Wednesday, December 9, 2009
Policy Recommendation
After the civil war ended in 2002 Sierra Leone have wanted to revive the key facets of their economy, agriculture and mining. For Sierra Leone to achieve massive economic growth they are in urgent need of improving and/or adding to the policies they have already established. There are currently a couple trade policies in place to help generate extra revenue through tariffs in Sierra Leone’s economy.
In 2003, Sierra Leone was the first WTO member to benefit from a new facility, the Trade Policy Clinics, to contribute to improving transparency in domestic policies at the national and multilateral level (Trade Policy Review). “Sierra Leone will be receiving technical assistance through different programs, workshops or seminars on a number of issues, including negotiating techniques and meetings to promote awareness among parliamentarians, in an effort to promote the country’s better integration in the multilateral trading system” (Trade Policy Review).
The government aims to secure an economic policy as well as aid to help the delivery of basic food for the entire population by 2007. They want to accomplish this through the following policy objectives: (i) increasing and diversifying domestic food production; (ii) increasing agriculture productivity, rural income, and employment, while ensuring adequate protection of the environment; and (iii) maximize Sierra Leone’s foreign exchange revenue generated by their agriculture through tariffs and other policy based actions. Import restrictions and licensing requirements for plants and seeds in place to preserve the environment when trading in Sierra Leone (Trade Policy Review).
Based on the World Trade Organization, “Sierra Leone's overall objective is to promote growth of Sierra Leones agricultural output so they can restore food security and create tradable surplus among the other countries. The strategy consists of: increasing farm accessibility and productivity; improving farm incentives and security in the countryside; improving access to land, farming implements, and inputs; facilitating access to credit; increasing private participation; rehabilitating partially developed inland valley swamps; and providing returnees with basic agricultural inputs and services” (Trade Policy Review). As said on the World Trade Organization’s website, the reason for domestic support is to encourage investors, promote employment, and increase production (Trade Policy Review).
My major goals to help Sierra Leone achieve economic growth would include: I) Help implement incentives, which encourage investment because if the investor speculates a high rate of return on their money invested either through stock or interest rates then he will be more willing to invest more money, for the assistance of domestic food production either with money, food, more land, and/or tax breaks. II) Improve productivity by helping to increase the human capital by rebuilding the damaged schooling infrastructure and help increase the literacy and overall knowledge throughout Sierra Leone. The new ideas that would be generated by the higher level thinking people would help improve productivity through increased efficiency in everyday tedious tasks. The well-educated people are needed to help with the government where they can administer their high level of thinking to help promote growth for Sierra Leone. III) Help change trade by encouraging foreign investment in firms through high interest rates on bonds and the investment of money within a firm. This would cause an influx in money supply due to the increase and investment and with that money the firms can use it to become more productivity and efficiency through the purchase of new tools, equipment and machinery for the work force. IV) Feed the energy needs of Sierra Leone’s population by establishing a way to provide efficient energy production to help the economic development of the environment and country.
The barriers of doing this would mean that the government would have to raise their trade tariffs to generate greater revenue to help supply the funding for the increase in electrical companies and electrical converters all over the city. This would help achieve growth by helping power the factories and equipment used to make the tasks of the work force easier that are already in place and could potentially allow bigger machines to be created and generate income that was deemed impossible before because of the lack of electrical power. It would take these policies anywhere from 5-25 years to start showing improvement the economic growth of Sierra Leone.
Each policy has many valid points that are to be respected but there also could be some adverse affects as well. The policy on increasing incentives would hinder the short-term growth because for every investment of money within a country there is a part of it being put back into the money supply. Although in the long run it would prove to be worth while because of the increase it would have over time on investment from abroad and how much money they invest would increase as well. To improve the infrastructure of the schools would take around 15-20 years and would cause the government spending to go up thus increasing GDP but increase taxes among the people. All of this in the long run would make for a more self-sufficient government and country.
Works Cited
"TRADE POLICY REVIEW: SIERRA LEONE." World Trade Organization. N.p., 25 Feb. 2007. Web. 3 Dec. 2009.
Money Summary & Analysis
Sierra Leone has a currency of ‘Leones’. The last time it was measured was in 2006 and was said that it took 2,961.7 Leones to equal 1 US Dollar, an increase from 2005 (CIA The World Factbook).
The Leone is a good medium of exchange because its used to buy certain needed or wanted items. It’s also a good unit of account because, although the prices would look high to us, to the people of Sierra Leone they would represent a good way to measure the prices of different goods and services.
The Leones would not be a good store of account although because it would not hold its value when being saved rather than spent as shown by the increasing exchange and inflation rate of 11.7% which is up 22% from the previous year but on average raises about 6.7% each year.
