Economic Crisis a Blessing in Disguise

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Everything being equal, the global food crisis could be an opportunity for a country like Namibia
to increase its fortune and place itself safely in the world market by grabbing the opportunity
by investing in agriculture to benefit from a high prices yield in the global market.-

The global food crisis is good for local food production, the world oil shock a search for new behaviour in the world economy and global warming and climate change, a warning signal for a new world order.

It has been for so long that human beings always over-estimate their external environment vs under-estimating/overlooking their internal environment.

The current world food prices hike has sent shock waves around the globe, but human beings rarely realize that despite being regarded as a threat to human survival, the same fate may be one of the best things ever that can happen in human history to take the world into a new equilibrium, a little bit higher than the primitive one.

It also serves as a warning to the world that it is not acceptable anymore for some economies to lag behind and operate below the world equilibrium.

Shortage of food is not something the world can afford per se, but the skyrocketing food prices might be a stimulus to local food production especially in developing nations that continuously operate below the world equilibrium with most of their population living below the poverty line.

It has been severally reiterated that a country that is capable of producing its own food and feeding its population is in a better position to fit in global competition by producing commodities in which it has comparative advantage.

It is also a matter of fact that hungry people hardly explore other opportunities until their basic needs are subdued. In Maslow’s hierarchy of needs, a person can only move up in a hierarchy if his lower needs (basic needs) are satisfied.

Everything being equal, the global food crisis could be an opportunity for a country like Namibia to increase its fortune and place itself safely in the world market by grabbing the opportunity by investing in agriculture to benefit from a high prices yield in the global market.

This has some observed advantages – first the local producers will benefit from a high price yield in the global markets; secondly, the local capacity will be built as retailers may shift from importing expensive food commodities and procure internally, which will help the economy to pick up.

Local Food Production Not Automatic

Despite the merits of the global food crisis, local food production could not however be automatic. With due consideration of revenue loss by the treasury due to government fiscal policy manoeuvring, certain interventions of short term and long term are sought both at individual, governmental and international levels.

Short-term interventions – came about by all working together. At individual level, individual consumers should start prioritizing in their budget, i.e. individuals should buy only what is necessary and sacrifice unnecessary items in their baskets.

Instead of buying individually they can also buy as a group, where the two or more households of the same basket need buy in bulk/doses of what they need and divide up between themselves with the view of benefiting from lower prices resulting from bulk purchases and potential discounts.

They could also shift to local food products, e.g., instead of buying and eating rice or some of the imported food items they should consider mahangu and other food made locally.

At governmental level, fiscal policy is applicable. A shift/relaxation of VAT on basic food commodities which are considered more basic is one of the options.

Team Namibia

It is good news that our government has responded positively in this regard. Private firms should also consider improving their supply chains and buy wisely to reduce the effect of prices on food commodities, while at the same time consider lower profit margins to relax the burden of the price. The latter sounds unpractical but through initiative like Team Namibia it is really possible.

Long-term interventions – since short-term interventions are only short-term measures the government should go an extra mile by manipulating the food market.

Several measures are applicable here. First the government should offer a conducive environment to local entrepreneurs who decide to venture into food production and value addition on food products. They can offer soft agri-loans which are structured to suit the agricultural industry and should be continually monitored.

Secondly, the government should encourage the increasing use of cooperatives in agricultural business and offer advice accordingly. Thirdly, the government should put policies in place that will encourage local food production as well as encourage retailers and wholesalers to buy locally where possible, e.g., retailers should be encouraged to hold 30-50% of domestic food commodities.

However local capacity should be considered so as to avoid short-term supply interruptions.

Fourth, the government should also consider subsidizing local agricultural commodities to sell cheaply and penetrate the local and even regional and international markets.

Lastly, but not least, the government should consider buying local food commodities, to use in its feeding programmes and drought relieve programmes.

Institute Funding Programmes

At international level – institutions like the World Bank, IMF and WAO should appreciate the initiatives of governments by instituting funding programmes like the agricultural revolution that took place in East-Asia and North America.

The global oil price on the other hand should not be looked into in isolation and at its negative perspective only.

I personally look at it as rather a warning to the world for its long-term stagnancy and dependency on oil and depleting oil reserves as a major source of fuel.

Therefore, this should rather be considered in its entirety as the right time to look for direct and significant substitutes for oil as fuel, disregarding the insignificant substitutes such as gas. On the contrary, oil fields/reserves will eventually deplete.

Like the food crisis, the global fuel crisis is subject to short-term and long-term interventions at all level in the society, and the international level being supreme.

Short-term measures should include the use of more economic means of transport and the use of electric powered machines in the place of diesel-powered machines.

The economic means of transport ranges from bicycles and motorcycles, to small engine cars.

The use of a bus fleet for transporting people to work also has merit. The government should then reward the use of public transport by subsidizing the bus fleet.

If necessary people who stick to private big engine cars unnecessarily should be charged to discourage them from using private motor vehicles with big engines.

However, care should be taken with this policy when it is applied to business people. They may as well be exempted.

At global level world funding institutions like the World Bank, IMF and African Bank, should put greater efforts in funding research and development projects aimed at discovering a direct substitute for oil as fuel.

Recurring Alarm

Global warming has been the recurring alarm by scientists and environmentalists: right now it is a concern of almost everybody. With the human species’ continuous battle for its survival on planet Earth it has become even more evident in the 21st century. But as I always believe, something that you can see coming is the best thing ever that can happen in human history.

The global warming issue always sends one back to the ancient/and anthropological history. Long ago lived ancient/fossil animal species like the dinosaurs. These animals have disappeared from world history for one reason only: they cannot adapt to climatic change.

Climate change is not however new in the history of planet earth – there have been severe droughts in the history of the globe. Most giant forests turn into world famous deserts, and inland seas into mountainous regions. The ancient Damara Sea covered the area of today’s Windhoek and Okahandja.

The Namib, Sabi and Sahara deserts expand their ways inland and major flooding and cyclones occur across the globe, some bigger than today’s hurricane Katrina.

Despite all of these, the human species find their way on the planet, and the survivors of all these calamities have reproduced rapidly and filled up the earth again.

Some of the islands we see today were all well under water – this is not because they were non-existent and not all of them are the results of today’s volcanic eruptions, but some of them were all well under water.

Cooled Down

Does this means the planet somewhat in between has cooled down? And for argument’s sake, the continents are still moving apart, which means it is not abnormal for these activities to prevail.

The point of departure here is that human species should not look at global warming in isolation: it is a big truth that human activities have contributed to a greater extent, but natural phenomena should not be overlooked.

It will be unwise or even be one of the bigger human mistakes ever on earth to direct all the resources/efforts on causality originating from industrial activities alone – but one should also consider the fact that this planet goes through phases and facets to which today’s events should be related.

In situations like this, the human species has few choices available: to hesitate and commit all their efforts to reducing emission and maintain the status quo, or they should prepare to live artificially on the globe.

Living artificially here implies increasing their survival by anticipating irregular shocks of natural phenomena and respond accordingly.

Immauel Nashivela
Windhoek

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