BY KHAMAL CLAYTON
Khamal Clayton is a second-year IDEV student from Jamaica with a passion for macroeconomic policy and sustainable economic development.
The IDEV Summer Internship Series highlights the experiences of IDEV students participating in internships this past summer. Each year, IDEV students intern with various development organizations around the world. These internships are generously funded by SAIS donors, and offer valuable opportunities for students to gain real-world experience between their first and second years at SAIS.
After spending my year at SAIS Bologna focusing on macroeconomic theory and econometric analysis, I knew I wanted to spend my summer interning at a central bank, applying what I had learned in the classroom. Fortunately for me, I was able to put these skills into practice after being selected as one of two interns to work at the South African Reserve Bank (SARB) during the (southern hemisphere’s) winter, which was still very mild compared to what I had become accustomed to while living in Bologna.
Although I had never been to South Africa, I knew I would not be completely on my own: I was working with two SAIS alums, David Fowkes and Chris Loewald, who both had spent a number of years helping to define SARB monetary policy. In addition to the SAIS welcome, my team members, who came from different ethnic groups, were very welcoming and eager to teach me words and phrases from their respective languages, including !Xhosa and Zulu.
I wanted a highly quantitative experience, and I certainly got it: I was placed on the Macro Models Unit, which was responsible for forecasting macroeconomic indicators such as inflation. I also worked on a long-term project with the Research Department on the pass-through impact of oil shocks on inflation. Ultimately, my work will be used in an upcoming research paper. For this project, I had to learn new concepts, like dynamic factors and principal components, as well as the mechanics of Vector Autoregression (VAR). Furthermore, the skillset that I developed in this role will be useful for any role at a bank that is focused on macroeconomic analysis.
Beyond work, I was able to explore the rich South African culture and history. I loved peri-peri chicken and I look forward to being a regular patron of Nando's while doing my second year of studies in Washington DC. I also enjoyed visiting Soweto, learning the history of the largest township during the apartheid regime, where Nobel Laureates Nelson Mandela and Desmond Tutu had spent many of their years.
My time in the country also allowed me to see its political legacy still impacts macroeconomic stability. Although apartheid formally ended more than twenty years ago, the memories and scars of such a traumatic period of South African history still remain fresh. It is most readily observed in urban areas, where socio-economic status still has an obvious racial component. Furthermore, the macroeconomic stagnation and rising income inequality have contributed to a volatile political climate. As the general elections approach next year, heated discussions on land reform will remain front and center.
It is honestly difficult to be optimistic about the near-term future of South Africa. Painful reforms will be needed in the short-term to put the country on the right trajectory in the long-term. Unfortunately, the necessary political is lacking and is currently held hostage due to pressing concerns including an upcoming election and a volatile political context. Nonetheless, I hope that the political establishment finds the resolve and the talent to chart the right path.