The fiat money are bank notes given value by government decree and is the primary focus of the Central Bank of Sierra Leone rather than commodity money. The Bank of Sierra Leone is the central bank of Sierra Leone. “It issues the country's currency, known as the Leone and formulates and implements monetary policy, including foreign exchange” (CIA The World Factbook).
The inflation rate in Sierra Leone isn’t at a point where it only seems to effect the countries store of value. Consumer price inflation was pushed higher due to the pass-through effects of steady increases in natural resources in 2007 and 2008 (CIA- The World Factbook). I think as the country grows there will be a positive effect to the medium of exchange and unit of account in Sierra Leones money system. Sierra Leone’s money has been losing value ever since the 1980s. Its value is now based on the export earnings of the country but since it does not earn enough from foreign trade so the IMF and World Bank are constantly encouraging them to reduce government spending to maintain a balanced budget (CIA The World Factbook).
Overall, the country money system is at a state where they are able to achieve massive growth if they just implement the right policies. If the trend continues Sierra Leone could experience a decrease in their money’s store of value and unit of account but if acted upon Sierra Leone could achieve economic growth and overall well being.
Works Cited
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17 Feb. 2009. Web. 30 Nov. 2009.
The Leone is a good medium of exchange because its used to buy certain needed or wanted items. It’s also a good unit of account because, although the prices would look high to us, to the people of Sierra Leone they would represent a good way to measure the prices of different goods and services.
The Leones would not be a good store of account although because it would not hold its value when being saved rather than spent as shown by the increasing exchange and inflation rate of 11.7% which is up 22% from the previous year but on average raises about 6.7% each year.
The fiat money are bank notes given value by government decree and is the primary focus of the Central Bank of Sierra Leone rather than commodity money. The Bank of Sierra Leone is the central bank of Sierra Leone. “It issues the country's currency, known as the Leone and formulates and implements monetary policy, including foreign exchange” (CIA The World Factbook).
The inflation rate in Sierra Leone isn’t at a point where it only seems to effect the countries store of value. Consumer price inflation was pushed higher due to the pass-through effects of steady increases in natural resources in 2007 and 2008 (CIA- The World Factbook). I think as the country grows there will be a positive effect to the medium of exchange and unit of account in Sierra Leones money system. Sierra Leone’s money has been losing value ever since the 1980s. Its value is now based on the export earnings of the country but since it does not earn enough from foreign trade so the IMF and World Bank are constantly encouraging them to reduce government spending to maintain a balanced budget (CIA The World Factbook).
Overall, the country money system is at a state where they are able to achieve massive growth if they just implement the right policies. If the trend continues Sierra Leone could experience a decrease in their money’s store of value and unit of account but if acted upon Sierra Leone could achieve economic growth and overall well being.
Works Cited
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17 Feb. 2009. Web. 30 Nov. 2009.
Unemployment Summary & Analysis
Sierra Leone offers many various types of employment. With natural resources like diamonds, rutile, bauxite, gold there is a great need for miners. Mining has a very harsh job environment but requires less skill than a teacher or machine operator within the industrial industry. For years diamonds have been the major exports in Sierra Leone and have proved to be the base for their economy.
Men make up most of the work force in the mining business due strong build for lifting but Sierra Leone has seen an increase in women working in the rivers mining for gold. Other industries include: small-scale manufacturing for beverages, textiles, cigarettes and footwear; petroleum refining, and small commercial ship repair (CIA The World Factbook).
Given the harsh environments of the factories, men primarily rule the majority of this work force because there is a tendency not to hire women due to the high birth rate so they would be gone for a long time and hurt the business while men, who have a higher literacy rate, can help manage equipment and fix if needed as well.
Based on what we know about Sierra Leone and their damaged infrastructure and sluggish economy, we can conclude that they are dealing with a high natural rate of employment because Sierra Leone is just undeveloped, who have no significant economic progress, rather than being a developed country that just deals with economic fluctuations (CIA The World Factbook).
There are no policies to help give the hard workings people of Sierra Leone the wage they deserve. This has caused a dramatic inequality of income distribution among the people (CIA The World Factbook).
Sierra Leones unemployment rate is 40% and spread across each of the 3 sectors of their economy: agriculture, industry and services. It is untold which industry is contributing the most to the unemployment rate but we can infer that since the services industry is the least developed that is would ultimately cause to greatest unemployment due to its lack of stable infrastructure.
Thanks to the vast amount of uncultivated land and natural resources Sierra Leone offers a great deal of growth in the agriculture and industry sectors of their economy. Currently, there are no laws in place to help protect the miners in the agricultural cultivation of natural resources.
Works Cited
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17
Feb. 2009. Web. 30 Nov. 2009.
