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Namibia must diversify to grow, say foreign experts Growth is estimated at 4% - well below inflation
By: BRIGITTE WEIDLICHNAMIBIA would need to rely less on mining and place more emphasis on diversifying its economy if the country is to grow, a meeting of international and local experts and officials heard last week.
More interaction between the private sector and Government, capable
civil servants and a disciplined workforce were key elements for
developing countries to industrialise their economies, foreign
experts told an economic symposium.
The one-day symposium was hosted by the Bank of Namibia under
the theme 'Structural transformation of the economy - insight from
other countries'.
"Namibia's drive to diversify its economy away from the primary
sector has not been sufficiently successful due to a low education
level of the labour force, low technological sophistication, a low
level of domestic investment and complete integration with a much
bigger and dominant economy - that of South Africa," said John
Odada, Associate Professor of Economics at the University of
Namibia.
Namibia showed an average economic growth of approximately 4 per
cent over the past years, while inflation hit 11,9 per cent in
July.
Mining is the largest economic contributor with N$ 5,5 billion
or almost 12 per cent to gross domestic product at the end of 2006,
followed by fisheries (N$ 4 billion) and agriculture, with 8 per
cent, including the informal sector.
According to Professor Ji Hong Kim of South Korea's Institute of
Public Policy and Management, his country's economic transformation
over four decades was mainly driven by its government, resulting in
a modern industrialised economy with steel, ship-building and
vehicle manufacturing as its main pillars.
This went hand in glove with scientific and technological
development and a skilled educated workforce.
"However, the development of the financial sector was neglected
and had economic impacts in the 1970s when Korea experienced a
financial repression and made us vulnerable to external financial
shocks from outside," Kim acknowledged.
The international financial crisis of 1997, which hit Asian
economies very hard, brought the necessary push for Korea to reform
its own financial sector and the economy as a whole.
"Export-oriented development strategies were mapped out, a
proper mix of free play of market forces and government guidance
were adopted, close communication with the business sector and
pragmatic policy responses to often unpredictable economic changes
led to good successes," according to Kim.
Chief Economist Hemraz Jankee of the Bank of Mauritius outlined
how that bank was instrumental in achieving economic growth on the
island, but how that economy had to make pragmatic adjustments to
sudden international shocks such as recent cuts in prices for
sugar, textiles and reduced tourism, the three pillars of its
economy.
"This has given way to a new economic strategy, based on the
development of a high-tech and innovative financial and business
services hub, printing and publishing services, light industry and
restructuring of existing sectors," Jankee said.
"Potential for growth exists to make Mauritius a platform for
the processing, storage and distribution of seafood and for repair
and maintenance of fishing vessels in the region."
The one-day symposium was hosted by the Bank of Namibia under the
theme 'Structural transformation of the economy - insight from
other countries'."Namibia's drive to diversify its economy away
from the primary sector has not been sufficiently successful due to
a low education level of the labour force, low technological
sophistication, a low level of domestic investment and complete
integration with a much bigger and dominant economy - that of South
Africa," said John Odada, Associate Professor of Economics at the
University of Namibia.Namibia showed an average economic growth of
approximately 4 per cent over the past years, while inflation hit
11,9 per cent in July.Mining is the largest economic contributor
with N$ 5,5 billion or almost 12 per cent to gross domestic product
at the end of 2006, followed by fisheries (N$ 4 billion) and
agriculture, with 8 per cent, including the informal
sector.According to Professor Ji Hong Kim of South Korea's
Institute of Public Policy and Management, his country's economic
transformation over four decades was mainly driven by its
government, resulting in a modern industrialised economy with
steel, ship-building and vehicle manufacturing as its main
pillars.This went hand in glove with scientific and technological
development and a skilled educated workforce."However, the
development of the financial sector was neglected and had economic
impacts in the 1970s when Korea experienced a financial repression
and made us vulnerable to external financial shocks from outside,"
Kim acknowledged.The international financial crisis of 1997, which
hit Asian economies very hard, brought the necessary push for Korea
to reform its own financial sector and the economy as a
whole."Export-oriented development strategies were mapped out, a
proper mix of free play of market forces and government guidance
were adopted, close communication with the business sector and
pragmatic policy responses to often unpredictable economic changes
led to good successes," according to Kim.Chief Economist Hemraz
Jankee of the Bank of Mauritius outlined how that bank was
instrumental in achieving economic growth on the island, but how
that economy had to make pragmatic adjustments to sudden
international shocks such as recent cuts in prices for sugar,
textiles and reduced tourism, the three pillars of its
economy."This has given way to a new economic strategy, based on
the development of a high-tech and innovative financial and
business services hub, printing and publishing services, light
industry and restructuring of existing sectors," Jankee
said."Potential for growth exists to make Mauritius a platform for
the processing, storage and distribution of seafood and for repair
and maintenance of fishing vessels in the region."
