Sudan PM announces ‘strict austerity’ in emergency economic reforms

Sudan’s Prime Minister Moataz Moussa announced to parliament on Wednesday a 15-month emergency economic-reform plan, including “further strict austerity measures,” to begin this month. (AFP)
Updated 25 October 2018
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Sudan PM announces ‘strict austerity’ in emergency economic reforms

  • The plan aims to “reduce the average inflation, stabilize the exchange rate of the pound, achieve a GDP growth of 4 percent
  • Sudan’s economy has been struggling since the south seceded in 2011

KHARTOUM: Sudan’s Prime Minister Moataz Moussa announced to parliament on Wednesday a 15-month emergency economic-reform plan, including “further strict austerity measures,” to begin this month.
Sudan’s economy has been struggling since the south seceded in 2011, taking with it three-quarters of oil output and depriving Khartoum of a crucial source of foreign currency.
The plan aims to “reduce the average inflation, stabilize the exchange rate of the pound, achieve a GDP growth of 4 percent and to fix the liquidity crises,” Moussa said.
The measures include slashing all tax exemptions except for materials needed for production, withdrawing some vehicles provided to officials, no longer paying for meals served in government meetings and banning use of imported furniture in government offices, Moussa said.
Moussa also mentioned plans to establish a commodity exchange for gold and currencies.
The economy has been starved of hard currency since South Sudan seceded in 2011, taking the lion’s share of oil, once a major export. Though gold mining has since boomed, officials acknowledge that most of the precious metal is smuggled out of the country.
At more than 60 percent, Sudan’s inflation rate is among the world’s highest. Its currency now buys fewer than half as many dollars on the black market — which has effectively replaced the formal banking system — as it did a year ago.
In September, 11 months after the United States lifted 20-year-old trade sanctions, Bashir dissolved his government, citing Sudan’s “state of distress and frustration,” and slashed a third of ministries to cut costs.
The end of the embargo has so far failed to provide a hoped- for boost to foreign investment, which economists have linked to Washington’s continued designation of Sudan as a state sponsor of terrorism.
“One of our biggest challenges that the 2019 budget is facing, is having Sudan on the list of state sponsors of terrorism,” Moussa said.


India names Modi demonetization backer as cenbank head

Visitors are seen standing next to a logo of the Reserve Bank of India (RBI) at the bank's head office in Mumbai on December 5, 2018. (AFP)
Updated 12 December 2018
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India names Modi demonetization backer as cenbank head

  • Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization

MUMBAI: Ex-finance ministry official Shaktikanta Das took charge of the Reserve Bank of India on Tuesday, in a swift appointment expected to ease a dispute with the government as it pushes for looser credit rules ahead of a general election.
The announcement by Prime Minister Narendra Modi’s administration came just a day after Urjit Patel resigned from the post, following months of clashes between the two institutions over lending curbs and how to deploy the central bank’s surplus reserves.
Pressure on the RBI to take immediate steps to boost the economy, including a transfer of the excess reserves to the government, could well rise after Modi’s ruling Bharatiya Janata Party (BJP) suffered likely election losses in three key states on Tuesday.
Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization — will serve a three-year term as governor, effective immediately.
RBI watchers said they expected the 61-year-old, who retired last year as secretary of the department of economic affairs having previously served on the RBI’s board, to put relations between the Mumbai-based bank and the finance ministry in New Delhi on a stabler footing.
Investors will also look closely at his ability to hold up against outside influences after recent efforts by the Modi government to gain greater control over the central bank’s regulatory powers.
“The incoming governor will have to work hard to prove that he has his own independent mind,” said Deepak Jasani, head of retail research at Hdfc Securities.
Investors said any openly political appointee with little macro-economic experience, would not sit well with financial markets that already sold off following the BJP’s election setbacks.
But Ashish Vaidya, executive director and head of trading at DBS Bank in Mumbai, said he expected India’s debt and currency markets to react positively.
“He is a bureaucrat...We expect the RBI to take a pragmatic approach under him, be pro-growth and change its stance going ahead given that inflation has come off sharply,” he said.
Finance Minister Arun Jaitley told Reuters partner ANI that the government acknowledged the bank’s independence.
“Government will fully support the RBI and coordinate with it in areas where consultations of government are required to make sure India’s economy benefits from both government policy decisions and areas which fall within domain of the RBI,” ANI tweeted, quoting Jaitley.

SWIFT APPOINTMENT
Pronab Sen, India’s former chief statistician, said he was surprised by the speed of Das’s appointment.
“If you have a situation where a position as important as the governor of the RBI is filled within 24 hours of the resignation of the incumbent, that will raise eyebrows,” Sen told Reuters.
“People are going to say, clearly this guy had already been identified. And, the situation was created where Urjit Patel had to quit.”
Das — widely seen as a contender for the top RBI job after Raghuram Rajan’s term ended in 2016 — did not answer calls from Reuters to his mobile phone.
RBI officials who have worked with him closely said Das was likely to be more inclusive in the decision-making process than Patel.
“He has a balanced approach and is good at consensus building,” said a former deputy governor. .”..We have had our fair share of differences. But he has always been solution-centric rather than festering on those differences.”
Das worked in the finance ministry under both Modi’s government and the previous coalition led by the main opposition Congress party and was also involved in drafting the Insolvency and Bankruptcy code aimed at protecting small investors.
He came under fire for his pro-demonetization stance and was the most vocal bureaucrat at the time Modi withdrew the high-value bank notes to fight tax evasion.
Das last year criticized the methodology of global rating agencies and sought a sovereign rating upgrade for India.