Men make up most of the work force in the mining business due strong build for lifting but Sierra Leone has seen an increase in women working in the rivers mining for gold. Other industries include: small-scale manufacturing for beverages, textiles, cigarettes and footwear; petroleum refining, and small commercial ship repair (CIA The World Factbook).
Given the harsh environments of the factories, men primarily rule the majority of this work force because there is a tendency not to hire women due to the high birth rate so they would be gone for a long time and hurt the business while men, who have a higher literacy rate, can help manage equipment and fix if needed as well.
Based on what we know about Sierra Leone and their damaged infrastructure and sluggish economy, we can conclude that they are dealing with a high natural rate of employment because Sierra Leone is just undeveloped, who have no significant economic progress, rather than being a developed country that just deals with economic fluctuations (CIA The World Factbook).
There are no policies to help give the hard workings people of Sierra Leone the wage they deserve. This has caused a dramatic inequality of income distribution among the people (CIA The World Factbook).
Sierra Leones unemployment rate is 40% and spread across each of the 3 sectors of their economy: agriculture, industry and services. It is untold which industry is contributing the most to the unemployment rate but we can infer that since the services industry is the least developed that is would ultimately cause to greatest unemployment due to its lack of stable infrastructure.
Thanks to the vast amount of uncultivated land and natural resources Sierra Leone offers a great deal of growth in the agriculture and industry sectors of their economy. Currently, there are no laws in place to help protect the miners in the agricultural cultivation of natural resources.
Works Cited
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17
Feb. 2009. Web. 30 Nov. 2009.
Tuesday, December 8, 2009
Productivity
Sierra Leone is in great need of improvement to their productivity as a country. Their human capital, such as education, training, and health care, is dismal. With only 3.8% of their GDP going to education, a literacy rate of 35.1%, and a total school life expectancy of 7 years give Sierra Leone an opportunity to improve their human capital, which will lead to an increased productivity (CIA The World Factbook). They could obtain this goal by increasing their government spending towards education by help funding new schools and teachers to help promote greater learning because with poor education comes poor training as well.
Ernest Bai Koroma, the President of Sierra Leone, was quoted commenting on the investment in agriculture, “Sierra Leone, like many other countries in Africa, is suitably positioned to benefit from such investment because of its vast arable land, abundant water resources and the fact that over 70 per cent of its population is engaged in farming or farming-related activities.” (UN News Centre).
Sierra Leone mineral exports, mainly diamonds, remain the key in their foreign trade. Although the unethical treatment of the people forced to mine these diamonds is a seemingly reoccurring topic. People even refer to the diamonds coming out of Sierra Leone as “blood diamonds”. Rich in minerals, Sierra Leone has relied on the mining sector in general, and diamonds in particular, for its economic base.
In the 1970s and early 1980s, the economic growth rate slowed because of a decline in the mining sector and increasing corruption among government officials. By the 1990s economic activity was declining and economic infrastructure had become seriously degraded due to the civil conflicts and lack of leadership in government to do anything about the atrocities happening beyond the walls of the capitol building. Annual production estimates range between $250-$300 million dollars of Sierra Leone’s GDP, which results in their diamond mining becoming the main focus of production. Diamonds, if for any reason were to run out or become harder to find, would pose a great threat to the economy of Sierra Leone and is why they are in need of other alternate cash resources and ways of producing money (U.S. Department of State).
Alongside diamonds, Sierra Leone has the world's largest deposit of rutile, a titanium ore used in paint pigment and welding rod coatings, so if productivity were too increase and investment in factories and mining to help harvest this ore, then Sierra Leone would greatly benefit from it.
To help offset the lack of industrial tools, factories and equipment, the government created “The Wellington Industrial Estate”, covering 46 hectares just east of Freetown. It was developed in the 1960s by the government to encourage investments. Its factories produce a variety of products, including cement, nails, shoes, oxygen, cigarettes, beer and soft drinks, paint, and knitted goods (U.S. Department of State). Through these efforts the government have tried to increase productivity and create a better envoirment to ease Sierra Leone’s tough economic time to hopefully, in turn, help increase their economic well being.
Works Cited
U.S. Department of State- Sierra Leone. Background Note, 18 Feb. 2009. Web. 22
Nov. 2009..
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17
Feb. 2009. Web. 30 Nov. 2009.
UN News Centre. “At UN, Sierra Leone calls for investment in agriculture to combat food crisis”. UN News Service, 25 Sept. 2008. Web. 30 Nov. 2009..
Ernest Bai Koroma, the President of Sierra Leone, was quoted commenting on the investment in agriculture, “Sierra Leone, like many other countries in Africa, is suitably positioned to benefit from such investment because of its vast arable land, abundant water resources and the fact that over 70 per cent of its population is engaged in farming or farming-related activities.” (UN News Centre).
