiving and establishing Operation Vulindlela, which has now become the flagship of the government's economic reform agenda.

Operation Vulindlela continues to deliver key gains including stabilizing energy supply, improved access to digital communications, and progress in transport and logistics.

Throughout his public service, Mboweni remained closely connected to his family and province, choosing to retire in Limpopo, a stone's throw away from his birthplace.

We could have a December holiday where my dad's invited as many cousins as possible and take us different places to go and support the local businesses.

We knew him as just a member of the community. You could talk about anything with him and he would listen attentively.

He was very passionate about your sort of small business, managing what you're doing about pressures, etc.

He was always a very humble man. He used to love eating around all over the place.

If you come and greet him, then he will ask about the environment of your work. You know, he loved the friendship of us, the weakest of all.

The nicest thing about Tito was he actually didn't want to be fussed about. So, he was just a genuinely kind man and part of a community.

It was such a big loss for us because we have lost such a person who was always rooting for our success in school.

Mboweni's prevailing wish for South Africa was for its economy and people to thrive. His policy placed the lived realities of South Africans at the center of this mission.

With this legacy in mind, let us turn our attention to this afternoon's discussion. I'm sure you'll agree that there is no better way to begin this lecture series than with today's speaker. So without much further ado, please join me in welcoming the 10th Governor of the South African Reserve Bank, Lesetja Kganyago, to introduce Professor Axel A. Weber.

Thank you, Governor. It's a real pleasure and an honor to be here. Ladies and gentlemen, distinguished guests, colleagues, friends, and family of Tito. It is both a profound honor and solemn privilege to gather here for this first memorial lecture in honor of Dr. Tito Mboweni, a patriot, an intellectual, a freedom fighter, an economist, a public servant, and one of the most distinguished voices, as we already heard, of democratic South Africa, and to me, a good friend over many years.

As the Governor just said, we met in meetings in Basel at the BIS. But more important for our friendship was the cigar we always had together after that in the Hilton. And that already tells you a lot about Tito and who he was. Tito belonged to that remarkable generation of leaders who not only fought for freedom but also accepted the equally difficult responsibility of building a nation thereafter.

From his years in exile as an activist of the African National Congress to becoming South Africa's first democratic Minister of Labor, the first black Governor of the South African Reserve Bank, and later Minister of Finance, his life was one of continuous service to the republic and its people. As Minister of Labor in President Nelson Mandela's first cabinet, he helped shape the post-apartheid labor architecture that restored dignity to millions of workers and laid the foundation for collective bargaining and labor rights in South Africa.

As Governor of the Reserve Bank from 1999 to 2009, he led with courage and independence, introducing inflation targeting and strengthening the credibility and the transparency of the central bank and its monetary policy. Under his stewardship, the bank became more accessible to ordinary citizens, reflecting his belief that economic policy should never be distant from the people it serves.

Many will remember his landmark public speeches. Tito reminded South Africans when he was governor that inflation hurts the poorest most severely and that sustained economic growth must serve the vulnerable and must be inclusive. Years later, he continued to advocate economic empowerment, accountability, institutional integrity in lectures across the country. And in one of the pictures before, you saw his aloevera, which he often referred to in public speeches as enduring the resilience that you need in public office.

But beyond the titles and achievements, he was a deeply human man. South Africans came to know Tito not only as Governor or the Finance Minister but also as a witty, outspoken, and refreshingly unconventional public figure who brought personality into the public life. He was famous for his humorous social media posts, his love of cooking, even reported internationally in the Financial Times, his unapologetic authenticity.

President Ramaphosa actually reflected on Tito and said that he taught everyone an important lesson: that leaders must remain connected to the people and never place themselves above them. Those who knew him personally often speak of his warmth, his humor, his generosity, and his intellectual curiosity. He mentored younger economists and leaders. He challenged orthodoxy where needed, and he never lost appetite for debate and argument. And during our cigar evenings, we would mostly argue about the right way forward for central banks in really pressured times.

Dr. Tito Mboweni understood earlier than many that South African economic destiny could never be separated from the health of the global economy. Throughout his career as Labor Minister, as Reserve Bank Governor, and Finance Minister, he consistently argued that macroeconomic stability, institutional credibility, and international cooperation were indispensable for sustainable development.

His public interventions often reflected a careful balancing act between the realities of an emerging market economy and the demands of global economic integration. He believed that developing economies like South Africa could not prosper in a world defined by persistent global imbalances, by excessive debt in some countries and chronic surpluses in others, by weak global investment, by volatile capital flows, or by rising protectionism.

As Governor of South Africa's Reserve Bank, Tito Mboweni repeatedly warned against fiscal laxity, inflationary pressures, and the dangers of excessive external vulnerability. He understood that emerging economies are often the first casualties when global liquidity tightens and when geopolitical tensions disrupt trade and capital flows.

These themes strongly resonate with me, and you will find that they are also strongly embedded in a recent report of the G7 Economists, a group of four economists, as a memo on global imbalances submitted to the French presidency for the meeting that will happen later this year in Avignon. I had the privilege to be one of the co-authors of this report, and the report warns that the global economy is once again threatened by deep structural imbalances, excessive current account surpluses and deficits, weak investments, industrial overcapacity, high debt levels, and declining international solidarity.

We argue in our report that imbalances fuel trade tensions, that financial instability helps to push protectionist pressures, and that geopolitical fragmentation is a threat that is real for the global economy. We therefore advocate coordinated multilateral responses rather than unilateral trade wars or economic coercion. Our recommendations include stronger international policy coordination, increased domestic demand in surplus countries, fiscal consolidation in deficit countries, renewed productivity investments, strengthened IMF surveillance, and reforms of global governance.

When it comes to trade, we argue that only balanced and reciprocal trade can be the foundation of a global economy that works well. This all sounds familiar, but in a period where these things happen to be questioned by most powers around the world, it is absolutely key that you repeat these fundamental warnings.

I brought a few slides to talk a bit more about the substance of what I know would have been an interesting debate in Basel with Tito Mboweni on global imbalances and where we stand now. What do the data say? In our report, we show that there was already a peak of imbalances just before the financial crisis. And actually, the financial crisis was the mechanism that actually reduced these financial imbalances and the global imbalances massively. And the warning is we cannot every time go through a crisis in order to correct excessive imbalances. That's the most costly and globally the most damaging way to do it.

And what we see again, global imbalances were almost at a peak in a period where the pandemic struck, and it was the lockdown of the pandemic that again caused these global imbalances to reduce. It wasn't better policy, it was an external event. And now again, as you see in the latest bar, we're heading for more imbalances. And if you look at the IMF and World Bank and every projection, the way forward will be imbalances will continue to grow.

In our report, we make a number of suggestions. The first one is that when you look at global imbalances and they are rising as we speak, it is basically our judgment that they are reflecting increasing unbalanced growth dynamics in the three major economic areas. And this is producing fallout for everyone else. And the imbalances we see in China, in the European Union, and in the United States are very simple: that China has chronically low domestic demand and overly relies on exports for its own economy. The EU suffers from persistently weak levels of internal demand, but in particular internal levels of productive investment. And the US has enduring fiscal deficits too large relative to the current economic conditions.

