DESPERATE economic measures are required to mitigate the current economic challenges world countries are going through, veteran politician Vernon Mwaanga has said.
He said the measures that are needed included stemming high unemployment levels especially among the young, arresting the galloping inflation, dealing with high interest rates and Government budget deficits.
Dr Mwaanga said the current global economic and financial meltdown has had a negative impact on the world markets and the citizens across the globe were faced with uncertainties of unprecedented proportions if ways of dealing with the season of economic discontentment were not found.
He told the Daily Nation that the global economic slump was initially blamed on China which had revised its economic growth downwards to seven percent from its projected nine percent while remaining the world’s fastest growing economy.
Dr Mwaanga said after revising its economic growth to seven percent, China took its corrective measures by adjusting its exchange rate of its currency, the Yuan against other convertible currencies such as the US dollar, the Euro and the British Pound apart from cutting interest rates to stimulate its growth.
He explained that it had become clear that the global economic growth had slowed down due to factors such as the unusually low international oil prices which had fallen to below US$40 per barrel because of over-production thereby stripping its demand on the world market.
Dr Mwaanga stated that the prices of metals such as Zambia’s copper fell considerably to US$5000 per ton from US$7000 per ton which had negatively affected many copper-producing countries in Africa and Asia.
He stated that the Sub-Saharan economy was performing better than most continents with an estimated growth of between four and five percent with countries such as Zambia, Mauritius, Mozambique, Botswana, Rwanda and Kenya having recorded stability in their economic growth.
“It is now clear that although the so called slowdown of the Chinese economy…the second largest economy in the world and which is still growing far above any other economy in the Western world, there has been a negative impact on the growth figures on the world market in the United States, Europe and Asia, clearly showing that world economic growth has generally slowed down and that the initial forecasts had to be revised downwards almost everywhere by the International Monetary Fund (IMF),”Dr Mwaanga said.
He warned that difficult times were still expected as production figured in the industrialised world were entering negative territory forcing local currencies nose-diving trading in the unchartered range of K10 to a US dollar.
Dr Mwaanga said other currencies in the region had not been spared from the global economic battering with the South African Rand hitting a record R14 to a United States dollar in as many years.
“When the economies of the developed world begin to sneeze, the smaller economies of the world catch a cold. It is less than certain how the smaller and larger economies will react in the short, medium and long term but what is certain is that desperate measures will be required to stem the high levels of unemployment, especially among the young people, arrest galloping inflation. Better managed economies with constituent and clearly thought out and managed plans will emerge with less damage than those that are poorly managed,” Dr Mwaanga said.