This is by By Chuol Ruey. Kompuok, PhD, in Iowa State.
Utilization of Resources and Development—A Corrupt Driven Approaches in South Sudan
By Chuol R. Kompuok, PhD
Brief background Economy of South Sudan
May 26, 2015(Nyamilepedia)
— South Sudan is a region in sub Sahara Africa that is endowed with
abundant natural resources where 90% of the land is arable and capable
of producing cash crops and staples; the country has immense surface and
underground natural resources where oil is the major provider of the
basic livelihood contributing 98% to the national revenue and non-oil
revenue account for 2%. Unfortunately the country is at a very low state
of development; this is because the area has been a source of minor and
major conflicts coupled with weak institutions. As a result South Sudan
faced human suffering of substantial magnitude.
Infrastructures
constructed during colonial era or after the 1972 Addis Ababa Peace
Agreement were neglected, destroyed and some are beyond repair. The
limited human resources that could have contributed to economic growth
in the region had out-migrated en masse. Agriculture–both large scale
and small-scale individual holding remained at the subsistence level and
the oil dependency curse theory became the reality. Different studies
show that the absolute poverty in South Sudan is estimated at 90% most
of whom are rural dwellers and only about 10% live above the poverty
line of less than a dollar a day and of whom are urban dwellers
controlling state machineries.
In
2005, a Comprehensive Peace Agreement (CPA) between the leadership of
South Sudan and the Central Government was signed. The semi-autonomous
region of Southern Sudan government was established with little or no
functional institutions. Since 2005 the region became a beneficiary of a
large inflow of revenue in terms of hard currency.
The revenue
due to the government included 50% of oil revenue share as well as multi
donor capital inflow. In 2005, oil revenues that were due to the
government of South Sudan were estimated to be 750 million dollars; for
the same period international assistance was estimated to amount to 200
million dollars. By 2006 the total amount of capital inflow was
estimated to be two billion US dollars. In general since 2006 the annual
capital inflow to the region is estimated to be more than two billion
dollars per year. Assuming that total population of South Sudan is 15
million, the per capita revenue inflow to the region is estimated to be
130 US dollars per annum-a substantial amount by African standards.
- Resources and development
A
resource is a source or supply from which benefit is produced.
Typically resources are goods and services that are transformed to
produce benefit and in the process may be consumed or made unavailable.
The concept of resources has been applied in diverse realms, including
with respect to economics, management and human resources, and is linked
to the concept of competition, sustainability, and stewardship.
Resources have three main characteristics: utility, limited
availability, and potential for depletion or consumption. In economics a
resource is defined as a service or other asset used to produce goods
and services that meet human needs and wants. Economics itself has been
defined as the study of how society manages its scarce resources.
Classical economics recognizes three categories of resources, also
referred to as factors of production: land, labor, and capital.
In
view of the above explanation, one would want to shed lights on
development as an economic term. Therefore, economic development is the
sustained, concerted actions of policy makers and community that
promotes the standard of living and economic health of a specific area.
Economic development can also be referred to as quantitative and
qualitative changes in the economy. Such actions can involve multiple
areas including development of human capital, critical infrastructure,
regional/state competitiveness, social inclusion, health, safety,
literacy and other initiatives. Economic development differs from
economic growth. Whereas economic development is a policy intervention
endeavor with aims of economic and social wellbeing of people, economic
growth is a phenomenon of market productivity and rise in GDP.
Consequently, as economist Amartya Sen (1983) points out, “economic
growth is one aspect of the process of economic development.”
The
relationship between resources and development pivots around, which the
present workshop resolves. Focusing on the process of resource creation
and utilization emphasizes the need of equitable development
integrating local needs, resources, people and functions. The resource
exploitation and their utilization are two independent economic
activities influenced by different algorithms and usually manifested in
core-periphery relationship. Resource utilization is the total amount of
resources actually consumed, compared against the amount of resources
planned for a specific process. It is normally measured as a percentage
(%). All the resources are very scarce and states/countries are forced
to plan ahead of execution of project per se.
For
the last ten years or so South Sudan has had enough resources to carry
out developmental project, some of which are now blamed on war and
austerity measures put in place as a result of the oil shutdown in April
2012. However, the SPLM-led government adamantly shelved the policy of
taking the town to the villages as late Dr. John Garang de Mabior
stipulated before his demise as one of the policy agendas. Due attention
was given to the culture of rent seeking behaviors that stand out tall
in the nascent state of South Sudan, a culture that ripped off the
people of South Sudan their rights of having primary healthcare
provisions and education at all levels. It is to be noted here that the
leadership of the SPLM failed the people and the country, and the only
option left was to loot the country forgetting the ideology of
intergenerational equity without any proper discounting factor
considered in their calculation. A glance of South Sudan budget for
seven years is in order.
