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South Sudan: Rising prices and prospect of Economic stability

Mon, 29/06/2015 - 18:57

 South Sudan: Rising prices and prospect of Economic stability

rising-costs

By Addis Ababa Othow Akongdit (PhD)

Reachable at [email protected]

Abstract

Prior to the outbreak of conflict on 15 December 2013, South Sudan had positive development prospects. The country was expected to achieve in 2014 at least an average growth rate of 30.7% of GDP, a growth in non-oil sectors, such as agriculture, construction and services, following two years of strong economic contraction.

However, this crisis has punctured the excitement of South Sudan becoming a beacon of hope for political stability, food security (Africa’s next food basket), the world’s newest investment destination, economic growth and prosperity.  The country is currently facing a widening financing gap, high inflation and unpredictable economic dilemmas, due to its on-going political crisis, deteriorating oil production and volatile global oil prices.

It is estimated that the current conflict has cost up to more 15% of the potential GDP in 2014 and it is predicted to upsurge as the recent conflict and the falling international oil price continue to cast a shadow over economic prospects.

Military and security expenditure has drastically increased, jeopardizing the availability of resources for service delivery and capital spending on much needed infrastructure and development programs.

On May 5-6, 2015, the Government of South Sudan had organized a high level Consultative workshop under the theme: “Towards improving Economic Governance”. The workshop was meant to exchange views and come up with concrete recommendations on how to improve the falling economic situation in the country, especially rising prices of essential commodities in the market.

This two-day Economic Consultative Meetings had generated recommendations which can be summarized as follows:

  • Fiscal Policy: strengthening of resources management (i.e. Restructure our economy) and adhering to the approved budget lines.
  • Monetary Policy: realign the exchange rate regime and better management of FX allocations (LC’s, public services and etc.).
  • Revenue collection and Management: enhance efficiency in tax, non-oil revenue
  • Market prices: introducing price controls measures

These recommendations were presented to the Council of Ministers with an aim to take quick actions to get back our economy to its right footing.

This deteriorating economic situation and sharp increase in food prices in our country raised serious concerns on what to do to bring our economy back to track.

Fiscal & Monetary policies

The core fiscal policy of South Sudan is to execute sound economic, fiscal and investment policies, distribute its revenue to the other sectors by adopting international ‘best practices’ of fiscal management, including new instruments such as a Medium-Term Expenditure Framework (MTEF), Revenue Authority,  and an Integrated Financial Management Information System (IFMIS). On the other hand, Bank of South Sudan (BSS) its primary objective is to maintain monetary and domestic price stability for effective functioning of a stable market based financial system and to promote a safe, sound and efficient national payments system which aims to maintain the stability of the financial system as a whole. However, with these well-articulated policies, the factors which contributed to the political and economic instability in South Sudan have been apparent since independence, yet they have not been addressed with any urgency. The Country has been facing major political and economic challenges such as internal conflicts, rebellion, food insecurity, price volatility and etc and the question is where/what are our strategic plans that tackle all these sweltering issues.

A- Prices and Free Market Approach:

Rising prices of basic commodities particularly food prices in the past few months raised a lot of questions whether our economic policies (SS Development Plan and Vision 2040) are adequately followed. As we know, South Sudan economy is based on free market policy where the prices of goods and services are determined by the interplay of supply and demand.  The market is driven by “invisible hand” of self-interest in which the consumer is at its centre and the facts are that South Sudan annual Consumer Price Index (CPI) has increased by 38.4% from May 2014 to May 2015, Food and non-alcoholic beverages increased by 41.1% from May 2014 to May 2015, while the prices for health increased by 77.4% and restaurants and hotels increased by 34.3% over the same period.  The high prices of food and non-alcoholic beverage were mainly driven by higher price of vegetables. On other hand, annual inflation in May 2015 was 36.4% in Juba, and 63.8% in Wau, compared with 39.5% for South Sudan. Prices of food and non-alcoholic beverages increased in Juba by 41.3%, and by 80.5% in Wau respectively over the same period.

These higher food prices have radically different effects across states and population groups. At the country level there will be a huge challenge to meet domestic food demand. Given that South Sudan is almost import dependent country, it will be hard hit by rising prices.  At the household or population level, rising and falling of food prices affect those who can afford it the least, the poor and food insecure population. This group (poor and food insecure population) forms the large majority (above 54 % of population) and they will be seriously affected by the situation.

Emerging factors behind rising food prices could be December 15th, 2013 political crisis, escalation of war which led to increased military, security expenditure, enlarged deficit financing and abandoned the fiscal policy. On other hand the Bank of South Sudan has maintained its fixed exchange rate policy, despite the irregular devaluations resulted from a failure to control inflation.  However, it is known that domestic price level is mostly equal to the parallel market exchange rate. In other words, the prices of goods and services are based on the black market rate. The instability arises under the fixed exchange regime led to a deteriorating budget leading to inflation.

Giving the situation we are in, what should be a sound policy actions, one may ask? Many countries which experienced the same had taken steps to minimize the effects of higher prices on their people. Argentina, Bolivia, Cambodia, China, Egypt, Ethiopia, India, Indonesia, Kazakhstan, Mexico, Morocco, Russia, Thailand, Ukraine, Venezuela, and Vietnam are among those that have taken the easy option of restricting food exports, setting limits on food prices, or both. For example, China has banned rice and maize exports; India has banned milk powder exports; Bolivia has banned the export of soy oil to Chile, Colombia, Cuba, Ecuador, Peru, and Venezuela; and Ethiopia has banned exports of major cereals. Other countries have introduced restrictions on imports: Morocco, for instance, cut tariffs on wheat imports from 130 percent to 2.5 percent; Nigeria cut its rice import tax from 100 percent to just 2.7 percent.

Generally, Price controls and changes in import and export policies may address the problems of poor people who find that they can no longer afford an adequate diet for a healthy life. However, some of these policies are likely to backfire by making the international market smaller and more volatile. Price controls reduce the price that farmers receive for their agricultural products and thus reduce farmers’ incentives to produce more food (which may not be the cast in South Sudan).  In addition, for those who can afford higher food prices, price controls divert resources toward helping people who do not really need it.

Joachim von Braun, director general of IFPRI and other economists believes that the rising food prices have a dominant role in increasing inflation and it would be misguided to address these specific inflation causes with general macroeconomic instruments.

There are sound policies which are needed to deal with the causes and consequences of high food prices:

  • Government should establish a comprehensive social protection, food and nutrition initia­tives to meet the short- and medium-term needs of the poor (safety net programs like food or income transfers and nutrition programs focused on early childhood). Some of the poorest people, especially in rural or displace areas  are not well connected to markets and thus will feel few effects from rising food prices, but the much higher international prices could mean serious hardship for millions of poor urban consumers( for example, Juba, Wau, Bor and all residents of big cities )  who are net food buyers. These people may need direct assistance. Some countries, such as India and South Africa, already have social protection programs in place that they can expand to meet new and emerging needs. Countries that do not have such programs in place will be able to create them rapidly enough to make a difference in the current food price situation.
  • Government should also impose price controls on the prices of essential goods and services to maintain the affordability of essential foods, goods and services and to prevent price gouging during shortages. A country like Egypt during the Third Century has regulated grain production and distribution. In Greece price controls were established on grain at a price the Athenian government thought to be just. Developing and developed countries have their own laws and regulations pertaining to price control. In advanced countries there is greater emphasis on price regulatory and monitoring commissions. For example, the Government of New South Wales, Australia established the Independent Pricing and Regulatory Tribunal NSW (IPART) and in the United Kingdom, independent regulatory bodies were established to oversee and regulate charges by utility monopolies.
  • Government should also eliminate agricultural trade barriers (if any). Although some progress has been made in reducing agricultural subsidies and other trade-distorting policies in developed countries, many remain, and poor countries cannot match them. This issue has been politically difficult for developed-country policymakers to address, but the political risks may now be lower than in the past. A level playing field for developing-country farmers will make it more profitable for them to ramp up production in response to higher prices.
  • To achieve long-term agricultural growth, the government should increase their medium- and long-term investments in agricultural research and extension, rural infrastructure, and market access for small farmers. Rural investments have been deeply neglected in recent decades, and now is the time to reverse this trend. Farmers are operating in an environment of inadequate infrastructure like roads, electricity, and communications; poor soils; lack of storage and processing capacity; and little or no access to agricultural technologies that could increase their profits and improve their livelihoods.
  • Government should also support private sector development programs and promote private sectors ability to create a competitive environment which will help generate quality services to the people; improving the standard of living of South Sudanese.
  • Free markets in developing countries such as South Sudan indulge in market abuses which resulted in rising prices and inflation. It is appropriate that south Sudan adopts a free market approach in the short run as it works on designing a mixed economic system that will tackle some disadvantages associated with capitalism such as fund repatriations, imports of illegal products among others. It should use its oil revenue to invest in building its productive capacity.

B- Parallel Market and Foreign Exchange Reforms

existence of a ‘parallel’ or black market for foreign exchange suggests that the official exchange rate overvalues our national currency(SSP), leading to allocative inefficiencies in the economy. In most of developing countries, dealings in foreign exchange (FX) are subject to restrictions on sale or / and official price ceiling. Typically, the exchange rate is pegged by the central bank and only a small group of intermediaries mainly financial institutions (banks & forex bureaus) are permitted to engage in currency transactions. But, when the individuals or/ and briefcase companies are allocated FX , the consequence would be that some of this FX (if not all) could be diverted and sold illegally at a market price much higher than the official price creating black market premium. That’s way; the Bank of South Sudan (BSS) had attempted to eliminate the parallel market premium either by floating the exchange rate or by adjusting the official exchange rate towards the parallel market rate.

On Tuesday November 12, 2013, the Bank of South Sudan had devalued its national currency (SSP) against the dollar by 34 percent to bring it onto a par with the black market rate, a move that risks fanning inflation. The Bank had indicated the official foreign exchange rate as one dollar to 4.5 pounds from 2.96 pounds before the devaluation. South Sudan has had a currency problem ever since it gained independence from Sudan in July 2011. Its oil exports have been disrupted by disputes with Khartoum, leaving it struggling to pay for the food and other imports that it depends upon.

The devaluation was part of Foreign Exchange reforms intended to bring the parallel markets into the formal economy and create jobs. It would had lower short-term exchange rate volatility, provide more reliable access to foreign exchange by the business community and members of the public and help to build buffers for the economy to deal with unanticipated shocks.

Although the BSS has the full mandate to take decisions that will stabilize national economy, including the harmonization of the exchange rate, but it was forced by South Sudan Legislative Assembly to revoke the devaluation decision with immediate effect.

However, the Governor of BSS had then reaffirmed the Bank its longstanding commitment to market reforms and to focus on the necessary conditions for creating conducive environment for more investments, macroeconomic stability, high quality financial institutions and effective banking supervision.  The rationale for exchange rate reforms can be summarized (not limited) to the followings:

  1. The core of the reform is the unification of all exchange rates into a single rate at which all transactions are settled.
  2. Multiple exchange rate systems damage the credibility of the Government. It projects an image of a country which is unable to pursue sound economic policies. This system implies a large hidden transfer of funds from the government to those that get foreign currencies at official rate. It facilitates also rent-seeking behavior and money laundering, raises risks, and deters foreign investments.
  3. Unification of official and ‘parallel’ market exchange rates may lead to an increase in steady-state inflation, because of the fiscal impact of real official exchange rate changes and enable the Government meet demand arise of a massive expansion of it expenditures associated with the civil war or other developmental programs.
  4. The typical rationale for doing away with a fixed regime or for devaluing the currency is to avoid the shortage in foreign-exchange reserves or the speculative attack that can arise from inconsistency between the fixed exchange rate and the country’s monetary policy (see Obstfeld and Rogoff 1996, section 8.4). If the exchange rate and monetary policy are inconsistent, then there will be substantial growth (positive or negative) in the stocks of official reserves; if these decline to zero, the exchange rate regime can no longer be supported. This reform (to the extent that the nominal exchange rate changes relative to nominal wages and prices) will alter the relative price of traded goods and will reduce the purchasing power of consumers in terms of traded goods;
  5. Devaluation is a natural process in the history of financial markets with aim to remove multiple exchange rates and eliminate the inefficiencies and corruption that follow from such rates. This will cause a shift in the relative prices of the goods sold under the multiple rates and will also change the allocations of income among producers;
  1. Government of South Sudan has ambitious plans to promote diversification of exports in an attempt to reduce the dependency on import and improve the foreign exchange supply situation. Therefore a more competitive exchange rate will support this goal. Devaluation will also in long run boost exports and creates a favorable investment climate;
  2. Results show that devaluation can bring about significant gains compared with the bleak and unwelcoming picture painted by the public. Devaluation would eliminate the parallel foreign exchange market and improve GDP growth. We will note a significant recovery in investments which will improve exports and ultimately supplement the pool of savings in the economy;
  3. Inflation levels will also lower once the currency is devalued. This reflects the fact that imports are no longer derived from the much higher parallel exchange rate that existed prior to the devaluation.
  4. Generally, devaluation is likely to contribute to inflationary pressures because of higher import prices and rising demand for exports. However, the overall impact depends on the state of the economy and other factors affecting inflation. Under the extensive trade and exchange restrictions that are common in Africa as well as South Sudan, devaluation of the official exchange rate should have little impact on domestic prices simply because is determine on parallel marker rate basis. When a country devalues its currency, its exports (if any) become cheaper for other countries to buy, and it becomes more expensive for the country to buy imports. This tends to bring more foreign currency into the country and to encourage the foreign investments. It can also help to increase aggregated demand (AD)[1] and improve the rate of economic growth.
  5. The parallel market and the accompanying rent-seeking behavior will never be completely eliminated as long as the members of general public seek to extract funds through illegal channels. Apart from legal measures, the devaluation is a way to reduce capital flight is to establish credibility in government as the custodian of a stable and prosperous economy in the long run.

C- Dollarization

There are voices calling for dollarization of South Sudan economy which means adopting the US dollar (fully or partially) as the currency of choice in the country.  Many countries today have already dollarized their economies as a response to economic instability, high inflation and protection of assets from the risks of devaluation of their own currencies

Generally, there is no any country that leaves its own currency as its own legal tender and adopts or deals in a foreign currency. However, even though SSP is our legal tender, but in South Sudan with that regulations,  some government & financial institutions, non- governmental & civil society organizations and general public are in the habit of drafting official or private contracts, normal rent payments or salaries in foreign currency and not in local currency(SSP).

Some dollarization supporters think that this policy is capable to eliminate the risk of a sharp devaluation of the exchange rate and rising prices. It allows the country to abolish the rent seeking behavior and establish one exchange rate that may permit its process of joining East Africa projects such the EAPS system (an integrated regional payment system that will enhance efficiency and safety of payments and settlement within the EAC region). They also believe that it creates a higher level of confidence among international investors, lower interest rate spreads on their international borrowing, reduced fiscal costs, and expand the investment and growth.

Based on the BSS regulations, it is highly prohibited for any institutions, official or private in any parts of the Republic of South Sudan to fix hotels rates or any kind of rental rates, payment of prices for all goods, services or requesting payment of contracts or any monetary dealings, in foreign currency, to the exclusion or disregard of the local currency (South Sudanese Pound), as the legal tender. Most importantly many people and politicians see South Sudanese Pound (SSP) as a symbol of national sovereignty and national pride. Losing it could be difficult for many to accept, but the question is could dollarization be an answer to our economic dilemma?

Conclusions:

South Sudan is indisputably one of the poorest countries in the world. It lacks vital institutional settings due to long period of destruction and instability. There is undesirable level of capacity building, low life expectancy rate, worse mortality rate in the world, poor basic services. The current situation is seriously shocking, although the country has abundant resources in Africa making its economic prospect potentially bright. South Sudan therefore needs a well-planned economic system to harness its resources as well as enhance its economic socio- political stability.

[1] Aggregate demand is the demand for the gross domestic product (GDP) of a country, and is represented by this formula:  Aggregate Demand (AD) = C + I + G + (X-M) C = Consumers’ expenditures on goods and services. I = Investment spending by companies on capital goods. G = Government expenditures on publicly provided goods and services. X = Exports of goods and services. M = Imports of goods and services.


التمويل بالعجز بين الانتعاش الاقتصادي والتضخم النقدي

Mon, 23/02/2015 - 19:45

التمويل بالعجز بين الانتعاش الاقتصادي والتضخم النقدي

بقلم د/ أديس أبابا اوطو اكونجديت 

مصطلحات:

التمويل بالعجز او التمويل التضخمي :

يقصد به تلك الحالة التي تعتمد الدولة زيادة نفقاتها عن ايراداتها وينتج عنها عجز يغطي بالاصدارة النقدي الجديد  

الانتعاش الاقتصادي :

نقصد به احداث تغيرات ايجابية في المتغيرات الاقتصادية نتيجة للاستخدام العقلاني الرشيد للمبالغ المتحصلة عن طريق الاصدارة النقدي الجديد

التضخم النقدي :

نقصد به ارتفاع في اسعار الناجم عن زيادة الانفاق الحكومي (عن طريق الاصدار النقدي الجديد ) وعدم تناسب هذه الزيادة مع كمية السلع والخدمات المنتجة عند حدوث تلك الزيادا 

مقدمة:

لاشك ان مشكلة السيولة من المشكلات العويصة التي تعاني منها اقتصاديات الدول النامية  بصفة عامة و جنوب السودان علي وجه الخصوص ،فهي جزء من المشكلات التي تتعلق بتوفير الموارد اللازمة لتمويل وتحريك النشاطات الاقتصادية في اي اقتصاد. وغالباً ما تنشأ هذه المشكلة من ضعف البنية المالية لاقتصاد الدولة وبالتالي لاتستطيع ان توفر الموارد المالية الحقيقية فتضطر الي اللجؤ الي مايسمي بالتمويل بالعجز او التمويل التضخمي بمعني الاستدانة من البنك المركزي عن طريق الاصدار النقدي الجديد ،او الاستدانة من الجمهور والبنوك عبر اذونات الخزانة (T.Bills). فضعف المدخرات الوطنية الخاصة والحكومية يجبر الدولة علي الاستدانة و التي تعني مزيد من طبع النقود لمقابلة الاحتياجات

تواجه دولة جنوب السودان أزمة  اقتصادية لم تكن تتوقعها من قبل جراء الانخفاض الدراماتيكي في اسعار النفط العالمية (من 100 دولار مطلع عام 2014، الى 46 دولار في عام 2015) واستمرارية أزمة ديسمبر 2013 مما جعل الحكومة تعتمد في اغلب الاحيان الي التمويل بالعجز لنشاطاته الانتاجية والاستهلاكية  ذلك لشح الموارد المالية وضعف المدخرات الوطنية مما ادي الي تزايد  معدلات التمويل التضخمي (الاصدار النقدي الجديد ) خلال الفترة السابقة . هذا العمل الكبير وما  له من انعكاسات سلبياً وايجاباً جعل شخصي الضعيف يتسال ، هل يساهم التمويل بالعجز في دفع عجلة التنمية الاقتصادية ؟ ماهو اثر التمويل بالعجز علي المتغيرات الاقتصادية مثل عرض النقود والتضخم والناتج المحلي الاجمالي في المدي القريب والبعيد ؟

لجات دول كثيرة الي التمويل عن طريق طبع النقود ومن بين هذه الدول الولايات المتحدة الامريكية في القرن التاسع عشر والتي قامت بطبع النقود والاقتراض وعدم  السداد ذلك لتمويل نشاطاتها الانتاجية بسب شح الموارد المالية وبالنسبة لاحتياجات الاقتصاد الامريكي وقتذاك ، ويقول ارثر شلير نقد مستشار الرئيس الامريكى جون كندي لشئؤن امريكا الاتينية في كتابه الف يوم ان الولايات المتحدة الامريكية لم تكن لتصل الي ما وصلت اليه من نمو الاقتصادي لولا انها لجات الي طبعة النقود والاستدانة وعدم السداد ، ولكن اذا كان الحال في الدول المتقدمة يسمح  بالتمويل بالعجز لعلاج مشكلة البطالة التي تعاني منه الدول الراسمالية  في تلك الفترة (الكساد العظيم 1929-1933م ) كما يري كينز علي انه اي التمويل بالعجز يعوض النقص في الانفاق الخاص للحفاظ علي المستوي اللازم  لتشغيل التام . فما هي حجج استخدام التمويل بالعجز (الاصدار النقدي الجديد ) في الدول النامية مثل جنوب السودان التي توصف بشح  رؤوس الاموال العاملة في المجال الانتاجي بسب انخفاض الميل الادخاري وارتفاع الميل الاستهلاكي وعدم وجود الاجهزة المالية والمصرفية القادرة علي تجميع الموجود من المدخرات مما يعني ضعف او عدم مرونة الجهاز الانتاجي

لاشك ان مثل هذا النوع من  التمويل قد يؤدي الي رفع معدلات التضخم ، الا ان الالتزام بتوجيه هذه المورد (النقود المطبوعة ) نحو انتاج حقيقي يقلل كثيراً من هذه المعدلات في المستقبل وهذا ما نود ان نشير اليه في ان التخطيط الاقتصادي السليم هو السبيل الرشيد لتحقيق التنمية الاقتصادية لذلك فان دراسة دور التمويل في تحقيق التنمية الاقتصادية تقتضي الاحاطة بمصادر الادخار الوطني فضلاً عن مصادر الادخار الاجنبي اي بعبارة اخري المصادر الداخلية بما فيها التمويل بالعجز والمصادر الخارجية للتمويل و دور كل منهما في تحقيق التنمية الاقتصادية

ويراد بالتمويل بالعجز في اصلاح كثير من الاقتصاديين الحالة التي تتعمد فيها الدولة زيادة نفقاتها علي ايراداتها تاركة ميزانيته غير متوازنة

وتعددت الاراء حول مصادر تمويل هذا العجز حيث حددت اللجنة الاقتصادية للامم المتحدة التي قامت بدراسة تمويل التنمية الاقتصادية في اسيا والشرق الاقصي بان عجز الميزانية يمول عن طريق المصادر التالية

 ا –   المصادر الخارجية كالقروض والارصدة الاجنبية .

ب- المصادر الداخلية وتشمل

 1- الاقتراض من الافراد والمشروعات الخاص.

 2- الاقتراض من البنوك المركزية عن طريق الاصدارة النقدي الجديد.

3- استخدام ارصدة الحكومة النقدية.