Sierra Leone mineral exports, mainly diamonds, remain the key in their foreign trade. Although the unethical treatment of the people forced to mine these diamonds is a seemingly reoccurring topic. People even refer to the diamonds coming out of Sierra Leone as “blood diamonds”. Rich in minerals, Sierra Leone has relied on the mining sector in general, and diamonds in particular, for its economic base.
In the 1970s and early 1980s, the economic growth rate slowed because of a decline in the mining sector and increasing corruption among government officials. By the 1990s economic activity was declining and economic infrastructure had become seriously degraded due to the civil conflicts and lack of leadership in government to do anything about the atrocities happening beyond the walls of the capitol building. Annual production estimates range between $250-$300 million dollars of Sierra Leone’s GDP, which results in their diamond mining becoming the main focus of production. Diamonds, if for any reason were to run out or become harder to find, would pose a great threat to the economy of Sierra Leone and is why they are in need of other alternate cash resources and ways of producing money (U.S. Department of State).
Alongside diamonds, Sierra Leone has the world's largest deposit of rutile, a titanium ore used in paint pigment and welding rod coatings, so if productivity were too increase and investment in factories and mining to help harvest this ore, then Sierra Leone would greatly benefit from it.
To help offset the lack of industrial tools, factories and equipment, the government created “The Wellington Industrial Estate”, covering 46 hectares just east of Freetown. It was developed in the 1960s by the government to encourage investments. Its factories produce a variety of products, including cement, nails, shoes, oxygen, cigarettes, beer and soft drinks, paint, and knitted goods (U.S. Department of State). Through these efforts the government have tried to increase productivity and create a better envoirment to ease Sierra Leone’s tough economic time to hopefully, in turn, help increase their economic well being.
Works Cited
U.S. Department of State- Sierra Leone. Background Note, 18 Feb. 2009. Web. 22
Nov. 2009.
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17
Feb. 2009. Web. 30 Nov. 2009.
UN News Centre. “At UN, Sierra Leone calls for investment in agriculture to combat food crisis”. UN News Service, 25 Sept. 2008. Web. 30 Nov. 2009.
International Trade
For Sierra Leone, their mineral exports are their main foreign earner when trading amongst countries. “The fate of the economy depends upon the maintenance of domestic peace and the continued receipt of substantial aid from abroad, which is essential to offset the severe trade imbalance and supplement government revenues” (CIA The World Factbook).
Sierra Leone exports $216 million dollars in diamonds, rutile, cocoa, coffee and fish. They rank 176 out of 223 in the world for the exported income. Their largest export partners include Belgium at 35.6%, U.S. at 20.1%, India at 15.2% and France at 4.9% (CIA The World Factbook). Sierra Leone also imports $560 million dollars worth of foodstuffs, machinery and equipment, fuels and lubricants, and chemicals from China (manufactured goods) at 10.3%, Cote d’Ivoire (fuel) at 8.8%, U.S. at 7.8%, Belgium at 6.6%, and the UK at 6.6%(CIA The World Factbook). These statistics show that larger countries are benefiting from Sierra Leone and how much they export/import with them. If Sierra Leone were able to produce more and diversify production of their goods and services, and then they could achieve great economic growth.
Since their independence in 2002 the government has encouraged foreign investment despite the fact that businesses have been hindered by the lack of foreign exchange, corruption, and uncertainty resulting from civil conflicts. Investors in new business although are protected by an agreement that allows for arbitration under the 1965 World Bank Convention which provides the transfer of interest, dividends, and capital (US Department of State).
Short after, the government also passed the Investment Promotion Act in August 2004 to attract foreign investors and began to work with international financial institutions to help “lower its administrative barriers to trade” which helped create, in 2007, the Sierra Leone Investment and Export Promotion Agency, which was created to assist investors by creating a "one stop shop" for starting a business (US Department of State).
“In 2008, the International Finance Corporation's ‘Doing Business’ guide ranked Sierra Leone 7th out of 15 West African countries in terms of ease of doing business. Sierra Leone is top-ranked in West Africa in terms of starting a business, but issues with licenses, contract enforcement, and high tax rates are still impediments to investment” (UN News Centre).
Thanks to these recent trade policies Sierra Leone has made it easy for business to operate within the country and has proved to be a vital part in the re-stabilizing of this country. Their open market has made of easy for them to trade even though it might look like they rely on their diamond market a little too much.
Sierra practices a free trade that means that traders are allowed to export/import without any government interference as long as it represents growth for the country that corresponds to its needs.
Before the civil war was initiated, the government heavily favored tourism as a growing attraction thanks to Sierra Leone’s non-discriminatory tariff that served the interests of the consumers because it kept prices relatively low (U.S. Department of State).
