Author, Chang Gem
Economic collapse is any of a broad range of bad economic conditions, ranging from severe, prolonged depression with high bankruptcy rates and high unemployment (such as the Great Depression of the 1930s), to a breakdown in normal commerce caused by hyperinflation (such as in Weimar Germany in the 1920s), or even an economically caused sharp rise in the death rate and perhaps even a decline in population (such as in countries of the former USSR in the 1990s).
Often economic collapse is accompanied by social chaos, civil unrest and a breakdown of law and order. Hyperinflation, wars, and revolutions cause hoarding of essentials and disruption of markets.
South Sudan’s economy, culture and way of life are tanking. Why? The leadership in Juba does not understand some fundamental and critical principles.
The misunderstood critical points are the scale of the Countrywide illicit economy and understanding of how issues such as government theft, absent of peace and security, terrorizing activities, money laundering and the shadow financial system contribute to some of the most intractable issues ranging from poverty to hunger, terrorism and even economic crises.
I see the root cause of South Sudanese national problems as a failure of leaders to define and employ effective systems of government. Self-interest, unprincipled ideologies, and political maneuverings have replaced constitutionally based and common-sense solutions. How can so many smart people be so dumb? South Sudanese need good government systems to replace bureaucracy, tribalism and incompetency.
Nowadays as the National Bank of South Sudan is running empty without a hard currency reserve, the economy continues to decline solely because the money and economic system are not properly understood and structured.
If the Country had a proper system and a correct understanding of the relationship between money and physical wealth, the economy would immediately begin to improve. Physically, the country is not capable of improving the economy right now.
Every problem in the South Sudan economy can be traced to a system that is operating contrary to the laws, principles, or best practices that govern economic outcomes. The people running the country do not seem to understand Cause and Effect! For example, The Economic Crisis Management Committee which has been formed by the President to look into the economic status of the country, what are they going to do?
Most of them lack technical skills in macroeconomics let alone being served (previous experience) in any economic institution in South Sudan or elsewhere. The South Sudan economic condition at this time only needs economics experts who can do the research, so ”cause and effect” are understood first before jumping into a solution.
This shows that government leaders think they can fix the economic crisis by cheating, by simply forming a committee and requesting a loan from International Monetary Institutions. They think they can add government jobs (what you and I call overhead) to make up for the loss of private-sector jobs that produce real wealth. They think the best way to get out of debt is to run up more debt at an accelerated pace. They don’t seem to learn from ineffective government and economic systems in the world today nor from their own country’s tried and failed systems of the past.
Sometimes Economists like to pretend that the economy is like the weather, sometimes good and sometimes bad. There are bad spots we just have to endure. Why? There is no physical reason. South Sudan’s ability to work and produce has not changed at all. The dishonest monetary system causes economic instability resulting in cycles of a bust.
The simple solution to the problems caused by the dishonest money system is an honest money system and monetary policy developed by Economic Experts.
South Sudan has more economists and subsidiary financial experts who can help fix the economic crisis of the country but the government is not willing to involve them. Being tactically aware of solving economic crises, experts are the right people to detect why, not political post-holders-Ministers, Director Generals………
(a). Involve economic experts to carry out research and handover the report to the National Economic Crisis Committee. Their reports would:
- Define the problems and the desired outcome.
- Apply laws, principles and best practices to create effective systems and processes.
- Measure the results of the systems against desired outcomes.
- Get rid of systems that do not produce expected results.
- Refine and improve the effective systems to continually reduce waste and increase performance.
(b). Consider Implementing Peace Agreement
This will directly contribute to economic fixes.
(c). Consider reducing corruption.
(d). Consider maximizing Growth on Domestic Products (GDP).
Coming across this, your economic system will automatically improve