South Sudan’s economy is being decided by a few “rich people” who control the exchange rate.
South Sudan will continue to face high exchange rates and volatile market pricing if the volatility caused by the free market economy is not addressed.
Prof. Abraham Matoc, a renowned economist, believes that if left unchecked, the free market would continue to destroy the accomplishments achieved to address currency devaluation and stabilize market pricing.
He said that the economy is being decided by a few “rich people” who control the exchange rate.
Prof. Matok explained in an exclusive interview documented by one of the national dailies seen by NCMP that the market volatility that causes exchange rate volatility is often produced by a few affluent people attracted by huge profits.
“Speculators (dollar traders) have no compassion.” High earnings are what they need. They are unconcerned about the rest of the public – commodity prices. “They will adjust the exchange rate as they see fit,” he stated.
“Sometimes, if they are not monitored, these individuals may possibly push the nation into a catastrophe,” he warned.
According to the economist, speculators may include merchants and government officials who enter the market for profit.
“They may include certain government personnel who are profiteers at whatever cost and are unconcerned about government policy.” “They might be businesspeople or anybody,” he said.
He urged the government to transition from a free market economy to a developmental economy in order to stabilize the market’s exchange rate and commodity prices.
“My opinion is that unless we pursue a developing economic system, our economy will never be stable,” he said.
“Any nation that wishes to expand its economy must begin with a developmental economic system, and then, after it has matured, it will begin with competition,” he said.
He emphasized the need of abandoning the free market model, claiming that it strangles the youthful economy.
“The currency exchange rate in a growing economic system is regulated and may be set and managed so that it does not become harsh,” he said.
“It needs to be managed so that the public survives, not just the few who are wealthy and create problems in the market; there may be market stabilisation or a regulatory structure that controls pricing.”
However, according to Matoc, South Sudan is still too young to practice capitalism in which competition is permitted since the affluent always have the upper hand in controlling the market rather than the government.
“Because we are an independent nation and are not productive, we import everything, even food,” he said.
He highlighted that most emerging countries begin with a developmental economy and then transition to a capitalist economy once they are established.
“The developmental economic system is beneficial to South Sudan; China began as a development system.” Capitalists may classify China as a dictatorship economy, which is not correct. It has arrived on the market, and they now dominate the global market.”
By last week, the SSP was trading for an average of SSP620 per dollar.
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