These structural divergencies underpin, in my view, persistent external imbalances, and this will continue to contribute, if not corrected, to global tensions. Growing sectoral imbalances, if you look a bit deeper at the data, are really at the core of what we are seeing when you move from aggregate balances to what are the reasons for these imbalances.

When we talk about sectoral imbalances, we talk about imbalances in goods and trade. We talk about imbalances in services and trade services, and we talk about the financial sector. Why do I talk about that? Too much focus is on trade balances. But the massive US trade deficit is only a part of the story. If you look at the US service account and capital account, the US is a massive exporter of both digital and financial services and the recipient of global capital flows. And you cannot focus on one side of that argument without really understanding the dynamics that overall the balance of payments will always be balanced, and it's a disequilibrium in parts of that balance of payment that cause the problem.

And in my view, whilst these might not be the underlying complete source of global imbalances, these sectoral imbalances are much harder to correct and will take much longer. So, we should start now given that we're heading in the wrong direction and we're picking up speed in that. These imbalances are the major reason why a lot of the mature countries now resort to protectionist policies, and basically this heightens national security concerns but it also heightens nationalist policy responses in many of the mature countries.

I have a graph here that shows you the largest imbalances with the United States. And what you can see here is quite clearly the China-US imbalance is one of the largest trade imbalances of the US. But then when you look at the European Union, which is this yellow bar, and you look at Germany, which is the next yellow bar, Europe also has a very massive trade imbalance with the US, largely fueled by Germany.

And when you look a bit deeper, the reaction to these trade imbalances was what the next graph shows, namely a massive reimposition of tariffs as a way to deal with global cross-border flows of goods. That is something that brought us back when you look at the start of the General Agreement on Tariffs and Trade to levels of US tariffs that are unprecedented, at least in this part of the post-World War II period, which is really setting us back in global exchange of goods and services to a degree that if you asked me two years ago, I would have probably not found possible to imagine.

If you look at China in particular, and there's a contribution of which parts of China's exports are subject to tariffs. Well, the answer is all of them are subject to a basic tariff, but many of them to various forms of tariffs, including tariffs on almost every good. And the reaction you see is on the other side, on your right side of the graph. The blue line you see there that drops down is the exports of China into the US. As you would predict, massive tariffs cause a correction of trade flows here. Much less exports of China into the US.

So if the US had a program to decouple from China and reduce its dependence, this is happening as we speak. But China has not suffered from that. This morning in our conference we talked about China shock too, because China was able to reduce its dependence on the US. The red bar, the largest red bar, is the decline of trade over the last three years of China with the US. But what you see is pretty much with a lot of the rest of the world, China was able to increase exports. So what we're talking about is largely a rerouting of exports rather than an overall decline driven by tariffs. It's just the US destination is less the recipient of these trade flows. Other regions are benefiting.

If you look at Europe and you're talking about trade with the United States, there are three very large bars that basically show where Europe has a disequilibrium and exports more to the US. Its pharmaceuticals, its vehicles, and its manufacturing products. So when we talk about the bigger components of US exports, these are structural specializations in industry like the pharma industry or the vehicle industry. And now you know that when you look at the US tariffs, they targeted particularly the pharma industry, the automobile, and the manufacturing industries.

But if you look a bit deeper, you actually can see that in the pharma area, most of this is driven by European subsidiaries of US firms that produce in countries like Ireland and reroute pharmaceutical products back to the US and shift the patents, which are responsible for the accounting of those pharmaceutical products, to countries like Ireland. And then of course the profits are booked in Ireland, but the flows are a repatriation flow to the US of a US holding company that outsourced production to. So if we want to correct these things with tariffs, we will simply fail because the cause of them is not a disequilibrium. The cause of them are strategic decisions by corporates at the level of global production and how they disseminate their global production.

Having led a global bank like UBS for a decade, I can tell you global institutions optimize their operation around the globe by doing what they can best do in each constituency. So tariffs are completely the wrong norm.

If you look at the other side of the trade, what does Europe import from the US? What you're seeing is there's one good in particular, this large bar, and that is energy. We actually increased our energy consumption from the US when we basically diversified away from Russia by building LNG terminals in Europe to get US imports of energy. Is that a disequilibrium or is it something that basically is an industrial strategy that will continue? And the second largest bar you see there is aeroplanes. That bar would be much bigger if we would not have built European airspace industry as a competitor to Boeing. It would be a very large bar.

So that example gives you a very good idea about what you need to do. You need to structurally change production in pharmaceuticals, in vehicles, and in manufacturing. And your energy backbone needs to change as you want to diversify away from these global disequilibria. We're not talking about tariffs doing anything to that. We're talking about tariffs setting the incentive to move these structural policies and get going. And I think this will happen as we speak.

As we speak, the world, if you look at China, which is red in this area, and the US, which is green, the world is reorganizing its global trade. The world, you know, like Mark Carney talked in Davos about what the blue countries do. They actually increase trade with each other. He called it the middle powers. It's actually the non-US industrial countries. And you see an increasingly cooperation between what we used to call the BRICS, but that's no longer true. Actually the global south is more what is relevant. And these countries collaborate with each other but they also collaborate with the countries that are blue. And we cannot have this global world order disrupted because in my view it was the right thing to do and it was a good thing to build. So we must do everything to preserve as much of it as we can.

When it comes to financial imbalances, and let's briefly talk about what people need to do when you actually want to move away from this imbalance. They should be addressed simultaneously by all countries. And one of the things that I find is very important, we should stop pointing fingers. We should all look at the levers we can move and move those, and then the collective sum of moving the right levers in each of our constituencies will sum up to something that actually produces a better global outcome.

So I'm not wanting to point fingers, but it's very clear that China needs to rebalance, but actually it's sufficient to say that if you look at the 15th five-year plan, there's a lot of things in there that will contribute to that rebalance. You can always argue that more can be done, but some of the key points are mentioned here. For Europe, we mentioned this morning in our conversation, we already have three reports by Italian prime ministers. We have Mario Monti, we have Enrico Letta, and Mario Draghi, and their reports all point to the same. Europe needs to move its levers. We need deeper integration of European goods markets and service markets. We need to increase the scale of our markets. We need to have deeper capital market integration and expand our markets for longer-term risk capital.

Let's not focus on telling China and the US what they should do. Let's focus on what Europe can do to improve its own situation, and then the collective sum of that will be a better situation for all.

What concerns me, having lived with Tito during the time at the central bank through the financial crisis, is sometimes these corrections of imbalances can happen brutally and can happen fast. And let me just share with you where the major disequilibria are in finance. If you look at basically debt levels and how they are rising and how debt levels can be financed, you can actually see that the US, which is for the federal budget or the overall budgets, is that dot on the right. The US is outstanding in terms of the cost it is producing to service its own fiscal deficit. And there is no break whatsoever. We even heard this morning from some of our American friends, there isn't even a public debate in the US about debt levels and to correct them. That's part of the problem in my view, and so that needs to be addressed.