- South Sudan fiscal year budget 2008-2014
Below
are some figures for South Sudan budget including pre-independence and
post independence period for about seven (7) years from 2008-2014
estimated in billion South Sudanese pounds. Let us be mindful that the
composition of the annual budget is oil and non-oil revenues accounting
for 98% and 2%, respectively.
2008 fiscal year budget 3.5 billion South Sudanese Pounds (SSPs)
2009 fiscal year budget 3.6 billion South Sudanese Pounds (SSPs)
2010 fiscal year budget 4.3 billion South Sudanese Pounds (SSPs)
2011 fiscal year budget 5.5 billion South Sudanese Pounds (SSPs)
2012 fiscal year budget 6.4 billion South Sudanese Pounds (SSPs)
2013 fiscal year budget 17.33 billion South Sudanese Pounds (SSPs)
2014 fiscal year budget 11.279 billion South Sudanese Pounds (SSPs)
The
above fiscal year budget from 2008—2014 amounted to 51.909 billion
South Sudanese Pounds, a substantial amount by any international
standards that could have put South Sudan where western world stands now
and forget about the suffering of its people either because of hunger
or conflict. Many believe South Sudan would have been categorized as
welfare state in the region and beyond. More so, regional/state
disparities in term of resources allocation stand out to be one of the
critical challenges facing the nascent state of South Sudan.
This
is because from the early year of the autonomous region where Southern
region was part of the greater Sudan during the CPA period, less of
about 2% was allocated to the oil producing states in the South, mostly
Unity State and Upper Nile State, but development was far from being
reached. After the birth of the Republic of South Sudan in July 9, 2011,
and as a result of the historic referendum, the figure increased from
2% to 5%, a significant amount of dollars that could have been used to
put in place the state infrastructures as inclusive. But only thing, if
at all, that exist is the pain and suffering of the respective
communities of the states in question was the one granted.
Unfortunately, the two oil producing states, Unity state and Upper Nile
state are the most backward states in term of infrastructures compared
to the non-producing states, but the state authorities used the
resources negatively against the people.
Even though, the current
war ravaged the greater Upper Nile Region, the developmental index shows
that there was nothing in place prior to the war. This in a sense
should not be blamed on President Salva Kiir alone but also on the two
governors who are the Nuer by ethnicity and bored the brand of key
policy actors at the level of two states. Thus, it remains to be the
task of the SPLM-IO to identify the best model of resources allocation
with the fair distribution of national resources from the center to the
Buma level without any discrepancies intended to satisfy the basic needs
of every citizen with the optimal choice of resources use.
- Challenges of resources utilization
Ostensibly,
poor utilization of resources, underdevelopment, and lack of
democratization plunged South Sudan into senseless war that has bearing
consequences on the lives of all South Sudanese. The scarcity of the
resources and inefficient resources utilization coupled with bad
practices in managing the state affairs has negative consequences on
South Sudan economy. Some challenges of resources utilization in South
Sudan are highlighted below:
- Governance
- Weak institutions: institutions at all levels remain weak, under-staffed and under-resourced, resulting in an inability to provide basic social services making the country more susceptible to corruption, a culture that ruin the unique values of all South Sudanese. In reality, what plays in very much is the arts of “technical know—who,” but not “technical know—how”. This alone has created a lot of damage into the economy because of mismatched of the right jobs to the wrong person (s) and those who are qualified for the jobs are not selected based on their qualifications. Thus, marginal value of labor productivity is not equal to the wage paid; in effect people are paid high with the job one not eligible to take up, and those who are qualified for the jobs are paid less or either overqualified. State authorities weaken democratization process at all levels serving as a recipe for more violent transcending under utilization of resources;
- Law and order remain weak: there has been a prevalence of violence with proliferation of small arms and light weapons that exacerbates the impact of disputes. Due to weak maintenance of laws and orders, the police in uniform become the main actors in maiming and killing people in the capital Juba in a broad daylight and the government remains muted without stemming out such practices. The recruitment processes of police force is very complicated one, and this was coupled with nepotism, which also in turn affected the security apparatus of which only the sons and daughters of Very Important Person (s) (VIPs) are selected without proper vetting individual background that would have allowed the members to be selected into the organ. Subsequently, the quality of the new recruits is put to test in away very much compromising the integrity of the regime and nonpartisan of security personnel which was violated; protecting only the regime but not the state. So far, the laying of landmines has affected economic or agricultural productivity and road use, as well as having long-term humanitarian impact deepening the acute food insecurity;
- Political unrest: affect employment, food distributions and standard of living that, in turn, affect utilization of resources. Politics has become the main means of earnings in South Sudan that derailed the culture of academics professionalisms.
