The National, Monday 21st November 2011
IN the midst of high economic growth, I see trouble looming from a distance and this may potentially ruin our overall economic growth and development.
The unemployed and the low to medium income earners are struggling to make ends meet due to the spiralling effects of inflation.
Their problems are likely to worsen in the coming months unless there is urgent government intervention to put in place a mechanism to cushion the effects of high inflation and also design coherent, compatible and sustainable policies for sound economic management.
The high cost of living is a recipe for social disorder and the government must immediately address this issue in the 2012 Budget which it will hand down tomorrow.
This is an opportune time for the government to commence the process of addressing and managing this issue.
There are some important actions that our government must take urgently.
First, it must reduce the personal income tax rate from 35% to less than 20% so employees and consumers have more money in their pockets to spend on basic food items and to increase their personal savings.
Second, the government must promote large capital investments in major impact infrastructure projects and promote large-scale agriculture projects so that locally produced fresh food are not only exported but are also sold domestically.
Promoting large-scale investment through export-based agricultural projects and connecting major towns and cities with reliable and quality transportation infrastructure will help to reduce inflation in the long run.
Unemployment should not be a major issue if current issues pertaining to law and order and corruption are addressed by the authorities and that significant and adequate investments are injected into promoting quality and mandatory education, manufacturing and downstream processing and infrastructure development.
The timing is right to piggyback on the current world-class mining and LNG projects to address most of the current economic and social woes but what is most needed is decisive, visionary and transparent political leadership.