If you look at countries having very high levels of debt, if you look at the left side here, the country most out there is Japan. Japan has a very high level of debt, but the servicing cost of Japanese debt, which is largely held by domestic citizens, is relatively low. US servicing cost is relatively high, and if you look at the debt amount that is maturing over the next two years in the United States, these are the two largest bars again for the federal and for the overall government. So there's a massive refinancing need that the US is running into, and it needs to basically sustain that because this is what this graph shows.

If you look at capital flows to the US, the one country that is benefiting massively from global capital inflows is the United States. That's that blue line. And that little twinkle at the top is Liberation Day where financial markets reset as a reaction. But the trend is unbroken and continues. Europe and China have not been recipients of international capital to the same degree. And if you look at what happened in recent years, the cross-border holdings in the US from abroad are outpacing massively the cross-border holdings of any cross-border holdings in Europe. And if you look at global portfolios, the US is now close to 60% of the benchmark of US equities in the global MSCI World Index.

This is a massive refinancing of the US from the rest of the world. I make the remark here that US exceptionalism, which is very often how US capital developments are, it basically lives off finances and being financed from the rest of the world. And that's a fragility where these cross-border flows, if they reverse, and South Africa and many emerging markets have seen reversals of capital flows, if this funding need is no longer and as much as in the past funded from the rest of the world, you will see that there are some corrections that will be coming.

So we make a few more recommendations on what to do. Basically on the United States, reducing the public deficit and reinforcing fiscal stability is an absolute necessity. Policy measures to put public debt on a sustainable path are essential in our view. Policy coordination is very important because talking about policy coordination, you need three parties to commonly act. If only the deficit countries react, then basically you're running into trouble because if the asymmetric adjustment that will then occur, surplus countries adjusting but the deficit country US doesn't adjust, then you will see that real rates will rise at the global level, and that will mean that the US and the deficit country will find it even harder to finance its own debt given the impact of the adjustment in the rest. So there is an interest why all three should react.

The problem with WTO, which we looked a bit into, and I want to make one recommendation, is the WTO rules were written when free trade was the norm. We're now moving in a world where more and more tariffs become a norm again. In that world, the narrow focus on products that are in the WTO rules needs to be broadened, and we need, in my view, a much different use of the WTO framework. In particular, the safeguard mechanism which is embedded there as a safety valve needs to be used systematically, much more systematically than it has been done, rather than national movements on their own. These movements need to be embedded in the WTO framework in order for everyone to get a fair adjustment process.

When we talk about financial sector imbalances, we talk about imbalances that should be addressed in particular under the supervision of the IMF and the FSB. The mismatches that you can see if you look into the data are basically large cross-border flows like the ones I showed you for the United States, but also maturity and currency mismatches which are developing excessive leverage in some parts of the financial system. All this can generate systemic risks and it needs to be addressed, and the best way to address it is to get actually the IMF, the OECD, the World Trade Organization, and in the financial sphere also the FSB and the Basel Committee to organize this.

We have an international structure, and I tell you, whenever I talked to Tito, he was deeply down an institutionalist. He was a member of these institutions, and he used his voice to make these institutions work for the better of everyone's thing. So to sum up in terms of this report, we do actually think that reducing excessive global imbalances requires the simultaneous policy action of major economies, whilst managing these sectoral imbalances requires much more pragmatic trade governance by the WTO.

Financial oversight is important to correct financial imbalances, and in particular these institutions need to become much better at information sharing and cooperating among each other even more than they've already done, and I'm not saying they haven't done this. So when I wrote the report and when we looked at and had our discussions, I sometimes, when sitting there in Paris in an evening, was wondering what would Tito have said if I would have had the privilege to discuss it with him.

He would likely have welcomed the emphasis that we put on macroeconomic discipline, on coordinated multilateralism, and a recognition that persistent imbalances are ultimately unsustainable, and whatever is unsustainable needs to be corrected. He would have probably also agreed that a country like China cannot indefinitely rely on export-led growth. Actually, I'm not throwing any stones because that's what Germany and Japan did during their industrialization. But the United States can also not sustain unlimited debt-financed consumption, and Europe must be much bolder in investing in productivity and innovation than we've been in the past.

At the same time, when I look at some of the recommendations about multilateralism, he would most certainly have insisted that we put into the report that any discussion on global imbalances must not become a pretext to protectionism disguised as economic security concerns. And there is a part in the report where we actually say these safety valves of the WTO and the GATT agreements could be used at least for an interim period to protect your own industry. But quite clearly his point would have been this risk becoming a problem if you rely on it. He believed in rules-based, cooperative, credible central bank policy, open markets with safeguards, and disciplined public finance. You find all of that in the report.

He would have also probably argued, and this is my deepest concerns, that whilst it's great to write a report on coordination, he would likely have warned that if the major powers fail to cooperate, then smaller economies such as South Africa would once again bear the costs through capital flight, weaker growth, inflationary shocks, and social instability.

So the world leaders when they get together at G7 have a key responsibility. The one thing that can correct imbalances is joint action together and on the problems that each of these regions has and produces for the global economy in terms of a spillover. If that doesn't happen, I'm afraid the next report will have to be much less favorable, and we will have to talk how we get out of protectionist measures and how we can actually revive global growth that's in the benefit of everyone.

Today as we stand here for this inaugural lecture, we do not just remember a man, we celebrate a legacy of a principled leader, of his institutional courage, democratic accountability, and public service. Tito Mboweni helped shape the economic foundations of modern South Africa. But perhaps his greatest contribution was his unwavering belief that the people matter and ethical leadership is at the core of serving the people.

May this lecture series continue in the spirit that he embodied: honest engagement, intellectual rigor, service to society, and frank and bold challenge. Dr. Mboweni may no longer be with us, but his voice can still be heard, and his example continues to speak for generations to come. So thank you for organizing this lecture. It's been an honor to be the first lecturer here. Thank you.

A sobering summation of the real issues before us. Persistent imbalances contribute to persistence of global tensions, fueling protectionist policies and potentially heightening national security risk. And we need joint action. The importance of economic policy never being distant to the people it serves. Leading with courage and independence, and remaining deeply human and authentic. Thank you, Professor Weber, for reminding us of the continued relevance of the messages and the lessons that we learned from Governor Mboweni as we confront today's global uncertainty.

You've given us a great deal to think about. To continue this discussion, we are joined by two distinguished discussants. Now in the interest of time, I will not read you all their accolades, but I am especially excited to call them up to the stage. First, Professor Jacob A. Frenkel, who is Chairman Emeritus of the Group of 30 and former Governor of the Bank of Israel. He is widely credited with curbing high inflation, liberalizing foreign exchange controls, and helping to integrate Israel into the global financial market. Next is Dr. Guillermo Ortiz, who is Treasurer of the Group of 30 and a board member and senior advisor at BTG Pactual. He is also a former Governor of Banco de México, where he championed inflation targeting and helped strengthen the country's economic stability. So allow me to invite the two guests and join me in welcoming to the stage Professor Frenkel and Dr. Ortiz.

