Expert:- cutting down of government spending to %80, encouraging traditional gold mining and extracting oil country, will be the way out of current economic crisis
05 February, 2011
Khartoum- 1/2/2011 (Sudanow) – Economic expert, and a critic of the Sudanese government, says there is urgent needs to adopt a package of decisions and measures to overcome the current economic crisis, brought partially by the international economic crisis and the secession of the south and consequently cut in oil revenues for the north.
Dr. Abdel-Azim al-Mahal, a Sudanese economic expert and Director of the Economics Department at Sudan University, argued in an interview with Sudanow (Sudanow), that to overcome this economic crisis, there should be a cut down in government spending by 80 percent, particularly in the security, defense and police sectors as well as the Presidency of the Republic.
He added that the state must also encourage traditional gold mining and give incentives for the people working in the sector so that they would sell their gold to the central bank (The Bank of Sudan), adding that the government, as well, should work to facilitate entry of gold detecting devices and hire-purchase them to the citizens as means of production to contribute to increasing the gold exports to reach 4 billion U.S Dollars by end of current year. He further said that the government must work to extract other minerals such as steel, aluminum and others.
Dr. al-Mahal urged for speeding up extraction of the petroleum in north Sudan, namely at al-Migainis, Abu Jin, al-Dindir, Adila wells and others, which have recently been discovered, besides motivating the industrial sector and working to increase its exports, particularly with regard to sugar and cement which are competing internationally, so that it could obtain 2 billion Dollars in the coming two years.
He went on to stress the importance for providing incentives for foreign investments and immediately embarking on enacting an attracting new investment law, adding that since Sudan was qualified and has high food production potentials and internal political stability it should utilize the unstable political conditions in other countries and work to attract the fleeing capitals from those countries and from the world markets to be invested in Sudan’s real economy.
Dr. Al-Mahal meanwhile urged the State to encourage the consuming co-operative institutions, not in their old forms, but in a form of great malls at the different areas and to be supervised by the Ministry of External Trade, which is currently inactive, provided that the malls should contain all basic commodities and services "from needle to cars" and at reasonable prices. Such malls, he argues, could bring revenues for the localities not to mention that they could provide around 20000 jobs for the graduates.
He stressed that one of the most important solutions is to motivate the Sudanese private sector, integrate it in the national projects, deal with in a different vision and not to force it to invest in sectors that it has no interest in such as health and education.
“We thought Sudan was among few countries that would not be affected by the global financial crisis due to its weak economic relations with America and Europe as that relation did not exceed %5, but unfortunately, after the global economic crisis, we were surprised that the State has yet to move in to remedy the economic effects of the crisis despite the many workshops and symposia which we have organized to draw the attention of the politicians and government officials to the negative economic impacts of the crisis since 2009”, said Dr. al-Mahal.
He added that they also pointed to the economic impacts that could arise immediately after separation of south Sudan, saying that the government has not dealt seriously with the recommendations of the workshops and symposia.
He said if the government had implemented those recommendations, it would have reduced the current economic impacts as did America and Europe when they initiated work plans and programs to confront the economic crisis and throw it into the third world countries of Africa, Asia and Eastern Europe.
He explained that the impacts of the crisis first appeared in the non-oil producing Arab countries and some of the Arab oil producing countries such as Qatar which has managed to overcome the crisis by pumping in 10 billion U.S Dollars into its economy.
However, other Arab countries such as Tunisia, Egypt, Jordan, Yemen, Mauritania and Sudan could not come out of the crisis and consequently prices started to rapidly go up in causing their peoples to burst in protests.
Al-Mahal went on to say that as the result, some countries adopted measures to absorb the anger of the people and reduce their living burden, particularly with regard to basic commodities, adding that this way some countries, like Syria and Algeria, have somehow managed to successfully overcome the crisis.
In the meantime, Dr. al-Mahal described the government’s recent measures to lessen the living burden as were “weak”, saying that those measures have led to rapid increase of prices that the normal citizen could not stand.
For instance, he said, the decisions of the central bank have caused a rise in the rate exchange of foreign currencies which led to an increase in the prices and reduction in the Sudanese pound value and in turn all incomes of the citizens, which are in Sudanese pound, have decreased which led to a drop in the purchasing force, particularly with regard to the basic commodities.
He further pointed out that the government has failed to control the foreign exchange market as it was expected to save part of the foreign currency from its share in the oil revenues, at least 5 billion Dollars, to face the consequences of the referendum, but "unfortunately we have discovered that the government Treasury was empty of foreign currency, matter which led to increase of the Dollar exchange price."
He said that the citizen presently needed to see the Dollar back to its previous exchange price (2 SDGs) and not a 100 SDG salary increase, which most of the state employees have not yet cashed.
In the meantime, responding to a question on how the issue of the northern Sudanese students in the southern Sudan universities could be resolved, as he is university lecturer, Dr. al-Mahal said this issue could be solved by establishing university colleges within the existing northern Sudan universities to assimilate those students according to the programmes and systems of the southern Sudan universities so that the students would not feel any change.
For instance, Sudan University could admit students of faculties of medicines and pharmaceutical studies, he said.
End
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