مبررات سياسة التمويل بالعجز:

يرى المؤيدون لسياسة التمويل بالعجز اومايعرف بالتمويل التضخمي انه يحقق الامور الاتية

اولاً :ان التمويل بالعجز يساعد علي تحقيق الادخار الاجباري عن طريق رفعه للاسعار ومن ثم تخفيضه للاستهلاك حيث يترتب علي ذلك زيادة موارد الاستثمار ،فالادخار الاجباري المتحقق عن طريق التمويل بالعجز نوعان

  • ادخار عيني :

وهو يحدث بسب ارتفاع الاسعار المترتب علي زيادة كمية وسائل الدفع حيث يعجز اصحاب الدخول المنخفضة عن استهلاك جزء من الانتاج بسبب ارتفاع الاسعار ، ويعني ذلك انه هنالك جزء من الناتج القومي لم يتم استهلاكه وباستطاعة الدولة توجيهها نحوالاستثمار ، ويشترط لتحقيق ذلك ان لايصاحب التمويل بالعجز زيادة الاجور

  • ادخار نقدي :

وهو يتحقق لرجال الاعمال واصحاب الدخول العلية حيث يترتب علي ارتفاع الاسعار وانخفاض القوة الشرائية للنقود اعادة لتوزيع الدخول لصالحهم وبما انهم من الفئات التي تتمتع بميل ادخاري عالي فسوف يزيدون من مدخراتهم النقدية بسبب ارتفاع الاسعار ويوجهون هذه المدخرات نحو مجالات الاستثمار فيزيد التشغيل وينتعش النشاط الاقتصادي ، اي بمعني اخر التمويل التضخمي (التمويل بالعجز ) يؤدي الي زيادة معدل التكوين الراسمالي

ثانياً : يؤدي التمويل بالعجز الي تحقيق التشغيل التام للموارد الاقتصادية ذلك عن طريقين هما:

  • ان التمويل بالعجز يمكن الدولة من الحصول علي قوة الشرائية التي تستطيع بموجبها ان تمول بها الانفاق علي مشروعات التنمية وتحصل بها علي الموارد الاقتصادية اللازمة من عمالة مدربة وماهرة والالات وفنون انتاجية ،كما تستطيع بحصولها علي القوة الشرائية التحكم في حركة الموارد الاقتصادية وتوجيهها حسب اولويات التنمية
  • يؤدي التمويل بالعجز الي زيادة الطلب علي المنتجات والي زيادة الارباح قينشط بذالك الاستثمار ويزيد معدل التنمية الاقتصادية وذلك في اي اقتصاد يتمتع بمرونة في جهازه الانتاجي

ثالثاً : ان سياسة التمويل بالعجز بارتكاز ها علي الاصدار النقدي الجديد تزداد اهميته ا في الدول التي استنفذت طاقتها الضريبية والاقتراضية فعن طريق الزيادة في كمية النقود المطبوعة تستطيع الدولة سد فجوة تمويلية في خطة التنمية الاقتصادية وفك الاختناقات في الانتاج

رابعاً : تظهر اهمية التمويل بالعجز في الدول النامية للاسباب التالية :

  • لتعويض النقص الحاصل في كمية النقود بسبب انتشار عادة الاكتناز في هذه الدول عن طريف الاصدارة النقدي الجديد والتوسع الائتماني
  • عدم وجود الاجهزة المالية والمصرفية الكفء في الدول النامية يقضي بان يكون التمويل بالعجز وسيلة من وسائل التجميع الراسمالي

خامساً : ان التمويل بالعجز يشجع الوهم النقدي الحاصل بفعل التضخم والمتمثل في زيادة الدخول النقدية وبالتلي يغري العمال علي المزيد من العمل ظناً منهم ان دخولهم الحقيقية قد ذادت كما يشجع ملاك الاراضي واصحاب رؤوس الاموال علي تقديم مايملكون من عناصر الانتاج مقابل الزيادة المتوقعة في الدخول النقدية لهذه العناصر وتستطيع الدولة اعتماداً علي هذا الوهم بناء مشروعات التنمية الاقتصادية قبل ان تستبين حقيقة الزيادة في الدخول (2) هل حقيقة ام وهمية ؟

فعالية سياسة التمويل بالعجز :

يري بعض الاقتصادين ان سياسة التمويل بالعجز تتميز بكفاءة وفعالية في الجوانب التالية :

  • تخصيص الموارد الاقتصادية :

يتم عن طريق التمويل بالعجز تحويل الموارد الاقتصادية من القطاع الخاص (افراد ومشروعات ) لصالح القطاع العام فتستطيع الدولة بتحكمها في الاصدار النقدي الجديد وقدرتها علي الاقتراض من الجهاز المصرفي شراء عوامل الانتاج التي يملكها القطاع الخاص وبالتالي

فان التمويل بالعجز يعطي الدولة قوة شرائية تمنحها القدرة علي التحكم في الموارد الاقتصادية

وتوزيعها بين الاستثمار والاستهلاك

  • تشغيل الموارد الاقتصادية :

يري كينز ان التمويل بالعجز يؤدي الي تشغيل الموارد الاقتصادية عن طريق زيادته للطلب الفعلي ذلك ان زيادة الانفاق الحكومي ورفع الدخول الفردية يؤدي الي زيادة الطلب الاستهلاكي وبالتالي ارتفاع الاسعار الناجم عن زيادة كمية النقود ويترتب علي ذلك انتشار حالة تفاؤلية وسط رجال الاعمال تحفزهم علي المزيد من الاستثمار  وبالتالي مزيد من تشغيل الموارد الاقتصادية

  • استقرار الاسعار :

التمويل بالعجز يستهدف اساساً رفع الاسعار لتحقيق الادخار الاجباري ، كما يهدف الي تشجيع المستثمرين علي زيادة استثمارتهم عن طريق رفع الاسعار وزيادة معدلات الارباح ، كما يهدف ايضاً الي تشغيل عنصر العمل عن طريق الزيادة النقدية في معدلات الاجور

ويري بعض مؤيدي التمويل بالعجز بانه ذو قدرة ذاتية علي انها ارتفاع الاسعار ، فهو يؤدي الي زيادة القوة الشرائية التي تساهم في زيادة معدل التكوين الراسمالي وبالتالي يرتفع معدل الانتاج ويترتب علي زيادة الانتاج زيادة المعروض من السلع والخدمات وينتج عن هذه الزيادة انخفاض في الاسعار وبالتالي احداث توازن في الطلب والعرض واستقرار الاسعار ويشترط لتحقيق استقرار الاسعار الاتي

  • ينبغي علي الحكومة منع الضغوط التضخمية عدم تصرف النقود المطبوعة في الانفاق الاستهلاكي .
  • ينبغي ان يحافظ علي سيادة المنافسة في السوق حتي ينتج عن زيادة العرض وانخفاض تلقائي في الاسعار .
  • ينبغي استخدام النقود المطبوعة بكفاة عالية حتي تزداد كمية السلع والخدمات المعروضة.
  • تحقيق التنمية الاقتصادية :

يري مؤيدين التمويل بالعجز علي انه يؤدي الي تحقيق التنمية الاقتصادية عن طريق:

  • رفع معدل التكوين الراسمالي عن طريق الادخار الاجباري .
  • تشغيل الموارد الاقتصادية العطلة .

    ج-  تشجيع المستثمرين (رجال الاعمال )علي زيادة استثماراتهم .

    د- تسهيل عملية استيراد راس المال الاجنبي .

  • اعادة توزيع الدخل القومي :

لاشك ان التمويل بالعجز يؤدي الي اعادة توزيع الدخل القومي لصالح ذوي الميل الادخاري العالي عن طريق ارتفاع الاسعار ويترتب عليه من زيادة ارباح رجال الاعمال وتناقص معدل استهلاك ذوي الدخول المنخفضة بسبب انخفاض القوة الشرائية للنفود ، فالتمويل بالعجز يؤدي الي تحويل جزء كبير من الدخل القومي لصالح الاغنياء علي حساب الفقراء بحجة ان الاغنياء هم الاقدر علي الادخار والاستثمار.

التقييم :

* اذا سلمنا جدلاً ان جنوب السودان كواحد من الدول النامية لا يتميز بالخصائص التي تحول دون تحقيق اهداف التنمية الاقتصادية مثل سيادة انماط من العلاقات الاقتصادية والاجتماعية التي تعرقل التنمية ، انخفاض مستوي الفن الانتاجي ، عدم وجود العمالة الفنية المدربة ، انخفاض معدل التراكم الراسمالي ، انخفاض الطلب الفعال وغيرها من الخصائص فاننا نجد ان هنالك عوامل اخري اكثر اهمية تؤثر في كفاء سياساته في تحقيق الانتعاش الاقتصادي وهي

  • عدم مرون الجهاز الانتاجي : لاشك ان زيادة الانفاق الحكومي قد ينعكس اثرها علي المستوي العام لللاسعار في حالة عدم مرونة الجهاز الانتاجي فتعجز بذلك السياسات عن تحقيق الاستقرار والتنمية واعادة توزيع الدخل القومي ويكون اثرها سلباً علي تخصيص الموارد  الاقتصادية
  • حجم الانفاق الحكومي والقدرة علي التحكم فيه : يري بعض الاقتصاديين ان الانفاق الحكومي لن يكون له اثار توسعية سالبة علي عملية التنمية الا اذا كان كبيراً بقدر الذي لاتستطيع الحكومة التحكم فيه
  • عدم التنسيق بين سياسات الايرادات العامة من جهة اخري بدليل زيادة حجم التمويل بالعجز الفعلي عن المقدر في الموازنة العامة ، بل زيادة وتنوع الانفاق العام بقدر لايتناسب والايرادات العامة
  • الاعتماد علي التمويل بالعجز في الغالب في تمويل الانفاق الحكومي الجاري

* وحتي لو اعتبرنا التمويل بالعجز نتيجة طبيعية لقلة مصادر التمويل ، فنجد ان

  • مستوي الادخار الوطني في البلاد شديد الانخفاض ويرجع ذلك الي انخفاض الدخول وارتفاع الميل الاستهلاكي ، بل لاتجابة البلاد مشكلة انخفاض المدخرات وانما ايضاً مشكلة سوء توجيه المدخرات ( ان وجدت ) حيث يستثمر جانب كبير منها في ما يسمي بالاستثمارات السلبية ( الاستثمارات غير المنتجة ) مثل تشيد المباني ، شراء العملات الاجنبية ، شراء الاراضي وغيرها .
  • عدم كفاية الاجهزة والاوعية اللازمة لتجميع المدخرات وعدم تنوع الاصول التي تغري الافراد علي الادخار .

ج- انخفاض مدخرات القطاع العام كنتيجة لارتفاع تكاليف الانتاج وانخفاض مستوي الكفاءة الانتاجية للعامل مما يتطلب ذلك وضع سياسات حازمة للاجور والاسعار والانتاجية

* كما نستخلص من تجارب بعض الدول ان الاعتماد علي المدخرات الاجنبية في المرحلة الاولي للتنمية امراً ضرورياً ونذكر علي سبيل المثال اسهم الاموال الاجنبية في تمويل التنمية في انجلترا في القرن السابع عشر ، وهولندا في القرن الثامن عشر روسيا و الولايات المتحدة الامريكية في القرن التاسع عشر كذلك استراليا وكندا ونيوذيلاندا ، ومع هذا لم يكن من المالوف ان يتجاوز الاقتراض الخارجي خمس الاستثمار الوطني ، وعليه فان المدخرات الاجنبية ضرورة لابد منها حتي يتسني للحكومة تخفيف العبء الواقع علي عاتق المدخرات الوطنبة التي هي في الاصل ضئيلة

*التمويل بالعجز يترك اثار سيئة علي العملية التنموية ذلك لانه يؤدي الي ارتفاع التكاليف عن طريق تخفيض قيمة النقود الحقيقية (تخفيض القوة الشرائية للنقود) والناتج عن زيادة اجمالي عرض النقود وارتفاع معدلات التضخم وبالتالي يؤدي الي عدم جذب رؤوس الاموال الاجنبية للاستثمار في الداخل ، كما ان انخفاض قيمة النقود يؤدي الي اضعاف مساهمة رؤوس الاموال المحلية في عملية الانتعاش الاقتصادي

* التمويل بالعجز يقوم في الاساس وبصورة متعمدة على عدم عدالة توزيع الدخل القومي ، ولا تصح الحجة بان حرمان ذوي الدخول المنخفضة مؤقتة ومرتبطة بظهور ثمرات التنمية ذلك ان التنمية نفسها هي الوسيلة الوحيدة لرفع مستوي معيشة السكان وان التمويل بالعجز غير فعال في الغالب في تحقيق الانتعاش الاقتصادي لوجود عقبات كثيرة

*يؤدي التضخم كواحد من افرازات التمويل بالعجز الي زيادة الاستهلاك بسبب الخوف من تاكل المدخرات الناتج عن انخفاض قيمة النقود عبر الزمن ، وزيادة الاستهلاك تعني ضعف فعالية التمويل بالعجز في توجيه الموارد نحو الاستثمار، كما يترتب علي التضخم هروب رؤوس الاموال الوطنية خارج الوطن بحثاً عن استقرار قيمة النقود مما يعني تخصيص الموارد لصالح العالم الخارجي ، كما يترتب علي علي التضخم ايضاً تخصيص الموارد في الاعمال غير المنتجة والضارة بالاقتصاد الوطني

* التضخم المتعمد يمكن ان يكون كمحفز للاستثمار وفقاً لمبدة الادخار الاجباري وقد ذهب البعض الي انه يساعد في سحب العمالة وراس المال من القطاعات المتراجعة والخاملة الي القطاعات النشطة ، واذا صح هذا في الدول المتقدم فقد لايصح في الدول النامية ك جنوب السودان التي تتميز بصعوبة انتقال عناصر الانتاج بين القطاعات الاقتصادية المختلفة ، وكذلك سلبية وعدم مرونة الجهاز الانتاجي

* التمويل بالعجز يؤدي الي ارتفاع الاسعار وزيادة معدلات التضخم الناجم عن زيادة كمية عرض النقود دون زيادة مماثلة في عرض السلع والخدمات ، ولن تستطيع الحكومة  الاستفادة من التمويل بالعجز الا اذا استخدم في اوجه النشاط الانتاجي مثل شراء المحاصيل للتصدير واستخدام حصيلتها من العملات الاجنبية في شراء حاجيات التنمية (السلع الراسمالية )

التوصيات : 

تشوه الاقتصاد  جنوب السودان يتطلب القضاء علي العوامل المسببة له وفي طليعتها السيطرة علي عرض النقود والكتلة النقدية وعلي التضخم وتحقيق الاستقرار الاقتصادي من خلال  

اولاً : سياسات العرض والطلب الكلي :

تخفيض معدل نمو التمويل بالعجز ومن بعده ارتفاع الاسعار والتضخم عن طريق تقيد نمو الطلب الكلي وفي نفس الوقت العمل علي زيادة العرض الحقيقي للسلع والخدمات من خلال اتخاذ الاجرات والسياسات التالية

  • في جانب العرض :

لابد من زيادة العرض الكلي للسلع والخدمات زيادة تتناسب مع كمية النقود المتداولة والمطبوعة حديثاً والزيادة في السكان ذلك عن طريق

  • فتح المجال امام اصحاب رؤوس الاموال المحلية والاجنبية لمسهمة في النشاط الانتاجي في البلاد
  • تشجيع المغتربين علي استثمار اموالهم بالداخل باعطائهم مزا يا خاصة مثل قطعة ارض باسعر رمزية واعفاء ضريبي لوراداتهم من السلع الراسمالية .

ج- اللجوء الي التمويل بالعجز بالقدر المناسب  وتوجيه هذه الاموال نحو المشروعات التي من شانها ان تزيد من السلع والخدمات .

  د- العمل علي اصلاح البنيات الاساسية االلازمة لنمو القطاعات الاقتصادية المختلفة حتي تقوم بدورها الكامل في تحقيق الانتعاش الاقتصادي .

ه- رفع مستوي الانتاج والانتاجية في قطاعات الاقتصاد الوطني المختلفة والاسراع بحل المعوقات التي تعرقل تنميتها .

ل- العمل علي دعم وتشجيع الاسر المنتجة لتاكد من مساهمة كل شرائح المجتمع في عمليات التنمية والانتعاش الاقتصادي .

  • في جانب الطلب :

يجب كبح جماح الطلب الكلي عن طريق تضيق الفجوة بين العرض والطلب الكلي باتبع السياست والاجرات التال

  • ضغط الانفاق الاستهلاكي الترفي الخاص عن طريق زيادة الضرائب علي السلع الكمالية الترفية والسلع الضرورية الترفية وغيرها ,
  • ضغط الانفاق الحكومي الاستهلاكي غير الضروري لتقليل العجز في الموازنة العامة ذلك عن طريق تحديد معدلات معينة للتمويل بالعجز يجب الالتزام بها وعلي ان لا يتجاوز معدل الانفاق الحكومي الاستهلاكي معدل نمو الناتج المحلي الاجمالي

ج- العمل علي توسيع الوعاء الضريبي وفرض ضريبة تصاعدية تتناسب والامكانيات الدخلية لشرائح المجتمع المختلفة ، وفرض ضرائب عالية علي النشاطات الهامشية والطفيلية التي تضر بالاقتصاد الوطني

د- عدم الاعتماد علي التمويل بالعجز الا عند الضرورة .

ه- ضرورة وضع برنامج تقشفي للحد من اوجه الاسراف والتبزير في بنود الانفاق الاستهلاكي السلعي والخدمي .

ل- مراقبة سياسة الاستراد بحيث يركز الاستيراد الحكومي علي السلع الاستثمارية .

 

ثانياً : السياسات المالية والنقدية والسياسات العامة :

العمل علي تحقيق الاستقرار النقدي والاقتصادي باتباع  الاجرءات والسياسات التالية

  • يجب ان تلعب السياسة المصرفية دوراً رائداً في مجال التنمية ذلك من خلال السيطرة علي عرض النقود ومعدلات التضخم ، وان لايمول الجهاز المصرفي الا المشرعات الانتاجية ذات العائد الاقتصادي الجزي .
  • الزام البنوك بان لاتمنح التمويل الا للمشروعات النموية التي تحددها الدولة .
  • ضرورة ضمان المستوي المطلوب من الادخار الوطني عن طريق التوسع في نظم التامينات الاجتماعية و المعاشات . . . . . الخ ذلك بوضع سياسات محددة للاجور والاسعار والانتاجية .
  • ضرورة تدبير المقدار اللازم من الصرف الاجنبي لاستيراد سلع الانتاج والتجهيذات ، الامر الذي يجعل من مشكلة تمويل التنمية الاقتصادية قضية دولية كما اسلفت تتطلب تكاتف الجهود الوطنية والدولية في العمل علي توفير حل مناسب لها ، طالما ان الصادرات لاتهئ للدولة مصدر مضموناً للزيادة الصرف الاجنبي .
  • ضرورة توفير الموارد الانتاجية الاخري المكملة لرؤوس الاموال سواء من ناحية الكم او الكيف مثال لذلك الايدي العاملة المدربة ، الادارة والتنظيم وغيرها .
  • ضرورة تهيئة اسباب قبول النظم الجماعية للادخار(التامينات الاجتماعية) التامين علي الحياة ، المعاشات ، . . . . . الخ ، وكذلك ضرورة تامين استقرار القوة الشرائية حتي يطمئن الناس ان الاموال التي يدخرونها اليوم عن طريق الامتناع عن جزء من الاستهلاك لن تضعف مقدرتها في المستقبل علي شراء السلع والخدمات .

 


Governance and Prospect of Stability

Thu, 23/10/2014 - 14:21

Governance and Prospect of Stability

Governance

By Dr. Addis Ababa Othow Akongdit

[email protected]

After decades of civil war, the Republic of South Sudan (RSS) has risen to become a beacon of hope for political stability, economic growth and prosperity, especially in an environment where attributes like stability and prosperity are in short supply. Good governance, cooperation and strengthening the rule of law are critical in order to help build a viable state. Although, social, political and economic stability are usually depend on the country core institutions performing their functions sufficiently well to manage public resources effectively and distribute them equitably, but also important to maximize the efforts of promoting multi-party democratic, decentralized and participatory governance, including the political opposition and civil society in the governance process and increasingly accountable to the citizens of South Sudan. These principles are already enshrined in the Transitional Constitution of the Republic of South Sudan (TCRSS), which was passed on the eve of the independence proclamation.

Further, the September 2012 Cooperation agreements between Sudan and South Sudan are considered as a major breakthrough that paves the way to peace, stability and prosperity. Its immediate positive impact was noted on Sudan and South Sudan’s economy, with the value of both their currencies and eased tensions between the two countries. Yet, learning from other nation’s experience in terms stability and prosperity is also essential. Therefore, this paper discusses the governance that can be seen as the exercise of economic, political and administrative authority to manage a country’s affairs at all levels. The governance which comprises the mechanisms, processes and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences. The paper discusses further the necessity of implementation of the signed cooperation agreements between Sudan and South Sudan as well as examining the link between political stability and economic development by using the Angola experience as a case study and draws conclusion on what can South Sudan learn from it.

Governance has been variously defined as “the management of society by the people(Martin Albrow 2001)”,[1] “the exercise of authority or control to manage a country’s affairs and resources”[2], or as a complex system of interactions among structures, traditions, functions (responsibilities) and processes (practices) characterized by three key values of accountability, transparency and participation. Good governance has also been described as the striving for rule of law, transparency, responsiveness, participation, equity, effectiveness and efficiency, accountability, and strategic vision in the exercise of political, economic and administrative authority. Recently the terms “governance” and “good governance” are being increasingly used in development literature. Bad governance is being increasingly regarded as one of the root causes of all evil within our societies. This section explains what “governance” and “good governance” means. It seeks the relation between good governance and development and link it with the case of South Sudan.

Definitions of Good Governance

The concept of “governance means: the process of decision-making and the process by which decisions are implemented (or not implemented)[3]. However, the governance is a broad concept and necessarily includes many facets of a society. As such, indicators of governance cover many different aspects of social organization. Governance can be also defined in different ways and proposals abound. Governance denotes how a society is organized and its procedures and rules for allocation of resources, power and change.

Kaufmann et al. (2004) define governance as the traditions and institutions by which authority in a country is exercised. This includes the process by which governments are selected and replaced, the capacity of the government to formulate and implement sound policies, and the respect for citizens and the state for the institutions that govern economic and social interaction among them.

World Bank (2007) defines governance as the ways public officials and public institutions acquire and exercise authority to provide public goods and services, including basic services, infrastructure, and a sound investment climate.

UNDP (2007) defines governance as the system of values, policies and institutions by which a society manages its economic, political and social affairs through interactions within and among the state, civil society and private sector. It is the way a society organizes itself to make and implement decisions – achieving mutual understanding, agreement and action.

The European Commission defines governance as the state’s ability to serve the citizens. It refers to the rules, processes, and behaviors by which interests are articulated, resources are managed, and power is exercised in society (cited from UNDP, 2007).Governance therefore, refers to how authority is created, shaped, exercised and changed.

However, during the course of the Twelfth Replenishment discussions for the International Development Association (IDA12), the concept of good governance was specifically mentioned in the context of institutional assessment criteria. The World Bank’s perspective of good governance is set in its definition of good governance as “the manner in which power is exercised in the management of a country’s economic and social resources for development” The World Bank identified three distinct aspects of governance:

1-    the form of the political regime;

2-    the process by which authority is exercised in the management of a country’s economic and social resources for development; and

3-    the capacity of governments to design, formulate and implement policies and discharge functions.

