For demonetization to be successful, adequate remonetization necessary

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Last weekend’s Madaraka Day celebration delivered unusual excitement to Kenyans following the announcement by the Central Bank Governor, that a new generation currency had been introduced to replace the old one. Of equal importance, was the additional pronouncement that the one-thousand-shilling note will be withdrawn from circulation in early October. This is in keeping with a heightened war on corruption, whose illicit proceeds have been stashed in hidden locations, causing cash shortages that are crippling the economy. And for this, we commend President Kenyatta for a truly bold initiative.

In the next few months, economists shall pay close attention to how the Central Bank of Kenya will navigate the sensitive process of demonetization, which has experienced both success and failures in different countries. So why have some countries successfully executed demonetization while others have miserably failed at it?

The simple answer is that money has three distinct functions. It serves as a medium of exchange, as a store of value and as a unit of account. Countries that have successfully conducted demonetization, have effectively managed to change the medium of exchange without significantly disrupting the stored value. This is typically achieved through an efficient process of remonetisation, which is the process of introducing new currency to ensure that total money supply in the economy remains steady.

Australia is a shining example of how a country can demonetize and remonetize in an efficient way that minimizes any disruptions to the public. In 1996, faced with a similar set of challenges around fraud and counterfeits, the Australian government chose to withdraw its paper-based notes and became the first country to adopt polymer-based notes. With a singular purpose of replacing paper with plastic, the government was clear that only the medium of exchange was changing, and it made every effort to ensure that stored economic value was conserved through an aggressive remonetisation process.

Similarly, the European Union (EU) demonstrated how successful demonetization is achieved when 12 EU countries did away with their national currencies and adopted the Euro on January 1st 2000. The European Central Bank prepared for almost three years while participating countries distributed 8 billion notes and 38 billion coins through banks, post offices and sales outlets making it arguably one of the most aggressive remonetisation exercises in monetary history.

However, countries that have poorly managed demonetization have ended up causing untold pain and destruction to their citizenry. In this respect, India provides powerful lessons on the difficulties that can arise when demonetization is bungled. In November 2016, Prime Minister Narendra Modi, in a surprise announcement, declared that the 500 and 1000-rupee notes would be banned in four hours’ time. People were given several weeks to exchange their demonetised currency for new notes at banks. But new notes could not be printed fast enough, and the policy sparked a months-long currency crunch, costing India over 1.5 million jobs and wiping off at least 1 percent from the country’s GDP.

The United States also bore the brunt of poor demonetization. The Coinage Act of 1873 demonetized silver in favour of adopting the gold standard as the legal tender of the United States. The withdrawal of silver from the economy, was not counterbalanced by any form of remonetization resulting in a contraction of the money supply, which subsequently led to a 5-year economic depression in the country. In response to the dire situation and pressure from silver miners and farmers, the Bland-Allison Act remonetized silver as legal tender in 1878. Reflecting on the economic hardships that arose after the demonetization of silver, Senator John Reagan would later on write “I am persuaded history will write it down as the greatest legislative crime and the most stupendous conspiracy against the welfare of the people of the United States, which this or any other age has witnessed.” Senator William Stewart would add that “the demonetization of silver was the crime of the nineteenth century.”

In the final analysis, the key formulators of Kenya’s monetary policy are invited to consider both the positive and negative outcomes that different countries have experienced when conducting demonetization. The balance of evidence suggests that the 230 billion shillings that will be withdrawn from the economy on October 1st, will need to be conserved and reintroduced back into the economy in the form of new currency through an efficient process of remonetisation. Anything less, could lead to a contraction of money supply which could unleash powerful deflationary forces.

Ken Gichinga is CEO at Mentoria Economics; Email: [email protected]

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0 Replies to “For demonetization to be successful, adequate remonetization necessary”

  1. thank God now u know the reason wat he saw ws devasitating to him and again u trust him.wat wud happen if he was diogonised wit a disease which wud render his manhood unfunctionable wud u get out of your matrimony to search for sex.Pray for God to intervene.

  2. First of all let me say that you are a lucky woman seeing as he has not cheated for all this long considering the circumstances. Walking out of the marriage does not seem to me like a wise decision because he does seem to love you a lot and thats why he does not want to do anything that would lead to losing you. However in my opinion speaking to a professional that would make him understand that there are proven birth control methods that are almost 99% effective would be a first step in persuading him to some intimacy.This professional would maybe also discuss other birthing methods such as cs that do  not hold as much anxiety and uncertainity as normal delivery.At 27 we can still say you have room to give him some more time before he recovers from the trauma seeing as you yourself have already recovered from that experience. 

