Developing a Sustainable Economy in Cameroon

20 - Conclusion: Implications for Economic Development

20 Conclusion: Implications for Economic Development Aloysius Ajab Amin Introduction Cameroon’s potentials are enormous. It can easily grow above 5 per cent with economic gains well distributed across all segments of society and all sectors of the economy. But it will require intensifying and extending economic reform for improved competitiveness and economic efficiency. This means developing and designing policies that would create and generate employment opportunities, particularly for the poor and the young, rapidly growing labour force, thereby increasing the per capita incomes and significantly reducing or even totally eradicating poverty. The proper functioning of institutions is a necessary requirement to achieve the desired development goals. To efficiently coordinate the necessary different socioeconomic activities, the institutional framework would have to be significantly restructured and strengthened in order to function more effectively and facilitate the performance of economic activities. As many studies show, the increase in poverty in Cameroon has been associated with high levels of inequality. There is evidence that extreme inequality tends to waste productive resources, income being the main determinant of the incidence of poverty. An increase in inequality increases the poverty level and hinders productive investment by restricting a large proportion of the population – the poor – from using their potential productive resources, particularly their labour. Lawrence and Thirtle (2001) observed that East Asian countries grew more rapidly with equitable growth than Latin American countries, which experienced high inequality with high levels of poverty. This suggests that growth is not enough to attain poverty reduction targets. Economic growth may not guarantee development or the eradication of poverty and sustainable development, unless growth is equally distributed and broad-based. Countries with more equal income distribution have tended to grow faster than those with high inequality. Deliberate policies with appropriate strategies must be implemented to ensure pro-poor growth and sustainable development. The right 402 Developing a Sustainable Economy in Cameroon policies must be implemented to generate the appropriate distribution patterns for successful equitable growth. Cameroon’s economic reforms took various forms. One important characteristic of the country’s economy has been the state/government dominance throughout the economy, such that budgetary cuts in the context of the reforms, which was across the board, affected all sectors and the most vulnerable groups of the population. No thorough analysis was done to forecast all the implications and effects of the economic reforms. Technocrats/intellectuals could have helped considerably in the reform process. They could have provided valuable inputs into the reform process, but were not well-utilized. Political leadership is crucial for ensuring a successful reform process. Hence both are necessary: local technocrats to provide proper analysis and policy inputs, as well as strong domestic political leadership for ensuring a successful reform process. Economic reform without proper analysis and strong commitment to reform is bound to fail right from the start (Devarajan et al. 2001). The proper functioning of institutions is critical. Policies or strategies that significantly improve income distribution and generate equitable growth patterns must be identified and analysed. What types of policies/strategies generate equitable growth, given that the initial distribution of income and regional development are not equal? Certain actions/policies have tended to exacerbate inequality in Cameroon. Improving income and resource distribution has an important link with growth and poverty reduction, and basic socio-economic development. Equitable growth strategies are therefore crucial for poverty reduction. Above all, it is important to provide the poor with the necessary skills and resources that can empower them to participate fully in economic activities, within an enabling environment. It has generally been observed and argued that growth (as part of development) is greatly enhanced by an environment characterized by critical attributes. Hence, government’s role is crucially important in: • creating adequate access to productive resources with effective physical infrastructure such as roads properly linking all the country’s regions; • strengthening the market infrastructure and facilitating competitive domestic markets; • providing and giving access to necessary social services, such as health, education, potable water and good sanitation; • carrying out public investment in health and education with the appropriate quality throughout the country; • creating an enabling environment for a stable financial system; • establishing macroeconomic stability with a strong financial sector; • institutions and promoting good governance; • carrying out equitable fiscal policy expenditures on those sectors/areas beneficial to the poor and other vulnerable groups; • creating and providing conditions and enabling environments where the poor can empower themselves, get themselves out of poverty and contribute in [3.128.203.143] Project MUSE (2024-04-19...