Ladies and gentlemen, dear friends and G30 colleagues, the Honorable Lesetja Kganyago, Governor of the Reserve Bank of South Africa, President Tharman Shanmugaratnam, Chairman of the Trustees of the Group of 30 and of course President of the great Singapore, Raghuram Rajan, Chair of the Group, and colleagues and friends. It is a pleasure and honor to be here in this event honoring the great Tito and joining his family in this important area.

I noted the remarks that what did it take to bring him to where he was, and in his words: hard work, sacrifice, focus. It's all relevant for us. The subject that our dear friend Axel Weber spoke about, global imbalances, is a timely topic, but I will tell you, 20 years ago, so in a seminar which was held in Washington, the title was 'Global Imbalances: Where Do We Go?' 35 years ago in another seminar, the subject was 'Global Imbalances: Where Do We Go?' And the question is, didn't we learn? And the answer is, the question is still relevant, but the world has changed, circumstances have changed, and therefore also some of our answers have changed.

What are the main new realities that we are now having that were not there in the past? Private sector is now playing a very important role. Capital markets are playing an important role. Human capital is understood to be key to good performance. Computing system is a very important element. Speed, cross-border. So let's not be surprised that the requests remain. But unfortunately, as was indicated by Axel, there are some challenges that are amplified by the new reality.

Globalization gave way to fragmentation. A unipolar world is giving way to a multipolar world. Consensus about objectives and about the means to achieve them that was there is lacking now. Solidarity that was formed in the post-war era is lacking now. Technical progress, which used to lift so many people all over the world and make them improve their standard of living, is now being challenged by those who have been left out.

Competition and trade that was used to benefit all and facilitate cooperation and coordination is now giving way to rivalry, weaponizing of economic policy, isolation, inward-looking, and even hostility. Why is it the case? Is it just ignorance? If that's the case, it would have been easy to solve. But there are some deeper structural issues that are creating built-in stresses and tensions that are putting tremendous challenges to policy makers, responsible leaders all over the world.

Let me start from trade. There is no field in economics in which the gap between theoretical analytical consensus and the practical reality of politicians is so wide. Everyone knows that there are gains from trade from the days of Ricardo and John Stuart Mill, Adam Smith, and the rest. And yet, even in the United States, when the two parties cannot agree about anything, they agree about protectionism. So that's something which we really need to realize: that if we have in our mind the notion that trade is a zero-sum game rather than that there is going to be great improvement, we have a challenge.

In the Second World War or immediately thereafter, the solidarity brought about the creation of the International Monetary Fund, of the World Bank, subsequently the World Trade Organization, all of those bodies that were built in order to improve international welfare. The Marshall Plan that transformed and transferred a lot of resources to the post-destruction in Europe and helped the recovery was key. Today, I have doubts, and many of my friends have doubts, that the IMF, the World Bank, the WTO, the Marshall Plan would have been introduced to the system. So the challenge that Axel Weber spoke about and that our esteemed giant Tito would have addressed, those challenges are still with us.

For Tito, openness is a mindset. It's not just a technical measure. It's a mindset that means that trade is key: trade in goods, trade in capital, mobility of people, mobility of ideas, mobility of values. Here, protectionism is the biggest enemy. You know, they say that in a world in which the rules of the game mean an eye for an eye, this is a world in which there are a lot of blind people. And as you can see the dangers with trade. You think you are protecting somebody, but by imposing tariffs, you really ignite retaliation, and that's the eye for an eye. We better be careful about it.

The world economy can be thought of as a big boat that has many cells, many cabins on it. Each one is another little country, but they are all in the same big boat. Each cabin can strengthen its resilience when there is a storm by blocking the windows, by making sure that water does not come in. But the boat as a whole is still subject to the storm of the ocean. That's where an individual cabin cannot take care of. We need the leadership of the global economy, and that's where we do need to have the major skipper. And I think that there is a task for leadership to take, to have this leadership, and leadership means both intellectual, political, and economic, all of the qualities that Tito had.

The interdependence in the world economy has changed dramatically over the years. Initially it started, I see here Jean-Claude Trichet, who is the champion of international policy coordination of that era. There was a Plaza Agreement in which the G5 agreed about what to do with the exchange rate. There was subsequently two years later the Louvre Agreement in which the G7 decided about a broader range of issues including macro, then trade, and then they realized it's very complicated. It's a politically difficult. Several decades later, they all met in London to deal with the G20 to deal with the great financial crisis.

What did we learn from that? We learned that when there is a crisis, there are three stages and three elements: crisis prevention, and if you fail in doing that, it's crisis management, and if you fail in doing that, it's crisis resolution. Crisis prevention is the most important thing. But once you have prevented a crisis, there is no appetite anymore for resolution to do the rest of the things. And that's why when we extinguish a fire, we must make sure that we think about the morning after, that we do not plant the seeds for the next fire. So that because the idea is when you extinguish a fire, it's really part of the ongoing work.

Let me move on to speak about monetary policy, which was very important for Tito. In the modern era, monetary policy is part of financial markets, and central banking is part of financial markets. Financial markets put a lot of weight on expectations, on risk management, on the future, on lender of last resort, on financial stability, all of those things that have not been dealt with appropriately in the past. You know, since Tito was both a minister and a governor, he would not have been upset even if somebody told a joke about governor and central bank. So let me just tell you the story that he told me.

The governor sits in his office and a friend comes in, and the phone rings, and the governor picks up the phone, and then he's heard to say, 'No, no, no... yes.' The friend asked him, 'Can you explain what was that? What was the no, no, no?' 'Well, the minister wanted me to lower rates.' 'And what was the yes?' 'The minister asked me if I hear him well.' You know. But now a story that he did tell me, an African story, which has a moral to it. The story says, 'When elephants fight...'

When elephants make love, the grass suffers. Too bad for the grass. Well, Tito refused to accept this verdict. I said, 'If I am a grass, I'm either going to become an elephant or I'm going to be resilient.' Resilient means, and here comes all the arguments that he was so much promoting. What does it take to increase your resilience to be stronger to do this? And there are basically six C's that are relevant in this regard in this world: collaboration, coordination, cooperation, consistency, clarity, credibility. Add them all together and you get a guy named Tito.

But there are key lessons that he would have told us even when he wakes up in the middle of the night and many of the leaders still have not learned that number one deficits do not produce jobs. Deficits do not produce growth. Growth must be sustainable. Sustainable growth must be inclusive. Debt needs to be repaid. Spending today means taxing tomorrow. Inflation hurts everyone, in particular the poor. Poverty alleviation requires a long-term approach, primarily when it comes to human capital, education, and the like. Don't overburden monetary policy. So if you think about all of those together, you get the recipe.

