Budget No Reason to Over-Celebrate


By Usutuaije Maamberua

SWANU’s socialist response to Budget: Praise of the Budget immature:

The imperialist origin of Namibia’s present economic framework

From the outset, it must be clear that the 2008/09 budget as all the budgets before is set in the context and background of the capitalist so-called market economy. This is a system that was forced down the throats of Namibians through the 1982 Constitutive Principles by the Western Five and adopted by the Constitutional Assembly in 1989. Hence they now form part of the Principles of State Policy in the Namibia constitution.
Therefore, to talk about a pro-poor budget in a capitalist environment is highly questionable. After all, it can be argued that merely allocating public resources for right goods and services may not necessarily lead to desirable outcomes if the ideological base is not correct.
It is unimaginable to think how Namibia decided to attempt correcting the ills of an exploitative capitalist Apartheid system with a capitalist exploitative model. Where did OUR Socialist ideals go? The Budget for the 2008-09 financial year projects a surplus and growth rate of over 4.7%.
It is reported that this growth rate stems from a significant expansion in transfer from the SACU Pool, an unanticipated growth in revenue collection by Inland Revenue and a steady corporate tax. The total revenue is estimated at N$19.5 billion for the period 2007/08.

Ideological base and allocation of resources

The bone of contention is not the arithmetic of the figures in the budget but the philosophy and the rationale informing the figures. We honestly admit that it is indeed an onerous task for the Minister of Finance to chart a budget amidst ideological confusion.

The socio-economic context

The surplus projection is tabled against the background of deep-seated social ills and structural inequality in our society that capitalism has not been able to address.
It is presented against the backgrounds of devastating unemployment statistics, high cost of living resulting from an increase in the price of basic food commodities, increase in the price of fuel, the continuing hike of water and electricity tariffs, the sky-rocketing interest rates, public debt estimated at 25% of the GDP and the shadow of a projected inflation rate of 7% that is still an underestimate of the true inflation status of Namibia.

Budget does not address the root causes of poverty and inequality

SWANU contends that the praise heaped upon this budget is premature because the budget does not address the root causes of poverty and social inequality, but it only attempts to mitigate their effects on household income.
As long as the budget does not set clear milestones for employment creation and empowerment of the poor through better wages and access to micro-lending facilities, it is not a pro-poor budget.

Increases of allowances of pensioners and war veterans no privilege

The increase in the pensioners and veterans’ allowances is long overdue and should not be treated as a privilege in a country where the rich are getting richer at the expense of the poor who are the economic victims of a system that promotes inequity in a wealthy state.

Beneficiaries are the capitalists and political elites

SWANU is worried that this budget is merely a manifestation of a liberal capitalism agenda adopted by ALL the parties represented in Parliament that SWANU a socialist party does not subscribe to.
The social strata of the society that stands to benefit are the local corporate entities, fly-by-night investors (Ramatex being a strong case in point) particularly in the mining, fishing, tourism, transport, road and construction sectors, the local economic elites and their foreign-based business associates, trans-national corporations.
As McChesney wrote:
“(n)eoliberalism is the defining political economic paradigm of our time – it refers to:
– the policies and processes whereby a relative handful of private interests are permitted;
– to control as much as possible of social life in order to maximise their personal profit.”

So-called surplus an accident not result of planning

The budget surplus and projected growth rates are nothing to go by if they are not measured against clear targets, intentions and milestones that have been set and achieved within the period under review.
For example, we should not over-celebrate a surplus which is to an extent a positive consequence of external and unintended factors.

Alternative sources of revenue long overdue

SWANU proposes that alternative sources of revenue must be found while existing ones must be consolidated. The Inland Revenue Department must be transformed into an independent Revenue Authority staffed with professionally qualified accountants, financial analysts, economists, and so forth.
This will foster a culture of efficiency, good governance and professionalism in the revenue collection regime. Equally, the office of the Auditor-General must become independent of state bureaucracy so that it can effectively monitor and report on unnecessary spending and public wastage.

Prudent macro-economic policy needed

The government needs a prudent macro-economic policy and strategy to stem the flight of capital out of the country. Namibia has become a net capital exporter as a result of flimsy excuses such as lack of investment opportunities in significant bankable projects.
The local small entrepreneurs must be assisted to form corporative and joint ventures aimed at obtaining shares in foreign-owned operations and parastatals.
The people (through community trusts, workers trusts, regional development trusts, women and children upliftment trusts, academic institutions’ research trusts funds) must be facilitated and enabled to invest in state-owned entities and foreign owned companies.

Skills transfer an essential ingredient for capacity building
The country continues to import skills and technology without transferring it to the local people.
For example, had the state through micro-lending schemes assisted the workers at Ramatex to obtain shares and ownership of the company over the 10 years of its operations, the Malaysian capitalists would have left without bringing its operations to a halt that regrettably resulted in massive loss of jobs.
We need to remind ourselves here that: “…private corporation is not in the business of being humanitarian. It’s in the business of increasing profit and market share. Doing that typically is extremely harmful to the general population. It may make some number look good.” (Noam Chomsky).

Time reckoning for a national micro financing institution

SWANU welcomes the idea of a Micro Financing Institution (Bank).
The Small and Medium Size sector is a vital component of the national economy and if properly financed will create additional jobs and prosperity for those without hope of entry into the mainstream economy.
Although the formal sectors driving employment are wholesale and retail trade, construction, mining, agriculture, tourism and fishing, workers are sometimes paid low wages that employment in the informal sector becomes a preferred alternative source of income.
This facility is long overdue because the Development Bank of Namibia has to concentrate on sourcing long-term joint venture capital, internally and externally, partly also to stem the outflow of our much needed resources to neighbouring countries.
Hence, the target for the DBN should have been N$10 billion in its bottomline within the first ten years of its existence. That is what SWANU calls a progressive change in the paradigm of development financing.

Alternative energy sources long overdue

The state must explore alternative sources of energy including exploiting our uranium resource to develop a nuclear enrichment plant for the peaceful objective of energy supply. We must plan in advance to avoid the impact of the looming energy crisis in the sub-region.
Imperialism should not dictate to Namibia as a sovereign state on how and when to explore this energy source.
We cannot continue to export this precious resource that could otherwise be used domestically to advance our own national development priorities. This budget should allocate research funds to explore this option.

A permanent remedy needed

SWANU proposes that a permanent remedy must be found for the perennial flooding in the northern regions. The ecological impacts as evidenced by the alarming rate of deforestation, population pressure and past colonial military devastations can certainly not be addressed by means of land reform programmes.
The resettlement programme may not always offer a genuine social and economic option, particularly in the context of the regions. It may only serve as an escape valve for social pressure and political expediency.
We urge government to set aside a budget vote for agrarian transformation in the northern regions.
The huge water resource there must be harvested for a Green Revolution to counter the effects of encroaching desertification and deforestation.
We must learn from the experiences of a country like Libya that introduced a Green Revolution in the Sahara Desert.

Defence budget the biggest allocation

Finally, we are a bit worried by the increase in the military budget in a country that is not at war or in an unstable region. What happened to the concept of democratic peace?
How does this dovetail with the so-called pro-poor budget proposition?

Vision and political will critical success factors

We need political will and vision to carry out these ambitious development projects. This is not a pipe dream, times are changing fast.

Usutuaije Maamberua is the President of SWANU


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