Growth and Development Strategies Aimed at Increasing Trade
Export Promotion is Sudan was believed to be achieved by means of policy packages designed to provide the incentives seen to be crucial in promoting the production of exports. The policy instruments of the ECRP and NESP comprised exchange rate reform, trade liberalisation measures (especially the removal of export taxes), elimination of costs and price distortions, a re-orientation of production on the irrigated areas towards Sudan's most competitive crops and reform of the production relations in the state-managed agricultural schemes.
Some structural and institutional reforms also appear to be extremely important if devaluation and other price policies are to be effective. As long as some significant constraints and distortions in the economy continue, the elimination of others will not necessarily result in a gain in efficiency. Although the removal of the remaining distortions may be difficult, their elimination would be crucial to the success of any export promotion programme.
Applying marker economy and trade liberalization policies will not help, more feasibly it will worsen food security and employment rates. The declining trend in international trade taxes resulting from trade liberalization typically would have a serious negative impact on the government budget in general, and on expenditure on education, health and transfers to the poorer segments of the society. This is likely to contribute to the aggravation of absolute poverty.
The experience of trade liberalization in African countries underscores the need for proper tax policy responses and macroeconomic stability to contain the negative fiscal effects of trade liberalization. When the market structure of agricultural exports is oligopolistic, as in most African countries, trade monopolies, not the producers are the main beneficiaries of any increase in the price of exports resulting from trade liberalization.
The Role of the WTO
The World Trade Organization (WTO) represents the international forum for establishing and policing the rules of the game for international trade. As a result of the ‘Single Undertaking’, obtaining membership requires signing all the WTO agreements that cover trade in goods, both agricultural and non-agricultural, and services, such as banking, transport, tourism and telecommunications. It also includes an agreement on trade-related intellectual property rights that will be of interest for South Sudan. Recent experience suggests that it can take up to 10 years to complete the accession process from the point of obtaining observer status.
Accession to the WTO will result in a variety of benefits for South Sudan. Most countries in the world are members of the WTO and trade between members makes up 95% of world trade in total. However, it will open doors beyond the WTO itself. Therefore, following to their accession to the East African Community in April 2016, applying for WTO membership is a logical next step in South Sudan’s process of engaging with the international community. By acceding to the WTO, South Sudan can benefit from most favoured nation treatment; it will signal its commitment to applying pro-growth policies, which may have positive effects on the growth of national income; it can facilitate South Sudan’s development of trade policy through the adoption of internationally accepted best practices;and it will provide a forum where South Sudan can settle its trade disputes with other countries. Overall, South Sudan will become more visible on the international stage and its policy makers will be able to actively engage and therefore both learn and contribute to international trade policy
Bilateral and Regional Preferential Trade Agreements
Sudan maintains diplomatic relations with Arab and African states. It has bilateral conventions and agreements in economic, trade, cultural and security areas. Sudan has very much benefited from its Arab and African ties. They have together confronted many challenges and played indispensable role internationally in defense of Sudan.
Sudan did not settle for typical relations oriented towards the West, but instead opened its doors to the entire world. It fostered close and solid ties based on common interests with China, Korea, Russia, India, Malaysia, Indonesia and other Asian nations and benefited much from these relations. This is precisely why Sudan has been able to withstand the age-old aggression of and attempts at isolation by the West.
While positive, Sudan’s growth was rather volatile and its rate of expansion below the average for SSA, despite the positive effects of the oil economy. The variability of GDP growth in Sudan during the past decade (caused by the advent of oil and the secession of South Sudan) was quite high and is the highest compared to a selection of comparator economies and SSA. Despite the extensive exploitation of natural resources, the average GDP growth rate during the past decade was in the lower half of its comparator countries. The level of GDP per capita in Sudan is also lower than the average for SSA, urging the need for economic restructuring and diversifying production structure and increase in productivity.
Fiscal decentralization and devolution of basic service delivery Sudan has undertaken political decentralization reforms since the early 1990s with the aim to transition the responsibility for basic service delivery to the subnational, state level. Sudan’s government administration has three tiers: federal, state, and local, with elected legislatures at each level and elected state governors. At the sub-national level there are now 18 states each with several localities. Sudan’s decentralization is governed by a plethora of laws and agreements.