The Asian Development Bank (AsDB) defined good governance as “the mannerin which power is exercised in the management of a country’s economic and social resources for development”. The AsDB has identified four basic elements of good governance:

1-    Accountability: Public officials should be answerable for government behaviour and responsive to the entity from which they derive authority. The accountability of public sector institutions is facilitated by evaluation of their economic performance. The suggested specific areas of action would be in the building of government capacity through, for example, public-sector management, public-enterprise management and reform, public financial management and civil-service reform;

2-    Participation: Government structures should be flexible enough to offer beneficiaries and others affected the opportunity to improve the design and implementation of public programmes and projects. The specific areas of action would be in the development of participatory development processes through, for example, participation of beneficiaries, a public/private-sector interface, decentralization/empowerment of local government and cooperation with non-governmental organizations (NGOs);

3-    Predictability: Laws and policies should exist that regulate society and that are applied fairly and consistently. Predictability requires the state and its subsidiary agencies to be bound by and answerable to the legal system in the same way as private enterprises and individuals. The specific area of action could be the development of predictable legal frameworks for private-sector development;

4-    Transparency: Information should be made available to the general public and there should be clarity as to rules and regulations. Access to timely information on the economy can be vital to economic decision-making by the private sector and can also serve to inhibit corruption.

All these elements are interlinked, and mutually supportive and reinforcing. Accountability is often related to participation and is also the ultimate safeguard of predictability. Transparency and predictability in the functioning of a legal framework would serve to ensure the accountability of public institutions.

Furthermore, the African Development Bank (AfDB) in its process of preparing an institutional policy on goodgovernance, defined governance as a process referring to theway in which power is exercised in the management affairs of a nation. Inits opinion, governance is central to creating and sustaining an enabling environment . The AfDB’s development policy on good governance is in line with itsvision for sustained African development into the 21st century and in its support of good governance, it focused on the following elements, which will be translated into specific activities.

1-    Accountability: Elected individuals and organizations charged with a public mandate should be held accountable for specific actions to the public from which they derive their authority. In a narrow sense, accountability focuses on the ability to account for the allocation, use and control of public assets in accordance with legally accepted standards;

2-    Transparency: The policies of the government should be publicly available and confidence developed in its intentions;

3-    Combating corruption: Assistance should be provided to fight the abuse of public office for private gain;

4-    Participation: Stakeholders should exercise influence over public policy decisions and share control of resources and institutions that affect their lives, thereby providing a check on the power of government. This process occurs at various levels: at the grass roots, local government and regional and national levels through flexible and decentralized forms of government;

5-    Legal and judicial reforms: A pro-governance and pro-development legal and judicial system should be created in which the laws are clear and are uniformly applied through an objective and independent judiciary.

The United Nations Development Programme’s (UNDP) definition of good governance is set out in a 1997 UNDP policy document entitled “Governance for Sustainable Human Development”. It is explained that governance has three dimensions: economic, political and administrative. Economic governance includes the decision-making processes that affect a country’s economic activities and its relationships with other economies. Political governance is the process of decision making to formulate policy. Administrative governance is the system of policy implementation.

Encompassing all three, good governance defines the processes and structures that guide political and socio-economic relationships. It means that good governance comprises the existence of effective mechanisms, processes and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences. Its essential characteristics are:

1-    Participation: All men and women should have a voice in decision-making, either directly or through legitimate intermediate institutions that represent their interests. Such broad participation is built on freedom of association and speech, as well as on the capacity to participate constructively;

2-    Rule of law: Legal frameworks should be fair and enforced impartially, particularly the laws on human rights;

3-    Transparency: This concept is built on the free flow of information. Processes, institutions and information should be directly accessible to those concerned, and enough information should be provided to render them understandable and monitorable;

4-    Responsiveness: Institutions and processes should serve all stakeholders;

5-    Consensus orientation: Good governance should mediate differing interests in order to reach broad consensus on the best interests of the group and, where possible, on policies and procedures;

6-    Equity: All men and women should have equal opportunity to maintain or improve their well-being;

7-    Effectiveness and efficiency: Processes and institutions should produce results that meet needs while making the best use of resources;

8-    Accountability: Decision-makers in government, the private sector and civil-society organizations should be accountable to the public as well as to institutional stakeholders;

9-    Strategic vision: Leaders and the public should have a broad and long-term perspective on good governance and human development, together with a sense of what is needed for such development. There should also be an understanding of the historical, cultural and social complexities in which that perspective is grounded.

Given the above-mentioned definition, the dimension of good governance can be pictured as follow:

Good Governance

Good governance has also eight major characteristics. It is participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of law. It assures that corruption is minimized, the views of minorities are taken into account and that the voices of the most vulnerable in society are heard in decision-making. It is also responsive to the present and future needs of society.

Good Governance 1

Source :UNESCAP, What is Good Governance?, UNESCAP: http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp

1-    Participation: Participation by both men and women is a key cornerstone of good governance. Participation could be either direct or through legitimate intermediate institutions or representatives. It is important to point out that representative democracy does not necessarily mean that the concerns of the most vulnerable in society would be taken into consideration in decision making. Participation needs to be informed and organized. This means freedom of association and expression on the one hand and an organized civil society on the other hand;

2-    Rule of law: Good governance requires fair legal frameworks that are enforced impartially. It also requires full protection of human rights, particularly those of minorities. Impartial enforcement of laws requires an independent judiciary and an impartial and incorruptible police force;

3-    Transparency: Transparency means that decisions taken and their enforcement are done in a manner that follows rules and regulations. It also means that information is freely available and directly accessible to those who will be affected by such decisions and their enforcement. It also means that enough information is provided and that it is provided in easily understandable forms and media;

4-    Responsiveness: Good governance requires that institutions and processes try to serve all stakeholders within a reasonable timeframe;

5-    Consensus oriented: There are several actors and as many view points in a given society. Good governance requires mediation of the different interests in society to reach a broad consensus in society on what is in the best interest of the whole community and how this can be achieved. It also requires a broad and long-term perspective on what is needed for sustainable human development and how to achieve the goals of such development. This can only result from an understanding of the historical, cultural and social contexts of a given society or community;

6-    Equity and inclusiveness: A society’s well being depends on ensuring that all its members feel that they have a stake in it and do not feel excluded from the mainstream of society. This requires all groups, but particularly the most vulnerable, have opportunities to improve or maintain their well being;

7-    Effectiveness and efficiency: Good governance means that processes and institutions produce results that meet the needs of society while making the best use of resources at their disposal. The concept of efficiency in the context of good governance also covers the sustainable use of natural resources and the protection of the environment;

8-    Accountability: Accountability is a key requirement of good governance. Not only governmental institutions but also the private sector and civil society organizations must be accountable to the public and to their institutional stakeholders. Who is accountable to whom varies depending on whether decisions or actions taken are internal or external to an organization or institution. In general an organization or an institution is accountable to those who will be affected by its decisions or actions. Accountability cannot be enforced without transparency and the rule of law.

Good Governance and Economic Development

Good governance is a precondition for economic development. The quality of governance plays a vital role in the economic development of countries. The need for good governance is widely recognised in today’s discourses on development. The exhortation for good governance to achieve economic development is widespread. We quoted President Obama who said that what Africa required was not strong men but strong institutions and good governance. President Obama who underscored the importance of good governance to achieve economic development in African countries would no doubt prescribe the same for other countries as well.

Earlier studies including Owens (1987)[4] and Sen (1990) have also argued for the need for economic and political freedom as necessary conditions for the economic growth and development of nations. Nevertheless, most of the previous studies only considered certain dimensions of governance, which are theoretical in nature. Empirical studies that have been undertaken since 1990’s primarily dealt with the effects of poor governance (as proxied by political and export instabilities and corruption) on the sources of growth rather than its direct impact on growth.

Keefer et al. (1997) find that institutions such as property rights and contract enforcement positively influence economic growth. Campos and Nugent (1999) also find that the institutions of governance improve the development performance. Kaufmann, et al. (1999a and 1999b) identify the problems associated with the aggregation of good governance measures, but conclude that good governance matters for development.

In a cross-sectional analysis of all developing countries, Chauvet and Collier (2004) found that those countries suffering from poor governance, on average, experience 2.3 percentage points less GDP growth per year relative to other developing countries. Most recent findings suggested that a strong causal effect running from better governance to better development outcomes. Other economist argued that good governance promotes growth and that growth further improves governance.

However, Mauro notes “a consensus which seems to have emerged that corruption and other aspects of poor governance and weak institutions have substantial, adverse effects on economic growth”[5]. Furthermore, there are extensive econometric studies that show strong correlation between long-term economic performance and good governance. In other words, the quality of governance fundamentally determines long-run developmental outcomes[6].Kaufmann and Kraay draw on a large World Bank data set designed to measure the link between governance and development, and to monitor the performance of countries. They track the quality of governance from 1996 to 2011 in some two hundred countries.The quality of governance is divided into six categories aimed at capturing how governments are selected, monitored, and replaced; a government’s capacity to formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern them. The six measured indicators so called WGI[7] on six broad dimensions of governance are[8]:

1-    Voice and Accountability: the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media;

2-     Political Stability and Absence of Violence/Terrorism: the likelihood that the government will be destabilized by unconstitutional or violent means, including terrorism;

3-    Government Effectiveness: the quality of public services, the capacity of the civil service and its independence from political pressures; and the quality of policy formulation;

4-    Regulatory Quality: the ability of the government to provide sound policies and regulations that enable and promote private sector development;

5-    Rule of Law: in and abide by the rules of society, including the quality of contract enforcement and property rights, the police, and the courts, as well as the likelihood of crime and violence;

6-    Control of Corruption: the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as “capture” of the state by elites and private interests.

These 6 dimensions can be illustrated as follow:

Components of Good Governance

1.     Selection, accountability and replacement of authorities

2.     Voice and accountability.

3.     Stability and lack of violence.

4.     Efficiency of institutions, regulations, resource management.

5.     Regulatory framework.

6.     Government effectiveness.

7.     Respect for institutions, laws and interactions among players in civil society, business, and politics.

8.     Control of corruption.

9.     Rule of law

 

The study concluded that good governance is not only critical to development but also that it is the most important factor in determining whether a country has the capacity to use resources effectively to promote economic growth and reduce poverty.Similarly, Roll and Talbott estimate that governmental institutions and policies explain most of the variation across nations in terms of economic development with secure property rights, business transparency, political rights, civil liberties, and stable rule of law as significant factors accounting for developmental success( Richard Roll and John R. Talbott 2003)[9].

Governance Indicators in South Sudan

No doubt, that the governance can be seen as the exercise of economic, political and administrative authority to manage a country’s affairs at all levels. It comprises the mechanisms, processes and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences. It ensures that political, social and economic priorities are based on broad consensus in society and that the voices of the poorest and the most vulnerable are heard in decision- making over the allocation of development resources. Although WG indicators are not absolute measures of good governance, but are measures of a country’s relative rank with respect to political and economic stability. The global coverage of the indicators and the claim that they are the most precise measure of governance make the indicators attractive to researchers and policymakers alike. In “Governance Matters,” Kaufmann et al. use the indicators to find “a strong positive causal relationship from improved governance to better development outcomes.” A number of other studies have also used the indicators as explanatory variables. (See, e.g., Andres, 2006; Apodaca, 2004; Clarke et al., 2006; Das et al., 2006; Hart et al., 2005; Jung, 2006; Liu et al., 2006; Llamazares, 2005; Neumayer, 2002).

If we apply six dimensions of WGI for South Sudan as it is stated in the table, 5.1 below, it shows clearly an estimate of weak governance (ranges from approximately -2.5 to less than 1 weak governance performance). It reflects also the reality of Sudan as the one of the longest running conflicts in Africa.

In the Machakos Peace Protocol, signed in July 2002, the government of Sudan and the Sudan People’s Liberation Movement had agreed to establish a democratic system of governance taking into account of the cultural, ethnic, racial, religious and linguistic diversity and gender equality of the people of the Sudan and to find a comprehensive solution that addresses the economic and social deterioration of the Sudan and replaces war not just with peace, but also with social, political and economic justice which respects the fundamental human and political rights of all the Sudanese people.

Many experts welcomed that commitment to a comprehensive solution, placing good governance at the heart of the peace process. However, considering it is precisely Sudan’s long history of bad governance that lies at the root of this conflict, this emphasis in the Machakos process is also a warning. The realities based on the tables.5 show that South Sudan clearly faces serious political, economic, and security challenges. These challenges can be summarized as follows:

1-    Voice, accountability and freedom of expression: The General elections which were held in South Sudan between 11 and 15 April 2010 as part of the Sudanese general elections, brought a lot of mess. The result was a victory for Salva Kiir of the Sudan People’s Liberation Movement, who received almost 93% of the vote. However, intimidation, “forced” voting and rigging are the primary complaints of those who said the 2010 elections were not conducted fairly. Their concern was not on the vote itself, but on the SPLM nomination process, which they feel was not in the interest of the community and where unpopular leaders were forced upon them. The evidence upon which some participants base their conclusion that the elections were unfair is not from personal observations but rather on complaints of defeated candidates, rebellions over election losses and the simple fact that so many SPLM candidates won. Complaints about the unfairness elections were concentrated in several states, namely Central Equatoria, Western Equatoria and Northern Bahr el Ghazal, Unity and Jonglei State.

2-    Further, there is a lack of accountability for serious crimes is a longstanding problem in South Sudan, a country with limited law enforcement capacity and a vast territory. It became an even more pressing concern in the wake of mass inter-communal violence in Jonglei state in December 2011 and January 2012, which killed more than 800 people, destroyed hundreds of homes, and displaced thousands, according to a June United Nations report documenting the killings and devastation. Even, many people were required to clamp down on speech critical of the government, in violation of their right to freedom of expression which is guaranteed in South Sudan’s constitution and international law. In a number of cases Human Rights Watch has documented since South Sudan’s independence, security forces arrested, harassed, detained or even killed journalists because of what they wrote or said.

 

3-    Political Stability and Absence of Violence/Terrorism: South Sudan has also failed to effectively address issues which undermine political stability in country such as conflicts of ethnic, rebellions, social conflicts and public security. For example, the cyclical inter-communal violence and heavy fighting in Jonglei state in December 2011 between some ethnic groups namely the Luo-Neur and Murle, have a history of rivalry over access to water and grazing land. Both groups have easy access to arms, and youth from both communities have perpetrated retributive justice for past grievances. South Sudan’s army and police were unable to provide adequate security to prevent this violence, which displaced an estimated 140,000 people in Jonglei state from late 2011 through February 2012. This inter-communal violence in Jonglei state has underscored, among other things, the weaknesses in South Sudan’s security and policing sectors. It has also brought to the fore underlying issues of a lack of accountability and political inclusion, as well as the breakdown of traditional authority structures, which collectively threaten to erode the fragile social and political stability of the country.

 

4-    Government Effectiveness: In line with Article 138 of the Interim Constitution of South Sudan, which lays out the values by which the Public Service shall be governed, the Ministry of Labour and Public Service in its vision is pointed out to create a Public Service that is able to provide impartial, quality and timely service to the Government and citizens of South Sudan. The ministry’s mission is to establish and implement an effective legislative and policy framework to create and manage a responsive and inclusive Public Service and a private sector labour market able to respond to the needs of a modern economy.

 

The ministry was able to formulate and publish the following policy documents:

a.     Public Service Mirror – July 2011

b.     Public Service Reform Implementation Framework Manual

c.      Guidelines for Public Sector Reform Management Structures

d.     Public Service Policy Framework

e.      Strategic Plan (2008 – 2010)

f.       Public Service Guidelines and Regulations

g.     Public Service Manual

h.     Public Service Code of Conduct for Public Service of Southern Sudan

i.       Public Service Bill (2009)

However, South Sudan requires capacity building and support to develop institutions, structures and processes to enable the equitable and effective delivery of a quality of public and civil services and policy formulation and implementation that will indicate the credibility of the government’s commitment to such policies.

4.      Regulatory Quality: South Sudan has established within the Ministry of Commerce, Industry & Investment what is called the Private Sector Development Project (PSDP) which its objectives is to improve access to finance for private sector development and increase employment opportunities in South Sudan. The PSDP, which will be processed under the World Bank’s, is formulated in the context of South Sudan’s overall strategy for private sector development as outlined in its three-year South Sudan Development Plan (SSDP). The strategy emphasizes the development and regulation of the economy of South Sudan in order to achieve prosperity and facilitation of the private sector. The program will focus on implementing three of its components, which will include investment climate reform project of which attracting new investments shall be one part. Also developing small and medium size enterprise project, primarily through training and capacity building; and access to finance project that explores new financial instruments such as leasing and mobile banking are among the various components to be covered by the program. This program shows the ability of the government to provide sound policies and regulations that enable and promote private sector development in the country.

5.      Rule of Law: There are many serious gaps and weaknesses in the nation’s justice system. In January 2011, UNMIS presented a review of the justice sector in South Sudan which noted the following issues in the effective functioning of the judiciary[10]: Shortage of qualified staff;

a.     High incidence of corruption;

b.     Lack of security for justice personnel;

c.      Nepotism;

d.     Ineffective accountability and oversight mechanisms;

e.      No access to libraries, legal texts and precedents;

f.       Limited capacity to record decisions;

g.     Inefficient court management systems’

h.     Poor infrastructure, transportation and communication facilities.

 

Furthermore, the unemployment is significantly high, tribal and ethnic divides persist, and disputes over cattle, water, and grazing and fishing rights often erupt into violence. Even, Human Rights Watch report published in June 2012 under title “ Prison is not for me” and based on visits to 12 of the country’s 79 prisons, stated that many inmates are detained following flawed arrests and prosecutions, or without any solid legal justification, and that children are still tried and detained with adults while dozens of people with mental disabilities languish in prison across the country without proper treatment. It has to be noted that the Government faces considerable challenges in ruling through law, primarily as vast tracts of land are cut off from authorities during the rainy season. This, in addition to difficulties in controlling the proliferation of small arms, contributes to communities taking security and justice into their own hands.

Control of Corruption is necessary. Although the country’s transitional constitution provides criminal penalties for acts of corruption, but the Government was frequently accused of allegedly failing to effectively implement the law, and officials continued to “engage in corrupt practices with impunity.” The top senior officials believe that the corruption culture in South Sudan is mainly attributed to poor management skills and lack of operational procedures and guidelines for civil servants in managing public resources and offices. It seems that this predicament has the effect of informing the government’s continued efforts to combat corruption. For the moment, the South Sudan Anticorruption Commission (SSACC) has developed an Anti Corruption Strategy 2010-2014 and a Five Year-Work Plan, which contains a series of preventive and responsive measures to be undertaken at all three levels of government in South Sudan and among non-state actors. Further, it has recently taken a number of specific measures to tackle official corruption and institute mechanism to help prevent corruption and strengthen transparency and accountability. Some of these measures are the following:

1.     A letter signed by the President of RSS was sent out to over seventy five former and current government officials in an effort to cover stolen funds;

2.     Several presidential degrees were issued to strengthen transparency and tackle corruption;

3.     The government of RSS has opened a bank account in Kenya so that the stolen funds can be returned to that account;

4.     SSACC has recovered an estimated US 60 million from various sources from fraudulent transactions and misappropriation of funds by government institutions;

5.     In January, the President Kiir sent eight letters to heads of states in Africa , Middle East, United States and Europe seeking their assistance to recover the stolen funds;

6.     Multiple investigations have been underway since January in an effort to recover stolen funds.

It is important to underline, however, regardless of the weaknesses of the various governance measures mentioned above, that South Sudan two year old has booked a huge progress. It has established functioning national and states institutions, a national parliament and ten state legislatures were established. More than two million people returned to South Sudan, the number of students attending primary and high school tripled, roads were constructed and opened to connect major cities and towns.

[1]Martin Albrow, “Society as Social Diversity: The Challenge for Governance in the Global Age”, Governance in the 21st Century, (OECD, Paris, 2001).

[2]H. Schneider, “Participatory Governance: The Missing Link for Poverty Reduction”, Policy Brief No. 17, OECD Development Centre, Paris (1999), p. 7.

[3] UNESCAP/ United Nations Economic and Social Commission for Asia and the Pacific ,What is Good Governance?, UNESCAP: http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp

[4]Owens, E., 1987, The Future of Freedom in the Developing World, Pergamon Press.

[5]Paolo Mauro, “The Persistence of Corruption and Slow Economic Growth,” IMF Staff Papers 51, No. 1 (2004).

[6] See, Daron Acemoglu, Simon Johnson, and James Robinson, “Reversal of Fortune: Geography and Institutions in the Making of the Modern World,” Quarterly Journal of Economics 17, no. 4 (2002): 1231-1294; David Dollar and Aart Kraay, “Institutions, Trade and Growth,” Journal of Monetary Economics 50 (January 2003): 133-162; Daniel Kaufmann and Aart Kraay, “Governance Redux: The Empirical Challenge,” Global Competitiveness Report (Geneva: World Economic Forum, 2003); David Landes, The Wealth and Poverty of Nations: Why Some are So Rich and Some So Poor (New York: W.W. Norton, 1998); and Dani Rodrik, Arvind Subramanian, and Francesco Trebbi, “Institutions Rule: The Primary of Institutions over Geography and Integration in Economic Development,” Journal of Economic Growth 9 (2004): 131-165.

[7]The Worldwide Governance Indicators (WGI) are a research dataset summarizing the views on the quality of governance provided by a large number of enterprise, citizen and expert survey respondents in industrial and developing countries. These data are gathered from a number of survey institutes, think tanks, non-governmental organizations, international organizations, and private sector firms. The WGI do not reflect the official views of the Brookings Institution, the World Bank, its Executive Directors, or the countries they represent.

[8] Kaufmann, Daniel, Aart Kraay, and Pablo Zoido-Lobatón. 1999. “Aggregating Governance Indicators.” World Bank Policy Research Working Paper 2195. Washington, DC.

[9] Richard Roll and John R. Talbott, “Political Freedom, Economic Liberty and Prosperity,” Journal of Democracy 14, no. 3 (July 2003): 75-89.

[10]United Nations Mission in Sudan (UNMIS), Southern Sudan Justice Sector Interim Review (UNMIS, 2011), p 12.


Microcredit Summit

Thu, 23/10/2014 - 13:33

 

Microfinance 1

I am deeply thankful for having been able to attend the 17th Microcredit Summit which was organized in Merida, Mexico Sept. 3-5, 2014 around the theme “Generation Next: Innovations in Microfinance with the goal of alleviating world poverty through microfinance. The idea behind this gathering is to engage delegates in a thoughtful discussion around the challenges and opportunities associated with the growth and transformation of the Microfinance sector, especially through innovative and best practices that accelerate the steps to reach full financial inclusion.

I was inspired by the general consensus among the delegates on the importance of having a new generation of leaders ( group, community, institution, public & Private… wherever they are) to understand and serve the needs of the older generation ( adequate income security, access to health care and etc.) and that that this new generation should understand how to bring together social and financial goals of any financial service provided, listen to their clients, make their governing structures reflect the clients they seek to serve and use technology in a way that alleviates poverty. This is exactly what is needed in our beloved Country South Sudan which is born as one of the poorest countries (50 per cent of the population lives below the poverty line) and where the ongoing political crisis is drastically harmful to our economy and social life.