Its key that Sierra Leone expands their market of goods so they are not so dependent on an export. If diamonds were to drop in price or if the people of Sierra Leone were unable to continue mining for some reason, the outcome would be devastating for the economic well being of the up and coming country.
Due to the increase in short-term debts, the balance of trade has suffered. There has been a decline of conditions in trade thanks to the increase of prices. These prices mainly are dealing with petroleum products and manufactured goods from the industrial world and exceed those of agricultural produce, diamonds, and bauxite in Sierra Leone making it hard for them to do trade.
If Sierra Leone can expands their industrial infrastructure and increase their farming productivity, they will be able to achieve high GDP and economic growth and overall, achieve greater well being.
Works Cited
U.S. Department of State- Sierra Leone. Background Note, 18 Feb. 2009. Web. 22
Nov. 2009..
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17
Feb. 2009. Web. 30 Nov. 2009.
UN News Centre. “At UN, Sierra Leone calls for investment in agriculture to combat food crisis”. UN News Service, 25 Sept. 2008. Web. 30 Nov. 2009..
"Key Facts: Sierra Leone." DFID: Department of International Development. Crown,
12 June 2008. Web. 8 Dec. 2009..
Sierra Leone exports $216 million dollars in diamonds, rutile, cocoa, coffee and fish. They rank 176 out of 223 in the world for the exported income. Their largest export partners include Belgium at 35.6%, U.S. at 20.1%, India at 15.2% and France at 4.9% (CIA The World Factbook). Sierra Leone also imports $560 million dollars worth of foodstuffs, machinery and equipment, fuels and lubricants, and chemicals from China (manufactured goods) at 10.3%, Cote d’Ivoire (fuel) at 8.8%, U.S. at 7.8%, Belgium at 6.6%, and the UK at 6.6%(CIA The World Factbook). These statistics show that larger countries are benefiting from Sierra Leone and how much they export/import with them. If Sierra Leone were able to produce more and diversify production of their goods and services, and then they could achieve great economic growth.
Since their independence in 2002 the government has encouraged foreign investment despite the fact that businesses have been hindered by the lack of foreign exchange, corruption, and uncertainty resulting from civil conflicts. Investors in new business although are protected by an agreement that allows for arbitration under the 1965 World Bank Convention which provides the transfer of interest, dividends, and capital (US Department of State).
Short after, the government also passed the Investment Promotion Act in August 2004 to attract foreign investors and began to work with international financial institutions to help “lower its administrative barriers to trade” which helped create, in 2007, the Sierra Leone Investment and Export Promotion Agency, which was created to assist investors by creating a "one stop shop" for starting a business (US Department of State).
“In 2008, the International Finance Corporation's ‘Doing Business’ guide ranked Sierra Leone 7th out of 15 West African countries in terms of ease of doing business. Sierra Leone is top-ranked in West Africa in terms of starting a business, but issues with licenses, contract enforcement, and high tax rates are still impediments to investment” (UN News Centre).
Thanks to these recent trade policies Sierra Leone has made it easy for business to operate within the country and has proved to be a vital part in the re-stabilizing of this country. Their open market has made of easy for them to trade even though it might look like they rely on their diamond market a little too much.
Sierra practices a free trade that means that traders are allowed to export/import without any government interference as long as it represents growth for the country that corresponds to its needs.
Before the civil war was initiated, the government heavily favored tourism as a growing attraction thanks to Sierra Leone’s non-discriminatory tariff that served the interests of the consumers because it kept prices relatively low (U.S. Department of State).
Its key that Sierra Leone expands their market of goods so they are not so dependent on an export. If diamonds were to drop in price or if the people of Sierra Leone were unable to continue mining for some reason, the outcome would be devastating for the economic well being of the up and coming country.
Due to the increase in short-term debts, the balance of trade has suffered. There has been a decline of conditions in trade thanks to the increase of prices. These prices mainly are dealing with petroleum products and manufactured goods from the industrial world and exceed those of agricultural produce, diamonds, and bauxite in Sierra Leone making it hard for them to do trade.
If Sierra Leone can expands their industrial infrastructure and increase their farming productivity, they will be able to achieve high GDP and economic growth and overall, achieve greater well being.
Works Cited
U.S. Department of State- Sierra Leone. Background Note, 18 Feb. 2009. Web. 22
Nov. 2009.
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17
Feb. 2009. Web. 30 Nov. 2009.
UN News Centre. “At UN, Sierra Leone calls for investment in agriculture to combat food crisis”. UN News Service, 25 Sept. 2008. Web. 30 Nov. 2009.
