Namibia’s Global Competitiveness

THE World Economic Forum issues, on annual basis, The Global Competitiveness Report.

Report compares countries’ economic potential for growth. Potential for economic growth is measured through sets of institutions, policies and factors that determine the level of productivity of a country. The level of productivity determines a country’s potential for sustained level of prosperity.The World Economic Forum identified twelve pillars of competitiveness. These are: legal and administrative institutions; development of infrastructure; the macro-economic environment; the state of health and primary education; the state of Higher Education and Training; market efficiency; labour market efficiency; financial market development; technological readiness; market size of a country; business sophistication; and innovation initiatives.A country’s status is placed into three possible levels of development depending on which pillars of competitiveness are dominant in that economy. If a country’s economy is dominated by basic requirements such as, institutions, infra-structure, micro-economic environment, and health and primary education, such a country’s economy is characterized as factor-driven. If a country’s economy is, however, advanced into efficiency enhancers, such as, higher education and training, market efficiency, labour market efficiency financial market development, technological readiness, and market size, such an economy is characterized as efficiency-driven. In an innovative driven economy, the pillars of competitiveness are business sophistication and innovation driven growth.The Stage 1 factor driven economies normally record less than US$7 000 GDP per capita growth. When an economy is able to sustain a GDP per capita growth of between US$2 000 – 3 000 that an economy is said to be in Transition from stage 1 to stage 2. A Stage 2 economy is efficiency driven. It records a sustained GDP per capita growth of between US$3 000-9 000. A country which is in transition from stage 2 to stage 3 posts a sustained economic growth of GDP per capita of US$9 000 – 17 000. A stage 3 economy is driven by innovation. Its growth should generate a GDP per capita of US$ 17 000 and above. Namibia’s competitivenessOn the basis of the pillars of competitiveness and income threshed stages of development, The Global Competitiveness Report assigns countries’ economies to stages of development. As alluded to earlier there are five stages of development. These are: Stage 1; Transition from Stage 1 to 2, Stage2; Transition from Stage 2 to Stage 3, and Stage 3. Namibia together with Cape Verde, Mauritius, South Africa and Tunisia was grouped in Stage 2.Other countries listed in Stage 2 are China. The Russian Federation and Brazil. The grouping of Namibia in Stage 2 in my view is rather flattering. The placing of Namibia in Stage 2 has something do with GDP per capita. We are all aware of high levels of income distribution disparity in our country. Another draw-back is that Namibia is a net exporter of capital. The GDP per capita does not take into account the expatriation of part of the GDP through dividends and profits.In terms of the Global Competitiveness Index Namibia is ranked at 74 out of 139 countries in the 2010-2011 The Global Competitiveness Report.Namibia is few points up on Morocco and Botswana, but twenty points down from South Africa. Commenting on the ranking of Namibia, the authors of the Global Competitiveness Report 2010-2011 aptly observed; ‘With regard to weaknesses… Namibia’s health and education indicators are worrisome’. The country suffers from high infant mortality and low-life expectance as well high level of communicable diseases, the Report noted. Out of 139 countries Namibia was ranked a low 113th on the health sub-pillar.The report further noted that the education enrollment rates were low and the quality of education system was poor. On the sub -pillar of education and training, Namibia was ranked 124thout of 139. This reflects badly on our higher and vocational education and training system. I shall discuss more on these weaknesses in my next ‘think piece’.AssessmentNamibia is well advanced in most of the basic requirement pillars as well as efficiency enhancement pillars. This means that Namibia should build on its strength in order to be able to move on into transition from Stage 2 to Stage 3. This will not happen by chance. A strategic plan for economic growth should be developed.Such an exercise should be all inclusive. Namibia should adopt a notion of a Developmental State. Through Public and Private Partnerships, the State should play its role as a catalyst for economic development and growth. One hopes that this approach shall guide the drafting of the Fourth Development Plan.

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