Ghana: Perhaps a Socio-Liberal Approach to Trade Will Help Country

All, February 6 ,2009

By Hannah Asomaning

Trade is something we do every time and anytime, among individuals, among groups and also among nations. It can be defined as a form of exchange where one uses money in exchange for goods or services.

Trade, whether it is done in small quantities or among major countries, is important and has impact on every individual in a country. Trade has an impact on every individual because the terms of trade defined and accepted by a group of people or a nation affects the rich as well as the poor in any given country.

Depending on the terms of trade people’s lives could also be changed positively or negatively.

It is, therefore, important and necessary that President John Evans Atta-Mills mentioned it in his inaugural address that his government would resuscitate local businesses by preventing cheap imports into the country to avoid the collapse of local businesses.

Ghana, as a country, trades with different countries in the world. For instance Ghana has trade agreements with Europe, there is also the Africa Growth and Opportunity Act (AGOA) where Ghana is one of the countries that trade in textiles with the United States of America. Ghana also trades with China as evidenced in the numerous Chinese products on the Ghanaian market. Ghana as a country is still considering signing the Economic Partnership Agreement (EPA) which is a proposed trade arrangement between Europe on one hand and Africa, Caribbean and Pacific countries on the other.

Trading arrangements between countries have effects on the country’s economy and that of her people that is why trade barriers are used as sanctions against countries that do not comply to certain international rules. Therefore, one factor that determines the economy of a country is trade.

Trade is, therefore, an integral factor to sustainable development in any given country, Mr Atul Kaushik, Director of CUTS International, an Indian based non- governmental organization, said at a recent seminar organized jointly by the Friedrich Ebert Foundation and the World Trade Organization to educate journalists on the relationship between “World Trade and Sustainable Development.”

A country’s decision regarding trade also affects the country’s governmental policies and that explains why some government would say we believe in socialists’ policies while others would say we believe in capitalists or liberal policies.

In Ghana there are two main political parties, the New Patriotic Party (NPP) and the National Democratic Congress with the former preaching liberal democracy and the latter preaching social democracy.

Liberal democracy focuses on the individual’s development in terms of a person’s, rights and freedoms and believes that a person having a private property is fundamental to individual happiness.

Liberals regard democracy as an instrument to maintain a society where each individual enjoys the greatest amount of liberty possible.

Social democracy on the other hand value individual liberty but do not believe that real liberty can be achieved for the majority without transforming the nature of the state itself.

social democrats therefore focus on the greater good on the society as a whole, social democrats may, potentially, step in and steer society in a direction that is deemed to be more equitable.

However, whether these parties really practice what they say depends on the Bretton Woods Institutions, that is the International Monetary Fund and the World Bank where developing economies like Ghana go to borrow monies for the country’s development.

Dr Kwesi Jonah, a Research Fellow at the Institute of Democratic and Economic Governance (IDEG) in an interview with an Accra based radio station said that that developing countries are not entirely independent in deciding the approaches to their economies.

He maintains that these economic programmes are handed down from Bretton Woods’ institutions and thus erode the impact of the political ideology of governments on their countries.

Perhaps what African governments need to do is to explain these policies which so much affect governance to the understanding of the ordinary Ghanaian.

The ordinary Ghanaian should know and understand what goes into fixing fuel prices and the prices of other commodities in a country.

In addition it would not be a bad idea for governments to also explain their means of making money or revenue mobilization to get citizens better involved in governance.

Mr Abdel- Hamid Mamdouh, Director of the Trade in Services Division, at the World Trade Organization, at the FES/WTO seminar expressed his support for liberalism and said countries can decide to close their markets to the world and make their people suffer the consequences of buying shoddy inferior goods at high prices as against opening their markets to competition and ensuring that their local industries develop the capacity to compete with foreign industries.

“Liberalism does not mean deregulation, it is about competition” he stressed and said where a country liberalizes her economy government must ensure that the rules are rigid and working.

He adds that the global financial crisis is not a failure of a market driven-economy, it is a failure of regulations, but admits that liberalization by itself is not a solution to a developed economy.

But Esther Busser, Trade Policy Officer of the International Trade Union Confederation, however said that trade negotiations between developed countries and developing countries still largely favours developed countries and put a huge demand on developing economies.

Mr Pascal Lamy, Director General of the World Trade Organization (WTO), puts it in a different light and says there is no such thing as developed against developing in the WTO and adds that his organization is in the business of rule making.

He endorses the need for African countries to open their markets to the world since it reduces poverty better but did not explain how.

Mr Lamy could not forget the global financial crisis and recommends that the financial decline in the world economy makes the Doha trade negotiation very necessary.

The Doha round is a declaration adopted by WTO members at a Ministerial conference held in Doha Qatar between the 9th and 13th November 2001.

In the writer’s opinion developing economies should adopt a socio-liberal approach to trade. In a social liberal economy, the state does have an important role in ensuring positive liberty or freedom in society.

Social liberals tend to trust that individuals are usually capable in deciding their own affairs, and generally do not need deliberate steering towards happiness.

That means putting the deciding power in the hands of the ordinary person and in Ghana’s case a deliberate attempt to make the populace understand and be involved in governance.

The media has a responsibility towards this to ensure that we concentrate more on developmental issues than the personality politics such that when a Ghanaian goes to the market to buy something, he will think about the trade policies and how he can contribute to the growth of the economy. That is democracy.

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