Don’t Go Blaming the Chinese

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By Clemens H. Kashuupulwa

– Anti-Chinese bout is not a solution to competitive business advantage
The grouping of anti-Chinese business entrepreneurs of more than 112 shopkeepers in the North, that calls for local small and medium entrepreneurs’ [SMEs] protection against foreign-owned business operations in Namibia, is in conflict with the Namibian Constitution.

The ideas ignore to respect the principles of Namibia’s Economic Order that strives “to secure economic growth, prosperity and life of human dignity for all in Namibia”. While the group is respected for its right to freedom of expression, assembly and economic status, these rights must not be incompatible with the rights of foreign business people to own enterprises and carry out business activities in Namibia.

The anti-Chinese business people “acknowledge the Government Policy of Free Enterprises” and demands for a government policy to protect local business entrepreneurs to compete in the business sector.

But they also need proper guidelines, through consultations with other stakeholders in the business sector such as the central government, the Ministry of Trade and Industry [MTI] and the Ministry of Foreign Affairs [MFA] in particular, and the regional and local authorities, the representative of workers unions, the Namibian Chamber of Commerce and Industry [NCCI] and other civil organizations in general for input to come up with the right decision that is not in conflict with Namibia’s laisser-faire economy.

“Laisser-faire economy is an international acceptable economic order in which government intervention is kept to a minimum and market forces are allowed to prevail, on which the Namibian economic system is based under Namibia’s Constitution’s Article 98, subsection 1.”

This is explicitly spelt out in the Namibian Constitution that “the economic order of Namibia shall be based on the principles of a mixed economy with the objective of securing economic growth prosperity and a life of human dignity for all in Namibia”.

Now a “group of 112 local shopkeepers” in the North are trying to seek audience with His Excellency the President, Hifikepunye Pohamba in their quest to end “an intolerable proportion of Chinese-owned retailers in Namibia which is putting local shop owners out of business”.

The group of 112 local business people regularly meets in Oshakati “to form an organization to protect the interest of local entrepreneurs against foreign-owned business”. This appeared in the Namibian newspaper.

Such organization needs guidelines to achieve its goal of competitive business protectionism in accordance with the laws of Namibia as well as international laws on foreign investment to which Namibia subscribes, under Article 99 of the Namibian Constitution.

The Constitution calls for foreign investment to be encouraged within Namibia subject to the provisions of an investment policy of the government in the country.

Finding ways for local business entrepreneurs to be protected against competitive business operations in Namibia in itself is not a bad idea if it is done under the framework of the principles of a mixed economy described by law.

It becomes only a problem when local business entrepreneurs instigate people to engage in violence against foreign businesses in Namibia, targeting to compromise the Government Policy of Foreign Investors in the country that aims for job creation, manufacturing and economic growth.

Also, the anti-Chinese bout must not lead to the outbreaks of xenophobia similar to those that are currently going on in South Africa against foreign workers who allegedly take up employment for South African nationals.

As I see it, the difference here, in Namibia, is that the local business people feel that the Chinese business people have taken up business opportunities of the Namibian people.

It is a strong belief of many business people in the North that their businesses are closed because of Chinese business owners competing against them with cheap retail goods in the business sector.

While it appears to be true in loose terms, there are also many other factors that lead to the closure of some of the Namibian business outlets in the country.

However, the Ministry of Trade and Industry [MTI] and Namibian Chamber of Commerce and Industry [NCCI] have alternatives in place to revive some of the local business enterprises that are closing down, by way of connecting them with foreign manufacturing companies to solicit business capital funding.

The Development Bank of Namibia [DBN] is also there to provide funding by way of providing viable business plans for funding.

However, the question remains as to why this did not happen to some local business enterprises.

Many local business people are not members of NCCI. Others are unwilling to merge among themselves within the Namibian owned companies to come up with manufacturing industries that under the Government Policy of Foreign Investment can be funded by DBN for job creation and economic growth.

The other factor, Namibia’s business sector is dominated by retail products imported outside the country that make local business people not to enter into competition with foreign manufacturing companies.

This is the main factor that leads to the closure of local business people as they cannot compete with manufacturing business owners in the country.
The issue leading to some local translational business closure is not related to the Chinese business boom in Namibia.

It is the business companies that compete with small and medium enterprises [SMEs] for retail goods in Namibia.

The anti-Chinese business owners in the north are thus a non-issue in business terms. The issue is competitive advantages on retail products between manufacturers and SME enterprises.