We need to think critically on the effectiveness of microfinance as a universal tool not only to fight poverty but also to bring peace among peoples who have been living under conflict and war. It is a believe subject to further study that the simple practice of exchanging of goods and services creates a climate for social cohesion and peaceful community relations. Microfinance institutions in Rwanda and Burundi have played a major role in bringing Hutu and Tutsi together, to collaborate through micro-financing ventures. In the Democratic Republic of the Congo, many of the young people who have been demobilized from the army or former rebel groups are now business people or entrepreneurs with the benefit of loans they received from microfinance institutions.

Microfinance can also be a useful tool in post-conflict recovery, both for development and for building sustainable peace. By providing access to financial services, it can restart and boost local economic development. In addition, it can play a major role in immediate post-conflict rehabilitation assistance. Beyond these economic benefits, microfinance can be highly effective at social mobilization, empowerment, stabilization and enhancing solidarity, through social capital enhancement. Most importantly, studies show that microfinance encourages reconciliation and conflict resolution by involving cross-ethnic cooperation; for example producers and consumers interact across ethnic borders. According to Larson (2001), microfinance efforts smooth the transition to a normal life after conflict by developing social capital through solidarity mechanisms. In addition, microfinance can encourage the reintegration of refugees, returnees and demobilized soldiers, by facilitating the development of economic activities, collaboration with local populations and fulfillment of entrepreneurial spirit. Indeed, when people need to earn a living to survive, conflict becomes secondary.

I strongly believe that this is an excellent topic for research proposal.

 

Good luck.
Cheers,
Dr. Addis


Political Stability and Development: A Comparative Analysis

Wed, 12/02/2014 - 14:17

imag 

By Dr. Addis Ababa Othow Akongdit

[email protected]

Political stability is without doubt a key to growth, for a given and highly particular vision of what stability means. The rule of law, strong institutions, good governance, low corruption and a business climate that is conducive to investment are key factors of stability which important for economic development. Perhaps, the African states that have been able to achieve high growth rates are considered relatively stable.

Although Africa is arguably the richest continent in terms of natural resources, but it remains the poorest and the least developed region of the world. Simply, because some believe that the critical challenge for economic development and political stability in Africa today is centred on democratic governance.

Much of the existing literatures that have pushed for democracy discourse on the African continent show unequivocally to this stark reality (Huntington, 1991[1]; Bratton & van de Walle, 1997; Ake, 1996; Hyslop, 1999; Ake, 2000; UNDP, 2002; Luckham et al, 2003). Although the entire world has witnessed impressive progress towards democratic governance following the collapse of the ideological bipolarity of the Cold War era on a global scale, and the demise of apartheid in South Africa specifically, enormous challenges for the nurturing and consolidation of democracy still persist. Even within United Nations (UN) circles, the issue of democratic governance is increasingly seen as a key pillar for sustainable human development (UNDP, 2002).

At the continental level, the newly established African Union (AU), which was formally launched in Durban, South Africa in 9 July 2002, has openly committed member states to democratic governance, which will be monitored from time to time through the African Peer Review Mechanism (APRM) (Cilliers, 2002[2]; Matlosa, 2003a). However, the current development situation of Africa is seemed to be inconsistent, but recent years it has witnessed a significant improvement in its economic growth performance. The continent achieved an average growth rate of 5.2, 5.7 and 5.8 per cent in 2005, 2006 and 2007 respectively. Compared with a growth rate of 0.3 per cent during 1990-2002, real per capita income in Africa increased at the rate of 3 per cent over the period 2003-2007. The improvement in Africa’s growth performance has been due to a number of factors; internal and external. Internally, most African countries have created a conducive domestic environment for growth through the adoption and implementation of economic policy reforms and improvement of macroeconomic management. Privatization, greater fiscal discipline, and more realistic exchange rates have all contributed to macroeconomic stability that is essential for growth. On the political front, the increasing adherence by many African countries to the principles of democracy, rule of law, and good governance have engendered greater stability and reduced the incidence of conflicts. This paper examines the link between political stability and economic development, uses the Angola experience as a case study and draws conclusion on what can South Sudan learn from it.

 

Case of Angola

After 27 years of conflict that ended in 2002, Angola is now rebuilding its country. Fighting between the Popular Movement for the Liberation of Angola (MPLA), led by Jose Eduardo DOS SANTOS and the National Union for the Total Independence of Angola (UNITA), led by Jonas SAVIMBI, followed independence from Portugal in 1975. Peace seemed imminent in 1992 when Angola held national elections, but fighting picked up again by 1996. Up to 1.5 million lives may have been lost and 4 million people displaced in the quarter century of fighting. SAVIMBI’s death in 2002 ended UNITA’s insurgency and strengthened the MPLA’s hold on power. President DOS SANTOS held legislative elections in September2008 and, despite promising to hold presidential elections in 2009, has since pushed through a new constitution that calls for elections in 2012. However, the Angola’s economy is considered to be one of the fastest-growing economies in the world, with the Economist asserting that for 2001 to 2010, Angolas’ Annual average GDP growth was 11.1 percent (see table 5D below). Angola’s economy is still recovering from the civil war that plagued Angola from independence in 1975 until 2002. Despite extensive oil and gas resources, diamonds, hydroelectric potential, and rich agricultural land, Angola remains poor, and a third of the population relies on subsistence agriculture. Since 2002, when the 27-year civil war ended, the country has worked to repair and improve ravaged infrastructure and weakened political and social institutions. High international oil prices and rising oil production have led to a very strong economic growth in recent years, but corruption and public-sector mismanagement remain, particularly in the oil sector, which accounts for over 50 percent of GDP, over 90 percent of export revenue, and over 80 percent of government revenue. This section explores a brief historical background of Angola as well as the political and economic context.

 

Brief historical background of Angola

Explored by the Portuguese navigator, Diego Cao in 1482, Angola was discovered by Portuguese explorers and became a link in trade with India and Southeast Asia. Later, it was a major source of slaves for Portugal’s new world colony, Brazil, and for the Americas, including the United States[3]. By the end of the 19th century, a massive forced labour system had replaced formal slavery and would continue until outlawed in 1961. It was this forced labour that provided the basis for development of a plantation economy and, by the mid-20th century, a major mining sector.

Following World War II, independence movements began in Angola but were brutally suppressed by the Portuguese military force. Portugal, under the Salazar and Caetano dictatorships, rejected independence. Consequently, (three) independence movements emerged: the Popular Movement for the Liberation of Angola (MPLA), led by Antonio Agostinho Neto, with a base among Kimbundu and the mixed-race intelligentsia of Luanda, and links to communist parties in Portugal and the Eastern Bloc; the National Front for the Liberation of Angola (FNLA), led by Holden Roberto, with an ethnic base in the Bakongo region of the north, and links to the United States and the Mobutu regime in Kinshasa; and the National Union for the Total Independence of Angola (UNITA), led by Jonas Malheiro Savimbi, with an ethnic and regional base in the Ovimbundu heartland in the center of the country, and links to the People’s Republic of China (P.R.C.) and apartheid South Africa. From the early 1960s, these movements fought against the Portuguese. A 1974 coup d’etat in Portugal established a military government that promptly ceased the war and agreed, in the Alvor Accords, to hand over power in Angola to a coalition of the three movements.

Angola was finally granted independence on November 11, 1975 after guerrilla groups joined forces with the army and overthrew the Portuguese government in a military coup.

No period of peace followed, however, as the competition between different movements that were vying to lead the country descended into civil war. The Popular Movement for the Liberation of Angola “The Movimento Popular de Libertação de Angola (MPLA)”, a Marxist-oriented group that included urban intellectuals, nominally led the country. It was opposed by two factions; the National Liberation Front of Angola (FNLA), and the National Union for the Total Independence of Angola (UNITA). The MPLA bolstered its rule with oil revenues, Soviet military equipment, and Cuban troops. UNITA and the FNLA were fueled by black market diamond revenues, South African military advisors, Chinese weaponry, and covert military and financial assistance from the CIA. War between the two sides shook the country for twenty-seven years, during which an estimated 1.5 million people died, over 4 million were internally displaced, and another five hundred thousand fled the country. The war also destroyed the roads, railways, and bridges built during Portuguese rule, decimated agricultural infrastructure, and left much of the population with no memory of what life was like in peacetime.

With the fading of the cold war and the withdrawal of Cuban troops in 1989, the MPLA began to make the transition to a multiparty democracy. Free elections took place in 1992, with the serving president José Eduardo dos Santos and the MPLA beating Jonas Savimbi and Unita at the polls. There were four years of relative peace between 1994 and 1998. In 1997, it was agreed that a coalition government with UNITA would be implemented, but Savimbi violated the accord repeatedly by refusing to give up his strongholds, failing to demobilize his army, and retaking territory. As a result, the government suspended the coalition rule, and civil war spread across the country again.

In 2002, government troops killed Jonas Savimbi and on 4 April that year, rebel leaders signed a cease-fire deal with the government. This was the end of the civil war. Although peace finally seemed secure, more than a 500, 000 Angolans were facing starvation. Thousands of refugees returned to their country in 2003, but their prospects remained doubtful. Today, Angola is the second-largest oil producer in sub-Saharan Africa, yet its people are among the continent’s poorest[4].

Political environment

With its first elections in 1992, Angola moved from a long and brutal civil war into an era of multiparty politics. This new era of ‘multipartyism’ in Angola paralleled the global ‘third wave’ of the early 1990s, in which more than 60 countries went through a period of political opening and democratic transition. Communism fell in the East Block, African regimes with similar ideology crumbled and other authoritarian governments on the continent opened up for multiparty elections. By 2011, all except two sub-Saharan African countries (Somalia and Swaziland) held multiparty elections.

In the 1992 elections, the ‘reformed’ ruling party won with a clear majority. Yet, the victory did not bring stability and peace. The defeated candidate Jonas Savimbi and most of his opposition party and guerrilla army UNITA returned to the bush and the armed struggle. Another ten years of civil war followed, until government forces killed Savimbi in 2002 and his army disintegrated. It took another six years for the government to re-establish control over most of the country and felt sufficiently secure to open up for elections. Thus, the second elections were held in September 2008. In these elections, the ruling party MPLA secured an even larger majority, and almost wiped out the opposition. MPLA won nearly 82 per cent of the votes and well above two-thirds majority in parliament. Thus, Angola moved into the trend of much of sub-Saharan Africa: the ruling party is consolidating its grip on power through multiparty elections. The parliamentary elections in 2008 were rated ‘credible and transparent. The elections were also deemed fair and transparent by international observers and its peaceful outcome marked an historical step towards democracy (see Figure 1.3). The main issues were the incumbency advantages: the absence of an independent election commission and the systematic use of state resources for the benefit of the ruling party.

 

Figure 1.3- Political Context

In 2010 and with the ruling party MPLA’s more than 2/3 majority in Parliament, the regime changed the constitution from direct presidential elections to indirect election. The new 2010 constitution solidified presidential rule in Angola. The president appoints the cabinet which is nominally accountable to an elected national assembly. The position of prime minister has been abolished and replaced with a vice president who is directly responsible to the president. The new constitution stated that the person who is named at the top of the party list of the winning party automatically becomes president. Thus the parliamentary and presidential elections happen simultaneously. These changes theoretically strengthen the role of the political parties which get to decide the sequence of the party list. More importantly, it minimizes the chance of shielding the presidential vote. Thus, according to the constitution, Angola is a multiparty democracy, with power separated between the executive branch (the President), the legislative branch (the National Assembly or Parliament), and the judiciary. The Assembleia Nacional da República de Angola (National Assembly of the Republic of Angola) is a 220 member unicameral national assembly, with 12 political parties represented. At the same time, Angola is a presidential system to an extreme degree. There is little to no Supreme Court influence on the government, and the Parliament has a very weak mandate, it has relatively little autonomy and it has a weak institutional capacity. Besides, the electoral system, the current party constellation, and the political culture are factors rendering support to presidentialism in Angola.

Presidential elections were scheduled to follow the legislative poll. However, under the new constitutional framework, presidential nomination was decided by the majority party in Parliament. Thus, the political system in Angola has become presidential which means that the President is the Head of State and Head of Government, Commander-in-Chief of the Armed Forces and President of the ruling party MPLA (Movimento Popular de Libertação de Angola). The President can appoint (and can remove) the government and a large number of government officials (including the Attorney General, the Governor of the Central Bank, the Generals and other commanders of the Armed Forces and the police, Chief Justices and all province Governors). The parliament has a little power and no impact on composition of the government. In fact, the president can, in practice, dissolve the parliament, but not vice versa[5]. He has exclusive and unrestricted rights to dissolve the parliament and call for new election. With this change, Angolan President José Eduardo dos Santos, who has been in power since 1979, is expected to remain in Office at least until 2012.

All in all, Angola is still facing serious challenges with regard to good governance, although there are some positive signals. There are improvements in civil society access to information on public affairs and on accountability of the executive: Information on government policies, budget, other fiscal data and regular macro-economic information are regularly published in the Ministry of Finance and the National Bank of Angola “ Banco Nacional de Angola BNA” websites. The 2010 constitution reinforced also Parliament’s legislative control and oversight functions. It also reaffirms the independence of Courts. In spite of capacity constraints, the Court of Auditors undertook in 2009,  21 audits and 21 surveys on different administrative municipalities, hospitals, higher education institutes, public enterprises and consulates, all of which are accessible on the Court’s website. It has also improved procurement practices and regulated granting of concessions. A judicial framework for the management of state assets was also approved.

Economic context

The Economy of Angola is one of the fastest-growing economies in the world[6], with the Economist asserting that for 2001 to 2010, Angolas’ Annual average GDP growth was 11.1 percent( see figure 1.4 below). It is still recovering from the Angolan Civil War that plagued Angola from independence in 1975 until 2002. Despite extensive oil and gas resources, diamonds, hydroelectric potential, and rich agricultural land, Angola remains poor, and a third of the population relies on subsistence agriculture. Since 2002, when the 27-year civil war ended, the country has worked to repair and improve ravaged infrastructure and weakened political and social institutions. High international oil prices and rising oil production have led to a very strong economic growth in recent years, but corruption and public-sector mismanagement remain, particularly in the oil sector. Angola is also the fifth largest diamond producer in the world by value, although diamonds represent only 1.1 percent of GDP. Gold, barite, iron, copper, cobalt, granite and marble are abundant, but their extraction remains limited. Prior to independence Angola was self-sufficient in food and an exporter of cash crops, in particular coffee and sugar. According to FAO, Angola has the sixteenth largest agricultural potential area in the world. Yet it is presently not self-sufficient and all crops have declined to near insignificance, as a mere 10 percent of the arable land is cultivated. Agribusiness investments sponsored by foreign companies and international initiatives from IFAD and G8 are blooming. The sector is expected to grow above 11 percent in 2010/11. The extensive coastline provides an estimated sustainable catch of 450,000 tones/year. Yet, less than 50 percent is fished, of which only a third is by domestic fishermen, exclusively artisanal. With a thriving internal demand, stimulated by large public spending, nearly 80 percent of all consumed goods are imported.

Figure 1.4: Annual average GDP growth %

20110108_WOC856_0

 

Angola’s high growth rate in recent years was driven by high international prices for its oil. It has became a member of OPEC in late 2006 and its current assigned a production quota of 1.65 million barrels a day (bbl/day). Oil production and its supporting activities contribute about 85% of GDP. Diamond exports contribute an additional 5%. Subsistence agriculture provides the main livelihood for most of the people, but half of the country’s food is still imported. Increased oil production supported growth averaging more than 17% per year from 2004 to 2008. A postwar reconstruction boom and resettlement of displaced persons has led to high rates of growth in construction and agriculture as well. Much of the country’s infrastructure is still damaged or undeveloped from the 27-year-long civil war. Land mines left from the war still mar the countryside, even though peace was established after the death of rebel leader Jonas SAVIMBI in February 2002. Since 2005, the government has used billions of dollars in credit lines from China, Brazil, Portugal, Germany, Spain, and the EU to rebuild Angola”s public infrastructure. The global recession that started in 2008 temporarily stalled economic growth. Lower prices for oil and diamonds during the global recession slowed GDP growth to 2.4% in 2009 and to 3.4% in 2010(see table 1.4 below), and many construction projects stopped because Luanda accrued $9 billion in arrears to foreign construction companies when government revenue fell in 2008 and 2009. Angola abandoned its currency peg in 2009, and in November 2009 signed onto an IMF Stand-By Arrangement loan of $1.4 billion to rebuild international reserves. Consumer inflation declined from 325% in 2000 to 14% in 2011. Higher oil prices in 2011, helped Angola climb turn a budget deficit of 8.6% of GDP in 2009 into an surplus of 7.5% of GDP in 2010. Corruption, especially in the extractive sectors, also is a major challenge.

Table 1 .4: Real GDP Growth Rates: 2003- 2013

 

2003

2004

2005

2006

2007

2008

2009

2010

2011 (e)

2012 (p)

2013 (p)

Angola

3,3

11,2

20,6

18,6

22,6

13,8

2,4

3,4

3,5

8,2

7,1

Botswana

6,3

6,0

1,6

5,1

4,8

2,9

-4,9

7,2

6,6

4,4

3,9

Ethiopia*

-2,2

13,6

11,8

10,8

11,5

10,8

8,8

11,4

10,7

7,0

7,6

Kenya

2,9

5,1

5,9

6,3

7,0

1,5

2,6

5,6

4,5

5,2

5,5

Libya

13,0

4,4

9,9

5,9

6,0

5,6

0,5

2,9

-41,8

20,1

9,5

Rwanda

2,2

7,4

9,4

9,2

7,6

11,5

6,0

7,2

8,6

7,6

6,9

South Africa

2,9

4,6

5,3

5,6

5,5

3,6

-1,5

2,9

3,1

2,8

3,6

South Sudan

Sudan

7,1

5,1

6,3

11,3

10,2

6,8

4,5

5,0

2,8

2,0

2,8

Africa

5,3

6,1

5,9

6,2

6,5

5,5

3,1

5,0

3,4

4,5

4,8

Note: * Fiscal year July (n-1)/ June (n)

Sources: AfDB/ Africa Development Bank, Statistics Dept., Various domestic authorities and AfDB estimates 2007

Table 1.5 – Key Macroeconomic Trends

 

 

During 2011, Angola continued with its main macroeconomic policy of reducing inflation, deepening international reserves, and increasing capital spending on infrastructure to promote economic diversification and poverty reduction. The country continued to implement the IMF Stand-By Arrangement (SBA) program (USD 1.4 billion in liquidity), which was signed in November 2009. The SBA aims to increase fiscal and monetary discipline; reform the exchange rate system; improve public financial management; create a sound banking system and enhance fiscal transparency. In 2011, Angola took measures to overhaul the tax regime, establish a debt management unit and manage and track the flows from the oil sector to the budget. The Central Bank (BNA) moved away from a temporary rationing exchange rate system to an auction system. A comprehensive strategy for private sector development was also drawn up. A contraction in capital expenditure and better expenditure control during 2011, allowed the authorities to make domestic arrears repayment of the USD 7.5 billion, which it had incurred since 2009.

Economic growth and fiscal sustainability are still highly dependent on the oil revenues. However, the oil sector is capital-intensive, lacks linkages to the real economy, and employs less than 1% of the total labour force. This constrains economic diversification and prevents much-needed job creation. The unemployment rate is estimated at around 26%, and the incidence of poverty remains high at 36%. Despite steady progress made in improving social conditions since 2002, the country still faces massive challenges in reducing poverty, unemployment and increasing human development. The government continues to allocate more than 30% of its budget to social spending. In 2012 budgeted social expenditure will increase by 1.6% to 33.3%, double what will be spent on defence, security and public order; and education and health budgets will be increased by 10%.

Overall, Angola is facing many challenges like economic growth highly dependent on oil sector. There is no diversification of economic structure, a deficient infrastructure network still being to be rebuilt (roads, railways, ports, etc…), reduce the high levels of poverty and promote better education and health system to the population. These challenges, weaknesses, strengths and opportunities can be summarized as follows:

Challenges: Oil revenues provide the long-term financing necessary for the country’s extensive reconstruction program and for the expanded provision of basic services needed to overcome the country’s human development deficits. However, Angola needs to reduce its dependency on the volatile oil revenues and industry. The major outstanding challenges are:

                   I.            the creation of a robust non-oil private sector that can generate employment, increase population wellbeing, and produce the necessary fiscal revenue to a sustainable fiscal balance;

                II.            Efficient use of the non-renewable resources that calls on enhanced government accountability;

             III.            Oil-price shocks;

            IV.            Political succession risk;

               V.            Slowdown in China, Angola’s main export partner;

            VI.            Government programs co-opted by local connected elites;

         VII.            Growing inequality fuels social unrest;

      VIII.            Continued changes to regulatory environment could create business uncertainty and hinder private sector investment;

            IX.            Mismanagement of influx of oil revenues into the local banking sector leads to an appreciation of the country’s real exchange rate that affects the competitiveness of the non-oil sector.

Weaknesses: The post-conflict fragile state that emerged from 27 years of civil war has profound social handicaps. An entire generation was adversely affected, deprived of access to basic services (e.g. education, health, among others) and infrastructure vital for social development and economic growth. The resulting widespread poverty and the low institutional capacity of the state apparatus are a major constraint for a sustainable and rapid development of the country. The two major weaknesses hindering the country’s development are:

                               I.            A weak institutional framework;

                            II.            Low human development conditions;

                         III.            High economic dependency on the oil sector;

                        IV.            Shortage of skilled labor;

                           V.            Weak education system;

                        VI.            High cost of doing business;

                     VII.            Challenging business environment;

                  VIII.            Inefficient legal regime;

                        IX.            Weak judicial system;

                           X.            Unequal distribution of wealth;

                        XI.            Rural-urban divide;

                     XII.            No stock market;

                  XIII.            Limited access to credit;

                 XIV.            Banking sector’s low appetite for risk;

                    XV.            Lack of reliable/accurate statistics;

                 XVI.            Corruption, excessive bureaucracy and red tape;

              XVII.            Infrastructure deficit;

           XVIII.            Unreliable energy supply.

 

Strengths: After 27 years of conflict, political stability was achieved in the country. Besides the considerable diamonds and oil & gas reserves, the country has other extensive mineral and natural resources and a vast agriculture land mass. The two major strengths in favor of the country’s development are:

                   I.            the mid-term political stability,

                II.            Extensive endowment of multiple natural resources;

             III.            Rapid and sustained GDP growth;

            IV.            Macroeconomic stability: inflation is near single digits and the exchange rate is stable;

               V.            Abundance of natural resources e.g. oil, gas, minerals, water resources, etc.

            VI.            Petroleum wealth is available to finance growth in the non-oil sector.

Opportunities: Angola seeks to assert itself as a logistical and economic hub and acquire a regional status commensurate with its military and financial might. Despite its poor infrastructure network, the completion of the national transport corridors rehabilitation, will potentially allow the full integration of Angola in the regional transport grid. The same applies to hydro-power whose potential could be unleashed once connected to the DRC and Namibian grids. With 45 percent of its 18 million inhabitants aged bellow 15 years, Angola has a potentially huge labor force capable of generating a strong domestic market. The two major opportunities to be seized by the country are:

                      I.            A privileged geographical positioning with favorable competitive growth factors;

                   II.            Abundant, dynamic and young population to supply the job market, and drive domestic demand;

                III.            Gradual liberalization of economic sectors;

               IV.            Infrastructure improvements enhance economic viability of agriculture and mining sectors;

                  V.            Greater efficiency in the collection of tax revenues decreases informality and reduces over-reliance on oil sector revenues;

               VI.            New exchange regime for the oil sector helps to increase and expand the range of financial products available;

            VII.            Emerging middle class with disposable income;

         VIII.            High population growth provides a base for rising domestic consumption;

               IX.            Special Economic Zones promote industrial development;

                  X.            Investment in information and communications technology improves labor productivity;

               XI.            Government strategy and support programs create opportunities for M-SMEs;

            XII.            Potential to supply the internal market which relies on imported goods and inputs;

         XIII.            Potential for mobile banking to increase people’s access to finance.

Acquired Experience for South Sudan

Angola case and many studies confirm the general understanding about the relationship between economic growth and political stability. The concept that says, “Democracy and political stability foster economic growth relative to instability and non-democracies in a given country”. On the other hand, this theory has been supported by many economists, who point out that countries such as Hong Kong, Singapore and Taiwan, which achieved ‘super growth’ regardless of the fact that the governments of these countries are authoritarian in nature, but politically stable (Nelson and Singh 1998)[7].

