Impact of Political Stability on Economic Development (Case of South Sudan)

Abstract

The main theme of this study "Impact of political stability on economic development - case of South Sudan" is chosen in response to the general consensus on the importance of conducting a comprehensive study that will sharp the economic policies and promote the business sector as well as the government and other organizations. llo\vever, the key question posed by this study is: whether the theory that political stability fosters economic development is simply the wishful thinking of people who value both stability and growth or it is a delusion ofthose who believe in the fact that most of developing countries may enjoy rapid growth if they are stable. The importance of this study emanates from the fact that South Sudan is confronted with enormous challenges of administrative, ethnic, political and economic development nature. In light of this the current study is trying to address the following issues: “What is the impact of political system in South Sudan on economic Development‘? What is the impact of oil resources on sustainable development? What is the impact of oil shutdown on political and economic stability and what is the possibility of deficit financing? Is there any possibility for cooperation between Sudan and South Sudan?” ln this context, the major objective of this study is to analyze the political development of the country to verrify the fact that political stability ensures the achievement of economic and social development. It also seeks to analyse the political history of Sudan in general and South Sudan in particular emphasising the importnance of political stability, among others as a precondition for socio- economic development. Furthermore, other objectives of study include suggestions on ho\v political stability could be ensured in South Sudan and how good governance could promote political and economic stability. In light ofthe above, this study focuses on the issues of the political transition and policies that will improve the economic, political, and social well-being of people south Sudan. lt seeks the ways of setting up policies that will raise the standard of living of people with sustained growth, and moving from a simple, low-income economy to a modern, high-income economy. It also attempts to develop a framework for cooperation between Sudan and South Sudan. The methodology which is adopted to address these issues is collecting, sorting and analyzing primary and secondary information relating political and economic development history of South Sudan, using empirical analysis such as SWOT analysis, information sources, references and books. The major findings ofthis study are as follows: 0 The political stability plays an important role in determining economic growth and economic development in many economies; 0 The degree of political stability is high if there is a high degree of democracy or autocracy; 0 Strong democracies or strong autocracies are best equipped to provide political stability that may lead to economic development. It is then the level of political stability within a given country, regardless of regime type, that results in economic growth; I Long-term sustainable economic growth depends on the ability to raise the rates of accumulation of physical and human capital by securing necessary sources (domestic, foreign or deficit finance) to use efficiently for financing economic development; 0 Most economists view corruption as a major obstacle to development. It is seen as one ofthe causes oflow income and is believed to play a critical role in generating poverty traps (e.g. Blackburn et al., 2006). Thus, corruption, according to this view, ‘sands’ the wheels of development and it makes economic and political transitions diflicult; I good governance is not only critical to development but also that it is the most important factor in determining whether a country has the capacity to use resources effectively to promote economic growth and reduce poverty.