Open Economy and the Subsequent Exchange Rates for South Sudan

Posted: March 19, 2019 by PaanLuel Wël Media Ltd. in Economy, Kuir Mayen Kuir

By Kuir Mayen Kuir, Nairobi, Kenya


Monday, March 18, 2019 (PW) — Does the debilitating economic menace in South Sudan has a solution? Are there goods and services leaving the country as exports? What is the nature of the country’s balance of payments (BoP)? All the above are quite some reasonable questions that any person can easily seek to find better answers addressing them. However, in the spirit of reasoning together towards our economic evaluation, the question on whether our economy is an open or closed one does not omit!

It is a question that can never be ignored in any analysis. Everyone has his or her own view on the same but as for me, the theme is still unclear because I haven’t seen or heard any restrictions that our government has strengthened towards controlling the goods and services coming into the country, neither have I seen any goods and services constantly leaving the country as an export apart from the common oil and its components.

We shall see the substantial evidences in due course given the current situation of peace successfully taking its full implementation over the country (I am optimistic that peace is coming) but it is apparently evidence that by our country emulating the open economic system, it can practically do well compared to when it decides otherwise.

In a nutshell, the choice of open economy is fundamentally essential to our young economy. I know there are people who bears different views with different reasons; Such as the closed economic system gives a room to protect our infant industries from unnecessary competition which does not only exploits the local industries but also it sponsors their possible extinction.

This is a very vital and reasonable thought of prosperity but adopting the protectionist mechanism by the national government such as tariffs and quotas on exports can be better controlled measures and tools to protect our local industries. When our economy is an open one, it bears the meaning that the economy siphons goods and services from the outside nations in order to supplement the goods and services produce locally by the local agents.

 Equally the same, when our country is a participant in the open economy, we are obliged to export our local surpluses to other countries and acquire foreign exchange revenues for the country’s development. This is a very fundamental factor as it contributes to healing of our economy from the debilitating inflation. This happens when the country’s trade is well consolidated with other countries within the rim of their participation.

However the current problem right now with our country’s economy is that the potential production economic sectors are ravaged by the long lace of the draconian war which seems to be endless. If our economic sectors were productive, we would look forward to seeing changes that will emanate from this important practice of trade. In this time of economic turbulences in our land, it would be easy to see the positive impacts of open economic system.

From the definition of inflation, we understand that it is the constant increase in prices of goods and services with a stagnant gross domestic product (GDP).This is a function of about 3 variables and demand is not excluded. In the importance of exports, the revenues (dollars) fetched from exportation of goods and services to a country such as USA will increase the amount of dollars within the circulation in our economy hence the demand falls, applying the law of demand and supply, the demand for dollars fall with increase in its supply, this increases the strength of our currency over dollars.

From this derivative, we derived that the price per 1$ decreases with increase in its supply. This deliberately leads to the fall in the prices of goods and services circulating in the economy. The opposite is also true for our currency in the USA. This is one important factor of participating in open economy.

Another essential benefit is the improvement of living standards for the indigenous or rather the citizens of the country as a result of the revenues which are obtained from the trade. It can also be a source of effectiveness and efficiency in production.

This comes in as a result of specialization in production of a specific goods that is a source of large revenues in order to withstand the competition within the span of the international market by simply meeting the international standards and if possible exceeds that.

In substance, when the country clearly draws the calculus of moving forward, we shall be very far in pursuit of better economic freedom that we shall be proud of as a country. We hold our prayers together for peace and stability as a country in order to resume our rightful position in the economic pathways.

Kuir Mayen Kuir is a South Sudanese student of Economics and Statistics at the University of Nairobi, Kenya. He can be reached via his email

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 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.

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