In regard to macroeconomic stabilization efforts, Angola has been commendably successful in terms of political and economic stability under its longest serving president. Its oil resources have provided a steady influx of funds into government coffers, but they also create significant challenges for macroeconomic stabilization and economic diversification. The booming oil industry creates wealth in related sectors finance, hospitality, and other industries that service oil companies, but it also makes it more costly for everyone to do business. The revenue from oil exports has given the state tremendous resources with which to develop the economy and has given Angola the semblance of a rich, thriving economy. This is a facade, however, because after 27 years of civil war with its concurrent high defence expenditures of 20 percent of the GDP, the Angolan economy is in shambles.

Oil revenue contributed 41.5 percent to the total GDP in 1991 and 79 percent to the total revenue in the 1992 budget. In spite of Angola having a 1993 GDP of $8.4 billion, and being placed in the middle-income group of countries in the world, the state has not been able to promote economic development. In 1993, for example, its external debt amounted to $10.9 billion, accompanied by the highest mortality rate in the world of children under five years (292 per 1000), severe food shortages, infrastructural destruction, and little diversification into manufacturing.

Although the civil war has been the most important factor in diverting resources from development, socialist centralized planning, subsidies, price controls, collectivization in agriculture, control of infrastructural facilities, and corruption have also contributed to the crumple of the Angolan economy. The civil war, waged since independence in 1975 to the present, between the ruling Movimento Popular de Libertacao de Angola (MPLA) and Uniao Nacional para a Independence Total de Angola (UNITA), has denied the state the peaceful environment necessary for economic development. In 1993, the government mortgaged three years of future oil revenue (on very unfavorable terms) to purchase military supplies, to finance the war against UNITA, resulting in further loss of revenue for development. However, in fairness to the government, it is difficult to ascertain whether or not Angola would have experienced successful development in the absence of civil war, because there are other equally important impediments to its development. The civil war negatively impacted on diamond mining when the mines were bombarded by UNITA forces and mining was temporarily halted as large diamond areas were seized. The war and smuggling of diamonds have deprived the state of revenue from diamond mining. The war has also caused serious destruction of infrastructural facilities including bridges, roads and railroads, making it difficult to transport supplies to producers and commodities to the market. Similarly, the war has reduced production in agriculture as farmers have abandoned the sector, fleeing war and the risks associated with land mines. The production of both food export crops (e.g. coffee) has been reduced causing severe food shortages resulting in famine. Angola has become dependent on expensive food imports and food aid to avoid famine conditions and the food shortages have given rise to a thriving black market.

In addition, socialist economic policies that encourage state participation in the economy have hampered rather than facilitated the process of economic development. The state’s involvement in the economy has meant a heavy role by bureaucrats. The lack of economic discipline among top leaders has resulted in a lack of congruence between plans and budgets, thus making it hard to realize the goals of development. Furthermore, state control of ports and shipping has led to their collapse because the Portuguese colonialists trained very few Angolans at the time of independence and the MPLA state was unable to retain expatriate personnel. Public services like education, health, water supply, sewage, and electricity also ground to a halt in the late 1980s due to lack of funds, and bureaucratic impediments. State companies such as utilities and those in productive areas have operated at a loss, primarily because of a lack of managerial autonomy to set profitable prices and economic production levels and political control by ministers. Subsidies given by the central government to companies to cover their losses are one example of the inefficient use of public resources. Corruption by top MPLA political and military leadership has resulted in state resources being used for personal aggrandisement or allocated inefficiently. In most cases there was duplication of purchases because of a lack of co-ordination and accountability for use of state funds among senior government officials. Undoubtedly, corruption goes on unabated because of the government’s inability to prosecute the offending officials. Fourth, the fall in world oil prices in the 1980s worsened the economic situation especially in the absence of government savings during the time of high oil prices. The government’s earnings from oil exports declined from $2,000 million in 1985 to $700 million in 1987. To resuscitate the economy, the government was forced to introduce economic reforms. In 1987, the government announced the Economic and Financial Restructuring Program, also known as the Saneamento Economico e Financeiro (SEF). Unfortunately, the reforms were not implemented because of a lack of commitment by top MPLA officials sympathetic to a socialist pattern of development, and the dismissal of the Minister of Finance, the architect of the SEF program. Persistent economic problems and poor results from its socialist policies forced the government to resume the SEF in 1990. However, the resumption of the war with UNITA in 1992, following UNITA’s refusal to recognize the electoral results, again blocked implementation of reforms as the MPLA was primarily preoccupied with defense matters. Finally, in 1994, SEF was launched in an effort to revitalize the economy. Some reforms were undertaken. For example, in 1984, the government embarked on a program to increase food production to achieve food self-sufficiency by converting state farms into small-holder peasant associations in rural areas. Through agricultural stations, the government provided support in the form of fertilizer and seeds to peasants with limited success. Similarly, in 1990, the government embarked on the privatization of state-owned coffee plantations to boost output by selling 33 plantations to foreign companies. The sale proved expensive due to the old age of the trees and unattractive due to the war.

Like Angola, the democratic experience of independent South Sudan is untested as the country has yet to hold its first elections as a sovereign nation. The Sudan People’s Liberation Movement (SPLM) led South Sudan to independence and, by virtue of its legacy, exercises significant control over government, the political space and the economy[8]. Similar to Angola, South Sudan can use its oil to increase its international standing and stimulate high growth rates, particularly in the non-oil sector, which may well see the country through the coming lean years. One of more concern is the socio-political situation in South Sudan in terms of human development indicators that show how oil wealth is concentrated in the hands of a few political elite and their alliances, leaving the majority of the population to languish in severe poverty. The last elections had served to entrench the ruling party’s position. While this may encourage political stability and allow the incumbent SPLM government to formulate long-term development plans, it does not bode well for political accountability, particularly given that the country’s oil-rich government was not dependent on a tax base for its revenue.

However, the country has vast and largely untapped natural resources and opportunities abound for visible improvements in the quality of peoples’ lives, but there are many challenges also. GDP per capita of South Sudan in 2010 was equivalent to USD$1,546, while the preliminary estimates for 2011 indicate a GDP per capita of US$1,804 which is much higher than its East African neighbors, mainly due to oil production. Above all and despite the economic shocks due to the oil shutdown, South Sudan’s inflation fell to just 25% in December 2012 compared to the 41%, registered in the month of November 2012 and 80% in April 2012, The decline in inflation, according to South Sudan National Bureau of Statistics (NBS), resulted from a fall in food prices by 26% between December 2011 and 2012. Prices for alcoholic beverages and tobacco, NBS said, increased by 54.1% over the same period the relevant figure for restaurants and hotels was an increase of 18.8%. Despite the substantial achievements of the last eight years, the development challenges facing the new nation remain significant. The civil war that lasted over 21 years took an enormous toll and left South Sudan impoverished. Over half of the population lives below the poverty line, and human development indicators are among the worst in the world. There has been also a significant increase in South Sudan’s population since independence. However, now that the “grace period” for South Sudanese in Sudan to sort out citizenship status has expired, the high growth rate is likely to drop. Yet, without the infrastructure in place to handle the larger population, access to resources and public services is likely to deteriorate. Moreover, a predominantly young population places further stress on the limited infrastructure and state resources.

As we all know, South Sudan, as a new country, encounters multiple challenges, but also holds opportunities, and it may be premature to predict which direction the country is headed in terms of governance and political stability. Key impediments are the less inclusive political space and corruption. The opposition complains of their inability to hold the government accountable and ethnic groups express feelings of exclusion. There is one opposition party, Sudan People’s Liberation Movement for Democratic Change (SPLMDC), with limited influence. Broad-based inclusion of all South Sudanese remains a challenge. South Sudanese have constitutional rights to form political organizations and engage in politics[9]. Civil liberties are enshrined in the Constitution and incidents of rights’ violations were reported. South Sudan lacks the capacity and resources (human resources and administrative infrastructure) for checks and balances to fully operate and for the rule of law to prevail.

In conclusion, eight years after signing peace agreement (CPA), South Sudan is possibly in the strongest political and economic position it has ever been in. its Economic performance was before oil shutdown unquestionably positive. Its oil Industry constitutes a major source of income and occupies a strategic position in its economic development. The industry has been playing vital and dominant role to its economic growth, both in foreign exchange earnings and domestic income generation. Therefore, we believe that through the experiences of Angola, South Sudan can learn the following:

    I.            Stability has a clear impact on a country’s general economic performance. This would seem to demonstrate that despite whatever specific development strategies that country may pursue at different times. It is the country’s level political stability that had the most conclusive effect on the economy;

 II.            The oil industry can be the backbone of the economic development. The oil sector has been the dominant sector to the Angolan economy as well as the South Sudan economy and will most like remain that way. However, as dynamic linkage affects of this sector are diffused to the rest of the economy, South Sudan should focus on other economic sectors to boost its development process;

III.            Oil industry is the main source of energy and shapes the political, socio-cultural, technological and economic destiny of the country;

IV.            Because oil is an exhaustible resource, South Sudan needs to develop a production structure that can take full advantage of the dynamic external affects that rise from oil production and enable it to transform its supplies of oil funds into human and physical capital in an optimal way over time. This will help ensure that South Sudan succeeds in establishing a firm basis for self sustaining growth wile the oil reserves still last;

V.            Oil wealth, human and natural resources must be properly managed and used to support the key national institutions such as power, energy, road, transportation, political, financial, socioeconomic, legal, investment environment systems etc . Accountability of oil income, its profitable investment and the diversification of the economy are very crucial for economic development;

Generally, Angola has relied on oil revenue to finance their development programmes since the government has a very narrow capabilities for generating domestic savings through conventional fiscal measures. Therefore, the Government of South Sudan should be alerted on the followings:

 I.      It is imperative for government to start with fair and most equitable reallocation of oil revenue on the basis that will ensure even distribution and balanced economic development;

II.      Government should focus not only on oil revenue generation but should also re-direct its attention to proper management of the non-oil revenue and effective control of necessary expenditure;

III.      Government should avoid budget deficit and ensure that balanced budgeting is the norm in the country;

IV.      Government should invest oil revenue more on the economic sector that has significant and direct bearing on the economy in order to improve the value of GDP, per capita income and reduce inflation;

V.      The government should use oil revenue to diversify the economy in the critical economic sectors such as agriculture and manufacturing sectors that would impact the per capita income positively;

VI.      Natural resources are generally associated to negative effects on the political environment of a country. Based on previous literature, there is a relationship between oil revenues, political instability (conflicts). Under certain circumstances, a process of full democratization is argued not to represent an optimal choice for the oil-rich authoritarian nations. Therefore, the government should not favor to remain nondemocratic in violating its constitution, in order to prevent internal conflicts from occurring. It is importance to encourage socio-ethnical fragmentation in determining the political transition of oil producing nations.

[1]Samuel P. Huntington, Democracy’s Third Wave, Journal of Democracy Volume 2, Number 2, Spring 1991

[2]Cilliers, J. 2002. ‘The NEPAD African Peer Review Mechanism: Prospects and Challenges’ Institute for Security Studies, Pretoria (mimeo).

[3]Camdessus, M. (1998), “The IMF and Good Governance”, Address by Michel Camdessus, Managing Director of the International Monetary Fund, at Transparency International, Paris, 21 January

[4]The United Nations Economic & Social Council Commission on Human Rights, 61st Session,

March 17, 2005. E/CN.4/2005/SR.10

[5]A brief by Chr. Michelsen Institute (CMI) and Centro de Estudos e Investigação Científica (CEIC),May 2011 Volume 1 No.9

[6] Birgitte Refslund Sørensen and Marc Vincent. Caught Between Borders: Response Strategies of the Internally Displaced, 2001, Page 17.

[7] Nelson, Michael A. and Singh, Ram D. 1998 “Democracy, Economic Freedom, Fiscal Policy, and Growth in LDCs: A Fresh Look.” Economic Development and Cultural Change 46(4), 1998, pages 677,697.

[8] Dr. Justin Ambago Rumba, “Addis Ababa Agreements Are Not New in the Sudanese Politics,” Opinion, South Sudan News Agency, 8 Oct. 2012, Web, 08 Oct. 2012, <http://www.southsudannewsagency.com/opinion&gt;!

[9] “The Transitional Constitution of the Republic of South Sudan, 2011, Part II, Bill of Rights,” Sudan Tribune, Web, 05 Oct. 2012,<http://www.sudantribune.com/IMG/pdf/The_Draft_Transitional_Constitution_of_the_ROSS2-2.pdf&gt;


اقتصاد جنوب السودان: قراءة الواقع ورؤية المستقبل

Tue, 11/02/2014 - 14:12

S.Sudan

بقلم د/ أديس أبابا اوطو اكونجديت                                      

Email: [email protected]

ترجمة/ الأستاذ/ الفريد قاسم يعقوب

قراءة دكتور/ كمينجي بلال النور

 

في الخامس عشر من شهر ديسمبر 2013، قامت مجموعة من قوات الجيش الشعبي بتحرير السودان بإحداث أزمة سياسية خطيرة يعتقد أنها تمرد في جنوب السودان. وعليه، أعلن الريئس سلفا كير علي أنها محاولة إنقلابية تمت إخمادها، ولكن تجددت القتال في اليوم التالي 16 ديسمبر 2013، حيث انتشر إلي مناطق اخري بجنوب السودان مثل ولايات جونقلي والوحدة واعالي النيل. وتفيد التقارير الواردة أن الأف من أ شخاص قد قتل والأف من الجرحة و نزوح عدد كبير من سكان.

 

وفي هذا السياق، اتهم الريئس سلفا كير نائبه السابق د. رياك مشار بمحاولة الإنقلاب عليه، الأمر الذي نفاه د/ رياك بشدة، في حين القي باللوم علي الريئس بأنه يلعب دور سياسة المحافظة علي السلطة.

لاشك، أن عدم الإستقرار السياسي يسبب في تراجع الأعمال التجارية وتقليل ثقة المستثمر، وأيضا قد يقلل من فرص الإستثمار الاقتصادي المحلي/الأجنبي ومن ثم تعطيل عجلة التنمية الاقتصادية والاجتماعية في جنوب السودان بشكل عام.

ومن هذا المنطلق، هذه الورقة ستحاول تسليط الضوءعلي ملامح الوضع الاقتصادي الراهن لجنوب السودان وإستجلاء فرص الاستثمار والنتائج الاقتصادية الممكنة في ظل الأزمة الاقتصادية التي تشهدها البلاد حاليا. وعلي صعيد آخر، ماهي أنجع السبل لتحقيق أستقرار اقتصادي وإستعادة ثقة المستثمرين حتي يتطلع الاقتصاد في جنوب السودان لآفاق أرحب مرة أخري.

I.      الخلفية السياسية والاجتماعية لجنوب السودان:

تعتبر جنوب السودان دولة مغلقة، حيث تقع في شرق إفريقيا، وعاصمتها جوبا وهي في نفس الوقت من أكبر مدنها. تحد جنوب السودان شرقا دولة أثيوبيا وكينيا في الجنوب الشرقي ويوغندا جنوبا وفي الجنوب الغربي جمهمورية الكونغو الديمقراطية وجمهورية إفريقيا الوسطي في الغرب والسودان شمالا.

وفي الواقع، إن ما يعرف بجنوب السودان كان في السابق جزءا من الحكم الثنائي (البريطاني المصري)، فاصبحت جزءا من جمهورية السودان بعيد نيل السودان إستقلاله في يناير 1956. وفي أعقاب الحرب الأهلية الأولي التي توجت بمنح جنوب السودان الحكم الذاتي الإقليمي في عام 1972 والذي إستمر حتي 1983. وفي نفس العام، إندلعت الحرب الأهلية الثانية التي تمخضت عنها توقيع إتفاقية السلام الشامل في عام 2005، وبمقتضها كونت حكومة لجنوب السودان تتمتع بصلاحيات واسعة. وفي 9يوليو 2011 أصبح جنوب السودان دولة مستقلة بناء علي نتائج إستفتاء تقرير مصير الجنوب، وفي 14 يوليو 2011 أضحي جنوب السودان عضوا في الأمم المتحدة  لتصبح الدولة رقم 193. كما إنضم للإتحاد الأفريقي في 28 يوليو 2011 لتكون الدولة الأحدث رقم 54 في القارة. فيما في 18 أبريل 2012 أصبح جنوب السودان عضوا بالبنك الدولي، إضافة إالي تقدمه بطلب للإنضمام إلي الدول الخمس التي تعرف بكتلة مجتمع شرق إفريقيا.

 ومن ناحية أخري، يعد جنوب السودان من أفقر دول العالم، ناهيك عن كونه من أكثر دول العالم ترديا في الأوضاع الصحية. كما أن جنوب السودان يتمييز باقتصاد هش، حيث يعتمد كليا علي النفط والإنتاج المحلي المحدود، وبالتالي تسد الدولة العجز الحاصل في حاجياتها الضرورية عبر الإستيراد من الخارج. فعلي المدي القصير أو المتوسط ستظل الإنفاق الحكومي في اقتصاد الموارد غير البترولية هو الأساس.

كذلك من المشاكل الرئسة التي تعاني منها دولة جنوب السودان النقص الكمي والنوعي الجلي في الموارد البشرية المهرة في كآفة القطاعات الاقتصادية. وعلي صعيد آخر، رغم وفرة الموارد الطبيعية بجنوب السودان، إلا أن العلاقة بين تلك الموارد والهياكل الأساسية لتحويلها بالكاد يعتبر ضعيفا كما تؤكد ذلك الحقائق التالية:

1)   يعتبر جنوب السودان دولة مترامية الأطراف، حيث تبلغ مساحتها حوالي 644 ألف كلم مربع، وهذا بالتقريب يعادل مساحة دولة فرنسا أو ولاية تكساس بالولايات المتحدة الأمريكية. وبالكاد غالبية شبكة الطرق بالدولة غير معبدة تماما، وحاليا تقدر طول مسافة الطرق المعبدة في جنوب السودان بحوالي 70 ميلا فقط.

2)   وفقا لتقديرات برنامج الغذاء العالمي، إن حوالي 3.3 مليون نسمة أي أكثر من ثلث سكان الدولة يعانون نوعا ما من إنعدام الأمن الغذائي.

3)   في حين، أورد مركز جنوب السودان للإحصاء والتقويم أن حوالي 50% من السكان يعيشون تحت خط الفقر، ويشمل ذلك الذين يقل مداخيلهم عن 25 دور أمريكي في الشهر (حكومة جنوب السودان).

4)   كما ذكر المركز أنه علي مدار 15 سنة الماضية بلغت نسبة التعليم بالبلاد حوالي 27%، بحيث تبلغ نسبة التعليم بين الذكور حوالي 40%، بينما تصل نسبة التعليم في أواسط الإناث حوالي 16% فقط.

5)   وأيضا ما يناهز 73% من السكان البالغين ليس لهم الالمام بمبادئ القراءة والكتابة، فيما حوالي نصف موظفي الخدمة المدنية مستواهم التعليمي أقل من الإبتدائي (الاقتصادي 2011).

6)   وأخيرا، لقد سجل جنوب السودان أعلي معدلات وفيات الأمهات في العالم. وقد لاحظت الأمم المتحدة أن الفتاة التي تبلغ 15 عاما في جنوب السودان أكثر عرضة للوفاة أثناء الولادة من فرصتها في مواصلة وتكملة تعليمها. 

وعلي ضوء ذلك، وضعت دولة جنوب السودان مسالة التنمية الاقتصادية والاجتماعية كواحدة من أولوياتها. وعليه، ضمنت أولويات التنمية القومية في أهداف الأركان الأربعة الأساسية لخطة التنمية في جنوب السودان ما يلي:

1-   الحكم الرشيد: تكوين حكومة ديمقراطية وشفافة وخاضعة للمحاسبة ومكونة من أشخاص أكفاء ملتزمين بأسس الخدمة العامة مع مراعاة توازن القوي بين قطاعات الحكومة التنفيذية والتشريعية والقضائية. 

2-   زيادة مستوي الرفاهية: يؤدي التنوع في القطاع الخاص إلي نمو اقتصادي وتنمية مستدامة والتي بدورها ستنعكس إيجابيا علي مستوي تحسن الأوضاع المعيشية للسكان وتقليل معدلات الفقر العالية حاليا. 

3-   تعزيز الحياة الكريمة: العمل علي ترقية شخصية الإنسان في جنوب السودان وذلك بتعجيل توفير الخدمات الاجتماية الضرورية.  

4-   الأمن والأمان: العمل علي دفع سيادة الدولة والتكامل الإقليمي بين أجزاء الوطن الواحد ومنع ظهور الصراعات القبلية والإثنية. ودعم الدستور من خلال التعامل بالتساوي أمام القانون والمحافظة علي النظام في جل المؤسسات. 

II.     فرص الإستثمار:

بعيد استقلال جنوب السودان في التاسع من يوليو 2011، أعتبرت الدولة أحدث محطة استثمارية في العالم، خاصة أنها مفتوحة لكآفة الأعمال التجارية إزاء توفر الإمكانيات المساعدة علي النمو الاقتصادي السريع (المطرد) والصرف المحدود للخدمات الجيدة. إضافة إلي كون أن دولة جنوب السودان كفيلة بتقديم فرص متنوعة للمستثمرين في العديد من المجالات الاقتصادية، وتشير التقديرات إلي أن اقتصاد جنوب السودان تنمو بمعدل 7-10% في العام، وذلك بعد السنوات الطويلة من الحروب والإهمال التام الذي حال دون إستغلال ناجع للموارد المحلية الكفيلة بإنتاج السلع الأساسية والخدمات الضرورية لتلبية متطلبات الأسواق المحلية من جهة، ومن جهة أخري، فأدي ذلك إلي الإعتماد الكلي علي السلع المستوردة من دول الجوار.

