Feathers fly over sale of ‘family silver’

TRADE and Industry Minister Hage Geingob yesterday said the ‘excesses of capitalism have played havoc on the global economy’ and that Government would need good reasons before placing its state-owned enterprises (SOEs) in the hands of private investors.

Speaking at the 11th Annual Symposium of the Bank of Namibia (BoN), this year looking at privatisation, Geingob said even the West is currently rethinking it through huge government bail-outs following the global financial crisis.The Minister quoted former World Bank Chief Economist Joseph Stiglitz – ‘love him or hate him’ – saying that the free-market ideology was simply an excuse for new forms of exploitation.’We therefore need justification for privatisation that goes beyond privatisation for the sake of privatisation,’ Geingob said.His point of view was in stark contrast to that of Professor Jin Park, President of the Korea Institute for Future Strategies and mastermind of the privatisation drive in his country, who was the guest speaker at the BoN symposium.Park said governments sometimes use the ‘no’ to privatisation as an excuse to get more votes, promising people services at lower costs than the private sector would be able to do.’That way my kids will be paying for my debts,’ Park said, warning that this cycle is very difficult to break.Namibia is predominantly a capitalist economy, with most sectors already in private hands, Geingob said.He nevertheless asked the audience, packed with members of the private sector: ‘Is Namibia a capitalist country? Tell me what you think.’Highlighting fears that privatisation may worsen unemployment and access to basic services by ‘selling off the family silver’ to rich foreigners, Geingob asked: ‘When we talk about privatisation, I ask the experts not to lose sight of the challenges we face.’The Swapo manifesto doesn’t contain a single reference to privatisation, Old Mutual Namibia Group Economist Robin Sherbourne said.Taking the podium, Sherbourne said although he believes that private ownership is the key to faster economic growth, he wonders whether Namibia is really up for privatisation within the next five years.’Namibia has a dominant party which has no unified view on privatisation,’ he said.When political parties are in power for a long time, it becomes difficult to admit mistakes in their economic policy and so they just carry on year after year, he said. ‘Who will pick up the baton for economic reform? Who is driving economic reform in Swapo?’ Sherbourne asked.Privatisation without the key industries falling into foreign hands will be very difficult in Namibia, given the limited size and experience of the private sector. As such, these companies may be better off left in the hands of the State, he said.The Deputy Dean of Economics at the University of Namibia (Unam), Omu Kakujaha-Matundu, agreed with Sherbourne that Government currently lacks the political commitment to privatise.’Government appears to have reached the conclusion that more, not less, political involvement is required to improve corporate governance and corporate performance,’ he sided with the economist.Like Sherbourne, Kakujaha-Matundu is also of the opinion that privatisation is unlikely to happen ‘in the foreseeable future’. (Also read report in today’s Bottomline.)jo-mare@namibian.com.na