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Lastly, we
will possibly work towards establishing consensus within the Global Community
on policies that, in the best possible manner, solve this crisis, and prevent
future crises from taking place.

To sum up,
our key goal is to establish effective trade policies, ensure meritocracy within
financial institutions, support banks so that they maintain and continue their
credit activity, increase foreign investment in our nation, and create more
jobs in the economy. We can possibly concede on less foreign investment and
less expenditure on physical infrastructure. We would also work towards the creation
of a custom union for African states that permits free trade, adopting a common
external tariff that may be decided with the consensus of the African countries,
or perhaps widening the base of CEMAC (Central African Economic and Monetary
Community). Negotiation with bilateral custom unions can also take place as this
will help stabilize commodity markets allowing developing, rich resource
country before they are struck with mass unemployment.

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 To solve such a problematic crisis, Gabon
believes in certain things. Firstly, crucial steps should be taken to secure
depositors up to a much higher level than at present. Secondly, laws and rules
for vetting the membership of boards and the top management of banks should be
revised to ensure meritocracy within institutions. In a third step, support
should be given to the banks that immediately require funds at reasonable costs
for maintaining and expanding their credit activity to satisfy the borrowing
requirements of their clients. In addition to this, Funds should be granted to
guarantee re-employment and new job creation. Moreover, in order to confront
economic instability throughout the world, attention should be diverted to the
needs and requirements of the developing and less-developed nations. A sensible
way to approach this is by investing in their physical and social
infrastructure, separately from any current aid program. Contracts placed for
this purpose in the developed world would not only help preserve jobs there but
would also create new jobs and enlarge the consumer market in the developing
world. Global spending from the large fiscal stimulus should focus on investing
in people and technology to create long-lasting, incentive-driven jobs that
will increase worldwide competitive capacity for decades. The Global Community
should work towards framing pragmatic trade policies with regards to less
protectionist measures so that it proves as an incentive for Less-Developed and
Developing countries to expand their export base. Furthermore, we would want
stability to persist in Exchange Rates so that sudden fluctuations do not harm
the health of the economy by either boosting or contracting Aggregate
Demand(AD) to an extent that is undesirable.

 

In the observed
trends and nature of Gabon’s economy, it can be understood that our economy is fueled
by trade, especially exports of oil. We believe that trade is the most crucial
subject of discussion for us as the global markets are collapsing which may
adversely affect our exports and imports. Considering the agriculture and food
aspect of trade, Gabon heavily relies on imported food items and since there
are high barriers (tariffs) it is likely that these prices will shoot up thus
burdening the economy. Not just us, but various other developing countries face
such an issue, and many require agricultural subsidies. In some cases, the
yielding harvesting may lead to practices such as ‘dumping’ which may place
Gabon’s agricultural sector at risk. In addition, the use of natural resources
may be a difficult spot to be in while great economies collapse. The
performance of other economies is critical to ours as it directly has a stake
in our ability to remain solvent during the crisis. Since we are highly
dependent on oil, a fall in global oil prices will put us under enormous fiscal
pressure.  This will also hurt the competitiveness
in non-resource economic sectors effecting the exchange rate. These factors
place us on the front line of the crisis.

‘A ripple
that turned into a tsunami’ is how the Financial Crisis is described. 

Gabon is a
central African country which is rich in natural resources. It possesses the
highest urbanization rates in Africa, where 80% of Gabonese live in urban
areas. Gabon is an Upper Middle-Income country. Its economic growth has been
driven by the oil sector (being the fifth largest oil producer in Africa). The
oil sector accounts for 80% of exports, 45% GDP, and 60% of budget revenue. However,
the inadequate quality of Gabon’s business climate poses a challenge to the
diversification of its economy. This makes us more vulnerable to the financial
crisis as our domestic markets would not be backed up if our export revenue
falls. According to factual data, Gabon’s real trade growth decelerated to 5.8%
in 2008, and is expected to turn negative in 2009, with trade falling by 0.1
percent, Imports increased by 13.2% and growth is forecast to slow down even
further to 2.6% in 2009. This is due to the unemployment and recession in other
countries which have led to lower average incomes and thus reduction in the trade
of oil. 

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