  3. The truth is  that you have another option. It’s called forcing the issue. It’s not a marriage if you are not having sex. In reality, he is being unfaithful to you by refusing to have sex with you. Faithfulness is basically being there for you in his capacity as your husband and that includes being there for you sexually. 

    How could you go 4 years??? How could you go 4 months without sex with your husband without any good reason??? You are asking for advice now???? You should have looked for advice when a month went by… Catch the cancer early, not going to the doctor when you have grown a head-size tumor…
    Address the issue. Raise hell until you get to the bottom of it. If it’s medical, see a doctor!!!  Just do not allow him to neglect you in this way. Address this issue strongly and don’t let it go until you come to an understanding. I’m saying, move out of the house, tell his parents… bring in the big guns… There’s nothing to be embarrassed about. 

    Anyway, I doubt that is the only problem in your marriage. The options you have are suffer or save your marriage. 

    1. You are not helping! Those ‘force the issue’ strategies NEVER WORK! She needs to reload her ‘Sexy App’, work out kidogo, get a tight body short sexy skirts and lingerie, some leg etc and work the man, we are visual creatures – it is images that switched him off, use a new image to switch him on…..

      1. Don’t be too quick to type nonsense Mazzdark. Has she mentioned anything about gaining weight or losing her sex appeal after child birth? She didn’t say her hubby has a problem with her weight. It has got nothing to do with her image. She clearly found out that it’s the trauma of reliving another complicated delivery that the husband just can’t face. It has got nothing to do with whether or not he’s visual. He can be visual, physical, spiritual……..it doesn’t matter. Point is they both need serious counselling. He holds himself responsible for her near-death experience and doesn’t want another such chance. That man is being controlled by FEAR.

        Having said that however, I do get this wee bit feeling that the woman in agony has not spilled the whole truth about her marriage.

        1. love is too big to a word for men, i believe this hubby is a liar. It is very rare for a man to give up sex because of trauma. I saw my wife deliver and i always love her love making. It makes us complete and can’t imagine missing it for a month with good reason like medical leave. This man is getting it from elsewhere and as mazzdark put it, you need to up your game else break it off and stop suffering alone. Sex will never come coz you forced it, women should know it better try forcing a lady it will be rape no matter the case. So jus engage a mental war and caress him out of his cacoons.

      2. Really, love is beyond Lingerie and short sexy legs, companionship and frienship sees beyonds small maters like those. Royco and Pilau Masala is only meant to spice up food

  4. Unfortunately the longer one stays with a problem without resolving it, the more it sinks in and becomes part of you. This is an issue that should have been dealt with immediately. It’s sad that you didn’t get to know the reason and that shows that there is a communication breakdown in your marriage. He should have been able to trust you enough to tell you the real reason he is not in the mood for sex.

    Alternatively, there may be another issue and he is using this story as a cover-up. After 4 years, you both need to be straight with each other. Be frank and tell him to see a counselor and both of you need to seek professional help from a CERTIFIED  marriage therapist.

    You need to move past the traumatic experience your husband went through, lack of communication and the last 4 years before you can move and continue with a healthy marriage or part ways. This can only be decided once you confront the various.

    Otherwise, 4 years is a long time for no sex in a marriage.

  5. 4 years without sex and you are married?? What!!! I’d be suspicious after the 6 weeks after birth and my hubby doesn’t want sex. I think he’s getting it elsewhere….which dude will last that long? It’s like being a virgin all over again!! 

  6. If someone loves you there’re ways to demonstrate and show they do. There’re a lot of relationships, not necessarily sexual, where parties claim they ‘love’ or care about one another, while the truth is very different and painful. If your man claims to care about you so much then he would be the first to hug you, kiss you and hold you tight thanking God you came through the life threatening ordeal. His prayer would be, “God, I’ll do anything for her and my baby and we’ll live happily praising your Name if you let them come through this!” NOT ‘I’ll never touch her again!”

    What your husband has continued to do is feed his own self-righteousness and selfishness. If a partner in a LOVING relationship had a physical or mental problem and they knew it, they would do anything to address the problem, not only for their own well being, but for the spouse they so much care about. He is the only man you should rightfully get sexual satisfaction from and if he knows that and he denies you your right for more than a month without explanation, he can not claim he loves you. By saying he’s not ready yet, is further prove that he’s only serving his personal selfish interest and what you feel or need is not part of his priorities.

