21-October-2017

Redefining Government Role

Redefining Government Role

Sudanese Council of Ministers

By: Alsir Sidahmed

One of the arguments usually raised against imposing sanctions is that it provides a scapegoat for targeted governments with an excuse to blame every failure on sanctions and not on its ill-devised or executed policies.

 

Regardless of the accuracy or validity of such an argument, but clearly the emphasis will be shifting to the domestic scene and how to manage the local problems.

 

A good illustration of the case is the fluctuation of the Sudanese pound against the US currency, the dollar. The pound has been depreciating and appreciating more by speculation based on a psychological factors than by hard economic realities.

 

Sudan production and exports that generate hard currency did not deteriorate in July in a way that justifies the pound drop. Equally nothing of significance happened of late to justify its appreciation.

 

By all measures lifting the sanctions will be followed by a short-lived euphoria. Moreover, other political and diplomatic issues on bilateral or multi-lateral Sudan’s relations will follow suit, namely upgrading the level of diplomatic relations between Sudan and the United States to ambassadorial level, then removing Sudan from the US list of states sponsoring terrorism. On the international level the main issue will be how to handle the mounting debt that is crippling the country and which should have been handled long ago since the separation of South Sudan, but the long awaited debt relief was in effect blocked for political reasons. It remains to be seen whether the recent thaw in Khartoum-Washington bilateral relations will have a positive impact in this area or not.

 

However, most important is the domestic economic scene and whether proper policies will be adopted to make use of the new window opening. Away from politics the Gezira scheme, for instance, is poised to achieve one of its highest cotton production yields in recent years. By applying the genetically modified cotton, production is expected to be a pumper one despite the fact that area planted amounts to around one tenth of that used in conventional agriculture.   

 

The genetically modified cotton has been a controversial issue that did not have a serious professional debate within a political framework to reach conclusive end. But more important and away from the pros and cons of this type of cotton, a new mode of production relations is evolving, the contractual agriculture.

 

Given the failure of government agencies in various agricultural projects in providing timely finance, fertilizers and extension, private companies ventured to step in to play that role. Experiments of such approach have been applied in parts of Gezira scheme, in Rahad and even in Northern Kordofan with various degrees of success.

 

However, since the experiment is new both sides of the equation, the farmers and the companies, were testing waters and that is why they opted to have the duration of the agreement for one year only in most cases. Percentages of the shares of farmers and companies as well as how to deal with the issue of prevailing market price following production if it exceeds or averaged below what has been agreed upon are issues that vary from one experiment to another. Equally the actual role of the government in all this is shrouded in ambiguity. After all government employees can’t be ignored as they represent the state authority, but at the same time both companies and farmers can deal directly with each other with no need for a government intermediary.

 

More serious is the issue related to contractual commitment. At least in one incident farmers were supplied with necessary finance and chemical inputs against a contract to turn over their production against an agreed upon price. The story goes that a different company stepped in luring the farmers with higher spot price.

 

These are kind of issues that need thorough investigation and serious debate that involve all parts of the equation, making use of available literature and similar experiences in other countries.

 

It became clear that the government is unable to carry its role in providing finance and other related services. The private sector seems to be more than willing to step in and fill the gap. After all the government declared policy is for liberalization and allowing the private sector to take the lead in the economy. It needs to redefine its role as crafter of policies favoring producers and be an honest referee guarding those very policies that are based on some kind of consensus.

 

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SS/AS

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