Economists' recipe for curbing inflation, Mr. Minister of Finance, can you hear me?! – The Other_Dimension – ✍️ Musab Brier
» Shortly after the publication of an article #TheAutre_Dimension entitled “Do we really have a strategy for managing the war economy, and why don't prices fall with a drop in the exchange rate…?! I followed with amazement the great transformation that took place within the group “Sudanese Economy: Reality and Future”, which includes the best Sudanese economic experts, where a system of forums was created to discuss issues and challenges of the Sudanese economy through specific axes. and with an extremely wonderful and scientific orientation.
“My personal relationship with economics is linked to the specialization in health economics, one of the important pillars of the specialization in public health and environmental health. I was one of the lucky few to earn an advanced degree in this field. my subsequent contributions to research into the economic feasibility of the Malaria-Free Khartoum Project and a number of health and environmental projects.
» I followed with great interest the professional and intellectual debates held by the evacuated economists until the fourth and final forum, entitled “Inflation and the exchange rate”. I have traveled and sought to help simplify and disseminate the results of these valuable forums. on the complex economy of Sudan, where our evacuated academics concluded that the definition The academic definition of inflation is “a continuous increase in the prices of goods, and they agreed that this definition may need to be added”, as they agreed that it can be defined as “a notable and continuous increase in the general price level (i.e. a means of measuring the general price level), and this increase is accompanied by a decrease in the power purchase…”
» The forum identified three sources of inflation: “supply (production) and demand (consumption), to which is added what is called (imported inflation), which results from the importation of goods in coming from an economy suffering from inflation. defined as It arises from the demand for imports, which in turn depends on the supply of foreign currencies, and this supply is ensured by exports, workers' remittances abroad, investment flows and the loans.
» Inflation affects all aspects of the economy, and it has a relationship with the increase in the money supply and a fundamental relationship with the collapse in the price of the local currency relative to foreign currencies… and a relationship with production, productivity and the abundance of goods… and a relationship with human behavior and the weakness of its patriotism and the widespread unemployment in society and its ability to trade foreign currencies…
» Experts point out that there is no overall agreement on the term inflation among economists. Inflation is a natural product of the capitalist economy, and its discordant phenomena constitute the state of inflation. one of the types of inflation (Credit inflation)… and the exchange rate is strongly influenced by inflation rates..
» Scientists from the Chicago School of Economics consider inflation as a monetary phenomenon related to the increase in demand for money, resulting from the expansion of its use, and consider taxes to be the most important cause of the increased inflation, particularly indirect taxes, all traders add. the taxes and fees they pay, and other expenses, on the price of the product, which increases inflation…and the increase in demand has many reasons, including: “an increase in the number of consumers, internal migration, arrivals, an increase in the money supply, change in consumption patterns and increase in public spending.
» Experts agree that the increase in inflation in Sudan, which is linked to the increase in the exchange rate, has two reasons: “traders and citizens”… Traders import goods goods in hard currencies, so they raise the prices of goods to maintain the value of their money in the goods they own. Citizens, in turn, shift their savings to hard currencies to maintain their savings, leading to an increase in the exchange rate. Therefore, the change in the exchange rate has become one. direct and major influences on market movement. Therefore, the government strives to stabilize the exchange rate by all means. Due to the importance of the effect of inflation, the inflation rate is considered an indicator of the performance of the economy in each country. situation of the country, in addition to the exchange rate against the dollar and the growth rate.
» (Demand inflation) is caused by the expansion of the money supply resulting from an increase in demand for goods and services, without being accompanied by an increase in production, and another reason is the increase in public spending, with a deficit in revenue. , which leads to the financing of the deficit through the issuance of new money, given that government demand is the largest component of aggregate demand. As for (supply inflation), its main cause is costs, and its most important component is the increase in wages. to increase the general price level, and also leads to an increase in demand. Bank credit affects inflation on both sides of supply and demand.
» In a peer-reviewed scientific study, presented by researcher and associate professor at Sudan University of Science and Technology, Dr. Qasim Al-Faki Ali, titled: “The causes of inflation in Sudan.. . for the period from 2012 to 2021”, the researcher explained in his article that inflation is an artificial and not spontaneous phenomenon, and that it results from the weakness and shortcomings of the country. government performance in a number of areas, the best of which is: “Weakness The land transport sector, although it represents 40% of costs, and the policies linked to it have encouraged migration from the countryside to the cities . Low local production capacities.. Weak economic planning.. Speculation, monopolies and intermediaries (official and unofficial)… And the sharp increases in taxes, duties and customs, and the increase in the money supply… continue to adopt measures economic. liberalization.. the existence of a time lag between decision-making and their implementation, which leaves room for rumors and false news..
» The forum concluded that there are policies to reduce the inflation rate, which are: (open market policy… monetary policy… fiscal policy… direct control) … “fiscal policy” is entrusted to the Ministry of Finance by managing and determining resources and their sources, and thus influencing the volume of liquidity… increase taxes, reduce public expenditure… As for ” monetary policy”, it is the responsibility of the central bank, and it uses quantitative measures. tools such as increasing legal reserve rates, selling securities, increasing the discount rate… and qualitative tools are also used such as ordering banks to reduce their liquidity through credit… and finally use interest rates to influence sources of financing…
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In summary, Sudan is considered a unique economic fabric, Mr. Minister of Finance (no country equals it), in many economic phenomena, including inflation, which requires analysis and reflection on Sudanese solutions. In this context, the researcher and economic expert, Dr. Muhammad Abdel Qadir Sabeel, for having observed a type of inflation that only exists in Sudan, suggested several names, among which I chose “rampant inflation “. There is a category that plays a very important role in this inflation, it is the category. of intermediaries and brokers, which reflects the phenomenon of monopoly. This abnormal phenomenon must be fought, and the exchange rate must be controlled because it has become the greatest influence on people's livelihood and the movement of the economy. There are many measures that can be followed to combat inflation and its problems, including: “control and rationalize public financing by banks…The Central Bank…Control the expansion of borrowing from the banking system to cover the deficit budgetary… » Stop indirect financing of the government through differences in the purchase and sale of gold… Increase the index of the cost of bank financing to the level equivalent to the general inflation rate… Reduce the deficit budget and cover it within safe limits. of government bonds.. Activation of the market opening mechanism.. Prevent saving of public funds.. End the exceptions issued by the Ministry of Finance to the Treasury Single Account.. Encourage banks to attract savings of citizens.. Issue gold coins of the highest denominations.. Will you please listen? A little advice from these scholars, Mr. Minister, I strongly advise you to join and order the leaders of the Ministry of Finance to join the Sudanese Economy Group “Reality and Future Prospects”.. Oh My God, I held out my hand… so bear witness.
I didn't get it without God revealing it
God is enough and yes, the agent
O God, do not impose on us, because of our sins, those who do not fear you for us and do not have pity on us, O Most Merciful of the merciful.
#TheOther_Dimension | Brier Musaab |
Together (June 22, 2024 AD)
