Safer Paths Out of our Wartime Economy (Part 6): South Sudan Pound – Facing a Risky Plunging
By. Mayen D.M.A Ayarbior, Juba, South Sudan
December 17, 2015 (SSB) — South Sudan’s politico-economic establishment has seemingly enjoyed the game of sliding down the drain so quickly. Considering the current disastrous security and economic hurricane courtesy of its self-inflicted wounds of civil war, the underlying controllers of economic stability which have kept the country afloat are facing a new challenge.
Against all odds, the country continues to stare economic disaster in the face as it tethers at the brink. The fear is that, God forbid, it may plunge on a free fall into an abyss of no return. As citizens who actually work and live in South Sudan, and will surely be affected by such free fall, we have now raised our hands to the heavens hoping that the IMF and World Bank descend upon our country with the rains. If they decided to withhold such rains, your guess is as good as mind.
Our SSP, poor old pound, has now become a “commodity” just like any other in the market place where its value shall henceforth depend on the needs of sellers and capacity of buyers. The forces of demand and supply are going to determine its “true” value. In other words, the market principle of profit maximization, which is a concomitant underlying force behind demand-supply, is also going to determine the value of SSP vis-à-vis USD. Even if it reaches 5,000 SSP per $100 so be it, as the market will have spoken. As simply as that. A free floating currency, it is called.
For normal commodities, demand-supply leads to market equilibrium. Commodity scarcity leads to rise in price while abundance to drop in price. So, the USD exchange rate (value/price) shall depend on its availability in the market place. As it stands, the oil (dollar) wells are not producing ‘enough.’ Hopes that the peace implementation will translate into more inflow of USD are anchored on verbal assurances from our old friends, who have renewed their friendship vows at many occasions. Keeping their words without more conditions will be a pleasant surprise or disappointment to some, depending whether you are an IO, FD, or IG. Just a citizens is not an available option.
We have received assurances from the high and mighty decision takers of South Sudan that all will surely be milk and honey in the long run. So, citizens are advised to learn how to tighten their belts or get courses on the same from their brethren who have seen it all, including rising from the dead. Yours truly stands to be counted on that roll call for an instructor.
While I personally have no doubt whatsoever about the patriotism and good intentions of some of those behind the decision, conspiracy theorists under our political trees have seen the “coincidence” of December 15 for taking the new strike at their bread baskets as a bad omen. It was the date when hell was unleashed upon helpless citizens who just wanted bread and beans two years ago. Two years later, it might go down in our very short history as the same date when they are taken from the children’s plates; that is if the awaited long run starts running away like the return of Jesus.
While such assurances from patriotic economic seniors should give some of us hope that may be, somehow somewhere, things may be okay (in the long run), we are yet to hear about concrete structural measures for the country to safely chart its way through the projected short run crisis. After all, just injecting more USD into an already hungry free market as-well-as raising the salaries of low income earners may not do the trick. Since December 15, 2015 all have become low income earners, unless one is a businessman/woman.
In Russia, there is a weird but popular winter game exclusively played by adult men (Very few woman are taking the risk for women seem wiser than men, in Russia too). They make wholes on thick ice surfaces, take off their shirts, and dare plunge their naked shapes into the icy cold water. I don’t know about you, but I wouldn’t dare do it even if I am offered a thousand USD at the earlier expected devalued rate of 5.96 SSP that never saw daylight. It would not be a worthy risk for I would surely freeze down there and never surface to get the price, I am no Russian after all.
Some people enjoy risky games just for fun. Others make so many calculations and evaluate multiple scenarios before they act, even when glittering rewards are dangled before their eyes to convince them take that plunging. Only time will tell to which camp our economic giants belonged- but that could be in the short run even when our country has no many seasons in a year.
Mayen Ayarbior, BA Econ Poli. Science (Kampala Int’l Univ.), MA Int’l Security (JKSIS- Univ. of Denver), LLB (Univ. of London). Author of: House of War (Civil War and State Failure in Africa) 2013. mayen.ayarbior@gmail.com.
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