Humanitarian
- Loss of life and assets: the conflict has taken tremendous toll on people’s lives causing mortality rate to increase steadily. Atrocities committed during the war, which are still continuing up to now including destruction of property, is profoundly impacted on South Sudan economy and perpetuate the poor use of resources
- Population displacement: approximately on average about 3 million have been internally and externally displaced from South Sudan which caused negative consequences on the fertility and increased the crude death rate for children below age 5 and elderly people above age 65, a pattern that affect productivity across all age groups.
- Food insecurity: the majority of the displaced persons have limited access to land and of those that may have land, many have not been able to till their lands because of insecurity and have been dependent on external food supplies for their survival. The result of food insecurity is high level of chronic and acute malnutrition impacting negatively on use of resources.
Socio-economic
- Poverty: South Sudan remains one of the world’s poorest countries, lagging behind on all socio-economic indicators, ….the resources are very much concentrate in the hand of few powerful elites, who wheel the country to the best of thy interest, an unfortunate circumstances South Sudan gets itself into.
- Disruption of basic social services delivery: the conflict in its totality has resulted in displacement leading to the loss of access to healthcare services and education. An entire generation of South Sudanese children has grown up without adequate formal education, the effect of which is only just being felt in South Sudan. The country is currently at a very confused state of affairs of which curriculum to follow either the Republic of Sudan or East Africa type of curriculum, a situation that led to the arrest of two MPs from Warrap state after voicing out their concerns over the nature of the curriculum the country South Sudan is following.
- Conclusions
South
Sudan economy though rudimentary in nature has attracted multi billion
donor agencies all around the globe and people of goodwill to pour in
the resources for building the nation deprived from civilization for a
very long time by the colonial masters including the neocolonial masters
of the northern regime of Khartoum. The euphoria was high with the hope
that all the resources from the international community, other world
bodies plus the domestic contribution will be put to use for the
intended purpose of uplifting the livelihood of the poor South Sudanese
who suffered most but the SPLM-led government under Gen.
Salva
Kiir Mayardit badly mismanaged the resources, a blame that discriminates
no single leadership from the SPLM party top echelon from the time
Comprehensive Peace Agreement (CPA) was signed in 2005. The SPLM-led
government tried very hard to convince the public that it was Khartoum
that halted the oil proceeds and paralyzed the development efforts in
the Southern Sudan. But they were proven wrong by president Omer Bashir
with the receipt of millions of dollars wired to the Central Bank of
Sudan (CBoS) Juba branch manned by Kornilo Koriom, a village boy hails
from Warrap state after late Elijah Malok Aleng from Jonglei state got
fired for unspecified reasons, a shame that was not reversed until now.
Kornilo
Koriom, the current governor of the Bank of South Sudan has a long
history of corrupt practices in the government of Sudan, which also
repeats itself in Juba after the man had established more than ten forex
bureau and Commercial Banks, whom allocates on weekly basis billion of
dollars, which in turn got their ways out in the parallel markets for
his own gains. The governor is very happy overseeing the economy
stagnating and very much collapsing while earning abnormal profits
through his underground economic activities.
It
is to be noted that development and resources are interrelated and
cannot be treated in isolation. Therefore, the scarce economic resources
require effective utilization to the fullest capacity wasting none in
order for a country to achieve minimum development goals. This is
achieved through the effective use of all the factors of production that
would bring about sound economic development. But, the challenges
facing the nascent state of South Sudan are many, some of which are
heighted. Remedial measures of challenges through democratization and
stem out corruption, fosters the development given the full utilization
of resources with the far-reaching positive implications.
To that
effect, benefits of resource utilization may include increased wealth,
meeting of needs or wants, proper functioning of a system, or enhanced
living standards of people. Therefore, reviewing the persistent problems
of economic development in perspective of exploitation of natural
resources, with the objective to provide some clues for occurrence and
persistence of regional/state disparities, and for suggesting a
development model synchronize both the resource management and
environmental protection to create a sense of order.
- References
GRSS, South Sudan Development Plan 2011-2013, Juba, August 2011
Mankiw, N.G. (2008), Principles of Economics, 5th ed. South-Western College Publishing,
Boston, MA, ISBN 1-111-39911-5
McConnell, C.R., S.L. Bruce, and S.M Flynn (2011), Economic: principles, problems, and
policies, 19th ed. McGraw-Hill/Irwin, New York, NY. ISBN 0-07-351144-7
Sen, A. (1983), Development: Which Way Now? Economic Journal, Vol, 93 issue 372, pp 745-
762
Samuelson, P.A. and W.D. Nordhaus. (2004) . Economics, 18th ed. McGraw-Hill/Irwin, Boston,
Ricklefs, R.E. (2005). The Economy of Nature (6th ed.). New York, NY: WH Freeman.ISBN 0-7167-8697-4.
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