وعلي صعيد آخر، فإن التنوع الإستراتيجي للدولة، قد أفضي إلي تحديد أهداف أولوية بغية تحقيق التنمية الشاملة وتتمثل في تطوير خمسة قطاعات رئسة وهي: البنية التحتية ،السياحة والضيافة ،البترول ،التعدين والزراعة. ويبدو أن الإحصائيات المتوفرة في هذه القطاعات واعدة، بحيث يتضح ذلك من خلال الأرقام الآتية:

1)    وجود نقص حاد في البنية التحتية بجميع المناطق في جنوب السودان، بحيث أقل من 1% فقط من السكان يتوفرون علي خدمات الكهرباء، وتقدر نسبة الطرق المعبدة بأقل من 6%، بينما ما يقل عن 2% من السكان فقط يسكنون في مساكن لائقة، في حين تفتقر الأنشطة التجارية والصناعية للتنظيم المجالي.

2)   ووفقا لإحصاء عام 2011، تقدر عدد الحيوانات الموجودة بالتراب الوطني حوالي 1,3 مليون، ولعل هذا كان من الممكن أن يساعد في خلق فرص ممتازة للإستثمار في مجال الفنادق والحظائر الوطنية. كما أن الظروف مواتية للدخول في مجال السياحة عبر ممارسة العديد من الألعاب والأنشطة الرياضية. أيضا يتيح الفرص لإبراز المورثات الثقافية والروابط التاريخية وتمنح الفرص لتأسيس وتقوية الوكالات المسئولة عن تنمية والمحافظة علي الآثار والمتاحف ومواقع التراث الوطني.

3)   توفر فرص لتطوير الإنتاج في حقول النفط المستغلة حاليا وبناء مصافي لتكريرالبترول والغاز ومستوعات التخزين وأنابيب نقل البترول.

4)   كما أن حوالي 90% من الأراضي في جنوب السودان صالحة للزراعة، ولكن نجد أن الأراضي المزوعة حاليا في جنوب السودان تناهز 4.5% فقط من إجمالي الأراضي، الأمر الذي أرغم الدولة علي إستيراد أكثر من 90% من المواد الغذائية لسد حاجيات السكان.

5)   يحظي جنوب السودان بإمكانيات زراعية هائلة، التي تؤهل الدولة لتصبح سلة الغذاء الرئسة في الإقليم. وفي هذا الإطار، يعتبر حوض النيل الأبيض الواقع شرق البلاد من أهم الأراضي الزراعية الخصبة في إفريقيا برمتها. كذلك تتمتع الأقاليم الشمالية لجنوب السودان بطاقات هائلة تساعد علي دعم الزراعة لأغراض تجارية وصناعية والمتمثلة في تصنيع القطن وقصب السكر والقمح والفواكه…إلخ.

6)   تطفو دولة جنوب السودان علي ثالث أعلي إحتياطي النفط في إفريقيا، ويتنبأ الخبراء بأن الاقتصاد الوطني سوف يتعزز بقوة إعتمادا علي إحتياطها النفطي في المدي القريب، بحيث تشكل ضرائب إنتاج النفط حاليا أكثر من 90% من عائدات الحكومة.  

وفي خضم ذلك، يلاحظ أنه بعيد الاستقلال وتوفر الإستقرار السياسي النسبي، بدأت الأنشطة الاقتصادية تنمو بسرعة ملحوظة لتوفير متطلبات النمو التجاري للبنية التحتية الضرورية في العديد من مناطق البلاد. والفضل يعود إلي القانون الجديد لتحفيز الإستثمار، وعليه طرأ تطورا ملموسا في الطلب علي المواصلات والطاقة وحق الملكية.

ومن المتوقع، أن تتبوأ إستثمارات القطاع الخاص مقدمة الإستثمارات في البلاد، والتي تقوم بتوفير البضائع والخدمات. وحسب ميزان الإستثمار، تري حكومة جنوب السودان بانها لا تستطيع إنجاز جل مشاريع البنيات التحتية الأساسية المطلوبة، ومن شان ذلك، إستعانت الحكومة بالمستثمرين في مجال البنيات التحتية لأنشاء هذه العناصر وفقا لأسس تجارية، وتتمثل ذلك في قطاع الملكية وتوليد الطاقة والمطارات والطرق والكباري، وخطوط السكك الحديدية المقترحة وغيرها من الخدمات.

ولعل من المسائل العاجلة حاليا في البلاد، توفير محطات لتوليد الطاقة الكهربائية من أجل توطين الأنشطة الصناعية والإضاءة وإستغلال الموارد المعدنية. إضافة إلي الجهود المبذولة لتوفير شبكة الطاقة الكهربائية المناسبة لخدمة المؤسسات التجارية والأحياء السكنية وذلك بالتعاون مع حكومات الولايات، وبالتالي يمكن التاكيد علي أن هيئة كهرباء جنوب السودان تعد من أبرز إمكانيات الإستثمار المفتوحة بالبلاد.

وفيما يخص تطور قطاع الملكية يمكن توفير المساكن بأسعار متفاوتة ومراكز التسوق والمجمعات والمكاتب والوزارات والمباني الحكومية والمناطق الصناعية، كلها إمكانيات ومجالات واعدة للإستثمار.

ورغم أن النفط يعد المصدر الرئس لعائد التنمية في جنوب السودان، إلا أن إنتاج النفط والغاز لم تكتمل بعد. ففي ظل الأستقلال ورفع الحظر المفروض علي جنوب السودان، عملت الحكومة علي جذب المزيد من المستثمرين لتطوير الإنتاج في الحقول التي لا تنتج. بجانب ذلك، لا توجد مصفاة لتكرير النفط والغاز ونظام التخزين وأنابيب لنقل النفط في جنوب السودان. ففي الوقت الراهن، تتم تكرير ونقل نفط جنوب السودان عبر أنابيب جمهورية السودان. وبعد الاستقلال، سعت الحكومة لجذب المستثمرين بغية تطوير نظام تكرير النفط (لسد المتطلبات النفطية المحلية والإقليمية) ونظام التخزين وأنابيب نقل إضافية لتسهيل إجراءات التصدير.

 وفي سياق آخر، يمتلك جنوب السودان ثروة معدنية هائلة، ويشمل ذلك الذهب واليورانيوم والحديد والنحاس والمآىس ومعادن أخرها، غير أن جل هذه الثروات قد أهملت بسبب الحرب. ناهيك عن عدم إستغلالها بطرق أمثل، الأمر الذي يستدعي قيام حكومة جنوب السودان بجهود حثيثة قصد جذب المستثمرين الجادين العمل في هذا القطاع الاقتصادي الحيوي.

 أما فيما يتعلق بالقطاع السياحي، فتتوفر الدولة علي مؤهلات سياحية عظيمة، ويتضح ذلك من خلال وجود أكثر من 18 حظيرة قومية ومحميات تحتاج فقط إلي عمليات تطوير مدروسة حتي ترتقي إلي مصاف المجمعات السياحية العالمية.

 هذا من جهة، ومن جهة أخري إن القطاع الزراعي في جنوب السودان كسائر القطاعات الأخري يحتاج بدوره إلي مستويات عالية من الإستثمار. في الوقت الذي ظلت الزراعة تمثل الجزء الأكبر من اقتصاد البلاد، كان من الطبيعي أن يتحول جنوب السودان إلي أكبر منتج ومصدرللمنتجات الزراعية. ولكن ما تقوم به القطاع الزراعي حاليا أقل بكثير من إمكانياته الغنية. وبكل تأكيد هناك أسباب عديدة وراء ذلك، ومنها التكلفة الباهظة لعمليات التسوق والتي تقلل من المنافسة وتسهم في تدني الإنتاجية.

وفي نفس الإطار، ليس هناك تطور في مدخلات الزراعة ومنتج الأسواق. علي الأقل هناك حوالي 30 مليون هكتار من الأراضي الصالحة للزراعة، غير أن المساحة المستغلة الآن أقل من 5%. ومن ناحية آخري، يتمتع معظم أنحاء البلاد بغزارة الأمطار والتي تكفي متطلبات ري الزراعي.

استنادا إلي ذلك، يجب علي جنوب السودان السعي والعمل بجدية علي استقطاب مستثمرين زراعيين وتوفير أسواق جاذبة للعاملين في الزراعة والتجارة. والملاحظ، فقد بدأ العديد من الفلاحين المحليين الإستثمار في مجال إنتاج الحبوب، كما تعمل الحكومة علي جذب المزيد من المستثمرين المختصين بمجال الزراعي. وجدير بالذكر، فمن المنتجات الزراعية المتوفرة حاليا بجنوب السودان: الذرة و الذرة الشامي، والأرز والدخن والقمح والصمغ العربي وقصب السكر والمانجو والباباي والموز والبامبي (البطاطس الحلوة) وزهرة الشمس والقطن والسمسم والكسافا (البفرة) واللوبيا والفول السوداني. بينما تنحصر المنتجات الحيوانية في الأبقار والماعز.

بناء علي ذلك، حددت الحكومة أولويات لمناطق الإستثمار التجاري لمختلف الإنتاج الزراعي في البلاد علي النحو التالي:

1-    ولايات أعالي النيل، واراب وشمال بحر الغزال حيث زراعة الأرز والذرة الشامية والقمح والسمسم والذرة.

2-   ولاية غرب الإستوائية: زراعة الأرز والشاي والبن ونخيل الزيت وإنتاج الأخشاب.

3-   منطقة السدود ( ولاية جونقلي والوحدة): الذرة الشامية والسمسم والقمح والأخشاب.   

كذلك هناك ستة مناطق بيئية زراعية في جنوب السودان، تتميز بإمكانيات زراعية متنوعة، وهذه المناطق هي:

1)   الحزام الأخضر في الجنوب والجنوب الغربي: تصلح لزراعة نخيل الزيت، الشاي، البن، والفواكه، والذرة الشامية والخضروات والغابات المدارية.

2)   هضبة الصخور الحديدية  (iron stone)في الغرب: تمتاز هذه المنطقة بزراعة الذرة والفول السوداني والسمسم وزهرة الشمس وتربية الماشية.

3)   جبال ومرتفعات شمال شرق: تصلح لزراعة الشاي والبن والفواكه (التفاح والعنب) والقمح والمزارع الغابية.

4)   نهر السوباط في الشمال: تمتاز بتربة ذات رواسب غرينية حيث تصلح لزراعة قصب السكر والسمسم والفول السوداني.

5)   غرب وشرق سهول الفيضان: يمكن زراعة محاصيل متعددة مثل الذرة والأرز وقصب السكر والفول السوداني.

6)   وأخيرا، المنطقة الجافة: جنوب شرق البلاد وتصلح لزراعة أشجار الصمغ.

وبإختصار، يمكننا بناء جنوب السودان إعتمادا علي إستغلال مواردها الغنية. وعليه، هناك بنيات تحتية أساسية يجب الإهتمام بها بصورة عاجلة مثل شبكة الطرق، قطاع الإسكان، الخدمات التعليمية والثقافية، وقطاع البنوك والتأمينات …إلخ. أيضا، يقتضي إيلاء عناية خاصة لقطاعات التعدين والسياحة والزراعة. وعليه، فأن جميع هذه القطاعات الاقتصادية والاجتماعية يجب أن تلقي إهتماما خاصا من قبل الحكومة والمانحين أو المستثمرين علي حد السواء.

III.                       الوضع السياسي الراهن:

نعلم جمعيا أن الإستقرار السياسي يعد من أهم خصائص الدولة الحديثة. وتلعب الديمقراطية الليبرالية دورا هاما في تحديد نمو التطور الاقتصادي في عدة مجالات اقتصادية. وعليه، يعتمد الإستقرار السياسي غالبا علي العناصر الآتية:

أ‌)       حكم القانون (كوفمان وكراي _ 2002).

ب‌) درجة الأوتوقراطية (حكم الفرد) أو الديمقراطية.

ت‌) نسبة التجارة (نسبة مساهمة الحكومة في برامج التنمية).

 

أولا، مع تزايد حكم القانون ستكون الأستقرار السياسي أكثر قوة. بالإضافة إلي ذلك، فإن فقدان حكم القانون يؤدي إلي فقدان الشرعية وحتما فقدان الإستقرار السياسي. ولاشك أن تراجع في حكم القانون يضعف الإستقرار السياسي. إذن، فإن لحكم القانون تأثيرا مباشرا علي الإستقرار السياسي لأن ذلك إشارة واضحة عن كيفية قيام الجهاز التنفيذي بواجبه علي الوجه الأكمل. حتي في النظام الفاشيستي أنه من الأهمية بمكان أن يتبع الجيش القوانين التي وضعتها الدكتاتور.

ثانيا، يصبح درجة الإستقرار السياسي مرتفعا إذا كان هناك درجة عالية من الديمقراطية أو حكم الفرد. ويحاول بيثم (1991:75) أن يبرهن أن التغيرات الكبيرة في العلاقة بين المجتمع والشرعية هي عبارة عن تحولات في النظام السياسي والاجتماعي. إن الديمقراطية القوية أو حكم الفرد القوي يجب أن تزود بالصمود أمام هذه التحولات وبالتالي تقدم إستقرارا سياسيا. نتيجة لذلك، فإن الدولة التي تتمتع بدرجة قليلة من الديمقراطية أو حكم الفرد هي أقل إستقرارا سياسيا.

أخيرا، يعتمد الأستقرار السياسي أيضا علي المظاهر الاقتصادية (الأوجه الاقتصادية)، ولهذا تأثير هام علي مستوي الإستثمار. فكل ما زاد الإستقرار السياسي فإن ذلك يبعث ثقة جلية في أوساط المستثمرين في الدولة المعنية، وبالتالي سيشعرون بالأمان علي إستثماراتهم. وعلي سبيل المثال، عندما نشجع الناس علي القيام بلأعمال التجارية والإستثمار وذلك عندما يثقون في مستقبل إستثماراتهم. ولكن ظهور بوادر لعدم الاستقرار السياسي، لا محالة لها إنعكاسات سلبية علي الأعمال وثقة المستثمر.

إذن، ليست التجارة مؤشرا للإستقرار السياسي فحسب، بل أيضا يعتبر جزءا من الإستقرار الاقتصادي. هكذا، فإن العجز التجاري لا يعني نقص في الإنتاج فحسب، بل يعني حدوث عجزا في الإستقرار السياسي أيضا. وفي خضم ذلك، يبدو أن هذه المظاهر الإيجابية غير متوفرة في جنوب السودان هذه الأيام نظرا للأزمة السياسية الحالية.

 

IV.                       العواقب الاقتصادية للأزمة السياسية الجارية (الحالية):

قد تكون للأزمة السياسية الجارية حالية تأثيرا بالغا علي حياتنا الاقتصادية والاجتماعية، وعليه، يمكن تلخيص هذه العواقب في النقاط الآتية:

1.    البنية التحتية: قد يتدني الإستثمار في مجال الطرق والطاقة كإحدي أولويات الحكومة، وبذلك يضعف خطة الحكومة الساعية للتطور الاقتصادي في المدي المتوسط والطويل.

2.    المنتجات الزراعية: قد ساهم الأزمة السياسية الحالية في نزوح عدد كبير من سكان الأرياف، في الوقت الذي يسكن فيه حوالي 84% من السكان في المناطق الريفية، والذين يعتمدون غالبا علي المنتجات الزراعية، وبالتالي تهدد هذه الأزمة السياسية الإنتاج الزراعي، كما أن في ظل هذه الأوضاع السياسية ستصبح الوضعية العامة للأمن الغذائي في البلاد أكثر سوءا.

3.    الفقر: في الواقع، إن جنوب السودان يعد من أفقر دول العالم، بيد أن حوالي 24% من سكان الدولة الفقراء يقطنون بالمدن. بينما يقطن حوالي 55% من السكان الذين تحت خط الفقر في المناطق الريفية. إذن، فمن المتوقع، أن تسهم هذه الأزمة السياسية في زيادة ظاهرة الفقر في البلاد وخاصة في المناطق الريفية.

4.    التعليم: للوضع الحالي تاثيرا مباشرا علي الموارد البشرية والتعليم عموما. لاشك ستزداد الفاقد التربوي وتؤثر إقبال التلاميذ علي المدارس الإبتدائية والثانوية والجامعات، وهذا سيشكل خطرا جليا علي مستقبل الأجيال القادمة.

5.    القطاع الخاص: قد تسبب البيئة السياسية غير المواتية في تعطيل المشاريع القصيرة الأجل التي تقوم بها القطاع الخاص، ومن ثم سوف يعوق إمكانيات خلق فرص العمل ومجالات الإستثمار.

6.    قضايا الحكم: قد تساعد هذا الوضع في إضعاف الأمن وحكم القانون، كذلك ستعمل علي تشويه بيئة الحكم وتراجع التقدم الذي انجز في مجال محاربة الفساد، وخلق عدم الشفافية في إدارة موارد الشعب والمساهمة في ضعف ترشيد إستغلال الموارد الطبيعية.

7.    المالية العامة: لعل هذا الوضع قد تفرض ضغوطا علي المالية العامة للدولة، الذي سيتجسد في إغلاق بعض حقول النفط، وبالتالي تدني إنتاج النفط وعائدات الضرائب، وإرتفاع التكاليف في مواجهة الصرف الحكومي. وأيضا قد تؤثر كل ذلك علي الوضع الحالي وزيادة الضغط علي قضايا استقرار المشاريع الاقتصادية الكبري.

8.    سعر الصرف والإستيراد والتضخم: طالما أن جنوب السودان دولة تعتمد كليا علي الإستيراد من جهة، ومن جهة أخري صادراتها محدودة، فقد تؤثر الأزمة الحالية علي التجارة والإستيراد وكما قد تؤدي علي انخفاض سعر الجنيه امام الدولار الأمريكي. لاسيما أن ذلك سيؤثر بطريقة مباشرة علي أسعار الواردات ويقود إلي إرتفاع معدات التضخم.   

 

V.   الطريق إلى الأمام

من المعلوم أن الصراعات تؤثر في المردود الاقتصادي ويتجسد ذلك بشكل كبير في تدمير الموارد البشرية والطبيعية وتحويل الإنفاق العام والخاص والإستثمار، كذلك تساهم في تمزيق الأنشطة الاقتصادية والحياة الاجتماعية. يعتمد التأثيرات الخاصة وعواقبها الاجتماعية علي نوع الصراع ومدي كثافته وفترته الزمنية وانتشاره الجغرافي. ولكن من وجهة نظر الاقتصادي، فقد بات الحاجة مآسة الآن لإيجاد الحلول السياسية للأزمة الحالية. ولكي يستعيد جنوب السودان مكانته كأحدث محطة استثمارية في العالم وواحدة من أسرع الاقتصاديات نموا. إذن، يجب علي الحكومة إتخاذ عدد من التدابير لتهدئة الموقف الحالي وإعادة ثقة المستثمرين وتعزيز الاقتصاد،، التي يمكن حصرها في النقاط الآتية:

1-    علي القيادة السياسية العمل سويا لوضع حد للخلافات عبر آليات السلام وإنهاء الصراع وضمان إنسياب المساعدات الإنسانية للمتضرين جراء هذه الحرب، وتوفير الأمن بغية تنقل المنظمات الإنسانية العاملة في مجال الإغاثة بشكل عام.

2-    يقتضي علي الحكومة العمل  مسنودا بدعم المجتمع الدولي علي تكثيف الجهود المطلوبة لإنهاء الصراع الدائر في كآفة أنحاء جنوب السودان، وتحديد أسباب إنداع الصراع والعنف حتي يعم السلام المستدام بين المجتمعات المختلفة ومنع الأعتداء علي المواطنين والقادة والسياسيين. كما علي جميع الموظفين في جنوب السودان تحمل مسئولياتهم للحد من حدوث أي عنف في المستقبل، وعدم إستغلال الصراعات الحالية لتحقيق مكاسب سياسية. بيد أن شفافية الحكم أضحي ضرورة في الوقت الراهن لتخفيف حدة الصراع التي أشعلتها النظم التي تفصل مجموعة إثنية أو مجموعة اقتصادية – اجتماعية معينة وتشجيع تعدد الأحزاب اليمقراطية والامركزية والمشاركة في الحكم ضرورة لرفع الصراع الذي خلقه الساسة.

3-    أيضا يجب علي حكومة جنوب السودان السعي لإيجاد الحلول المناسبة لأسباب إندلاع الصراع والعمل علي تعزيز مبدأ المحاسبة والمصالحة والتضمين السياسي وتفعيل الحكم الولائي والتنمية وتشجيع جهود بناء النظم السياسية والقانونية للدولة الجديدة، وذلك عبر مبدأ الإجراءات الجارية نحو صياغة الدستور الدائم للبلاد.

4-    كذلك علي الحكومة اتخاذ خطوات إضافية لترقية الاستثمار في البلاد وذلك من خلال وضع مسألة تنظيم مؤتمر عام للإستثمار في عين الإعتبار، وبدء حملة لتوعية المواطنيين المحليين والأجانب عن فرص الإستثمار في جنوب السودان. أيضا يجب تطبيق قوانين خاصة تعامل المستثمرين المحليين والأجانب بالتساوي، ودعم الإستثمار بوضع لوائح تجذب وتحمي حقوق الملكية الصناعية والفكرية وتضمن الأمن القانوني واستقرار الاستثمار وإعادة العائدات والإيرادات والرسوم الجمركية والإعفاءات وتقليل ظاهرة تفشي البيروقراطية في الإدارات الحكومية.

5-    ليس الحكم الرشيد وحده يشكل الحاحا لتحقيق التنمية فحسب، بل فأنه يعد عاملا مهما في تحديد عما إذا كان للدولة مقدرة في استخدام مواردها بصورة فعالة قصد تنمية التطور الاقتصادي وتقليل معدلات الفقر. وعلي ضوء ذلك، فأنه من الضروري علي حكومة جنوب السودان أن توضح مقدراتها الفاعلة في إدارة الأمور، وذلك بضم المعارضة السياسية والمجتمع المدني في إجراءات الحكم. كما يجب أن يخضع الحكومة لنظام المحاسبة من قبل مواطني جنوب السودان وإدارة موارد الدولة بنجاعة وتوزيها بالتساوي لتحقيق ديمومة التنمية الاقتصادية.

6-   لا محالة، تنشأ عدم الاستقرار السياسي عادة نتيجة لعدم مقدرة الحكومة والمجتمع علي مواجهة شكاوي ومظالم السكان أو مجموعة سياسية معينة، مما يدفع البعض علي ممارسة السلوك السلبي الضار بالموارد الاقتصادية. لذلك يوصي بعدم تشجيع مثل هذه السلوك بحيث يجب علي  صناع القرار السياسي الوضوح وإتاحة فرص للحوار الذي يسهل عملية نقل السلطة بصورة سلسة من خلال الإنتخابات. علاوة علي ذلك، فإن الحكومة الديمقراطية الأكثر استقرارا توفر ضمان للمستثمرين وسلامة لإستثماراتهم. إضافة إلي أن الحكومة المؤثرة والحرية الاقتصادية قد تساهم في تأسيس المؤسسات الضرورية لعملية زيادة إنتاجية الإستثمار. أيضا سوف تشجع عملية تحرير التجارة ومؤسسات الحكومة الفاعلة في تآمين حقوق الملكية بشكل أفضل مما يزيد من ثقة المستثمر.

