Getting a member country's economy back on track
|Why Are Exports Down?|
The Finance Minister begins. "I must remind you that our exports are down because of the high inflation over the last several years. Our currency, the CFA franc, is tied to the French franc. Fifty CFA francs equal 1 French franc. But both prices and wages have gone up faster here than in Europe. So the same amount of European currency buys less and less here."
"You know that fish is our biggest export. Well, the tuna fish packers are losing money," says the Finance Minister. "With production costs so high, they can’t sell a can of tuna in Europe for enough to make a profit." You learn that there are two reasons that the tuna costs so much to produce.
"The first reason is that wages for the workers keep going up," says the Labor Minister. "The trade unions refuse to discuss any sort of pay cuts to help lower the cost of export production. They say they’ll go on strike if wages aren’t kept high."
"The second reason is that electricity is very expensive," says the Energy Minister. "The managers of the fish packing plant are complaining that the tax on electricity adds too much to their costs. They say they’ll have to shut down the plant if we don’t lower the electricity tax."
What will you do to bring down production costs of your fish exports and make them more competitive on the international market?
|Negotiate with the labor unions and ask them to take a pay cut.||Cut the electricity tax in half to make it cheaper for the tuna packing plant.|