"Key Facts: Sierra Leone." DFID: Department of International Development. Crown,
12 June 2008. Web. 8 Dec. 2009.
Savings & Investment
Sierra Leone’s President, Ernest Bai Koroma, was quoted saying, “A massive investment in agriculture is needed across Africa if the continent is to respond to the global food crisis sparked by soaring prices of basic crops. It is vital that Africa increases food productivity and achieves food self-sufficiency. African farmers need to adopt higher-yielding land practices, with increased use of improved seeds, fertilizers and irrigation” (UN News Centre).
Given the abundance of Sierra Leones fertile land, which 8% is still uncultivated, shows that the reason their productivity is the lowest in the world is because of the lack of incentives farmers have because of the high cost of input and incomparable prices that are in the world market for goods (UN News Centre).
Sierra Leone needs to increase their investment in building and tools to help production in the agricultural industry and industrial industry as well. A change must be made if they want to see any economic improvement to their failing infrastructure and social order in government. To increase the capitol, a factor of production, Sierra Leone simply needs to change the amount of capital it has.
Trade-offs, when involving investment and savings, play a major role. It is vital that Sierra Leone realizes their need for capital. They would need to consume less and save more, a trade-off, to be able to afford their new expansion in the sectors of their economy that need it most and where they can see the highest potential of growth. Sierra Leone currently seems to be saving their money for the things they know they can benefit the most from, such as diamonds and agriculture, but isn’t investing to their full potential to help maximize their capital.
Also, if they invested more money in education that would significantly help the country as a whole thanks to the increase in educated workers to help produce ideas to become more efficient. The DFID, Department of International Development, strongly encouraged Sierra Leone to invest in education so between 2002 and 2005 Sierra Leone doubled their enrollment in schools thanks to their free primary education policy that ahs been enacted. Sierra Leone and others created a 10-year education plan that is intended to increase the literacy rate of the people living in Sierra Leone.
In regards to incentives, the corrupt government, during the time of the civil war, would restrict the participation in political life, access to justice, minimum wage, and adequate public service (DFID). This decreases the incentive to work if the working person isn’t able to earn a reasonable income to support their growing families and isn’t allowed to be apart of the actions being taken against the government for the injustices.
Thanks to the DFID and European Commission, they have developed a ‘poverty reduction strategy’ aimed to, “continue to build on the gains in the security and governance sectors and will also do more to stimulate and sustain economic growth, develop infrastructure and improve basic service delivery to the poor” (DFID). Sierra Leone needs to start saving their money while reducing consumption only to later take out and increase investment by purchasing tools, factories, and equipment to help grow their economy.
Given the room for growth Sierra Leone should increase investment in other industries and even the ones at hand if they want to see any growth as a country and of their GDP and economic well being.
Works Cited
U.S. Department of State- Sierra Leone. Background Note, 18 Feb. 2009. Web. 22
Nov. 2009..
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17
Feb. 2009. Web. 30 Nov. 2009.
UN News Centre. “At UN, Sierra Leone calls for investment in agriculture to combat food crisis”. UN News Service, 25 Sept. 2008. Web. 30 Nov. 2009..
"Key Facts: Sierra Leone." DFID: Department of International Development. Crown,
12 June 2008. Web. 8 Dec. 2009..
Given the abundance of Sierra Leones fertile land, which 8% is still uncultivated, shows that the reason their productivity is the lowest in the world is because of the lack of incentives farmers have because of the high cost of input and incomparable prices that are in the world market for goods (UN News Centre).
Sierra Leone needs to increase their investment in building and tools to help production in the agricultural industry and industrial industry as well. A change must be made if they want to see any economic improvement to their failing infrastructure and social order in government. To increase the capitol, a factor of production, Sierra Leone simply needs to change the amount of capital it has.
Trade-offs, when involving investment and savings, play a major role. It is vital that Sierra Leone realizes their need for capital. They would need to consume less and save more, a trade-off, to be able to afford their new expansion in the sectors of their economy that need it most and where they can see the highest potential of growth. Sierra Leone currently seems to be saving their money for the things they know they can benefit the most from, such as diamonds and agriculture, but isn’t investing to their full potential to help maximize their capital.
Also, if they invested more money in education that would significantly help the country as a whole thanks to the increase in educated workers to help produce ideas to become more efficient. The DFID, Department of International Development, strongly encouraged Sierra Leone to invest in education so between 2002 and 2005 Sierra Leone doubled their enrollment in schools thanks to their free primary education policy that ahs been enacted. Sierra Leone and others created a 10-year education plan that is intended to increase the literacy rate of the people living in Sierra Leone.
In regards to incentives, the corrupt government, during the time of the civil war, would restrict the participation in political life, access to justice, minimum wage, and adequate public service (DFID). This decreases the incentive to work if the working person isn’t able to earn a reasonable income to support their growing families and isn’t allowed to be apart of the actions being taken against the government for the injustices.
