Various policies are geared towards spreading of wealth and related to patriotism and resource Nationalization. There are strategies where nationalization can be a catalyst for wealth maximization. According to wikipedia.com – Nationalization is the process of transforming private assets into public assets by bringing them under the public ownership of a national government or state. During the past 26 years we allocated development finances primarily towards projects that don’t generate profit and hence we achieved less trade. According to the budget review by economist Roland Brown current revenue income is composed of taxes (30%), SACU revenue pool (24%). We cannot depend on a system where the government is only feeding itself from taxes. He further states that debt expenses are 7% of revenue and there is less expenses for development projects. Salaries expenses accounts for 38%, subsidies and SOE expenses equate 26% of expenditure. Globalization reminds me of a David and Goliath situation whereby the world as a giant is taunting Africa, according to WTO global trade grew by around 2.8% (2015) to the benefit of “wealthy” nations and our detriment. This places poorer nations under immense pressure from the global established countries. One of the adverse effects is the shrinking African currencies, our money holds less value to import consumption goods, in principle countries should trade on a fair currency basis, but unjustifiable currency fluctuations create a serious trade imbalances and severe forex losses. In a country with hyperinflation nationals tend to save less, whereas countries with strong currencies invest more because their money ensures greater future returns and higher interest rates. They pump this bonds and securities into Africa thereby achieving national wealth. We must rethink our Models because Adam Smith was not raised in Africa and cannot offer a panacea for our abandoned kwachas and rand losses that increases poverty. This is not the same case if we were less dependent on imports. “When the rich think of the poor they have poor ideas.” (Eva Peron the former first Lady of Argentina).
Adam Smith wrote in the book titled “The Wealth of Nations” – countries trade where they have competitive and comparative advantage. Because of globalization some countries are far competitive than the rest, dominant and over protective. Globalization will make NEEEF look like a puffed-up alligator with baby teeth. Currency outflows are becoming rampant even in South Africa where middle class is becoming extinct and the poor is getting poorer. Let me put an axe to the bottom of this tree called globalization. The answer to globalization for China was nationalization of banks to eliminate commercial sector red tapes and availed the money need for industrialization. Local goods have an edge over import goods because it takes 2 months for a product to leave China and arrive in Namibia, in the meantime we can create the similar products in a matter of weeks and through the process we could work on our competitiveness. Professor Justin Barnes(RSA) explained that local producers must apply “contract-winning”, “order-qualifying” and “quick response” enterprise ethics to overcome globalization. Globalization promotes import goods, but it also creates a logically unfair impression that imports are superior to local goods, which is not always the case. There are four key methods for tackling globalization and might be easier to adopt for Africa, they are: government subsidies, subsidies on complete agricultural value chains, improved foreign trade cooperation. Mining nationalization is another complex matter on its own. Method one: Government spending is a launching pad for “strategic” nationalization and this has nothing to do with squeezing the private sector but empowering the poor. Any country that suffered historic marginalization must reserve room for radical economic reform, to reconcile their financial position and reverse the harm of apartheid laws instead of premature competition with giants. I don’t mean NEEEF, as I mentioned earlier NEEEF is politically motivated and was not targeted to diffuse globalisation. Government spending is deal-maker because Infant Industry protection(IIP) is becoming less effective as a legislation. Government spending has the ability to boost private sector and SME cooperation. Modernized production of subsidized goods, if we give free sanitary pads at schools they should be manufactured locally, vast public procurement cannot be spent on imports. NDF and prisons food must be produced locally to benefit local economy, cookies, bread and the likes. We can also link other projects like mass housing to be geared towards full Nationalization. If South Africa makes Tertiary education free they should publish their schoolbooks locally and tie the entire value chains (e.g. school uniforms) to create local employment.
Method 2: In Agriculture, most of Europe is heavily subsidising their farmers as the sector is very volatile and dependant on climate conditions and improved manufacturing methods. Agribank may apply a different approach with subsidies without bureaucratic red tape and lesser commercialization. We need help with “complete agricultural value chains” that ensures a better value chain for all farmers. The market has various technicalities that needs Agribank and state intervention for example transport, branding, standards, packaging or product improvement, etc. Method 3: What do I mean by “improved foreign trade cooperation” – whatever we don’t own we can rent in another country on a reciprocal basis, for example the top import products such as barley, wheat, sugar and rice, if we don’t have the climatological requirements to produce the rice and sugar why can’t Namibian cooperatives buy/rent land in countries where they can plant the products and import it back to our country (most wine estates for example in South Africa are attracting French or foreign cooperatives). Bilateral, multilateral an plurilateral trade agreements should look beyond tariff free trade of consumables. Likewise, we granted Chinese owners to operate and run the 4th best Uranium mine in the world without asking for at least 40 hectares of land in China to plant rice for Namibia’s poor people or for the foodbank for example. It will take our local rice initiatives a while to meet national demand. China is requesting for us to give them our sea creators, instead of money in return lets think of resource exchanges. If they plant tobacco here, what can we plant in their country that has more water than us. We are approaching trade complexities whereby people are replaced by machines as a result of globalization, we need to think a probable escape plan. Nationalization is preferable for local capacity building and boosting of vocational training sectors which later boosts services exports.
Rodney Dan-Ao !Hoaeb is a Trade and Investment Researcher Committed to seeing a radical economic shake-up in Namibia.