Economic growth possible only through increased productivity
Accra, May 31, GNA - Mr John Taylor, the visiting US Treasury Under- Secretary for International Affairs, on Monday said that sustainable economic growth and poverty reduction could only be attained through enhanced productivity.
He said increasing the labour output per unit of time with skills and tools available could speed up the rate of growth and lead to a fast decline in the level of poverty.
Mr Taylor was delivering a lecture on the topic: "Launching the Millennium Challenge Account in Africa," at the Institute of Economic Affairs in Accra.
He said examples in countries such as Botswana and Chile had shown that higher productivity could stimulate strong economic growth, which would translate into a big per capita income.
However, many of the poorest countries had low and stagnant productivity and income because of impediments to investment and adoption of technology.
These impediments are the lack of the rule of law and prevalence of corruption, weak social sectors and restrictive economic environments that prevent people from trading goods and services or adopting new technologies and stagnant productivity and growth.
He said it was these concerns that the Millennium Challenge Account sought to address to place resources directly in the hands of beneficiary countries for the improvement in the welfare of the citizenry.
enacted in MCA countries can provide opportunities for their citizens to also benefit from both increased international trade and private capital inflows, from the growth of their domestic economies, and from greater economic and political freedom.
Mr Taylor lauded Ghana for a good performance in all the areas, especially in maintaining fiscal discipline and expressed the hope that they could keep it up in the face of an election year and reversed a long and destabilising trend in the country's economy.
He was, however, not happy with government's continued provision of subsidies, saying if these funds were directly invested in people, it could make dramatic impact on the welfare of Ghanaians.
Mr Taylor asked government to take additional steps to improve the investment climate, particularly for foreign investors through quick resolutions of outstanding investment disputes.
"The private sector will be concerned if the government appears to be impeding into the private sector investments- this needs to be carefully monitored, as the government needs to let the private sector be the driver for economic growth."
He said in preparing projects for accessing the fund, Ghana needs to deliver quality programmes with a strong level of success since the Millennium Challenge Corporation could reject a country's proposal. "In a broad sense, we expect it to focus on programmes that will stimulate transformational change within countries resulting in increased economic growth. It could include investments in agriculture, education, private sector and financial systems development, legal and regulatory reform and enabling infrastructure."
He said monitoring is a key element of the MCA programmes, saying, evaluation of results would allow the MCA to incorporate lessons learned into ongoing future operations. Mr Taylor urged government to continue with the right mix of political, economic and social conditions to attract investment to increase economic growth and improve the livelihood of its citizens. 31 May 04