Thanks to the DFID and European Commission, they have developed a ‘poverty reduction strategy’ aimed to, “continue to build on the gains in the security and governance sectors and will also do more to stimulate and sustain economic growth, develop infrastructure and improve basic service delivery to the poor” (DFID). Sierra Leone needs to start saving their money while reducing consumption only to later take out and increase investment by purchasing tools, factories, and equipment to help grow their economy.
Given the room for growth Sierra Leone should increase investment in other industries and even the ones at hand if they want to see any growth as a country and of their GDP and economic well being.
Works Cited
U.S. Department of State- Sierra Leone. Background Note, 18 Feb. 2009. Web. 22
Nov. 2009.
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17
Feb. 2009. Web. 30 Nov. 2009.
UN News Centre. “At UN, Sierra Leone calls for investment in agriculture to combat food crisis”. UN News Service, 25 Sept. 2008. Web. 30 Nov. 2009.
"Key Facts: Sierra Leone." DFID: Department of International Development. Crown,
12 June 2008. Web. 8 Dec. 2009.
Resource & Industry Data Table for Sierra Leone
Significance of Data: To show the different ways Sierra Leone could be alleviating their economic situation
Natural Resources:
-Diamonds, rutile, bauxite, gold, iron ore, ilmenorutile, platinum, chromite, manganese, cassiterite, molybdenite, as well as forests, abundant fresh water, and rich offshore fishing grounds
Agriculture:
-Products--coffee, cocoa, ginger, palm kernels, palm oil, cassava, bananas, citrus, peanuts, cashews, plantains, rice, sweet potatoes, vegetables, cattle, fish, pigs, poultry, sheep. Land--30% potentially arable, 8% cultivated
Industry:
-Types--diamonds, bauxite, and rutile mining; forestry; fishing; beverages; cigarettes; flour; cement and other construction goods; petroleum refining; plastics; small commercial ship repair; tourism.
(Accoring to the U.S. Department of State)
Natural Resources:
-Diamonds, rutile, bauxite, gold, iron ore, ilmenorutile, platinum, chromite, manganese, cassiterite, molybdenite, as well as forests, abundant fresh water, and rich offshore fishing grounds
Agriculture:
-Products--coffee, cocoa, ginger, palm kernels, palm oil, cassava, bananas, citrus, peanuts, cashews, plantains, rice, sweet potatoes, vegetables, cattle, fish, pigs, poultry, sheep. Land--30% potentially arable, 8% cultivated
Industry:
-Types--diamonds, bauxite, and rutile mining; forestry; fishing; beverages; cigarettes; flour; cement and other construction goods; petroleum refining; plastics; small commercial ship repair; tourism.
(Accoring to the U.S. Department of State)
Sierra Leone's Data & Anaysis
Sierra Leone
GDP: 4.38 billion
Real GDP growth rate: 5.5%
GDP per capita: 900
Pop. Living below poverty line: 70.2 %
Life Expectancy: men-38.92; women-43.64; total pop. -41.24
Adult Literacy: men-46.9%; women-24.4%; total pop. -35.1%
Birth Rate: 44.73/1,000 people
Death Rate: 21.91/1,000 people
Pop. Growth Rate: 2.282%
Age Structure: 0-14: 44.5%; 15-64-52.2%; 65+-3.2%
(data derived from CIA- The World Factbook)
Given Sierra Leone’s economical status it proves to be a perfect example of a third world country and shows great need for reconstruction. From 1991-2002 Sierra Leone struggled with a civil war that killed tens of thousands and displaced nearly 2 million people, or 1/3 of the population (Background Note-Sierra Leone). This halted Sierra Leone’s economic growth by creating a corrupt society and government that was controlled by people who did not care about the well being of the country but them. They gave little money to the people for their work and kept the rest for themselves and it drastically damaged the GDP and infrastructure of the country.
“While it possesses substantial mineral, agricultural, and fishery resources, its physical and social infrastructure is not well developed, and serious social disorders continue to hamper economic development” (CIA).
Sierra Leone’s GDP is in the bottom bracket with only 4 billion dollars and is 163 out of 228 in the world rankings. In the births over death ratio, or population growth rate, Sierra Leone is ranked just 30 out of the 233 countries surveyed (CIA). This may explain why Sierra Leone has an increasing distribution of wealth.
Even more astonishing is that women, on average, have 5.88 children each (CIA). Due to the high population growth rate, Sierra Leone’s natural resources are being overwrought. Sierra Leone’s increasing GDP would not only would decrease GDP per capita, it would most likely increase the poverty rate, due to the overabundance of people, pop. growth rate, and the age structure as well. You can also infer from the data that because of the increasing population rate there lays a connection in why there is such a high poverty rate, adult literacy, and life expectancy because if there is a high population rate then the poverty rate will increase unless acted upon by the government which in turn effects adult literacy and overall life expectancy because of poverty.
