Why Policy-Makers in South Sudan do not regarded inflation as a problem?
By David Matiop Gai, Juba, South Sudan
April 4, 2017 (SSB) — I am not an economist but I have a serious point of argument against policy-makers and national economists that why they failed to understand inflation and regarded it as a problem, and if they understood it as a problem, what did they do?
I think inflation is a problem in the Republic of South Sudan. It is a social problem; it is a psychological and mental problem; it is an economic and socio-economic problem; it is a national problem; it is a regional problem as well as spiritual problem. I got chocks and eminent surprise with clear evidences today when I came along the main road to my workplace; and I got three children lying down along the roadside hungry; they couldn’t see and they have deserted their parents because parents couldn’t feed them.
It is now something affecting the nation’s future with terrible targeting of children whereas policy-makers are comfortable sitting enjoying their luxuries of leadership bonus and conditions that lead to disability of the national economy has becomes a do away with public. It is indeed a problem. It is a suicide choice of unreasonable policymaking on national resources and resources delivery system. Others collected money and them in their pockets.
In this rule case, there are two major problems in the national income accounting; one is the government spending problem, and two is the foreign firms on domestic goods spending problem. The value of GDP, that’s Gross Domestic Products, by adding up expenditures of markets participants in Konyo –Konyo market, Jebel market, Gudele market, Thuksita market, Juba Town market, and other markets in Juba and in states of South Sudan had given hard time for economy to resolve very easily because conflict and these factors have given by GDP = C+I+(E+I) whereas please understand this properly, C= consumption expenditure; G= government expenditure; E= exports expenditure; I = imports expenditure, and the problem here is outflowing credits or flowing spending and empty of national owned-factors of locations to zero levels. We export everything, and gain nothing. Our living depends on others.
And my point of argument here is not a point of political motivation, it is a point of people need to pay their fair shares of the costs of having public services, otherwise there is a social and political impact in this economy inflation, but why inflation is not regarded as a big problem by South Sudanese policy-makers, and economists? It is better to understand inflation, effects of inflation, measures of inflation, cause of inflation, and solutions to inflation by the economists and policy-makers.
What is inflation? The inflation is an increase in the average of all levels of prices of goods and services. It is a level where everything in term of economy is increase to an extent of uncontrolled price of goods and services like how South Sudanese pounds dysfunctions against US dollars whereas $ 100 dollar = 15,000 SSP and levels of high inflation of goods and services is not a portable by ordinary citizens of South Sudan.
The effects of inflation. The effects of inflation are usually or always felt throughout national economy. I have written it in last articles that everybody in South Sudan is affected by this inflation directly or indirectly. Whether you have a lot of money or little money, the inflation has unified us of all, while those who struggle daily to survive per $1dollar in a day are totally put down to zero level. At this juncture, there are three redistributive mechanisms of inflation. 1). Price effect, where people who prefer goods and services that are increasing in price least quickly end up with large share of disposal income; 2). Income effects, the people whose nominal income rises faster than the rate of inflation end up with a larger share of total income, and 3). Wealth effects, where people who own assets that are increasing in real value end up better off than others; and this problem rise concern that we in South Sudan are classless society. I don’t think that we categorized ourselves into three classes of first class citizens, middle class citizens, and lower class citizens. We are uniform; we are equal, and we share the same opportunities of the nation wealth.
Measures of inflation. Inflation is commonly calculated on the basis of the consumers’ price index, (CPI), and the consumers’ price index is a measurement of change in the average price of consumer goods and services. It is determined by measuring the change in price of a weight basket of goods and services in particular economy. Since eruption of conflict in 2013, the basket goods have chosen to represent the poor average of consumers increase in the market. Consumers’ price index is a problem by itself. It’s always includes the prices from certain sectors or institutions of the economy.
The cause of inflation. The cause of inflation could be traced back to the two converging factors: Demand and supply. We know it very well that the demand pull-theory of inflation suggests that demand exceeded supply. In our country, demand is so high than supply, and that why in other countries, a nation serve first the interest of its people by supplying all the demands of consumers with goods and services.
Solutions to inflation. Economists interpretation, arguments, economy diagnose, and understanding of inflation concepts are solutions to South Sudan economy. If policy-makers understand why inflation is regarded as a problem? The inter-relationships amongst economic growth, inflation, and human costs of unemployment will gain quantity of economy treatment. Again creating national income accounting, government spending, and foreign firms on domestic spending will be creditable to save South Sudan economy when money be use for futuristic purposes. God bless South Sudan.
The author is a co-founder of South Sudan Mental Health care Organization, (SSMHCO). He holds Bachelor degree in Social Work and Social Administration from SSCUST, Bachelor of Theology from CLT, Bungoma, Kenya/Kalispell, USA, and a fellow researcher. He can be reach at david.matiopgai@gmail.com.
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