JUBA/GENEVA — While some South Sudanese experts recommend the government adopt a new economic system used by developing states to cut off black market currency exchange and stabilize skyrocketing prices, a new U.N. panel report says the real problem in South Sudan is deeply entrenched government corruption.
 
South Sudan should switch to a developmental state economic system under which the government could control prices, the black-market foreign exchange rate, and the flow of currency in and out of the country, according to Abraham Matoch, economics professor and vice chancellor at the Doctor John Garang Memorial University of Science and Technology in Bor.
 
“There’s no rule in a new country wishing to reconstruct, rehabilitate, and reconstruct to move immediately into a free market economic level which is more or less a catalyst, and therefore, I encourage having a developmental state economic system because we cannot apply a capitalist economic system in a developing country,” Matoch told South Sudan in Focus.
 
The developmental state economic system embodies strong state intervention, as well as extensive regulation and planning.
 
In South Sudan, speculators are able to manipulate foreign exchange rates to their advantage, said Matoch.
 
“If the commercial banks or the forex [bureaus] go and abuse the exchange rate to keep the bulk of the money or dollars with them for black marketing, this will affect the economy. And this is exactly what has actually happened,” Matoch told South Sudan in Focus.FILE – Children play with hula hoops at the Children Friendly Space, run by UNICEF at the United Nations Missions in South Sudan (UNMISS) Protection of Civillians (PoC) site, in Juba, South Sudan, Jan. 15, 2016.A new report by the U.N. Commission on Human Rights in South Sudan blasts South Sudanese officials and their cronies, however, for destroying the nation’s economy, saying the country is mired in crooked schemes aimed at enriching the political elite at the expense of millions of impoverished people who have endured years of conflict and abuse.
 
Looting and pillaging are not just offshoots of war, they are the main drivers of the conflict, according to commission chair Yasmin Sooka.
 
“At one end of the spectrum, South Sudan’s political elites are fighting for control of the country’s oil and mineral resources, in the process stealing their people’s future. At the other, the soldiers in this conflict over resources are offered the chance to abduct and rape women in lieu of their salaries,” said Sooka.   
 
She said the commission has uncovered brazen embezzlement by senior politicians and other government representatives, adding that they have misappropriated a staggering $36 million since 2016. Sooka noted a number of international corporations and multinational banks have aided and abetted in these crimes.  
 
University of Juba economics lecturer Ahmed Morjan agreed that South Sudan’s problems are political, not economic.
 
“An economy that produces goods and services needs to have proper peace and security whereby people will begin to produce import substitution goods and will lessen dependents on imports. If this is done, we expect the country to have enough reserves from the oil money that comes in, the reserves of foreign currency, but this has never happened, and people are not able to produce either for themselves or surpluses for export,” Morjan told South Sudan in Focus.  
 
He said the new finance minister, Athian Diing Athian, and the administration must find a way to end rampant government corruption.
 
“If they can work to lessen corruption, there should be some improvement internally, especially now that the government sometimes is not able to pay its workers, wages and salaries of employees. What the new minister could do is to fight, reduce corruption,” Morjan told VOA. 
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