So my dear friends, before coming in, I arrived with my colleagues a few minutes earlier and during the get together outside, I asked several of you, not knowing everyone in fact, what comes to your mind when you hear the word Tito in one word. I took a piece of paper. Courage, integrity, knowledge, dedication, commitment. He's a doer. He's a scholar. He is a leader. He's a mentor. He's a friend. A man with a vision, a man with inspiration, what else? Accountability. He's empowering people. Kindness, sophisticated, towering figure. And today, Lea added the word giant to this: consequential. And that's the point: consequential. South Africa has never been like that. And he laid the foundation to an enduring path that South African people are now enjoying. And how fortunate we are and all of you is carrying forward the torch that carries Tito's legacy. So let me thank you very much on this privilege to pay respect and honor and admiration to this great man and thank you again.

Consequential is the word that we add today. Thank you, Professor Frenkel. Let me invite to the stage Dr. Ortiz to join us. I know that you're thinking of questions, so start jotting them down because as soon as he's done, we'll move to a short Q&A segment. Dr. Ortiz.

Good afternoon. Governor Lesetja, thank you very much for organizing this tribute to Tito Mboweni. I think that it's a very fitting tribute to be held today and I did enjoy very much the remarks of Axel and Jacob. So, you know, both of them but particularly Axel since he spoke first offered a portrait of Tito that I found deeply moving.

What I would like to do regarding Tito's legacy is to recall the many instances that we shared together particularly at the Bank for International Settlements. You know, Tito was appointed the central bank governor of South Africa more or less a little bit later than I was at Bank of Mexico and we both served long terms, 10, 12 years. So we did interact very, very much. We also were appointed central bank governors, I was shortly before the financial crisis, Tito pretty much in the middle of it. So we had so many interactions that I would have to be orderly not to extend myself too much. But Tito was not only a distinguished public servant but someone whose company made difficult conversations really enjoyable.

He brought to every forum intellectual honesty, a political realism and a directness that was sometimes disarming and always clarifying. What made him truly singular was his capacity to move between worlds that rarely overlap: academia, labor activism, politics, central banking, while remaining unmistakably himself.

Our paths crossed particularly closely at the BIS, where Tito played a very active role. And as I mentioned, we started during the great financial crisis, which was a time where the discussion as to why what was happening, because we didn't really understand very much what the causes were. I remember just a year earlier before the financial crisis erupted, Alan Greenspan who was still the chairman of the Fed mentioned that historically it has never been the case that the housing market would actually suffer, you know, would actually experiment negative numbers. I mean that the price of housing would go down. That had no historical precedent in the US. So I think that we were all trying to figure out what was going on.

And obviously this was the case of emerging markets particularly South Africa, Mexico. So Tito and I had many conversations. First trying to understand and second realizing that we would get the short end of the stick as usual, that is emerging markets. And the fora of the BIS offered an important opportunity to make our views known and to try to move the institution, which was always eurocentric since its foundation, to be a bit more receptive towards us. We had obviously the great support of Andrew Crockett who was the general manager at the time and he was of course behind the internationalization of the BIS and also we had many discussions together and Andrew was extremely supportive of our efforts.

Our joint work in the BIS included working in the group of central bank governance. This was an ad hoc group inside the BIS which I was honored to chair and which Tito was a very active member of the group. And our work culminated in the 2009 BIS report on issues in the governance of central banks. A document that addressed at the core the conditions on which central banks can maintain credibility while remaining accountable to democratic societies.

And I remember the conversations with Tito regarding this last point led to, you know, how do we speak to our politicians at home, you know, how do we convince them that having a central bank that's independent is worthwhile, why designing inflation targeting and effective means of communication was fundamental and why it was not advisable to spend the reserves of the central bank in infrastructure projects as some politicians were pushing at the time both in Mexico and South Africa.

So again, our work culminated in this central bank report and Tito's contributions remained invaluable because he understood both sides of the tension from lived experience. He had presided over the South African Reserve Bank during one of the most demanding chapters of his country's democratic transition, steering the institution through the task of building inflation targeting, and I was more or less busy with the same issues at home.

And, you know, credibility of central banks, central bank issues while remaining deeply conscious of the inequality, unemployment and social pressures that surrounded every monetary policy decision. So that was a balancing act at which Tito excelled. He reminded us often and compellingly that central banking in emerging markets cannot be a purely technocratic exercise and that the experiences of countries navigating deep democratic and economic transformations had much to contribute to a global conversation that was richer for including the views of emerging markets.

Let me now make some comments on Axel's remarks on global imbalances. I think that he has given us a vigorous and I think largely correct diagnosis of the imbalances weighting in the global economy and I agree with what he said. What I would do is to add a perspective that Axel himself would be the first to acknowledge deserves more space: how these dynamics look from where emerging markets stand.

Global imbalances are obviously macroeconomic in nature, rooted in savings and investment differentials across major economies, not in trade policy. The current retreat into tariff centrism is using the wrong instrument for the job and the consequences are being felt acutely across the globe and in our countries like South Africa and Latin America. Tariffs unless extreme do not close current account balances. They redirect bilateral trade flows while acting as a negative supply shock on the countries imposing them. So the US administration instinct of reaching for tariffs is using just the wrong instrument for the wrong purposes. And the consequences of all, I mean these disruptions that have already been extensively commented on, the world rules of the game, the world trade and so on are being felt acutely.

I also agree on the asymmetry of adjustment risks. Rebalancing must be coordinated or it generates its own instabilities and the financial vulnerabilities that Axel identified in his report. The concentration of equity exposure in artificial intelligence related assets, the growing systemic weight of lightly regulated non-bank financial intermediaries, and a US net international liability position approaching 90% of GDP are not just bookkeeping observations. They're indicators of fragility that could unwind rapidly and with severe spillovers for everyone.

Let me add a few thoughts on China. The prescription, rebalancing towards consumption, expanding safety nets, reducing precautionary savings, is analytically sound, but we have to be candid about the timeline. China's surplus is now driven partly by the mechanical arithmetic of collapsing investment following the real estate crisis, not only by deliberate policy. Household consumption remains structurally suppressed by decades of incentive structures that have rewarded industrial production over services and firms over households. But reversing these kind of trends is a generational project and we should be very candid about the timing. We cannot expect China to rebalance overnight and so this will take time and we should be conscious of that because the impact in the rest of the world is huge. As you know, China's ability to supply almost any product the world needs is immense. It's unparalleled in history. I mean China has, I don't know, the capacity of producing 20, 25% of world's cement consumption, is able to supply more than 20% of the world's automobiles and I could go on and on but this is not going to be corrected overnight by any means. But it doesn't mean that we cannot just loosen our concerns regarding the need to rebalance. And I mean China's overflowing products in emerging markets at a huge rate. So this is something that obviously is unsustainable but it's also very difficult to think of corrective measures that would work in the short term.