Because 70% of the people in Sierra Leone are below the poverty line, they are unable to provide for themselves causing them to die earlier either because of malnutrition or because of their high rate of disease from food or water. In Sierra Leone 55,000 of the 6+ million people are infected with AIDS and currently have resulted in only 3,300 deaths, which ranks them 54 out of 236 (CIA). This is a contributing factor in why the life expectancy is so low because if AIDS becomes more widespread then less people will be able to work, that is if your not already, and cause more to die off and become unable to help provide for the economy thus hinder economic growth. In addition, more money would be spend on health related services because of the spike in disease.
If the economy could stabilize and increase this growth rate, it would see a dramatic improvement in the infrastructure that has proved unstable and unproductive. Also, if Sierra Leone tried to increase its literacy rate then that would increase the demand for education in the work force because all the qualified men and women which would increase productivity thanks to the ideas that would be generated for better efficiency by the more educated qualified workers. Given their debt at $1.61 billion dollars the increasing of education and productivity would prove to be a vital part in the countries rise out of the 3rd world status.
Works Cited
Background Note- Sierra Leone. U.S. Department of State, 18 Feb. 2009. Web. 22
Nov. 2009..
The World Factbook. 2009. Washington, D.C.: Central Intelligence Agency, 2009.
GDP: 4.38 billion
Real GDP growth rate: 5.5%
GDP per capita: 900
Pop. Living below poverty line: 70.2 %
Life Expectancy: men-38.92; women-43.64; total pop. -41.24
Adult Literacy: men-46.9%; women-24.4%; total pop. -35.1%
Birth Rate: 44.73/1,000 people
Death Rate: 21.91/1,000 people
Pop. Growth Rate: 2.282%
Age Structure: 0-14: 44.5%; 15-64-52.2%; 65+-3.2%
(data derived from CIA- The World Factbook)
Given Sierra Leone’s economical status it proves to be a perfect example of a third world country and shows great need for reconstruction. From 1991-2002 Sierra Leone struggled with a civil war that killed tens of thousands and displaced nearly 2 million people, or 1/3 of the population (Background Note-Sierra Leone). This halted Sierra Leone’s economic growth by creating a corrupt society and government that was controlled by people who did not care about the well being of the country but them. They gave little money to the people for their work and kept the rest for themselves and it drastically damaged the GDP and infrastructure of the country.
“While it possesses substantial mineral, agricultural, and fishery resources, its physical and social infrastructure is not well developed, and serious social disorders continue to hamper economic development” (CIA).
Sierra Leone’s GDP is in the bottom bracket with only 4 billion dollars and is 163 out of 228 in the world rankings. In the births over death ratio, or population growth rate, Sierra Leone is ranked just 30 out of the 233 countries surveyed (CIA). This may explain why Sierra Leone has an increasing distribution of wealth.
Even more astonishing is that women, on average, have 5.88 children each (CIA). Due to the high population growth rate, Sierra Leone’s natural resources are being overwrought. Sierra Leone’s increasing GDP would not only would decrease GDP per capita, it would most likely increase the poverty rate, due to the overabundance of people, pop. growth rate, and the age structure as well. You can also infer from the data that because of the increasing population rate there lays a connection in why there is such a high poverty rate, adult literacy, and life expectancy because if there is a high population rate then the poverty rate will increase unless acted upon by the government which in turn effects adult literacy and overall life expectancy because of poverty.
Because 70% of the people in Sierra Leone are below the poverty line, they are unable to provide for themselves causing them to die earlier either because of malnutrition or because of their high rate of disease from food or water. In Sierra Leone 55,000 of the 6+ million people are infected with AIDS and currently have resulted in only 3,300 deaths, which ranks them 54 out of 236 (CIA). This is a contributing factor in why the life expectancy is so low because if AIDS becomes more widespread then less people will be able to work, that is if your not already, and cause more to die off and become unable to help provide for the economy thus hinder economic growth. In addition, more money would be spend on health related services because of the spike in disease.
If the economy could stabilize and increase this growth rate, it would see a dramatic improvement in the infrastructure that has proved unstable and unproductive. Also, if Sierra Leone tried to increase its literacy rate then that would increase the demand for education in the work force because all the qualified men and women which would increase productivity thanks to the ideas that would be generated for better efficiency by the more educated qualified workers. Given their debt at $1.61 billion dollars the increasing of education and productivity would prove to be a vital part in the countries rise out of the 3rd world status.
Works Cited
Background Note- Sierra Leone. U.S. Department of State, 18 Feb. 2009. Web. 22
Nov. 2009.
The World Factbook. 2009. Washington, D.C.: Central Intelligence Agency, 2009.
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