    I think you should consider what @e1ee1df38e7a8f1dd16ec80dddb2235d:disqus  has posted below wisely and seriously with the aim of arousing his mind from slumber in the hope to save (not wreck) your marriage. Let him feel your frustrations and disappointments, let his see how his “loving you” is meaningless if he can not help, defend and satisfy you like a man. Let him realize what a coward he has been by failing to recognize your love and effort to make him a proud father, which is the fruit of your labour in the ward, and how happy and ready you are to make him even more proud with more children.

    I think there’s no more waiting, you’ve got to act now. Take the lead, do more than you have already done. If he so cares, he wont let you go or lose your mind, but if he doesn’t then you’ll know for sure. You’ll then seek wise counsel to guide you in the best way forward.

    Love is not just being with somebody and leaving the rest, it’s more about a commitment that makes you do much more for the one you love.

  7. What is clear: You did marry a man who
    had waited until marrying you to involve in sex. This has been
    manifested in his ability to practice celibacy for all those years
    you did mention: thats one of the benefits of the principal. Your
    husband has no problem whatsoever: He loves you and your daughter
    enough to deny himself pleasures of love making. As the common unwise
    lines goes goes “what dude could do that?”, he must be getting it
    elsewhere? My wise did undergo similar labor difficulties and vowed
    to me she will never want another child and she developed phobia for
    sex; we had to resort to use of protection. I am just wondering:
    what is the biggest issue for you: Wanting another child or having
    intimacy with your husband? You don’t have to go outside to get a
    baby: Your husband could donate the seeds. If it is the latter, you
    will have to work together to relearn your passions for each other,
    not in a confronting way, but in a loving manner that each
    participant works for the other and fully understands what is a
    stake: each others wellness and assurance. Please assure your husband
    there are no babes for now, just the pleasure of intimacy (which I am
    certain he misses more than you could imagine). And when both of you
    will be ready for more children: Tell him, Why not try delivery
    through Cesarian section. Importantly, all will be well: God will see
    you through as He did before.

  8. From your post, I am assuming that your husband was in the delivery room during this traumatic experience.  Although modern women want their men by their side during delivery, not all men are built for this – most especially African men!

    From a Psychologist’s perspective, your husband probably suffers  Post Traumatic Stress Disorder and needs to see a mental health professional for diagnosis and treatment.  Should you decide to leave him and be with someone else, this will only traumatize him further, leading to a break-up.  That would likely be the easy way out for him; but what about you and your lovely daughter.  Encourage him to have therapy and sort out the emotional and psychological impact the birth experience created.

  9. my understanding is that he promised himself or even committed himself in front of God not to ever have sex if you and your baby come out safe and kicking(which I totally understand) but that doesn’t mean he stopes loving, caring and stay committed to his family. i understand it is hard and not optional not to have sex in a marriage for this long at this age, in a normal situation.
    i believe what could be the possible solution for this, in my opinion, is either to convince him to get help from phsychatristes and/or have a serious talk with his spiritual leaders that (this actually should be the 1st thing you should try).

  10. Lady u are very special personally i’m not sure i can exceed 30days with her in the same bed as i and not have some fast action. on the other hand he has valid concerns, it may be a death of an aunt or something happened when he was young and it still gets to him, since you talked to his BFF maybe try the same and the BFF may hint tht u growing cobwebs in the hanky panky department, (We sometimes listen to our BFF’s thn our own mothers n wives). then he also says he is not ready, well people have different healing rates yours may be faster than his, so jus take him slow, jus be the chick he married, kiss him daily, should spark something, help him as best as you can, also explain your fears in black and white to him. but i must say you not just any chick, most would have left, you do take your vows seriously biggup

  11. One thing stands out here, something that reaches deep in my inner being. This is something that makes every part of me want to curl up in anguish, it torments me like nothing else ever has…

    “preggers “

  12.  The word to underline here is “traumatized”. Trauma for men is especially difficult since most of us lack the ability that ladies take for granted, introspection. Men are traumatized and then stressed even more because they dont understand what is happening to them. Happily thre are specialists to deal with these kinds of traumas and I can garantee that within three session or less of therapy, he will be back and hopefully rearing to catch up on the last four years. If the problem is still persesisitng, email me for refferals, [email protected]

  13. This story must be fake. However, if true, then you have been lied to by your husband and his friend (birds of same feathers…). Just get some of those drugs that increase man’s libido, add in his drink, wear provocatively, put on a pornographic movie, suck him dry or raise hell if he still refuses. Threats of putting issues in open may help as men guard their egos passionately.

  14. 4 years without sex is good grounds for divorce, including in most churches. That must one strange man, most men I know will be asking for ‘it’ almost immediately the wifey is out the hospital ….childbirth not withstanding. Guy is creepy. Did he even like sex in the first place are is he using it an an excuse ???

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