“You have a big government, and this is not an advantage in economic development terms. Hence there is a need for a retrenchment policy in the public sector as well as enforcement for a mandatory retirement age” opined South African -based Economic advisor, Russel Lambert.
Lambert was speaking on investment, growth and social development by drawing comparative country lessons from developed and developing nations during a business breakfast co-hosted by the Economic Association of Namibia (EAN) with support by the Hanns Seidel Foundation (HSF) this week.
Lambert further opined that both South Africa and Namibia are ensnared by an ideology of state-led development.
“The state should be an enabler and not a sole driver of economic development” said a pro free trade Lambert. He also opined that Namibia should untether its economic development from South Africa. “The advantage of Namibia is that it is open to currency flow which is an opportunity to unpeg from the Rand and maybe even linkup with a more stable currency”. Lambert strongly motivated that economically, Namibia appears to be in trouble and in this time, it is problematic for Namibia to be so tethered to the South African economy. This is because there also exists a prevalent risk that South Africa can decide to withdraw from SACU any given time and this could negatively affect Namibia as it gets 35% from the SACU pot of which South Africa is the biggest contributor.
He critiqued Namibia-China relations by stating that loans are fundamentally debts which equally ensnare. “Developing countries, the world over do not need more loans but need to prioritise a culture of saving to enable investment. China is playing a Geo-political game with its One Belt, One Road (OBOR) economic plan”.
Lambert presented a case example of how Sri Lanka is marred with massive Chines debts that it is unable to pay and had to hand over its strategically located Hambantota port to China for a 99-year lease. This acquisition was said to be evidence of how effective China’s debt-trap diplomacy can be by international critics as China is alleged to have encouraged its companies to bid for outright purchase of strategic ports where possible as it gets to work on its economic development plan.
Whilst Namibia is not in the direct development path of OBOR, China appears to have vested interest if the recent trip to China by President Geingob is anything to go by. Local analysts have openly critiqued the motive of the President’s visit and cautioned against trade agreements that could negatively entangle the country with the Asian giant.
“The essence of growth is savings, without it there is no prospect of economic growth. Questions of investment can only be answered by a savings culture. This is because true lasting organic growth comes from domestic savings, without it, foreigners will come and invest their own savings and take the proceeds back home. So how do you encourage domestic savings amidst a prevalent debt culture? What is clear is that a debt culture does not encourage savings nor enable growth” supported Lambert.
Comments from the floor critiqued Lambert’s position that inequality can be harnessed to propel economic development; whereas participants felt that by and large racial inequality of opportunity is a hindrance which dictates the boundary lines within which entrepreneurs can harness inequality as an opportunity to create wealth.
A participant noted that the opportunity of a black entrepreneur is different from that of a white entrepreneur who is backed up by generational wealth in his efforts to harness inequality as an economic opportunity.