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Balancing global competition
Last year Standard & Poor’s gave Ghana its first credit rating. Have you been able to tell whether the rating has had an impact on Ghana’s economy so far, and looking at the long term, what effect do you believe it will have?
It is a statement of fact that Standard and Poor’s, the prestigious credit ratings firm, gave Ghana a B+ rating in 2003. It is clearly too early in the day to determine the impact in concrete terms on the national economy. I think, however, that this rating, which is based on a thorough analysis of key indicators of our country’s economy, reflects the signs of a gradual recovery.
The rating is a confidence booster for doing business in Ghana. Our focus as a government has been clear since we took officethat is, mainly to resuscitate Ghana’s economy. Five priority areas, including vigorous infrastructure development, modernized agriculture, enhanced social services with emphasis on education and health, private-sector development, and good governance, have been identified as the main vehicles to achieve our goals....
How do you balance the need for foreign investment with the need to promote Ghana’s own homegrown industries?
Two things prop up any economy: The inventiveness of our local captains of industry and entrepreneurs, and foreign direct investment. The two represent the two faces of the same coin. GDP is the measure of total aggregate supply in an economy. Foreign direct investment shores up or is a key component of such aggregate supply. What is good for our local investor is good for the foreign investors. That is our philosophy.
Telephones must work. “Red tapeism” must be reduced. State institutions must be receptive to the needs of industry. The transport system must be efficient and reliable. Our economy will grow with a skilled, well-educated work force. These prerequisites are key for both local and foreign investment, and that is how we balance our call for foreign direct investments and propping our local industries.
To what extent do trade barriers imposed by the world’s richer countries affect Ghana’s ability to generate jobs?
I am happy that the current thinking, globally, is moving away from protectionism. Ghana is largely an agricultural country and greater access to markets for our produce has a direct bearing on job creation. Our export level could have been higher in Ghana without such barriers. These are issues that the international community must keep talking about within the WTO framework and on a matter of urgency. There must be reciprocity in this matter.
Have the competitive pressures of globalization made it more difficult for Ghana to pursue a human development agenda that fights poverty and promotes human concerns?
The global context within which nations have to engage each other presents a fascinating reality for the 21st Century. Globalization provides both opportunities and challenges.
The current state of world trade is unfavourable towards developing economies like Ghana. We are largely producers of primary products whose prices are determined by the developed world, whilst at the same time, the prices of our major imports are also determined by the first world.
So we can say that it is not fair competition. Not that we are not prepared to compete, but simply, the challenges are formidable, but we cannot relent.
The recently stalled WTO talks are a clear manifestation of the frustrations of the developing world. Issues such as removal of subsidies, unrestricted access to markets should be addressed so that our farmers can really compete with their counterparts in Europe, America and elsewhere.
In Ghana, UNDP Resident Representative Alfred Sallia Fawundu, Deputy Resident Representative Christophe Bahuet, and Communications Officer Iddrisu Siddiq contributed to this article.