BY: Garang Atem Ayiik, SOUTH SUDAN, SEP/19/2014, SSN;
This week, Ministry for Labor issued a Ministerial Order that ordered all companies, and NGOs to terminate all foreign nationals working in South Sudan by mid-October 2014.
The same circular went further to mention some specific positions to be advertised and filled with nationals with the assistance of the Ministry. Specifying the roles to be South Sudanized, adds further confusion ‘to all’ mention in the circular.
This circular is already making head-line. Kenya Citizen TV reported Kenya Amb. To South Sudan having said that all African ambassadors in South Sudan are considering approaching South Sudan Ministry of Foreign Affairs to discussed this issue.
As usual, though this is a good policy intended to helps localized opportunities to South Sudanese, it seems the Government of South Sudan has done this out of emotions with little due process, without due diligence to diplomatic implications, and operationalization considerations.
This article aims to discuss the impact of this circular from an economic policy perspective, suggest possible implications and policy options.
2. What does the circular mean?
South Sudan through Ministry of Interior, ordered foreigners nationals driving motor cycles in South Sudan early this year. There was rapid and immediate uproar from Uganda. This got the attention of Ugandans Parliamentarians, with some members looking at South Sudan as attacking her economic interest.
Some members of Uganda Parliament asked the Government of Uganda to pays South Sudan with the same coin. However, these calls died down after it received low reception from the executive.
Though the motors cycle boys’ case was a tangential issue, this circular touch on economic hearts of Kenya, Uganda, Ethiopian, Eritrea, Africa and the World at large.
In a world runs on principle of self interest, will these nations allow South Sudan to edge them off the economic cake and did South Sudan anticipate these nations reaction and her respond?
This is viewed from the background that these nations contributed to significantly to well-being of South Sudan and to some extent; these nations consider themselves as stakeholders in South Sudan.
As an economic student, from theoretical perspective, I surely agreed with the need to put monies in the pockets of South Sudanese. These has multiples merit, first, incomes for the local will be re-invest in South Sudan and hence encourage local economic growth;
Secondly, reduced repatriation of salaries will reduce pressure on South Sudan Pound; and thirdly, improves standard of living for South Sudanese through employment creation.
With all the due advantages, the circular was a wild miscalculation. In late 2013, the Government through Central Bank issued order to devalue South Sudan pound from 3.16SSP to 4.5SSP.
Though at that time, I supported devaluation, I knew the way the devaluation was framed, it was not going withstand test of public pressure. There was no economic helmet to short term economic stones.
Again, the government is at it – a good intention but a wrong thought process and approach. Already Kenya media is leading hype with report of its 30,000 nationals being targeted for termination.
If it is true what Citizen TV reported its evening news of 16 Sep 2014 that Africa ambassadors in South Sudan are planning to see South Sudan Foreign Affairs Ministry on this, it is likely that South Sudan does not have economic and diplomatic muscles to withstand such pressure.
It is possible like the devaluation directive with all the due advantages, this circular will at some point be rescinded. In 2012, as graduate student at University of Nairobi, I overheard two Kenyans saying ‘tumewaletea peace, na wajinga are killing our people’. Translated to ‘though we bring them peace, stupid South Sudanese are killing our people’.
This was at period of hype reporting in Kenya whenever dead body was brought from South Sudan. The media reported another body from South Sudan. This reporting disregarded the realities of South Sudan.
This circular creates the following impact: one, it will create an opportunity for hype reporting in Kenya, Uganda and other nations about how thankless South Sudan is;
Second, it will creates a diplomatic war that South Sudan has no capacity to win, and mostly at such times when she is very vulnerable due to internal challenges.
Thirdly, it paints South Sudan business environment as gloomy and unfriendly. Such directives are done through regulatory frame-work and not through attention-calling approach.
In all economic jurisprudence, no government can participate in directing investors on who run their business, government give guidance and follow up compliance.
Already there are reports that South Sudanese are some of most reliable workers in the world. With this in the air, what will convince investors to invest in South Sudan when they are compulsory provided an option of employing from unreliable labor in the world! This circulate pollutes South Sudan business environment.
This circular point to serious policy contradictions within government establishments. At some point, the government is a number one pro-East Africa Community whose key principles included liberalization.
This circular is a total departure from this understanding. Though it is author’s believes that this circular will never be implemented in spirit and letter, it will cause diplomatic and economic damage.
3. Conclusions and Recommendations
At such times, the government does not need to piss off her allies and investors. In economic policy, it is about incentives, understanding the respond of the economic agents involved and prepare for perceived reactions. South Sudan should know better.
Can government tries fiscal policy – say a firm that employ 80% of South Sudanese work force, get tax preferential treatment! There are ranges of policy options to choose from;
It was not necessary to create unnecessary diplomatic and economic war. The government needs to coordinate and analyze her decisions. Was it really necessary to ask for namely calling from the region?
Already there are quotas in some sectors to be employed as South Sudanese. The government should make NGOs and private sector to comply with this for now instead for asking for lofty dreams;
Decisions such as devaluation, or directive to pay local staffs working with NGOs that cannot withstand test of time and realities should be avoided. These decisions portray lack of understanding, and appreciation of local and geo-economic realities;
The government has soft and friendly ways of implementing this directive in non-attention calling fashion. Doing audits to sustain compliance with employment quotas, and do human resource audit in South Sudan and thereafter, regulate entrance through work permits and entry visa. The government can use sectors’ regulators to ensure compliance.
The government has an option of refusing to issue permits and visas base on judgment of cadres that she needs to import.
After all, it is a legal non-sense to ask an employer to terminate an employee with a valid work permit and entry visa to South Sudan;
Economic decisions need to be institutionalized. Economic policy requires systematic analysis likely insufficient on an individual capacity.
It is better to subject policies to independent policy test through think tanks and expert advisers. Otherwise, South Sudan might continue to make short-sighted harmful economic policies.
Garang Atem Ayiik is an independent South Sudan Economic Policy Commentator base in South Sudan. He can be reached email@example.com