Foundation for South Sudan Development
Foundation for South Sudan Development
By By Atem Garang Gabriel;
August 17, 2007 — Economists from Adam Smith to 21st century economists believe in the rationality and viability of investment as corner stone for economic takeoff. In writing this article I must admit and quote that economic is not a pure science as they say if six economists meet, they will have varied opinions on the same subject and hence my analyses represent one of its kind.
The Liberalization of economics is a recent concept of integrating global economies and catalyzing economic prosperity and growth. But again is liberalization way-out for a country like south Sudan starting from nothing? Liberalization is a tool for foreign domination by advance countries since even in natural sense it is impractical for an infant to compete against seniors in any competition. What is the rationale of bring together wounded, infants and giant economies in the same market contest? As South Sudan economy begins to take shape does GOSS have any practical approach to ensure speedy growth and at the same time control the opportunities and wealth distribution in the country or is it just a worshipper of globalization and liberalization as advocated for by the West? The answers and preparedness to handle these issues are the foundation and economic path South Sudan Economic is going to take in all economic aspects.
Economics gears are for take-off; infrastructure, roads, efficient and reliable communication system, electricity, friendly bureaucratic system in issuance of licenses and other legal documents, Security and Fiscal and monetary policies that will control inflation, redistribution of resources. Is GOSS marshalling resources to create oiled and prosperous economy?
Having outlined these essential gears of economic development, do we have economic policies and plan to institute development and growth oriented economy? Have GOSS set our opportunity cost right? I must stress here that economic development is a function of proper diagnoses of the economic problems and making the correct prescription of the economic dose. Had we identified the most outstanding economic problems and relevant attempt to address these? Economic is like medicine too were the doctor identified the signs and give dose that he/she thinks fit best and wait for the response. In the same way economic planning require identifying the problems and give the right dose and watch the responses of the problem and then make a follow-up till the problem is solves. Unless GOSS collects statistics and problems it is bound to make irrational and uninformed decision that will make less impact on the life of the people.
Yes a cartoon in an article in Sudan mirror written by Dan Eiff recently denotes a protest and displeasure of wounded heroes and heroines, martyrs against ministers, departments’ heads and other high caliber guys who used government resources. The message was they are forgotten lot when they were core to the liberation process. They are remembered only in speeches but don’t feature when our leaders enjoy in aired condition vehicle, at Juba Raha and South Sudan Hotel when sipping their cold drinks. But here is an economic reason to be weary about these mushrooming vehicles. Economic wisdom tells the buying of these expensive vehicles was untimely, selfish and forgetfulness of South Sudanese interest. Why? I believe our government in doing so put the horse before the cart. The roads should be constructed, follow by vehicles. The guiding economic principle is the reduction of cost and rational priorities. The government should have built the main road throughout South Sudan and feeder roads-misplaced priority by minister of finance and economic planning. Road construction is more commanding economically than expensive vehicle because GOSS vehicles buying rate of turnover and maintenances cost will be at optimum. By investing in vehicles which are to be highly maintained, is declaration of deficit operating treasury, slow local, regional and international investment since good roads catalyze investment. My assumption in roads construction in South Sudan should be cheap because we have cheap if not free tar from Bentiu petroleum plant. If the assumption is wrong ask why? I would like to state here and remind the citizens here road construction is a great economic weapon for prosperity and secret weapon of economic frustration and destruction depending on the approach. If GOSS continue buying expensive vehicles, we would miss the economic expectations and economic development will continue to be dwarf. The enemies of the South will continue to lobby within the GOSS for buying of more vehicles but that is expensive and frustrative approach. That path means pouring money to spare parts, maintenance cost, luxury and frustration and a ticket for treasury inability to maintenance Goss’s operative cost and hence possible financial collapse of GOSS. Booming of business is a product of good roads. It is worthy less to point out that when road construction is done in South Sudan, local and international investors will easily tapped unexploited resources and markets since business making will be cheaper in terms of time, operation cost and money and hence more profit.
Communication is another issue that GOSS should address. GOSS should liberalize communication market but this should be done with a caution not to sell the South Sudanese economy to the foreigners-The prescription is Stock market window in the South Sudan where local buys shares. Some companies such as Sudani, Mobitel and Gemtel are not to the satisfaction of many South Sudanese. Study cases are in Uganda and Kenya where mobile technology is cheaper, efficient, job creators and offer other technology based services. Gemtel was vehicle to south Sudanise the communication system. But the question is why incorporate or bring a company that does not have financial and technological capacity to provide services. Many times there are network problems a clear sign of incapability and inefficiency, Short network coverage a sign of financial feebleness and technological backwardness, semi-card shortages or you may call it hoarding which is against world class business. How on Earth you want a semi-card/services and it is not available? It is unworkable in world class standard. What is in the interest of ministry of communication in giving Gemtel in this shape an operation license? Is South Sudanese the interest or something else? Initially many South Sudanese used to avoid Sudani and Mobitel services. That was a politically protest since the duo are believe to have roots in the North. But the law of economic is taking root and now people are buying services worthy their money-moving to Mobitel and Sudani is inevitable. In this regards, subscribers of Mobitel and Sudani call cheaply to Khartoum while Gemtel calls are expensive to both East Africa and Khartoum. In this connection, what are the survival strategies for Gemtel? Are they just relying on the monopoly created at the heart of South Sudanese? South Sudan needs able company like Celtel and Safari COM. Such companies will take the services to the door step and whole South Sudan will be a talking point.
The government through fiscal and monetary policies is able to reorganized and direct resources to the sector that require more and immediate attention. GOSS is able to remote-control the investment of the investors in the country. Throughout the two decade of war no houses and roads had ever been constructed. The government shown creates taxation policies that will address this. The government via Nile commercial bank and Kenya commercial bank should arrange for the advancement of loans toward houses construction. Such amount should be exempted from taxes and the interest received by these banks should be tax free. These will encourage banks to give loans since the profit will be tax free and the citizen will take more loans since the principal and the interest paid are tax free. These should also be supplemented by easy licenses issuance to construction firms and tax allowances to them and the constructions material should be less tax this will create a chain of willingness in construction sector and this will address accommodation and other housing problems in South Sudan. Unless this is address accommodation problem will persist for long then expected in economic perspective.
No economy today can effectively and correctly address all the fundamental problems without strong Stock market. GOSS should begin to study the possibility of establishing South Sudan stock exchange. The importance of stock market can not be debated. It is a forgone economic conclusion that stock market is an adjustment tool that government uses to operationalise its policies and developmental agenda. It is a challenge to development one but South Sudan should be in the learning curve. GOSS is always in financial problems but if it had one, it should uses treasury bonds and treasury bills to solve this short term problems. As bigger economies in Africa like Kenya, Nigeria passes the test of domestic borrowing and begins to eye international stock market for internationally borrowing to solve deficits budget problems South Sudan should explore this window which will greatly enhance economic development through internationally and local stock investments.
3rd Year Economic Major, Moi Nuivesrity, Kenya,
[email protected],0723233575