Increase in Govt's role in developing economic structures advocated

Accra, Feb 26, GNA- The role of government in developing sound economic structures has been underscored with calls for greater involvement as a means of ensuring full benefit of investment flows. "The notion that government's reduced role in economic activity is the best practice is an old one that must be revised," Dr Nii Moi Thompson said on Thursday at the launch of the 2003 UNCTAD Report titled: 'Trade Performance and Commodity Dependence.'

He was dilating on the dynamics of the Report and its impact on the national economy. The launch was done jointly under the auspices of the Third World Network (TWN), a public advocacy group and the United Nations Information Centre (UNIC)._

He described the current cocoa spraying exercise as a clear manifestation of how far government could be involved in developing a major area of economic activity, without taking on itself, the excess weight of daily operation that has proved over the years to be detrimental to the national economy.

The 2004 Budget indicated that the mass cocoa spraying exercise had led to a massive rise in agricultural contribution to GDP, which for the first time rose from negative 5 per cent to 16.4 per cent.

Dr Thompson said in advanced economies, the state takes centre stage in developing a strong base for sound take-offs in economic, manufacturing and industrial set ups and suggested that government makes similar inroads to not only develop the industrial and manufacturing sector, "but providing them with the required tools, finance and environment to accelerate the nation's development."

He said Africa's story in the UNCTAD Report has been all but "grim and familiar": that the world could have done well, but Africa did poorly and sometimes even worse.

He noted that while Asian states seemed to be rising and meeting targets of development, Africa continued to wallow in the dark and in a state of hopelessness.

Dr Thompson attributed the situation among others to the unfair trade practices that the World Trade Organisation (WTO) provides for prices of major export products from Africa and the third world in general.

He said that for country like Ghana, it was strange that raw cocoa beans attracted zero export tariffs in Japan, Europe and the United States.

"But each time we decide to add value to this product we have to pay tariffs of between 27 per cent and 30 per cent." He asked government to place emphasis on developing a strong vibrant domestic market that would work in tandem with a similar regional market.

"We need to adopt a culture of efficiency, efficient resource mobilization and utilization," he added.

He suggested a business mortality database for the country to establish what makes so many companies go under and why and how others stay afloat over the years, even though with little profits to show. Mr Affram Asiedu, Deputy Minister of Trade, Industry, and PSI said the continued dependence on commodity prices with historical trends in commodity prices that have been persistently downwards set a picture of an economy headed for crisis.

"Unless something drastic is done to change the situation, we are bound to continue in this cycle of poverty that only takes us down and further down the spiral."

He regretted that despite intensive negotiations," the only new commodity agreement containing economic clauses negotiated within the IPC was the International Rubber Agreements," adding that, " the activities of the Common Fund for Commodities have failed to fulfil the expectations of developing countries who fought for its establishment." Dr Yao Graham, Executive Director of TWN stressed the increased government role in moving the economy forward saying, "there must be emphasis on indigenous businesses as against Ghanaian-based foreign businesses."