On the US. Axel is right that putting public debt on a sustainable path is essential and the numbers are sobering. As you know, US general government debt at around 120% of GDP and projected to climb further with the current political environment moving in the opposite direction. But Jason Furman reminded us this morning that the US debt situation, the fiscal deficits and so on and so forth are not, you know, a current important political issue. And I mean I was surprised to hear that but I'm not surprised because if you look at the headlines of the papers and the surveys that are conducted regularly on US attitudes and on different subjects, I have never seen a survey, you know, are you concerned about the US fiscal deficit, are you concerned about the US level of debt, are you concerned that there is no corrective solutions going forward but that the debt is going to be growing at, you know, more an arithmetic progression. Never seen one of those. So I mean obviously we're not predicting a collapse of US markets even if we are observing a retreat away from dollar assets, but a continuation of the trends and we know these trends are not sustainable but the horizon of unsustainability is very flexible and that's precisely why the point is not at the center of the political discussion in the US.

A disorderly adjustment would transmit to emerging markets through capital outflows, currency pressure, and high borrowing costs, channels that are well understood, but rarely factor into the domestic political calculus. On Europe, deepening capital integration is correct as far as it goes, but the European Union surplus is concentrated in Germany and the Netherlands. So a credible rebalancing strategy must address the persisting high corporate savings rate in the core of Europe which reflects structural underinvestment and not merely Brussels level market architecture. Deeper euro area fiscal capacity is necessary to redirect surplus savings into productive investment across the union.

Let me close by offering the perspective that I think that both Axel and Tito would have wanted represented in this conversation, which is that when the major economies run large and persistent imbalances, emerging markets absorb the consequences with a force that is rarely visible in aggregate statistics. We tend not to be the source of these imbalances, but we are reliably among the first to feel their effects through capital flow volatility, currency pressures and higher borrowing costs that compress our policy space and ultimately our development trajectories.

The historical parallel that weighs on me is not the emerging market crisis of the 90s, you know, Mexico, Asian crisis, Russia, Brazil, Argentina, that's not because they were largely generated by domestic imbalances and external shocks so this is not apparent what I'm thinking of is the crisis of the 70s. As you know, the oil surpluses of the 70s were recycled through large money center banks into sovereign lending to Latin America at low floating rates. And then when Paul Volcker in around 79 raised interest rates, of course all the debt that had been contracted at low rates and low flexible rates and so on all of a sudden became a huge mountain and the consequences for countries carrying dollar denominated floating rate debts were catastrophic. Real interest rates turned sharply positive. The dollar appreciated and commodities collapsed. Mexico suspended payments in August 82 and within months the crisis had spread across the continent. GDP per capita in Latin America was lower in 1990 than in 1980. That's why it's called the lost decade.

And the causal chain of events we're discussing today, a savings glut intermediated through poorly regulated global financial institutions followed by a policy of adjustment whose spillovers fell far beyond its borders. The architecture of vulnerability today is recognizable to anyone who lived through the 80s. A large current account deficit financed by capital inflows, rising public debt, elevated interest rates and a significant share of emerging market debt denominated in dollars. A disorderly adjustment in US financial markets would transmit through the same channels as the Volcker shock. We do not need history to repeat itself precisely to take the warning seriously. The lessons of the lost decade is simply this: by the time imbalances become impossible to ignore, the space for orderly adjustment has already closed. The signals are visible now and Axel's report makes a compelling case for acting on them.

There is something fitting about raising these concerns at a lecture held in Tito's memory. He understood perhaps more than anyone that international institutions that facilitate global adjustments are not just absolutely necessary and fundamental but they need the feedback of emerging markets as the governor has pointed out on several occasions. So let me thank you again for this opportunity and let me wish you a very good afternoon. Thank you.

From the time point of view, I'll only be able to take three questions. So, make them very good. So if you can raise your hands.

Good afternoon everyone. My name is Baling and I am currently a master's student at Stellenbosch University. I have one question. I like the analogy of the global economy being like a ship. So I think for me my question is if the global economy is like one boat and the different nations are merely different cabins within it, why has not pointing fingers become a virtue when many global imbalances stem from identifiable policy choices? Not to say we're assigning blame but at one point when does naming uncomfortable truths become not as an act of blame but as a prerequisite to have meaningful collective action. So how do we balance accountability with humanity?

Thank you very much. We will take all three questions at once. Let's move to the second question.

Good afternoon guys. My name is Simphiwe, I currently work with pension funds as an analyst. Hopefully I'm not skewing too much here but my question is for Dr. Ortiz. So my question is many emerging markets struggle to pull cash from pension savings where they are heavily invested in government bonds. So my question is really what is the most important catalyst for shifting capital towards infrastructure in PE markets? Is it regulation or market development or a much better benchmark such as an African infrastructure benchmark in your own experience and your own words to say? Thank you.

Okay. So if we can just be helped with the sound so that the microphone volumes can be lifted. So the question as I understood it was what is the best catalyst to shift capital towards infrastructure for emerging markets. That's the second question. And the first one is there was an echo. So can you... Yes. So the first question, I mean the second question was what is the catalyst to mobilize capital towards infrastructure investment for emerging markets? Do we need to see some shifts in regulation or is something else required? What was the first? So on the first question, Baling, I'll have to ask you to come up again because she was asking about the analogy of the global economy as a ship and that concept of a global economy as a ship. So maybe we can return the microphone and you can just summarize to the most succinct points. Thank you.

Hi everyone. Okay, so basically I was asking, it's about fingerpointing basically we said that we don't want to finger point when it comes to dealing with the global economy so I just wanted to ask when does it become okay to actually start fingerpointing and at what point does it make naming this uncomfortable truth not an act of blame but as a prerequisite for meaningful collective action.

Okay. Thank you. So she's asking about what Professor Weber raised around the importance of collective action and policy coordination and the importance of not fingerpointing. So in essence she's saying if we are raising the question are we being truthful or are we being fingerpointing because we need to be truthful about what we are dealing with in order to resolve the problems. And she'd like some reflections on that. Shall we move to the third question please?

Hi my name is... I am an undergraduate student at the University of Cape Town and I think listening to today's presentation what really stood out to me was the amount of agency that is given to global superpowers in comparison to developing countries such as South Africa. And because of this, or because how countries like South Africa experience these global or structural constraints, we experience them in a very material way through inequality and exclusion. And so my question is how much of South Africa's economic stagnation is genuinely the result of structural constraints and the realities of the global economy and how much of it is also a failure of our own political imagination of what development should look like for us. Thank you.

Thank you. So if I can hand over to the panel to distribute the questions among yourself. Please go ahead.

Maybe I kick it off and apologies. There's a huge echo when you sit on this side of the room because the speakers are heading that way and it's very hard to hear. Let me just take the first question on the infrastructure investment in emerging markets. As I was just saying, most economies, including the European economy for which I was speaking, now have massive investment needs in infrastructure. The difference is that in many emerging markets, it's a first time build of infrastructure that very often isn't there and needs to be there. In many of our economies like Europe, our infrastructure has decayed over years. In Germany, it's traffic infrastructure and we need to build digital infrastructure. Reasonable estimates for the European economy, a country like Germany, is we need to invest about 20 to 30% of GDP over the next decade into rebuilding infrastructure to the level it should be. And if you compare that to other countries where a lot of infrastructure investment is not just done by the public sector but also by the private sector, that is a huge delta. And we're not even talking about some of the new technologies like investment in say compute capabilities where if you imagine alone the top seven companies in the US, the magnificent seven digital companies have an investment program of 700 billion in compute and AI and if you look at Europe the numbers are by a factor lower. So we are in a very unequal global economy and the build that needs to be done in infrastructure both in emerging markets but also in mature markets is huge. The US at the moment is setting the pace on that and the rest of the world really needs to focus.

