CPP offers alternate approach to development
The Convenition People’s Party (CPP) has pointed out that the 2015 budget of the National Democratic Congress (NDC) government sacrifices the people for hopeless ends.
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The government budget levied higher taxes, evaded responsibility to create jobs while freezing wages. In the same breath, the government cut its expenditure on social interventions and subsidies to raise the cost of living to impose hardships on the people
The government argued that these deficit reduction and austerity measures were necessary to control inflation, firm the exchange rate and deliver a Gross Domestic Product (GDP) growth of 3.9 per cent.
Projected growth
The government, however, did not indicate how and where in the real economy the growth would be generated and the impact and effect of the projected growth on the standard and quality of life of the people.
The failure of the policy of stabilisation and fiscal austerity for a 'take-off'' is, however, well known in our economic development history. From the budget and economic development policy statement of the NDC in 1983, to that of the NPP in 2008, the take-off has been a mirage. The use of same structural adjustment template by Seth Terkper will deliver the same results of increasing poverty and unemployment.
The policy failure is obviously due to the fact that the policy measures do not address the causes of the deficits that lead to inflation and currency depreciation. Further, the restriction of government economic development management responsibility to monetary intervention has been sterile and unproductive.
Government business
This restriction is justified by the governments of the NDC and NPP with their mantra that. “It is not the business of government to do business” (sic) and that the development management responsibility of the government is to “create an enabling environment” by deficit reduction or quixotic fighting of the windmills of inflation.
The development achievement of the CPP government of the first republic teaches the relevance and effectiveness of its development policy guideline of decolonisation. The policy guideline is informed by our history of colonialism for the reform and reconstruction of the colonial peasant agricultural economy.
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The success of the CPP government of the first republic in the transformation of the agricultural economy was the interventions in the productive sectors to promote the strategic investments for economic reconstruction.
This development approach advised the investments of the Tarkwa Gold Refinery, the Cocoa Processing Company and the Tema Food Complex as value addition to the primary production of the mining, agricultural export commodity and domestic food production sectors respectively. The impact of these investments on export earnings, employment creation, international trade balance, sustainable exchange rate and a stable economy is real and obvious.
Raw materials
The colonialist tied our installed manufacturing capacity to the processing of imported agricultural raw materials. The breweries produced beer from imported hops and malt and the flour mills used imported wheat to produce flour.
Besides they did not install in the colonised economy a manufacturing facility for the processing of locally produced agricultural raw materials and committed our agriculture to peasant production of a single export crop at the expense of domestic food production. The construct was an import-dependent mono-cultural raw material exporting economy dominated by peasant production.
Imports and exports
Our poverty was designed and defined by the arrangement that enabled them to dictate the prices of both our imports and exports with the objective that we pay more for our imports than we receive from our exports. The colonialist made no investment in value addition to primary export production to increase our export earnings because our trade deficit was their trade surplus. This established the process and mechanism for our impoverishment by an outflow of the surplus value from the domestic economy.
The capacity and capability of the economy to save and build capital under this international trade relation was eroded. In sum, the structure of the colonial economy and international trade relation caused trade deficits, deprivation and poverty. The sustainable development solution, therefore, cannot and will not be an International Monetory Fund (IMF) bailout and austerity measures but a reconstruction of the colonial economy.
CPP alternative
The development policy alternative of the CPP, therefore, shall be the pursuit of economic stability by investments that integrate the agricultural and manufacturing sectors for a reform of the economy to deal with the sources of trade deficits, inflation, currency depreciation and unemployment.
The party will, in this regard, facilitate the partnership of the cooperative sector in primary food and raw material agricultural production and the corporate private sector in manufacturing. The cooperative sector is identified for the partnership to displace subsistence peasant production and increase formal sector participation in the economy.
With support from the government of the CPP, the partnership will produce, for example, sugar for the Coca-Cola Company and Fan Milk Ltd and ethanol for Kasapreko and GIHOC Distillery. The savings on import expenditure to reduce our trade deficit while we create jobs will be in excess of $500 million.
Breweries and local cereals
The breweries under the development policy guidelines of the CPP will produce beer from suitable local cereals to save the import expenditure of more than $500 million on hops, malt and barley. The flour mills may be retooled if necessary to produce flour from local cereals. A percentage of the foreign exchange expenditure of about $400 million for wheat imports will be redirected to our cooperative farmers in the production of wheat substitutes. Bast fibre farmers will be assisted to produce the raw material and conserve the expenditure of more than $600 million for the importation of finished jute sacks. Their production will feed the Kumasi Jute Factory that will be restored by an elected CPP government.