Africa-Press – Angola. Economist Alves da Rocha criticized inequalities in Angola today and argued that if income distribution were different, especially at the salary level, the removal of state fuel subsidies would not provoke social criticism.
For Alves da Rocha, fuel adjustments, with the removal of government subsidies, are a measure that results from “necessary adjustments in the economies,” as in Angola, because economies cannot be out of balance. “Economies have to make adjustments.
There are successes, both at the macroeconomic and microeconomic levels.
“And there are adjustments that take time to be made and that are more painful than others,” the economist stated. Speaking to Lusa, when asked about the new fuel price hike in Angola, the expert stated that the government measure contributes to the economy’s balance and growth, if done properly.
“But the fact is that economies cannot be out of balance,” he argued, noting that when it comes to fuel prices, Angola, in that regard, “has always been out of balance relative to the rest of the world.”
He argued that adjustments to fuel prices in Angola should have been made a long time ago, stressing that if that were the case, the Angolan economy would probably have already absorbed the negative effects of these adjustments.
“And therefore, clearly when fuels are subsidized, and fuels are an element, a factor, in the functioning of the economy, of factories, clearly there is a cascade reaction and that will have repercussions on inflation,” he said.
The director of the Center for Studies and Scientific Research at the Catholic University of Angola (CEIC-UCAN) also considered that wages could mitigate the negative impact of fuel price adjustments, while expressing concern about inequalities in the country.
“What concerns me, especially here, is the tremendous inequality that exists in Angola, between people, between sectors, but, above all, between people. And these inequalities, to be resolved, require time, a lot of time,” he emphasized.
He considered that inequalities in Angola should have been reduced a long time ago, “because there was sufficient national income at the time” and that Angola “is one of the most unequal countries in the world.”
“And, to do this, just look at the salary levels practiced in Angola, at all levels, the amount of monthly and annual salaries, in all sectors and at all levels of the population, which are, therefore, salary values that do not help the economy to grow,” he insisted.
Criticism of measures to remove government fuel subsidies, the economist continued, stems from the current income distribution model in Angola, which, as he noted, needs to be changed.
“Naturally, people react with reason; they wouldn’t react if the social situation, the income distribution situation in Angola, were completely different,” the economist emphasized, noting that economies don’t grow through investment alone.
Alves da Rocha also highlighted the need to consider income, “wages, and the creation of endogenous national demand that enables private investment.” But to achieve this, he concluded, “there must also be public investment in infrastructure.”
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