It will be hard to attract infrastructure investment. I think there are a couple of reasons for that. As a former regulator who turned banker, I must say that one of the biggest impediments for infrastructure investment financing by major institutions like banks is the massive capital weights that are attached to these 20, 30-year project financings. That's why most of the infrastructure financing has moved from two decades ago being financed by banks to now a lot of it being in the private market. So many private equity companies have an infrastructure arm. They're not subject to the same requirements. We need to really overhaul the requirements for banks and mature financial firms to finance infrastructure investments again and that is something that if that needs to be built we need to enable mature finance to play part of role in that and I think at the moment that's not sufficiently the case.

Let me just get another... Look, I think global coordination even so it's hard is what we should do. The thing I fear most, you know, and even if we're talking about the G7 for which we wrote the report even at this stage with it being a few days away it is unclear whether the US president will participate in the G7 meeting, it then becomes a G7 minus 1 meeting and if we're resorting to a unilateralism that basically means that one country goes one way and the rest of the country coordinates. My view is still that we need to coordinate within the institutional framework and structures and organizations we've given ourselves to manage all of the crisis we had post second world war. To move away from that to unilateralism in my view would be really damaging for the global economy. So as hard as coordination is and as much as you may doubt that it will be done and will be fruitful, there's simply no alternative to go in this way. It's only within these institutions, their capital key, their governance that everyone around the world is represented. Whether representation is already fair, I have my doubts that you don't need to evolve the governance of these institutions. But it's a much better starting point to use these organizations and to evolve them with the challenges than to redraw a new international architecture on how we manage and how we coordinate. So, I'm not saying it's a perfect structure, but what I'm saying it's the only structure that works and if we move away from it, we're ending with real problems around coordination and the ones that will be paying the biggest price in my view, unfortunately, are the emerging markets and the most vulnerable countries of this planet.

Thank you, Professor Weber. Professor Frenkel.

Yes. Like Axel, I'm starting by apologizing, we did not hear all the nuances of the question so we will try to guess what you would have asked given that you were asking... You know, when I was a student one of my professors Milton Friedman used to say whenever somebody asked him a question he said what you really want to ask and that there was a perfect answer. Of course, I think that like always in this kind of a second best world in a complexities, the case for every choice is really the case against the alternative. So if one of the alternatives is go it alone versus try to make the best of the interaction, you better work hard to get the best of the interaction. The world of fragmentation does not reduce the degree of interdependence. Interdependence is there. Fragmentation makes it more difficult to internalize the externalities that are there in the interdependent world. So the whole machinery of policy coordination is not to reduce the shocks or to reduce the interdependence but rather to enable us to internalize the shocks and make sure that we respond to it correctly. So if you close your eyes and stay at home and say I don't want to know about it, it does not mean that the storm will not come your way. So the argument is yes the coordination needs to be done. There are some nuances. What do we mean by coordination? It does not mean that I in country one will do what the guy in country two tells me to do. I think that a better way to go to say is I need to understand why he wants me to do this and I will respond why I am less interested, something will come out of it. So greater understanding is all that we want to achieve which is more than nothing.

About the third question about the issue of an asymmetric world. Yes, there are some large countries that call the shots and then there are those smaller countries that have to get the consequences. That is correct. But what does it mean for the smaller countries? Should they just hope that somebody will take care of their destiny or should they do the best in order to at least whatever they can do? And that's where Tito came in. Namely, we need to increase resilience. Whatever happens, whether it comes from a large country or from nature or from whatever, we need to make sure and there are some rules. What does it take to do good economic policy? Namely, especially in the current days where capital markets are so important and every message to capital markets is being amplified and occasionally feedbacks on you. You better be on the alert. And you know capital markets are having continuous beauty contest. They are very cruel. They are very impatient. One mistake is one too many. So you really need to try to do the best. There are some norms of what does it take to do the best. One of the challenges which I mentioned in my remarks that there is now less of a consensus of what does it entail to do good economic policy. In the old days we had what was called the Washington consensus. We knew what it means. That was some difficulty politically but we knew what needs to be done. Today there is something less than that and that's why especially countries like South Africa and other countries that are not the giants of the world have special responsibility for themselves. Nobody will do it for you other than yourself.

Then there is the third question which I apologize. I wish you brought this business with the boat, with the ship, with all of this, which I love that thing, but I really did not understand fully the bottom line. It's not that I did not understand because you were very clear. The speaker system was not sufficiently clear.

Thank you very much, Professor Frenkel. Any last reflections, Dr. Ortiz?

I will refer to the one question I heard clearly which was the third question. I mean it went something like this, you know, what do you attribute to South Africa's relative growth stagnation to structural constraints or political constraints. And I think this is the billion dollar question usually and it applies obviously to not only South Africa to many emerging markets. Latin America has been also on a stagnant growth path for quite a long time and obviously we all have structural constraints, all countries have structural constraints and it's a job of the politicians to find their way around these structural constraints in order to achieve the desired objectives in this economic growth, get out of this sense of stagnation, you know, seek more equality or less inequality.

We had a conversation this morning about jobs and Tito was very emphatic in his appreciation that we should not seek necessarily to formalize the economy, to formalize jobs. I mean obviously it's preferable to have a more formal labor market, has a lot of advantages but it's something that you cannot be forced to. So he mentioned that you should improve the quality and productivity of all jobs, the formal and the informal sectors and not try to necessarily move towards formality as a precondition and this is something very important and it goes to the heart of this question. These structural problems are there and we know where they are and so on. And when politicians cannot solve them, they become part of the problem. Part of the structural, I would say, intertwined are the politicians who are unable to find a clear path solving the problem. So I think we have to do a bit of training as Tito would say to our politicians and we discussed that very, very often that it was an educational exercise to talk to politicians in our countries and explain them why an independent central bank was something to be desired and why it was not a good idea to spend the central bank's reserves as part of the budget. So let me end here.

Thank you very much Dr. Ortiz. Some very strong messaging there from our panelists. First a reflection on Tito Mboweni's openness, that openness is a mindset, the need for leadership in the global economy that there's a task for leaders at an intellectual level, at a political level, at an economic level. These are strong messages that are echoed throughout. So ladies and gentlemen, this is as far as we can take this discussion up here on the stage. I think you'll agree that we have fulfilled our promise of a fulfilling and thought-provoking discussion. So please join me in thanking our speakers for a rich and thought-provoking conversation. Thank you.

I'd now like to invite Fhumulani Mboweni to the stage to deliver a vote of thanks on behalf of the Mboweni family.