في الختام، يمكن القول أنه بعد ثمانية أعوام من توقيع إتفاقية السلام الشامل قد أصبح جنوب السودان في وضع سياسي واقتصادي أفضل وأقوي مقارنة بأي وقت مضي. ولقد ظهر ذلك جليا خلال إغلاق أنابيب تصدير النفط عبر جمهورية السودان،بحيث لم تطفو علي السطح أي سؤال عن الأداء الاقتصادي بجنوب السودان، بالرغم من أن صناعة النفط كانت تشكل أكبر مورد للدخل القومي حيث يحتل مركزا استراتيجيا في التنمية الاقتصادية. وقد لعبت صناعة النفط دورا مقدرا في النمو الاقتصادي علي صعيدي عائدات الصرف الأجنبي وجلب الدخل القومي.

ومما لاشك فيه، أن الاستقرار السياسي يعتبر أساس النمو الاقتصادي في جنوب السودان. كما أن حكم القانون والمؤسسات القوية والحكم الرشيد وتدني ممارسة الفساد والمناخ الملائم للعمل التجاري والإستثماري، فجميعها عبارة عن عوامل أساسية متضافرة تعمل علي خلق الإستقرار السياسي والذي بدوره يشكل أهمية قصوي في دفع عملية التنمية الاقتصادية. وعليه، فمن الملاحظ إن الدول الإفريقية التي تمكنت من تحقيق أعلي معدلات النمو الاقتصادي بدون شك عبارة عن الدول التي تنعم بالإستقرار السياسي.

 

 


Food Security and Political Stability

Mon, 13/01/2014 - 12:42

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By Dr. Addis Ababa Othow Akongdit

Email: [email protected]

1-     Abstract

A food-secure world is one where all people have access to safe, nutritious and affordable food that provides the foundation for active and healthy lives.  It exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life. A household is considered food-secure when its occupants do not live in hunger or fear of starvation (FAO 2006)[1]. Thus, food security doesn’t only affect human health and welfare, but it also contributes to economic and political stability. At an individual level, food security affects people’s physical, mental and social wellbeing, including their dignity.

Without doubt, there are strong, direct relationships between agricultural productivity, hunger, poverty, and sustainability. Three-quarters of the world’s poor live in rural areas and make their living from agriculture. Hunger and child malnutrition are greater in these areas than in urban areas. Moreover, the higher the proportion of the rural population that obtains its income solely from subsistence farming, the higher the incidence of malnutrition. Therefore, improvements in agricultural productivity aimed at small-scale farmers will benefit the rural poor first.

However, the challenges to achieve food security are huge. It involves an interdependent and interconnected set of issues, including agriculture, energy, the environment, government policy, trade, low productivity, high costs, and a lack of modern techniques and technology.  The number of people without enough food to eat on a regular basis remains stubbornly high, at over 800 million, and is not falling significantly. The latest FAO figures indicate that there are 22 countries, 16 of which are in Africa, in which the undernourishment prevalence rate is over 35%.

This paper provides an overview of the link between food security and political stability, addressing the emerging threats to security and political stability. It assesses the current and future food security situation in South Sudan, in order to identify factors that would likely influence food security in the future. It also discusses the effects of food insecurity on political and social factors, focusing on mechanisms that can shield consumers and producers from food price shocks. Finally, it discusses ways in which the government can assist or contribute to peace building, food security and rebuild social capital.

2-     Introduction

Food security is one of the major challenges confronting the world today. The United Nations estimates that about 870 million people, just over 15 percent of the world’s population is undernourished today. The majority live in developing countries, with the largest numbers of undernourished people in China and India, and the highest prevalence of undernourishment is in sub-Saharan Africa. Every day, almost 16,000 children die from hunger-related causes, one child every five seconds.

Often, the poorest members of society are unable to access food at an affordable price. The world produces enough calories to meet their nutritional needs, but they frequently lack physical or economic access to this food. Barriers include poverty, inadequate storage and transportation infrastructure, trade barriers, conflict and food safety issues. Annual food production is enough to feed the 6.9 billion people in the world. However, access and distribution of food remain elusive making food security one of the major global challenges. The Food and Agriculture Organisation (FAO), World Food Programme (WFP) and other organisations of the United Nations; World Food Convention (WFC); and other Non-Governmental Organisations are providing food in emergencies and helping save many people’s lives. But their efforts to strengthen capacities of countries to reduce hunger have remained inadequate (Kattumuri. R, 2011)[2]. Food security has become a matter of access instead of availability. In other words, food is often available and the global agricultural system is capable of assuring this availability, but people cannot always get access for various reasons, economic, social or political.

3-     The link between food security and political stability

Food security can  be defined as access by all to sufficient food for an active, healthy life and can be influence by literacy rates; levels of farmer education; agricultural research and extension capacity; transport infrastructure; non-agricultural income opportunities; social support systems; international security and confidence in international trade; domestic civil strife; international capital movements, etc. it has also been said that food security exist when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life (FAO 2009).

Food security may usefully be seen as the result of three factors: people will be food secure when there is sufficient food available, when people have access to it, and when it is well utilized and some would add as a fourth condition, when availability and access are reliable. From the perspective of nutrition, the utilization factor has equal weight with food availability and access, since under the heading are matters of food preparation, feeding practices especially of weaned infants and of the health of individuals, itself a function of sanitation and health services (Wiggins. S and R. Slater 2011)[3]. In other word, food security has three aspects; food availability, food access and food adequacy (Latham, M. 1997)[4]. Food availability has to do with the supply of food. This should be sufficient in quantity and quality and also provide variety. Food access addresses the demand for the food. It is influenced by economic factors, physical infrastructure and consumer preferences. Hence food availability, though elemental in ensuring food security, does not guarantee it. For households and individuals within them to be food secure, food at their access must be adequate not only in quantity but also in quality. It should ensure an adequate consistent and dependable supply of energy and nutrients through sources that are affordable and socio-culturally acceptable to them at all times. Ultimately food security should translate to an active healthy life for every individual. For this to take place the nutritionally adequate diet should be biologically utilized so that adequate performance is maintained in growth, resistance or recovery from disease, pregnancy, lactation and or physical work. Hence adequate health and care must be provided in addition to adequate food. Herein lies the problem facing poor households today.

Figure 1. summarizes the diverse determinants of food security status in a general conceptual framework. The framework highlights the hypothesized causal relationships between the various elements of food availability, access, and utilization.

Food 1

However, the political stability is known as the absence of domestic civil conflict and violent behavior or a peaceful, law- abiding society where decision-making and politico- societal change are the result of institutionalized and functional procedures. Furthermore, the political stability[5] is further set out of the four dimensions of political stability: S1 – stable government; S2 – stable political system; S3 – internal law and order; and S4 – external stability.

Given the above definitions, we scrutinize that the Food security and political stability are often linked, although the relationship is complicated and not necessarily direct or causal. However, evidence suggests that food security can be upset by a lack of political or social stability. Similarly, the lack of food security resulting from a sudden jolt (i.e. international embargo, poor climate) can lead to political instability. “Food riots”, when they occur, are often instigated by urban residents; poorer rural residents rarely have a political voice.  Food security is also affected by a complexity of factors (IFPRI 2002)[6]. These include unstable social and political environments that preclude sustainable economic growth, war and civil conflict, macroeconomic imbalances in trade, natural resource constraints, poor human resource base, gender inequality, inadequate education, poor health, natural disasters, such as floods and locust infestation, and the absence of good governance. All these factors contribute to either insufficient national food availability or insufficient access to food by households and individuals. Some believes that the root cause of food insecurity in developing countries is the inability of people to gain access to food due to poverty (Inter Academy Council, 2004)[7]. While the rest of the world has made significant progress towards poverty alleviation, Africa, in particular Sub-Saharan Africa, continues to lag behind. Projections show that there will be an increase in this tendency unless preventive measures are taken.

In fact, food security and political stability are often inextricably linked in many countries. Historically, significant malnutrition and famine have been caused by the disruption of food supplies through wars and civil strife (Blanford. D and Viatt, G 1997) [8].Yet, the concepts of food security and political stability are often mutually dependent and reinforcing. Food security, for example, can influence the political stability of countries. Simultaneously, political instability such as wars or other forms of civil strife can influence food security, as can be seen recently in the case of Indonesia. It has to be noted that the greatest risk for regime stability is the risk of urban riots that are sometimes sparked by food shortages or sudden price increases among food products. Generally, starvation in the countryside does not result in political instability. This is because those who experience the brunt of food shortages tend to be rural and have little political voice. A recent example of this phenomenon occurred in India where rising food prices led to urban riots directed at India’s ruling political party the Bharatiya Janata Party. Similarly, when the price of rice soared in Indonesia, thereby making it prohibitively expensive for a large segment of the population, food riots erupted in eastern Java. The government deployed military forces around markets to prevent looting. Moreover, China’s sharp rejection of the Lester Brown thesis that China needs to import massive amounts of grain from the world market in the coming century was partially rooted in a persistent fear within the Chinese government that food insecurity could potentially provoke widespread anger against the Communist Party and perhaps lead to civil unrest. Thus, the sensitivity that many Asian governments have about food security may be linked to fears of social instability and perhaps even political revolution. Food security thus becomes an issue of regime survival and has been widely claimed as a causal factor behind recent revolutions and political uprisings (Sjöstedt. M, 2013)[9].

4-     Current and future food security situation

Food security is a multi-faceted issue that is affected by many factors such as social, political, economic, technical, and climate factors. Today, more than 800 million people around the world are malnourished, despite the fact that food production has doubled during the past three decades. Some experts such as Lester Brown are warning that the number of malnourished could rise substantially as global demographic pressures clash with such limits as diminishing arable land and growing water scarcity. Brown argues that the food system is the “missing link” that connects global environmental degradation to loss of food security and its economic consequences. Brown also asserts that as the pressures of diminishing arable land and decreasing water supplies become more acute, food prices will likely rise(Brown. L,198)[10]. Conversely, Food security pessimists are particularly alarmed by what they view as the strong linkage between food insecurity and global population growth. Some of them have revived a neo-Malthusian thesis (Thomas R. Malthus, author of Essay on the Principle of Population, 1798) that views population growth as a root cause of famine. Malthus argued, among other things, that populations tend to outstrip food supply because food supplies tend to grow arithmetically whereas populations tend to grow geometrically. Food security pessimists are concerned about the widely-accepted fact that within the next 30 years, the world’s population is expected to increase by 2.5 billion. Remarkably, they argue that most of this population growth will occur in the poorer, developing regions of the world and in many areas that are already experiencing serious food shortages. By the year 2040, the world’s population may increase to more than 9 billion. If this does occur, world agricultural output would need to increase by at least 250% (Avery. D, 1998)[11] . Consequently, many proponents of a neo-Malthusian viewpoint anticipate that rapid population growth in the future will cause or exacerbate food shortages. At the other extreme, food security optimists tend to be more sanguine about the prospects for global food security in the future. Although they recognize that there are real challenges that must be overcome both now and in the future, they also believe that effective and enlightened policy responses can prevent any disasters. One clearly positive trend, they would argue, is the fact that global population growth is diminishing (in percentage terms), although absolute increases are expected to continue until the year 2050 primarily as a result of population momentum. Moreover, the challenges to food security tend to be local, rather than global, suggesting that policy changes or improvements at the local level could dramatically increase agricultural yields. Food security optimists also believe that technology and research can create abundant food supplies in the future (Frederick W. and Hunter ColbyW. 1996) [12].

Food security optimists do not deny that the world is experiencing food shortages or famines. However, they generally argue that the causes are due to access problems, not availability problems. Barriers to access can include poverty or simply the lack of purchasing power to buy food. As one study has noted, the “lack of access to food due to inadequate purchasing power has been identified as the prime cause of food insecurity (Mercado P.M and Shapouri. S)[13].

In summary, there is the challenge of raising food production to meet the needs and demand from a larger world population, expected to reach 8.3 billion by 2030 and 9.2 billion by 2050. FAO believes that future needs can be met, see, for example Figure 2, although it is not clear that such assessments take enough account of the impacts of climate change and of measures to mitigate  emissions that will probably be needed. Others are more concerned that it may not be possible, see Funk and Brown (2009)[14], Lutz and Samir (2010)[15].

Figure 2: Long-term trends in agricultural production, by region

FAO

Source: FAO (2009b).

However, the food securitysituation in South Sudan remains unfavorable and varies across states and over time. Food prices increased significantly in main markets along the northern border.This was the result of trade restrictions imposed in May 2011, which drastically reduced imports from the Sudan, causing food shortages. In 2013, high food prices and reduced livelihoods continue to limit poor households’ food access. In parts of Jonglei State, households are facing Crisis (Figure 3; IPC Phase 3) acute food insecurity outcomes driven by insecurity, high prices and restricted access to wild foods and income sources such as collection and sale of firewood, charcoal and grass. In Unity, Warrap, and Lakes states, Crisis (IPC Phase 3) acute food insecurity is expanding to counties previously Stressed (IPC Phase 2) due to insecurity.

The inflated increase in prices is attributed to the current macro-economic situation, high transaction costs, and the prevailing border tensions, which restrict the flow of informal trade from Sudan into the northern states. This resulted in reduced availability of white sorghum, normally imported from Sudan.  In Jonglei State, insecurity and high production deficits from the 2012 agriculture season are the main reasons for early price increases. In Bor, sorghum price increased by 15 percent in February 2013 compared to January and 33 percent compared to last year.  Insecurity created by internal and interstate cattle raiding continue as the dry season progresses. The situation in Pibor County of Jonglei State remained tense in March with clashes reported in Gumruk and Labaraab. Increased levels of insecurity prevented humanitarian access to populations affected by earlier violence in Boma and Gumuruk. Furthermore, Pibor County has also displaced more than 23,000 people from their homes as of May 31, 2013. Boma, formerly a key market town for the area, is nearly empty, and the market is no longer functioning. Households are reportedly mixing blood and milk for consumption, a coping strategy employed during bad years.

On March 10, 2013, over 500 heads of cattle were raided from Twic County in Warrap state. A separate attack which took place in Gogrial East resulted in 23 deaths and 5 children missing, 1800 cattle looted and 254 killed. The total number of displaced resulting from cattle raiding stands at 12,433 as of March 10, 2013. In spite of the Implementation Matrix supporting the September 2012 agreement signed recently, tensions are still widespread along the Sudan/South Sudan border.

Despite the fact that trade normally declines once rains begin, a significant portion of this decline was due to the growing tension between the two countries. The most significant reduction was observed in Warawar, Aweil East where cereal imports fell by about 70 percent from 994 metric tons (MT) in April 2013 to 286 MT in May. However, a four-fold increase in imports through Gok Machar in Aweil North from 50 MT in April to 247 MT in May suggests that traders may be avoiding the route through Warawar due to its proximity to Abyei, where security tensions are high. Despite the drop in trade, market conditions in May 2013 remained better than those of May 2012. Cereal prices were lower in 2013 than 2012 on all markets (except Juba due to its rapid economic growth). According to the National Bureau of Statistics, annual Consumer Price Index (CPI) decreased by 9.2 percent between May 2012 and May 2013, mainly due to low food prices.

Figure 3: Current food security outcomes, June 2013.

Famine Early

Source: Famine Early Warning System Network (FEWS NET)

Although border tensions are expected to ease following the signing of the Implementation Matrix between South Sudan and Sudan on March 12th, 2013 and last visit of President Kiir to Khartoum, areas affected by inter-ethnic fighting in Jonglei, Unity, Lakes, and Warrap states will continue to have limited access to humanitarian assistance and restricted livelihood activities.

The enforcement of the cooperation agreements, establishment of a Safe Demilitarized Border Zone and continuation of oil production will improve security along the border, and over time encourage cross border movement including trade and labor migration. This will also improve the economic situation of the country by stabilizing prices particularly in the states bordering Sudan and may lead to political stability.

However, increased cattle raids are expected to continue until end of the dry season, in line with seasonal trends. Insecurity due to cattle rustling will continue to displace and disrupt livelihoods and undermine the food security of the affected populations in Jonglei (Pibor, Nyirol, and Akobo counties), Lakes (Cueibet county), Unity (Mayom and Mayendit counties) and Warrap (Gogrial East, Tonj, and Twic counties) states. Food security is expected to deteriorate through the year 2013 in the conflict affected areas.

Displacement within Pibor County and to Kapoeta will continue despite the rains due to conflict and food insecurity (lack of market access). Given the reduced consumption due to market closures and the high cost of trade due to rains and conflict, poor households who remain in the area will continue to face crisis of acute food insecurity throughout in the coming period.

Prices of staple food commodities will probably increase in July and August 2013 prior to the start of green consumption in the northern states. Food supplies will dwindle as informal trade reduces due to the growing tensions between Sudan and South Sudan and the peak of the rainy season that normally impedes transport during the period between July and September. With limited income levels, high prices are likely to limit food access to poor households in the northern states. Households in conflict-affected areas might increasingly face food deficits in July and August 2013.

5-     Conclusion

Food security is an extremely complex phenomenon that is as much dependent on social and political systems as environmental factors such as land, weather, soil conditions, and water availability. It is also clear that food can be linked to security when it is used as a “weapon” or even a tool for gaining political leverage of some sort. In Indonesia, for instance, the ruling Golkar Party has reportedly engaged in “food politicking” by handing out bags of rice and money in exchange for political support[16].

All in all, the fundamental relationship between food security and political stability is complex and difficult to generalize that is to say that food insecurity can be caused by conflict/political instability, and political instability can be caused by food insecurity militarized conflict an extreme form of political instability has clearly been a major driver of humanitarian emergencies, particularly since the end of the cold war, with high levels of food insecurity  a common consequence of these emergencies. However, at the same time, many of the local drivers of conflict have been related to control over land and other natural resources, which are ultimately linked to peoples livelihoods and therefore to their food security (Alinovi, Hemrich, & Russo, 2008)[17]. In short, the relationship between food security and political stability can be understood in any given context. For example, substantial levels of food insecurity can exist without there being any driver related to political instability, and without necessarily causing major political instability.

Second, there are some common drivers of both political instability and food insecurity. Climate change is at least partly implicated for both in the Darfur conflict, for example as rainfall patterns changed, nomadic camel herders had to migrate farther and farther southwards to find dry season grazing and water, which brought them increasingly into conflict with other ethnic and livelihoods groups and made the lack of a designated homeland for the nomadic groups more evident (Young et al., 2005)[18].

Third, as implied throughout this paper, the relationship between humanitarian actors and policy-makers or actors more primarily focused on political stability questions is problematic. The question from a policy- making perspective is not just what the cause is and what is the effect, but also which is the means and which is the end? We can argue that that causation can run both ways so presumably the policy-making logic can too: that is, achieving food security can be a means to the end of political stability, but the evidence suggests that political stability is also important for achieving food security. We can also argue that nearly all parties in conflicts, protracted crises and food security emergencies are all too happy to manipulate humanitarian assistance to achieve other goals be they economic, political, territorial, security or other goals and that this has severely undermined humanitarian goals and humanitarian access.

This has long been rationale for separating humanitarian response from partisan political objectives, as suggested by numerous international agreements, both formal and informal (humanitarian principles).The far more serious question about means and ends is not whether improved food security is generally good for political stability (most any reasonable person, humanitarian or otherwise, could agree to such a proposition), but rather whether, under certain circumstances, ignoring some amount of short-term food insecurity is a useful too. l with which to promote longer-term stability or other political or security objectives.

There is no doubt that humanitarian assistance has been restricted, channeled and in other ways manipulated so as to favor one side in conflicts. There was little doubt that the response to the Pakistan displacement crisis in 2009 for example (which had major elements of food security in the response) was deliberately channeled in such a way as to strengthen the Pakistani government and weaken the Taliban, without evidence of any specific concern for the humanitarian consequences of doing so(Péchayre, 2012)[19].Similar suggestions have been made in other contexts as well notably the North Korean famine in the mid-1990s (Haggard & Noland, 2007)[20].

Finally, a country might even use its own lack of food security to attempt to influence outside powers. North Korea, for example, has cleverly used its own famine as a tool for political leverage with outside countries. Recognizing the humanitarian impulses of the outside world, North Korea has sought to gain significant concessions in exchange for having outside organizations and governments distribute food aid to its own population. Initially, in order for a country to have a viable military force, it must be able to provide that force with adequate food supplies. As one military study has noted “soldiers are probably more easily exhausted and demoralized by the absence of food (and water) than almost anything else apart from severe sleep deprivation (Philip Liston1989) [21].Therefore, governments eager on maintaining their power and influence will probably ensure that their armed forces receive adequate food supplies, even when the entire country faces severe food shortages.

The Government should be urged to improve food and nutrition security of its people by taking the following actions:

1-     Improving the enabling environment for investment through both policy reforms and increased investment in key areas, such as infrastructure and farmer training;

2-     Focus on improving the environmental sustainability of agriculture, particularly in the areas of water and climate change;

3-     Decrease the risk of highly volatile prices, price regulation on basic commodities and larger cereal stocks should be created to buffer the tight markets of food commodities and the subsequent risks of speculation in markets. This includes reorganizing the food market infrastructure and institutions to regulate food prices and provide food safety nets aimed at alleviating the impacts of rising food prices and food shortage, including both direct and indirect transfers, such as a global fund to support micro-finance to boost small-scale farmer productivity;

4-     Support farmers in developing diversified and resilient eco- agriculture systems that provide critical ecosystem services (water supply and regulation, habitat for wild plants and animals, genetic diversity, pollination, pest control, climate regulation), as well as adequate food to meet local and consumer needs. This includes managing extreme rainfall and using inter-cropping to minimize dependency on external inputs like artificial fertilizers, pesticides and blue irrigation water and the development, implementation and support of green technology also for small-scale farmers;

5-     Improving infrastructure and reducing trade barriers. However, this does not involve a completely free market approach, as price regulation and government subsidies are crucial safety nets and investments in production. Increased market access must also incorporate a reduction of armed conflict and corruption, which has a major impact on trade and food security;

6-     Raise awareness of the pressures of increasing population growth and consumption patterns on sustainable ecosystem functioning.

6-     References

Alinovi, L., Hemrich, G., & Russo, L. (2008). Beyond Relief: Food Security in Protracted Crises. Rugby, UK: Practical Action Publishing.

David Blanford and Gerard Viatte, “Ensuring Global Food Security,” Organization for Economic Cooperation and Development: the OECD Observer (Dec. 1996/ Jan. 1997).

Dennis Avery, “The Promise of High-Yield Agriculture,” Forum for Applied Research and Public Policy (Summer,1998).

FAO Agricultural and Development Economics Division (June 2006). Food Security (2). Retrieved June 8, 2012.

Frederick W. Crook and W. Hunter Colby, The Future of China’s Grain Market, USDA Agriculture Information Bulletin, No. 730 (October 1996).

