The Crippling Impacts of the Ongoing Civil War on the Economy of South Sudan

Posted: June 10, 2018 by PaanLuel Wël Media Ltd. in Economy, Junub Sudan, Kuir Mayen Kuir

By Kuir Mayen Kuir, Nairobi, Kenya

New 500 SSP

Congrats to the Central Bank of South Sudan (BOSS) for the timely introduction of the brand new 500 note – say what you may, but it will surely reduce the risky business of carry huge sacks of 5ssp and 10ssp and 20ssp around Juba, which often attract the dangerous attention of the unknown gunmen and the dogged creditors. FREE AT LAST

Sunday, June 10, 2018 (PW) — The economy of any country depends largely on the political stability of the host country. That is a fact which nobody can deny. The persistent Civil war in our country (South Sudan) has mothered series of problems and estrangements which our people go through each day. It is conspicuous enough and too major to be hidden. The youngest country in the world experiences economic agony tailored by warlords and merciless demagogues which I doubt if their eyes twinkle in reflection of what they are doing.

At least initially, there was a good reason to fight and whichever the subsequent consequences which shifted in, there was no regret because it was a war of liberation but not a fruitless war of interests as it is the case now. A war due to massive individualism and mismanagement of the country fundamental resources. This is always the preliminary walk through of a country before it fails.

This is what Ernest Hemingway said when he was shedding some limelight on the relationship between a war torn nation and the top leadership, “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists”.

It is absolutely dangerous for a young resourceful nation like South Sudan. Without economic efficiency, we totally forget about the growth of an economy. Anyway, I wish my beloved country a quick recovery and probably in the soonest time possible, all shall be well. Back to my topic, the current war has maimed, injured and totally disorient the economic progress of our country. Since the war began back in December 2013. It has been a rough economic journey.

Obviously the co factors which the war touch on are macro in nature. They includes government debt, consumption, investments, taxes and inflation. Gross domestic product (GDP) is usually the very first element affected. This is because it largely depends on the factors of production which are never present on a war ground. The factor products such as labour, land, capital and entrepreneurship are subsets of peace and tranquility.

This bears the meaning that whenever war escalates in any country, the country drastically lose these vital factors of production. Therefore it goes without saying in our case as a country. The war has led to massive deaths and displacement of people which has a direct negative impact on the economy. People who carry the country’s economic tools for development. These people are the potential producers and consumers.

For instance, in a country where peace owns the day, the citizens peacefully embarks on their different activities according to their respective specialization and help the economy grow. Producers produce goods and services which meet the country insatiable needs for the major consuming population. The consumers on the other hand will be very vigilant on the quality of goods and services from the production sectors.

The distributors will get employment hence increasing their disposable income which in turn increase consumption. Goods and services which are basically produced within the demarcations of the country are freely exported and foreign exchange is obtained. The traders both in wholesale and in retail get the opportunity to exchange their goods and make their income out of it. When all this circulation is complete, we can proudly say that the country’s GDP is elevated and this is a very healthy state of the economy.

The economy is booming in one word. I mean, this is what happens when the country is enjoying peace and harmony. What about when the country is an example of South Sudan? This becomes very easy to explain because any bad economic impairment is the best term one can use to clearly define this. At the absence of human resource, the factors of production are not present and therefore the economy is extremely drained. The aggregate output for the country goes down and the subsequent GDP.

When this happens, the country is nearing its economic grave because the total output in the production sectors is drastically minimized. This create a shortage in the demands of goods and services which stimulates a successful increase in the prices. As the war of politics of division continues, the supply reduces because the man power is no longer present. The demands then meet an empty market and the few monopolies quickly take advantage of this situation and sky rocket the prices further.

This sustainable increase in the average prices of goods and services without addition in the GDP is what welcome inflation, (the demand pull inflation). The prices are hiked every other day because the demands for goods which are not available is escalating. The cost of factors of production also extrapolates and this will help in the maintaining of average prices extremely high.

The currency devaluation shifts in because very petty goods are costing a whole box of note without question. (The cost push inflation flame on until the currency eventually burst). This is very painful to the economic growth and this is what war has given birth to in our nation. This may not recuperate in the soonest time because the injury on the economy is gulley.

In conclusion, the country top leadership must be mindful of this situation because it might besom the face of our economy in the economics pathway. The only solution to our economy is no longer formulation of good policies (there was a time it could work) but impromptu cessation of hostilities combine with burying of hatchets as soon as possible.

This way, a momentum towards a paradigm shift will take over and the economy undertake a gradual healing.

The author, Kuir Mayen Kuir, is a South Sudanese Student of Economics and Statistics at The University of Nairobi in Kenya and can be reached via his email: Mayen Kuir <mayenkuir@gmail.com>

The opinion expressed here is solely the view of the writer. The veracity of any claim made is the responsibility of the author, not PaanLuel Wël Media (PW) website. If you want to submit an opinion article, commentary or news analysis, please email it to paanluel2011@gmail.com. PaanLuel Wël Media (PW) website do reserve the right to edit or reject material before publication. Please include your full name, a short biography, email address, city and the country you are writing from.

Comments
  1. James Chut says:

    Dear beloved citizen, do you think that the introduction of new note will solve the current inflation rate because what we need is not reduction on carry huge money but we need our economy to be stable. for more info: chutjamesangon@gmail.com

    Like

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