Good afternoon to you all. Deputy Governor Chazibana, thank you for your stellar direction of today's event. I personally always enjoy listening to you. So, thank you very much. Professor Weber, Dr. Frenkel, and Dr. Ortiz. Thank you for your deeply considered contributions. Governor Lesetja, Uncle T had only imagined that the extent of his legacy would live in his memoirs. Thank you for mobilizing the institution that he cherished so deeply to memorialize him in a way that far surpasses the strict confines of his life.

Indeed, Uncle T would have appreciated everyone's presence here today. From his esteemed colleagues who have traveled from across the world to everyone else who has come in from around South Africa. We are deeply humbled as a small family from Zanin to hold with you the dear memory and legacy of our late father, grandfather, brother, uncle, friend and colleague.

Uncle T would have loved this event. And when I say that he would have loved this event, I'm not just referring to the grandeur and the ceremony of it all, which are things he absolutely relished in. I refer more specifically to what it fundamentally symbolizes. This event has been an act of rigorous grappling with Lenin's lasting question, what is to be done? And what it symbolizes is the importance of public intellectualism for democratic society.

It is still difficult to speak of Uncle T in the past tense. But what brings him into the enduring present is the persistence of the questions that he dedicated his life to. Many years ago, I met with Uncle T to tell him of an interview that I had recently conducted. I had spoken to one of the authors of the famous 1993 MERG report, the full title being Make Democracy Work: A Framework for Macroeconomic Policy in South Africa. This author had expressed to me some disappointment at the ANC's economic cluster for not having engaged with the report as the contributing academics had hoped. And so being a committed young socialist, I raised the same challenge with Uncle T. I asked him, had the ANC's economic cluster adopted the so-called Washington consensus wholesale, thereby abandoning economic outcomes that would have benefited the country's majority. In response, he started with some humor classically. 'So, you say you're a socialist, eh?' And yes, I said proudly. 'Well, let me tell you something about socialists. I've never met a socialist who didn't have a rich uncle.'

And that was a direct jab at me, of course, the young socialist who was meeting with her now prominent uncle for lunch at a fancy restaurant to discuss the revolution. That is to say that the acknowledgement of contradictions, even when nuanced, is necessary to the honest statement of our positionality. This is something that Uncle T insisted on, not just for the sake of a good joke, which he always enjoyed, but to call us to an awareness of what sincere political action requires, which first and foremost is a lack of self-righteousness. Acknowledging that we are not linear while it may feel like a risk does not diminish our sincerity. Instead, it allows us to be seen with greater clarity, giving due respect to the intelligence of those in our company and making trusted comrades of us.

Having shared a laugh, we then moved to the substance of the conversation. 'So you asked the question, have you actually read the MERG report?' My answer was embarrassingly no. I hadn't been able to locate it, but was somehow emboldened to debate it. Without stating the obvious, he had made the next point. 'If you want to be credible, do your homework.' But generously as my teacher, he also invited me to come pick up his copy of the report from his study in KwaNobuhle. Because the topic was important to him, he opted to engage further by pointing to the facts. It's these facts that I want to reiterate today, not just in memory of Uncle T's contribution, but so that we who are living today may always know who we are and what we are capable of.

The choices made through the independent deliberations of the first stewards of our democracy led to the following. Approximately 4.5 million households were connected to the electricity grid for the first time. That drove electrification rates in South Africa from around 50% to over 80%. More than 15 million people gained access to clean drinking water. Over 10 million people gained access to sanitation services. And 1,600 clinics were built and/or upgraded taking health care to communities that did not have access previously. These outcomes confirm what the literature teaches that an increase in infrastructure stock is positively correlated with gross domestic product.

In fact, one of Uncle T's favorite memories of serving under President Nelson Mandela was that all he had to do was drive through a village in Limpopo. And if he noticed the absence of a school or a clinic, Uncle T would be amongst those to receive a call to do something about it. Because it's your home province after all. In other words, the moral imperative to deliver infrastructure laid the foundation for strong economic performance. And therefore, when we speak of the 5% GDP growth rates experienced in the mid 2000s, it's not abstract economic jargon. It is the very reason that our country was able to build out an extensive social grant system, an important and necessary tool of social protection for dignified and self-respecting societies.

It is important that we state these facts for our collective memory. But what Uncle T really wanted us to understand as a response to the question on the MERG report and many other moments of that nature was that we should never shy away from the responsibility of thinking for ourselves even when the challenges are grand and hairy. True intellectualism does not derive from taking the ideas of others wholesale. True intellectualism is in the ability to translate the science, the data and the reports into a meaningful way forward for your own context. In other words, our commitment is not to the right or the left, the east or the west. It is to a path that can sustain a just and equal society for us.

What the facts demonstrate is that the path taken resulted in verifiably improved lives, most importantly for those most severely impacted by an economy that was designed to exploit and exclude. Now, if the question is, can we do better? The answer is yes. And that imperative will be the constant responsibility of every successive generation. But that does not require us to be revisionist or immune to the facts in the face of challenges. The facts are that we once built an incredible economy. The truth is that more can and must still be done. And the more of what remains to be done is not in tactical responses to short-term crisis. It is in thinking about and strategizing for who we want to be 20, 50, 100 years from now. We must think deeply if we are to see further.

And so in closing, I must emphasize once again that Uncle T truly would have loved this event. And he would have loved it because he appreciated the virtues of scholarship. He embraced his mind's abilities, not for its own sake, but to serve. And he made a point of locating that intellectual tradition within the African National Congress. He made it clear that he was actively trained to read widely, to think deeply, and to discuss robustly. Therefore, as we navigate the historical inflection point that we are currently living through, our task is to be deeply studied. Currents that go beyond the internal dynamics of our country are calling us to reimagine our path towards justice and equality. The forces of competition are diminishing the ideal of global cooperation as the world establishes a new order. The possibility of another wave of our country and the African continent's exploitation now require direct attention. In response, we must be supremely confident, appreciating that we continue to live in a world that mediates knowledge claims through the lens of identity. And therefore, it is ever more important for us to stand firm as autonomous intellectual agents of our own destiny.

We need not fear because we have achieved this before. What we have inherited from a century old project of applied intellectualism is a robustly progressive society whose very DNA is the outcome of dazzling intellectual prowess grounded in Ubuntu. For that we stand in deep gratitude and deep pride. For that we thank the South African Reserve Bank for contributing so strongly to the intellectual life of our democracy. Thank you for celebrating the beautiful mind of a beautiful black boy who lived his life in service of the beautiful struggle. He killed.

Thank you Fhumulani. The importance of public intellectualism in democracy today. We must not shy away from thinking for ourselves. If we want credibility, we must do our homework and translate for our own context. And we must think deeply if we are to go further. Ladies and gentlemen, our program is drawing to an end. To the Mboweni family, we would like to thank you for your guidance and for your support in establishing this lecture series. We value the relationship that your family and the South African Reserve Bank have built, a relationship shaped by the lasting contribution of our eighth governor.