We need qualified economists to relieve the nation from chronic economic crisis
By Daniel Machar Dhieu, Bor, South Sudan
February 10, 2016 (SSB) — Allows me to have my voice on economical confusion in the heart of juba town, the question of hard currency has been a serious deal to tolerate for so long. Our government has failed to monitor the problem of hard currency across the country. Now, in South Sudan one Dollar has raised to 22 SSP in central Bank of South Sudan while in black market 1 Dollar has gone up to 35 SSP Yet our local citizens are not aware of the U.S dollar currency policy in the nation.
Though, The U.S. dollar is the world’s reserve currency and the founded nation of U.S dollar is the world’s biggest consumer of other currency. Other countries whose economies are centred on exports rely heavily on America’s consumption. Hence, a falling dollar is an issue many countries cannot afford to ignore. Further devaluation of the dollar is sure to come.
The near-inevitable move would set up a frantic race to the bottom among world currencies and the ramifications are serious for everyone. Therefore, there need of eradication toward the random dollars on the street of juba otherwise this may result currency devaluation and cause economic scarce to the nation.
Furthermore, some other countries are trying to boost and maintain export levels other than import in controlling their currency from being exploited. Is the work of government to maintain it economic status by controlling U.S dollar flowing to black market. Government should give U.S dollar to the recommended business people who use to buy their goods in world market such as Dubai and not just to the demanded one.
Therefore, government should be clear about this point and make sure that no any government employee receives salaries on foreign currency. The issue of U.S dollar has been serious demanded excise that has even resulted to insecurity in the town of juba. Every human is demanding U.S dollar despite of her/his status, the thing become the sources of income this has made the rate of U.S dollar so expensive to access.
Another problem, the business base U.S dollar is making citizens lost hope on home currency and making them to demand U.S dollar more than anything. Therefore, all people have different views in this nation concern the foreign policy of which there should be laws to govern this business before it give birth to unexpected boom.
Most people do not work simply because they enjoy doing it as kind of living. The basic reason for every person demanding U.S dollar than taking another path it because they consume more than what they were expecting in working umbrella in the government and this Theory is in generally in ten states if poorly control the nation will only devalues it currency to foreign currency rather than consuming it to gain a comparative advantage.
When a country devalues its currency to gain sales overseas and increase exports, that country will indeed increase exports, but it will receive less in return from trade if its currency was still strong. But this case differ from our own country we can’t enjoy anything completely instead we be in a worse direction if not minimize unless we change to currency debasement. Therefore, Currency debasement allows for increased exports while ignoring whatever problem caused a radical trade imbalance in the first place.
In the case of the United States, it is and was the haemorrhaging of its manufacturing base. If leaders adopt a policy of currency debasement, the comparative advantage will be severely blunted and citizens will be forced to consume less. The portion of domestic goods that are consumed may increase, but that is only because the nation would be consuming less overall as the dollar would be unable to purchase as many goods, foreign or otherwise.
After currencies devalues more quark will simply expose in, consider an unemployed workers. One way for an unemployed individual to increase his chances of landing a job would be to accept lower wages. The worker will be much more likely to get a job if he accepts a 50 percent income reduction, but would he/she really be better off? Relative to being unemployed, yes, but if he/she could have found work at full pay he’d be much better.
Currency debasement, like a pay cut, allows the same systems that failed to work in the past to remain in place while providing the illusion of better prosperity. Selling some of our stuff is surely better than selling nothing, but in the end the total value of our trade will diminish and prosperity will continue to disintegrate. The politics surrounding currency debasement are really quite clear.
For example, Japan’s economy is centred on exports to American consumers. The problem for Japan is that Americans cannot really afford to buy as much as they could just a few short years ago.
Rather than look for new customers, like China’s citizens who currently have a massive trade surplus, manufacturers in Japan have used their political rate to essentially force a bailout for their traditional U.S. customers by devaluing their currency. The same to east African countries to South Sudan these countries are importing whatever produced in their home countries and gain more profits here because we unable to produced anything at all.
What I learn now in South Sudan, government is basically supporting the elite few by surreptitiously forcing workers to take pay promise salaries increase via inflation. Despite the extra effort, workers will fail to achieve higher standards of living. In fact, even as employment rises, overall consumption will fall. The geographical looks darkest for us in the South Sudan.
The sad reality is that the nation’s plan for currency debasement can have very little to do with saving jobs related to exports because South Sudan as a nation simply does not have many jobs left to save due to economic low status in the nation. The only logical conclusion one can build from the government’s decision to debase the dollar is that it merely intends to ‘pay’ its own bills, preserve the status quo on Wall Street (bank profits and bonuses) and “allow” us to keep buying homes we cannot really afford, mostly on credit. This will actually prevent many workers in the service-sector from finding more productive jobs.
In the end, currency debasement is a way to perpetuate the same economic model that has kept middle class incomes stagnant for over three decades while expanding the wealth of the top 1 percent by over 300 percent. So, even if the U.S. Dollar wins the currency war, in the process the nation will lose the real battle – the battle to improve and even maintain the quality of life for its citizens.
The writer is the Student at South Sudan Christian University, Juba, South Sudan. Contact him through machardhieu@gmail.
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