Chinese retail competitors fill the business demand gap of retail products that offer consumers greater value, either by means of lower prices on retail products or providing greater benefits and better service facilities that could justify low prices.

The Chinese business sector is promoted by ways of offering the same products in the market in terms of quality that are affordable by low income customers above other same products in the market.

It is the competition in the business sector that makes customers to have the right of choice of products and services in the market. Today low income customers and the poorest people are Chinese customers as basic products and services are made available in the country by Chinese investors.

Chinese investment in Namibia makes it also possible to employ many people and dish out money to the local business people who are lending business buildings to Chinese business owners.

True, it is high time for Chinese manufacturing companies to open manufacturing industries in Namibia and wholesalers for Namibian SMEs to open up businesses of their own.

The same applies to South African manufacturing companies and others that dominate the Namibian business market with retail products. It is the retail business products that lead to business closures in Namibia as local business people cannot compete with manufacturing companies selling their products in Namibia.

Chinese sell retail products at low prices. If the local business people increase the prices of the same products, customers will only take the offer on low prices in the market.

Local business people have the alternative to join the NCCI to come up with creative and innovative business ideas that facilitate them to enter into competitive business undertakings in Namibia and elsewhere in neighbouring countries.

The NCCI in consultations with the MTI and DBN have ways to improve local business ventures in the country. That is the way out for local business people to survive the competition with foreign business owners in Namibia.

True, if NCCI cannot introduce business innovation and strategies for local business entrepreneurs to gain business competitive advantages in the country, local SMEs will also not grow from informal to formal business enterprises.

This in itself does not augur well for SMEs. It is like Namibian local business owners are locked out of the business industry of the country of their birth.
A situation of this nature cannot be accepted as it creates more disadvantages than advantages to economic growth and job creation in Namibia. SMEs’ role in Namibia cannot be underestimated.
Many people are employed in this sector.

The Labour Resource and Research Institute [LaRRI] has it on record that the SMEs sector “is estimated to be growing by about 16 000 jobs per year compared to 3 000 – 4 000 jobs in the large business sector”. This indicates that the SME sector plays an important role for job creation in Namibia as it “is estimated to provide 100 000 full-time jobs at present”.

The support and promotion of the informal business sector financially by the MTI, NCCI and DBN are needed to eke out potential business owners into the formal sector to reduce Namibia’s unemployment rates downward below 37 percent.

These can only be done with SMEs also joining the NCCI taking into account that Namibia is currently at an advanced level and moving towards a new era in the global business competitive venture. Unless local business owners are to change the existing business attitudes of sole trading to gain business competitive in the market.

They need business skills that contribute to economic growth for industrial change and more job creation in the business sector.

The anti-Chinese bout in the business sector can only lead to xenophobia that is unacceptable in a free-market economy in the country. Yes, the question still remains how do we go about surviving in such a globally competitive business venture in the country.

Namibia needs light and heavy manufacturing industries with appropriate technologies in join ventures in the country.

Namibia needs light and heavy manufacturing industries with appropriate technologies to create a friendly global business environment that would equally benefit its business entrepreneurs to have access to manufacturing technologies in joint ventures with South Africa, the European Union and their Asian counterparts, also to utilize its untapped resources for mass production and exports to Europe and Asia.

The Ministry of Trade and Industry offers good incentives for manufacturing products through its economic policy zone [EPZ] at Oshikango and Walvis Bay. By so doing, it has created favourable opportunities for local business entrepreneurs to enter into business ventures and mergers with foreign investors.

This opportunity is needed to expose SMEs to appropriate manufacturing technologies with developed countries so as to break the existing vicious cycle of depending on retail goods imported into the country.

The introduction of business studies in the Namibian Education Curriculum Vitae and other science subjects are indicative of a good start in the right direction for future generations to take the challenge of partnership in business joint ventures and mergers with the foreign manufacturing companies in the absence of the existing SMEs in the business sector.

Namibia can no longer keep the status quo by doing business with retail goods alone as this is not in the best interest of the economic growth and industrial development of the country and its people.

Strategic mapping and benchmarking options are needed to re-identify the country’s economic needs and goals as well as barriers to addressing industrial development so as to be in line with Vision 2030 that strives for a “prosperous and industrialized Namibia, developed by her human resources enjoying peace, harmony and political stability”.

Anti-foreign business owners in Namibia will not help us out to engage in the business sector on competitive ventures in whatever forms it deserves.
– Clemens H. Kashuupulwa is the Governor of Oshana Region.

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