Funk, C. and Brown, M. 2009. ‘Declining global per capita agricultural production and warming oceans threaten food security’, Food Security, 1, 271-289.

Haggard, S, and M. Noland (2007). Famine in North Korea: Markets, aid, and reform. New York: Columbia University Press.

IFPRI (International Food Policy Research Institute). 2002. Reaching sustainable food security for all by 2020. Getting the priorities and responsibilities right. Washington, D.C:IFPRI

Inter Academy Council. 2004. Realizing the promise and potential of African Agriculture. Amsterdam

Latham, M. 1997. Human Nutrition in the Developing World. FAO. Rome 1977

Lester Brown, “Food Scarcity: An Environmental Wakeup Call,” The Futurist (Jan/Feb 1998).

Lutz, W. and Samir, K. 2010. ‘Dimensions of global population projections: what do we know about future population trends and structures?’ Philosophical Transactions of the Royal Society, 365, 2779-2791.

Martin Sjöstedt 2013; food security and political stability, academic paper , Goteborg University 2013

May Mercado Peters and Shahla Shapouri, “Income Inequality and Food Security,” in Food Security Assessment (November 1997), (Washington D.C.: United States Department of Agriculture, 1997).

Péchayre, M. (2012). Politics, Rhetoric and Practice of Humanitarian Action in Pakistan. In A. Donini (Ed.), The Golden Fleece: Manipulation and Independence in Humanitarian Action. Sterling: Kumarian Press.

Philip Liston, “Feeding Frontline Forces,” International Defense Review (vol. 31, no. 11), November 1, 1998, p.26.

Ruth Kattumuri (2011), Food Security and the Targeted Public Distribution System in India; Asia Research Centre Working Paper 38

Steve Wiggins and Rachel Slater (2011), Food security and nutrition: current and likely future issues

Young, H., Osman, A. M., Aklilu, Y., Dale, R., Badri, B., & Fuddle, A. J. A. (2005). Darfur: Livelihoods under siege. Medford, MA: Feinstein International Famine Center, Tufts University.

[1] FAO Agricultural and Development Economics Division (June 2006). Food Security (2). Retrieved June 8, 2012.

[2] Dr Ruth Kattumuri (2011), Food Security and the Targeted Public Distribution System in India; ASIA RESEARCH CENTRE WORKING PAPER 38

[3] Dr. Steve Wiggins and Rachel Slater(2011), Food security and nutrition: current and likely future issues

[4] Latham, M. 1997. Human Nutrition in the Developing World. FAO. Rome 1977

[5] Paldam: Does Economic Growth Lead to Economic Stability?

[6] IFPRI (International Food Policy Research Institute). 2002. Reaching sustainable food security for all by 2020. Getting the priorities and responsibilities right. Washington, D.C:IFPRI

[7] Inter Academy Council. 2004. Realizing the promise and potential of African Agriculture. Amsterdam

[8] David Blanford and Gerard Viatte, “Ensuring Global Food Security,” Organization for Economic Cooperation and Development: the OECD Observer (Dec. 1996/ Jan. 1997).

[9] Martin Sjöstedt 2013; food security and political stability, academic paper , Goteborg University 2013

[10] Lester Brown, “Food Scarcity: An Environmental Wakeup Call,” The Futurist (Jan/Feb 1998).

[11] Dennis Avery, “The Promise of High-Yield Agriculture,” Forum for Applied Research and Public Policy (Summer,1998).

[12] Frederick W. Crook and W. Hunter Colby, The Future of China’s Grain Market, USDA Agriculture Information Bulletin, No. 730 (October 1996).

[13] May Mercado Peters and Shahla Shapouri, “Income Inequality and Food Security,” in Food Security Assessment (November 1997), (Washington D.C.: United States Department of Agriculture, 1997).

[14] Funk, C. and Brown, M. 2009. ‘Declining global per capita agricultural production and warming oceans threaten food security’, Food Security, 1, 271-289.

[15] Lutz, W. and Samir, K. 2010. ‘Dimensions of global population projections: what do we know about future population trends and structures?’ Philosophical Transactions of the Royal Society, 365, 2779-2791.

[16] “Food May Become Political Weapon at Election Time,” South China Morning Post, October 20, 1998.

[17] Alinovi, L., Hemrich, G., & Russo, L. (2008). Beyond Relief: Food Security in Protracted Crises. Rugby, UK: Practical Action Publishing.

[18] Young, H., Osman, A. M., Aklilu, Y., Dale, R., Badri, B., & Fuddle, A. J. A. (2005). Darfur: Livelihoods under siege. Medford, MA: Feinstein International Famine Center, Tufts University.

[19] Péchayre, M. (2012). Politics, Rhetoric and Practice of Humanitarian Action in Pakistan. In A. Donini (Ed.), The Golden Fleece: Manipulation and Independence in Humanitarian Action. Sterling: Kumarian Press.

[20] Haggard, S., & Noland, M. (2007). Famine in North Korea: Markets, aid, and reform. New York: Columbia University Press.

[21] Philip Liston, “Feeding Frontline Forces,” International Defense Review (vol. 31, no. 11), November 1, 1998, p.26.


South Sudan Economy and the current political crisis

Mon, 30/12/2013 - 19:16

Development

By Dr. Addis Ababa Othow Akongdit

Email: [email protected]

On Sunday December 15th, 2013, a faction of the Sudan People’s Liberation Army (SPLA) caused a political crisis, seen as a mutiny in South SudanPresident Salva Kiir announced that the coup attempt was put down, but fighting resumed on 16 December and spread beyond the capital, Juba, to Jonglei, Unity and Upper Nile states. At least 700 people were reported to have been killed and over 1000 other people were injured. President Kiir blamed former vice president Dr. Riek Machar for instigating the “coup” but Dr. Machar denied any knowledge of it and instead blamed Kiir for playing power politics. This political instability/ unrest is more likely to undermine business and consumer confidence and may reduce investment and the speed of economic development in South Sudan. Therefore, this paper provides an overview of the characters of South Sudan Economy, investment opportunities, possible economic consequences on the current crisis and the way forward to calm it, restore the confident of investors and boost South Sudan’ economy once again.

1-   South Sudan: Political and Social Background

Republic of South Sudan is a landlocked country in North-eastern Africa. Its capital and largest city is Juba. South Sudan is bordered by Ethiopia to the east; Kenya to the southeast; Uganda to the south; the Democratic Republic of the Congo to the southwest; the Central African Republic to the west; and Sudan to the north. What is now South Sudan was part of the British and Egyptian condominium of Anglo Egyptian Sudan and became part of the Republic of the Sudan when independence was achieved in 1956. Following the First Sudanese Civil War, the Southern Sudan Autonomous Region was formed in 1972 and lasted until 1983. A second Sudanese civil war soon developed and ended with the Comprehensive Peace Agreement (CPA) of 2005. Later that year, southern autonomy was restored when an Autonomous Government of Southern Sudan was formed. South Sudan became an independent state on 9 July 2011. On 14 July 2011, South Sudan became a United Nations member state number 193 and joined the African Union on 28 July 2011 to become the Africa newest state of number 54. The country has become on April 18, 2012 a member of the World Bank and IMF and is also submitting an application to join the five-nation East African Community (EAC) regional bloc.

However, South Sudan is born as one of the poorest countries with possibly the worst health situation in the world.  The economy of South Sudan is still fragile, characterized by high dependence on oil, limited domestic production and a high reliance on imports. In the short and medium term, government spending will remain a key driver of the nonoil economy. The country has a shortage of skilled human resources in all key sectors of the economy. Despite the abundance of natural resources, the linkage between resources and structural transformation is still very weak, hence the failure to maximize “returns” from available natural resources. The statistics are sobering

I.        South Sudan is a vast country of 644,000 sq.km roughly the same size as France or Texas. Little of the road network is paved and much of it is in disrepair.  Until recently, there was only 70 miles of paved road in all of South Sudan;

II.        The World Food Program (WFP) estimates that 3.3 million people – more than a third of the population – are moderately or severely food insecure (FAO 2011).

III.        According to the South Sudan Centre for Census, Statistics and Evaluation (SSCCSE), 50 per cent of the population lives below the poverty line, defined as those earning less than US$25 per month (GoSS 2010).

IV.        27% of the 15 years and above population is literate. The literacy rate for males is 40% compared to 16% for females ( SSNBS 2010);

 V.        Of the adult population 73 per cent cannot read or write, and half of the civil servants do not have a primary education (Economist 2011).

VI.        South Sudan has the world’s worst maternal mortality rate. The United Nations observes that a 15-year-old girl in South Sudan has a greater chance of dying in childbirth than of finishing school.

As a result, the Republic of South Sudan has put socio-economic development as one of its priorities. The key national development priorities are encapsulated in the objectives of the four main pillars of the South Sudan Development Plan (SSDP). These form four national policy goals are as follows:

     I.        Good governance: To build a democratic, transparent, and accountable government, managed by a professional and committed public service, with an effective balance of power among the executive, legislative and judicial branches of government;

   II.        Increased prosperity: Diversified private sector-led economic growth and sustainable development which improves livelihoods and reduces poverty;

  III.         Enhanced quality of life: To promote the well-being and dignity of all the people of South Sudan by progressively accelerating universal access to basic social services;

 IV.        Safety and security: To defend the sovereignty and territorial integrity of South Sudan; prevent the resurgence of conflict. and uphold the constitution by providing equitable access to justice and maintaining law and order through institutions

2-   Investment opportunities

After the independence of South Sudan on the 9th July, 2011, the country has been referred to as ‘’the world’s newest investment destination’’ which is open for business. With a potentially fast growing economy and very limited supply of goods and services, South Sudan offers untapped opportunities for investors in many areas of economic activity. It is estimated that the economy of South Sudan is growing at the rate of 7-10% per annum. After years of war and neglect, local supplies of all types of goods and services are virtually non-existent. Almost all goods are imported from the neighboring countries. 

However, the country’s diversification strategy is to prioritize the growth in five sectors namely infrastructure, tourism & hospitality, petroleum, mining and agriculture: The statistics in these sectors are promising:

I.        South Sudan has critical infrastructure shortages in all areas: less than 1% of the population has access to electricity, less than 6% of the main roads are paved, less than 2% of the population lives in formal housing and there are virtually no organized retail, commercial or industrial real estate available;

II.        2010 census estimated total number of migratory animals at 1.3 million, this create an excellent opportunities to invest in hotels accommodation, national parks. There are outstanding conditions for adventure tourism: ballooning, rafting, kayaking, climbing, hiking, etc. Fascinating cultural traditions and historic sites and opportunities to establish & strengthen agencies responsible for developing & maintaining monuments, museums & heritage sites;

III.        Opportunities to develop production in oil blocks that are not yet producing and to build oil and gas refinery, storage and pipelines;

IV.        At least 90% of South Sudan’s land is suitable for farming. Only 4.5% of South Sudan’s arable land is under  cultivation, and the nation imports more than 90% of its food;

 V.        South Sudan has the agricultural potential to become a regional bread basket. The White Nile valley in the East is home to some of the most fertile land in Africa. The northern regions also have the potential to support large-scale commercial farming and processing of cotton, sugarcane, wheat, and fruit;

VI.        South Sudan sits on the third-largest oil reserves in Africa, and analysts predict that the national economy will be largely driven by oil revenues in the near term. Currently, above 90% of the government’s revenue comes from oil production royalties.

With independence and relative stability that was taking root; economic activity was growing fast enough to generate commercially viable demand for infrastructure in many areas. Thanks to new investment promotion Act, demand for transportation, power and property was growing strongly. The private sector is expected to spearhead investments that will provide the lacking goods and services.

Given the scale of investment required, the government of South Sudan realizes it cannot possibly build and operate the entire infrastructure needed. The government is, therefore, eager to bring in private investors to build and operate any infrastructure that can be run commercially (e.g. property development, power generation, airports, roads, and bridges, railways, river services, etc). Electricity for industrial use and lighting are not available so that investments in dedicated power generation facilities or large-scale industrial and mining companies are an urgent issue. Power generation facilities and distribution, Joint Ventures in each state (selling direct to commercial and residential customers); power generation facilities selling to the national utility institution, South Sudan Electricity Corporation, are open investment possibilities.

In property development sector, housing projects at all price points, shopping centers and retail complexes, office buildings, ministries and government buildings and industrial parks are potential areas of investments.

Although oil is the major source of development revenue for South Sudan, oil and gas exploration and production is not yet complete. With independence and the lifting of sanctions, the government of South Sudan is keen to attract more investors to develop production in blocks that are not yet producing. Besides, oil and gas refinery, storage and pipelines are non-existent in South Sudan. Currently all oil produced in South Sudan was done through pipelines and refineries located in North Sudan. With independence, the government of South Sudan is keen to attract investors to develop a refinery (to meet local and regional demand for petroleum products) and storage facilities and additional pipelines to handle exports.

South Sudan is rich in mineral deposits including gold, uranium, iron, copper, diamonds and more but due to war and neglect, these resources have never been properly exploited and the government of South Sudan wishes to attract investors to develop these resources.

The potential investment in tourism is very great. More than 18 national game parks, game reserves, bird sanctuaries and other protected areas covering more than 1 million hectares exist.

The agricultural sector, like most sectors in South Sudan, requires high levels of investment. Agriculture continues to be dominant part of the South Sudan economy and is naturally endowed to be a large producer and exporter of agricultural products. However, the agricultural sector is performing far below its potential. Several factors such as high marketing costs that reduce competitiveness have contributed heavily to the existing state of low productivity.

Both agricultural input and product markets are undeveloped.  At least 30 million hectares of arable land, but less than 5% is currently cultivated. Most of the country receives high-levels of rainfall, sufficient for rain fed cultivation. Given its natural assets and growing local and regional demand, South Sudan’s top priority is to attract commercial cereal farmers and millers and offers an attractive market for agribusiness with significant export, high process and growing demand. Several local firms have begun investing in cereal production, and the Government is keen to attract additional investors with global know how. Agriculture products  which available are  sorghum, maize, rice, millet, wheat, gum arabic, sugarcane, mangoes, papayas, bananas, sweet potatoes, sunflower, cotton, sesame, cassava (manioc), beans, peanuts; cattle, sheep

The Government has also identified several priority areas for commercial investments in cereal production; 

I.        Upper Nile, Warrap & Northern Bahr El Ghazal states: Rice. Maize, Wheat, Sesame and Sorghum.

II.        Western Equatoria: Rice (uplands) tea, coffee, oil palm and forestry.

III.        Sudd (Jonglei & Unity): Maize, sesame, wheat, tea, coffee and forestry.  

There are also six agro-Ecological zones in South Sudan offering a diversity of agricultural potential. These zones are the following:

  1.  Green Belt in the South and Southwest: Good for oil palm, tea & coffee, fruits, maize, vegetables and tropical forestry.
  2. Ironstone Plateau in the West: Excellent for sorghum, groundnuts, sesame sunflower and live- stock.
  3. Hills and mountains in the Northeast: Good for tea, coffee, temperate fruits (apples, grapes), forest plantations and wheat.
  4. Nile Sobat in the North: alluvial soils ideal conditions for sugar cane, sesame and groundnuts. 
  5. Western and Eastern Flood Plains: variety of crops; sorghum, rice, sugar, sesame and groundnuts. 
  6. Arid Zone – Southeast: Good for gum acacia. 

In short, South Sudan is literally being built from scratch. The infrastructure, power, road network, housing, mining, tourism,  agriculture & banking sector, insurance, schools and other amenities in the country all need urgent attention and the focus is on the donor community, the government, and above all, commercial investors. 

3-   Current political situation

As we all know, political stability is the most important attribute of a modern state, liberal democracy and plays an important role in determining economic growth and economic development in many economies. This political stability depends mainly on the following:

1-   the rule of law (Kaufmann and Kraay 2002);

2-   the degree of autocracy or democracy; and

3-   the amount of trade (as a percentage of GDP) that the country engages in.

First, political stability is getting stronger when the rule of law increases. In addition to that, a lack of the rule of law leads to a lack of legitimacy and consequent political instability. If the rule of law decreases, political stability will definitely weaken. The rule of law has an influence on political stability because it is an indicator for how well the executive does its job. Even in an authoritarian regime, it is important that the army follows the rules set up by the dictator.

Secondly, the degree of political stability is high if there is a high degree of democracy or autocracy. Beetham (1991: 75) argues that the biggest changes in the relationship between society and legitimacy are shifts in the political or social order. Strong democracies or strong autocracies are best equipped to withstand this shift and hence provide political stability. Therefore, states with a small degree of democracy or autocracy are less politically stable.

Finally, political stability is also dependent on economic aspects and it has a significant effect on the level of investment as it increases investors’ confidence in a particular country and gives them an assurance of the safety of their investments.  For example, people are encouraged to invest and trade when they are confident in the future. However, the prospect of political instability or unrest is likely to undermine business and consumer confidence. Therefore, trade is not only an indicator for political stability but also a part of economic stability. A lack of trade not only means that there is a lack of production but also that there is a lack of political stability.  Most of these aspects seem not to be found nowadays in South Sudan due to the current political crisis.

4-   Economic consequences of the current political crisis

The ongoing political crisis may drastically harm our economy and social life. The possible economic consequences of that crisis can be summarized (not limited) as follows:

I.        Infrastructure: Investment in roads, power and water infrastructure as one of Government priorities might increasingly decline which impair the medium- and long-term development of our economy;

II.         Agriculture productions: the ongoing crisis has displaced many citizens across the country. Given that a large proportion of the population of South Sudan (84 per cent) live in rural areas and depend mostly on agricultural productions, this crisis may threaten the agricultural production and worsening the overall food security in the country;

III.         Poverty:  Given the fact that South Sudan is one of the poorest country in the world and that  only 24 per cent of people living in an urban area are poor, whereas 55 per cent of those living in rural areas fall below the poverty line, it is expected that this crisis may gruffly increase the overall poverty in the country, especially in the rural areas;

IV.        Education:  the ongoing situation will definitely affect our human resources and education in general. More children will drop out of schools decreasing enrolment in primary, secondary education even universities. This may risk the welfare of future generation;

V.        Private sector: the highly uncertain environment in our country will harm the short-term prospects of the private sector  in driven our economy by hampering creation of jobs and opportunities to invest;

VI.         Governance issues: this situation might further  increase insecurity, weaken the rule of law, worsen governance environment, rim the progress on the anti-corruption front, create a lack of transparency in the management of public resources and contribute in poor governance in natural resource exploitation;

  1. Public finances: the current situation may put a lot of pressure on public finances by shutting down more oilfields, declining oil and tax revenues and increasing expenses to meet the Government needs. All these will affect our fiscal position and increase pressure on macroeconomic stability issues.
  2. Exchange rate, Import and inflation rate: due to the fact that South Sudan is import dependent country with very limited exports beyond the extraction of oil revenues, the ongoing crisis may slow down the process of trade, affect the volume of import, depreciate the national currency (SSP against Dollars) and shatter the investor’s confidence to invest in the country. This will also directly affect the prices of imports and raise the inflation rate. It is presumed that countries with high imports from abroad tend to attract FDI (Mundell, 1957). However, the inflation rate is regarded as a crucial factor in influencing the FDI inflows. Therefore, high rates of inflation are associated with the lesser FDI inflows which may result in the economic decline of the country, weak institutions and decline in agricultural productivity.

5-   Way forward

It is generally known that conflicts affect economic outcomes mainly through the destruction of human and physical capital, shifts in public spending and private investment, as well as the disruption of economic activities and social life. The specific impacts and its economic consequences depend on the type of conflict, its intensity, duration, and geographical spread. However and from a strictly economic point of view, a political resolution of the current crisis is urgently needed.  For South Sudan to regain its place as ‘’the world’s newest investment destination and one of the world’s fastest-growing economies, the Government has to immediate take a number of actions in order to calm the current situation, restore the confident of investors and boost its economy.

I.        The political leadership in South Sudan should work together  to resolve their differences through peaceful and constructive mechanisms to bring an end to the current violence and should  ensure that the humanitarian aid reach  the suffering citizen affected by the current war, and all local and international humanitarian distribution agencies should have safe access to deliver needed support. It is also imperative that security is provided to all civilians, regardless of their communities of origin;

II.        The Government supported by the international community should urgently intensified the efforts needed to deescalate the conflict across South Sudan and address the systemic causes of that violence in order to foster a sustainable peace between different communities and prevent further attacks on civilians and the leaders and politicians as well as other RSS officials, have to take up their a responsibility to actively deter future violence and not to exploit the current chaos for political gains. Transparent governance is critical to mitigate conflict fuelled by patronage systems that favour particular ethnic or socio-economic groups; and promotion of multi-party democratic, decentralized and participatory governance is also essential to alleviate the conflict created by politician;

  1.   III.        The government of South Sudan needs to resolve the causes of conflict by enhancing accountability, reconciliation, political inclusion, state effectiveness, development and encourage the effort to build the new nation’s political, legal, and social systems through the recently initiated process of drafting a permanent constitution;
  2.  IV.        The government has to take extra steps to promote investment in the country by reorganizing investment conferences and launching campaigns to educate the public locally and internally on the investment opportunities in South Sudan and should introduce specific laws that treat local and international investors equally and support investment by making provisions for attractive fiscal regimes, protection of industrial and intellectual property rights, credible guarantee of legal security and investment stability, repatriation of profits and dividends, custom duties exemptions, as well as reduced red tape and bureaucracy;
  3.    V.        Good governance is not only critical to development but also is the most important factor in determining whether a country has the capacity to use its resources effectively to promote economic growth and reduce poverty. Therefore, the South Sudanese government needs to demonstrate that it can govern effectively by including the political opposition and civil society in the governance process and by becoming increasingly accountable to the citizens of South Sudan and manage public resources effectively and distribute them equitably to achieve sustainable economic development;
  4.  VI.        Political instability always arises as a result of the inability of government and society in general to adequately address the grievances of the population or particular political group and it can therefore creates an incentive for some to adopt predatory behaviour vis-à-vis the private resources of the economy.[1] That’s way is recommended to discourage such predatory behaviour due to the fact that decision making should be more open to public debate that facilitates a smooth transition of power through public elections. Consequently, a more stable democratic government gives investors an assurance of the safety of their investments. Additionally, government effectiveness and economic freedom will set up the institutions necessary to increase the productivity of investment. Trade liberalization and effective government institutions encourage more secure property rights, thereby increasing investor confidence.

In conclusion, eight years after signing the Comprehensive Peace Agreement (CPA), South Sudan is possibly in the strongest political and economic position it has ever been in. Until the oil shutdown, its economic performance was unquestionably positive. Its oil industry constitutes a major source of income and occupies a strategic position in its economic development. The industry has played a vital and dominant role in its economic growth, both in foreign exchange earnings and domestic income generation. Therefore, political stability is without doubt a key to economic growth in South Sudan. The rule of law, strong institutions, good governance, low corruption, and a business climate conducive to investment are key factors of stability which are important for economic development. Perhaps the African states that have been able to achieve high growth rates are consider relatively stable.

[1] Tavares, J. And Wacziarg, R. 2001 “How Democracy Affects Growth” European Economic Review 45,2001, pages 1341 -1378