Beyond the Horizon: Accommodate and Not Fight the Informal Sector Best Policy

By: Alula Berhe
Informal Sector
There are have been lately a lot of debate about the major role played by the informal sector in the economy and this lately in the presentation (Strategic Vision for Restructuring the Sudanese Economy) by Prof. Mekki Al Shibbly, in a forum convened in Mamoun Beheiry Center for Economic and Social Studies and Research in Africa Saturday 14 Sept.
The Prof. said that the formal sector now controls Two-thirds of the national economy and so there is a need to find ways to accommodate this sector in the national economy. It was stressed that this factor is an economic reality and cannot be addressed by security and police measures only but as well by economic and financial policies. We should take into consideration that Sudan is not unique in this regard but is a phenomena that cover the whole world but the degree depend on the strength of the national economy as in the developed world countries compared to the developing world where the informal sector play an important role.
Naturally, some of the activities of the informal sector which goes beyond the boundaries of normal economic activities and the law have to be combatted to insure a healthy national economic environment.
At the same time some of these sector activities are driven by the need to find any form of livelihood for those who were driven from rural to urban migration because of the wars, conflicts, climate change and natural disasters or even man-made crises like the construction of dams in their areas without proper compensations.
This segment can be absorbed in better formal economic opportunities in new economic projects which are expected to come out with the new economic policies to revitalize the economy.
In this context, the Prime Minister has already declared his priorities which will focus mainly on the agricultural sector and the agricultural products value added activities. This program when implemented will serve two purposes; it will reduce the rural urban migration and this will reduce one of the main sources of the formal sector manpower and at the same time will encourage those already in the cities to return back home when there is better livelihood. Such a step will as well have a lot of social benefits as it will energize the rural areas not only economically but socially and culturally.

Gold Export Freeze

The transitional government should temporary freeze the Gold exports until a proper governance structure is in place that guarantees the receipt of the foreign proceeds by the Central Bank of Sudan and at the same time end the smuggling of this precious metal. This came out in the presentation mentioned above.
This is not the first time that this sector is under fire just few days ago in an interview with Sudan Vision the Foreign Exchange expert Dr. Dr. Isam Elzein Elmahi Ahmed had expressed wander that Ghana which export just half of Sudan gold receive a $40 billion dollar while Sudan for double the quantity gets just $2 billion or less. If we go to the international statistics it showed that Sudan 90 Tons of Gold in 2017 which according to the international price of $ 46.5 million per ton should have generated and income of $ 4,163 million and in the first 9 months (Jan-Sept) of 2018 Sudan gold exports were 78 Tons worth $ 3,588 million. If you look at these figures naturally you will support this call for the temporary freeze of the gold export.

Peace Economic Program

Also, Dr. Meki has stressed on that the strongest focus of all the economic programs during the transitional period should be on supporting the peace process as the first and utmost priority. This is the main that the priorities should be for the five Darfur states, Blue Nile and South Kordofan. This will provide these areas people with the first dividends of peace. But some of the participants commented on the presentation suggested that the Red Sea state should be added to this list as having the lowest points in the Human Development Index.
Adding that the 200 Days Emergency Programme announced by the Finance Minister should be tabled for dialogue to win the much needed public support and this program should be followed by a strategy for the remaining period vide wide consultation.
On the other hand he pointed to that any attempt to implement any part of the Structural Economic Reform Program during this period will be below out the peace process and will not be publically acceptable.
While, we agree in general with Prof. Mekki that the economic programs and in particular the first 200 days should focus on the provision basically of peace dividends. But must as will later lay the ground for the stage after the transitional period, so that the next democratically elected government will not start from zero.
The economic program tabled for discussion by Dr. Ibrahim Ahmed Al-Badawi Freedom, Peace and Justice: The Foundation of the Revolution Economic Policy is a good foundation for a wide dialogue among all the stakeholders and not only the experts; that means the civil society, political parties, etc. at large as the program contains a 200 Days Rescue Program , then the rest of the transitional period 33 months and later endeavor to propose plans for the period ending by 2030 ,that means in whole a 10 years program. We are going to explore this program in depth but would invite all concerned who would like to contribute to come forward and our pages will be one for them.

Services Sector

While the importance of the modern services sector was stressed on by the presenter all warned of the danger if this sector participation exceeds 50 percent of the GDP. On the other hand it was recommended that the Ministry of Foreign Affairs has to play a more active role in Sudan foreign economic relation who requires the drastic restructuring of the ministry.
The services sector has mushroomed during the last thirty years as it is loosely linked in many areas with the informal sector due to the absence of job opportunities in particular among the youth and is most apparent in the telecommunication petty services and street venders. This as mentioned above can only be addressed by the modernization the economy as well as the social life as the two are inter-connected. There is a need to re-invent the value of hard and decent work that benefits both the individual and the country and this are great challenges and need a lot of efforts to address.

Central Bank

One of the issues that all agreed upon both the presenter and the participants was the need for a radical restore of the Central Bank of Sudan but Prof. Mekki pointed to that the independence of the CBOS does not mean it will operate as a separate island from the other economic and financial governance institutions.
The second important issue that was raised in the forum was that the need that the government start the formulation of social contract with the people to insure their essential political and social support for the success of its programs.
At the same time the Prime Minister aim to move from the export of raw materials to manufactured ones to add value to the national exports was tabled in many different forms but in general all agreed on the importance to move in this direction.
Also, the presenter stressed on that this vision is limited only to the transitional period. And advised the transitional officials to have a ticking 1000 days watch to be always on the alert that time is going on.
Social Democracy Failure
Election and polling results for the Centre-left in Europe are becoming increasingly worrying. But at least people are beginning to look more seriously at the reasons for this crisis. For far too long, the Centre-left simply refused to recognize that the world around it is changing.
However, the socio-economic and socio-cultural landscape has been shifting for a long time now. The reason is relatively easy to identify. The unbounded nature of global and European capitalism creates different polarities and different conflicts from those of the old, nation-state capitalism of the 19th and 20th century.
The instruments by which those conflicts were contained ñ limited redistribution within the framework of the welfare state, and democracy on nation-state lines ñ are losing their effectiveness. In many cases, they do not work at all: they have proven largely ineffectual against the new conflicts of cultural identity within multicultural societies. Immigration, global trade and the possibility of European or global relocation of enterprises have drastically shifted the balance of power between capital and labour. The bargaining power to compromise on the distribution of wealth is disappearing.
Instead, in the age of the disappearance of borders, a new fundamental socio-political constellation of capitalism is emerging: a profound conflict of interests between those parts of the population believing it will benefit from these developments and another part believing it will not.
The problem is not with what might be called social ëeveryday liberalismí but with liberalism as an economic, political and cultural ideology of the elites ñ and with its impact on their lives.
The new division into globalizationís winners and losers currently splits the historical electoral base of social democracy right down the middle. And the forces driving this division are massive ñ too big to be controlled by any single party.
The second dimension is strategic. It concerns the future of Europe’s political systems at a fundamental level. The refusal of the established parties to defend the interests of the ëcommunitarianí section of the population leaves a vast number of voters ñ in most countries it is likely to be a 50/50 split ñ either unrepresented or prey to new ëpopulistí movements from the right and the left
If social democracy wants to remain true to its self-perception as ëprotector of ordinary peopleí, then it also has to take their side in the conflicts generated by globalised capitalism.

You May Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *