Contextualising Namibia's development and economic crises

By: Pendapala M. Taapopi

Africa is saddled and bridled in multifold crises of development, with implications threatening not only the welfare and existence of the broader populations, but the development base for future generations. As per Aina (1993), these crises entail features ranging from the continent being conflict ridden, negative economic growth, increasing environmental degradation, a socio-cultural malaise and the region's complacent and stagnated domestic politics with centralised authoritarian tactics and patriarchal regimes.

Africa's poverty and her economic predicament is distinguished by export patterns virtually unchanged as agricultural products and raw materials still account for the bulk of trade, while government's development plans and industrial policies are met with failure and peripheral neoliberal capitalist structures inhibiting industrialisation efforts. In addition, Africa's public sector is the significant source of employment, supplying up to more than 68% of the jobs in the formal sector. However, neoteric employment in this sector has been deterred by austerity measures due to the adverse liquidity crisis.

The concept of development entails a process of change and improvement. For Stiglitz, development represents a transformation of society, a movement from traditional methods of production to most productive modern ways. Indeed, change is a generational necessity and governments are charged with the responsibility to practically improve the standard of living, extend lifespans and increase productivity.

The ripple effects of these phenomena infect weak economies leading to overall contraction. The credit crunch will certainly have lengthy negative consequences for the development and growth capacity of the nation-state, as the government scrambles to stabilise and secure capital.

While a few countries have succeeded in rapid economic growth many more have seen the poverty and inequality gap grow, as neoliberal capitalist markets, even when assiduously followed, have not guaranteed success.

Indeed, the rapid growth of the countries of East Asia wasn't achieved through the promotion of liberalisation and privatisation of markets. Yet their success in development was accompanied by a reduction of poverty, widespread improvements in living standards, and even a process of democratisation.

In most cases, government played a large role as they followed standard technical prescriptions, of stable macroeconomic policies, while disregarding adverse policies. These governments pursued high productive investment in strategic economic sectors, complemented by industrial policies emphasising the importance of education and technology to close the knowledge gap between them and the more advanced economies.

Namibia is in pursuant of the neoliberal capital market, based on free trade, minimal market regulation and export promotion. The government campaigns with such principle to attract FDI, which is not a sustainable means of development, despite what we are being taught in schools. For no country is built by foreigners owning its resources and factors of production.

More so, Namibia fails to attract investment because TNCs do not invest in fragile economies, whose governments cannot guarantee a stable currency and are therefore more attracted to Latin America and Asian markets.

The period 2012 - 2015 saw the economy grow by 5.6% - this is 1.18% average a year. The NDP5 attributes the negative and exclusive growth towards a lack of industrialisation, infrastructure development and investment.

For instance, the 2008/09 crisis was resolved in many of the industrial and emerging markets, by employing counter-cyclical economic policies, comprising lowered interest rates and fiscal stimulus programs enacted in pursuit to avert the economic collapse.

And Namibia does not have the capacity to deploy such counter policies, 'ones that cool down the economy when in an upswing and stimulate the economy when in a downturn' because the tax bases are narrow and domestic revenues insufficient.

The impact of this crisis is defined by high inflation, prolonged unemployment, falling average incomes, increased inequality and additional high government borrowing. The class struggle is the order the day, with its effect on the working class and the youth in its majority.

The youth see, feel and live with the effects of the crisis daily and overall experience the lowest living standards in the country. In 2016, the World Social Employment Outlook report, found that 35% of young Namibians aged 16-24 are jobless, while 15% of the employed youth experience extreme poverty.

The economic crisis is but a crisis of capitalism as Marx and Engels' fundamental predictions on the intense concentration of wealth, the development of monopolies and the inevitability of crises proves accurate. A radical alternative paradigm is the only option, through a socialist system.

This paradigm will be constructed on the condition of a people-centered development structure and based on universal human values. By this, development will not be measured solely in terms of GDP growth but assessed in the background of human contentment.

Moreover, citizens can only play an active and non-partisan role in championing the common interests of the people through public deliberation of civil society engagement, to help institutions deliver public goods better.

While the regional and local institutions of governance should be democratised and be decentralised in the literal sense, to check the authoritarian attitude of the state and strengthen the process of the democratic machinery from the perspective of development based on cooperation would ensure the participation of all in the political and economic processes and equip the citizens with the responsibility of managing their own affairs at the grassroots level through people-centered planning and initiatives.

*Pendapala M. Taapopi is a fourth-year student towards a bachelor of Public Management at University of Namibia