Standing on the shoulders of giants

The decision by President Hage Geingob to invite several eminent economic scholars to debate the state of the Namibian economy and the integrity of the Harambee Prosperity Plan has sparked widespread and lively debate about the economic path the country is on and, in particular, about how to bridge the gaping abyss of inequality that separates the rich and poor.

Surely, the entire initiative and debate is based on the open recognition by the Head of State that his administration faces a mammoth task in view of the fact that Namibia – despite the advanced constitutional and political rights enjoyed by its citizens – is one of the most unequal countries in the world in terms of income distribution.

Novice commentators had a field day this week in their assessment of the decision to invite Nobel Laureate Prof Joseph Stiglitz and Dr Carlos Lopes (executive secretary of the United Nations Economic Commission) to discuss the results and prospects of Namibia’s economy.



We should rely on the best achievements in science and economic theory to guide our plans and economic practice. To see further and more clearly what lies on the horizon we have to, as it were, stand on the shoulders of giants.

Stiglitz, a former chief World Bank economist, considered “a heretic” among mainstream economists, is widely regarded as a giant in his field.

His work has been highly critical of free market orthodoxy, neo-liberalism and the role of the IMF and the World Bank. He has also been critical of the doctrine of economic “shock therapy” applied to places such as the former Soviet Union.

Recent pronouncements by Minister for Economic Planning Tom Alweendo that the State must take a more active and interventionist role in economic life to address social and industrial needs is indicative of a definite shift away from the neo-liberal model, which prescribes that every problem must be left to “the invisible hand” of the market to solve.

Clearly the market has not solved the housing crisis and is indeed largely responsible for the exorbitant and obscene prices that have effectively excluded a large majority of the population –­ particularly young adults – from the prospect of ever owning a home. The market cannot be expected to solve the very problems it created.

President Geingob inherited a situation where, according to UNICEF, 24 percent of Namibian children are stunted in their growth due to malnutrition. With the lingering drought and the spike in food prices on the world market, a purely free market approach to the nutritional needs of the people would be detrimental.

The idea of setting up food banks to assist the poor is clearly interventionist and an attempt to counter the dictates of the market, where currently only those who can afford may eat.

This is also true of the unemployment crisis in the country. It would be the height of folly to imagine that the unemployment problem – and the needs of unemployed people – can be addressed by market dynamics, which in the first place forced vast numbers of people out of meaningful productive life.

Youth unemployment (between the ages of 15 and 34), according to the National Statistics Agency’s report released in November 2015, stood at a worrisome 43.4% in 2013, and there is no indication of any decline in numbers of jobless since.

Considering that there is no social welfare net or protection for the unemployed, this represents a massive loss of productive potential and a real risk to the future stability of the republic.

The calls for progressive taxation from scholars, like Stiglitz and Lopes for example, are a direct outcome of the realisation that there is no way one can tackle inequality and mass poverty without tackling the cause of it: the over-accumulation of wealth in the hands of the few, the one percent.

The hosting of the high-level seminar this week is not only a sign of the President’s intellectual inclination, but also of his determination to open up and raise the level of debate.

 

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