Think twice about open economy, warns expert

AN open economy means an exposed economy.

‘Be careful of the side-effects of an open economy,’ European financier and banker Dr Lode Beckers cautioned at a media conference yesterday morning.
He reiterated the same warning at a global financial crisis briefing of senior Cabinet ministers later in the day, similar to the message he delivered at high-level meetings with the National Planning Commission (NPC), Development Bank of Namibia (DBN) and the Bank of Namibia (BoN) this week.
The dilemma with an open economy without barriers is that if one trading partner runs into trouble, the other one will suffer too. This is something African-Caribbean-Pacific (ACP) countries and the Southern African Development Community (SADC) need to be particularly wary of, Dr Beckers said.
Asked whether his warning relates to the Economic Partnership Agreements (EPAs) the European Union (EU) seeks with several developing countries and which calls for significant trade liberalisation, Dr Beckers said negotiations will demand concessions from both sides.
He referred to the landmark EPA debate at the 17th session of the ACP-EU Joint Parliamentary Assembly (JPA), which took place in Prague in the Czech Republic yesterday afternoon, and said it would be an opportunity for the G20 to ‘practise what they preach’.
At the recent G20 summit in London, the twenty most powerful countries on earth agreed that the voice of ACP countries should be heard and that they should be listen to. As many members of the JPA represent the G20, they now have the opportunity to prove that they meant what they said, Dr Beckers stressed.
He was joined by NPC Director General Peter Katjivivi, the host of the press conference, who added that the ‘very least’ the EU can do is to listen to the various concerns ACP countries, including Namibia, have about the EPAs.
Issues range from fears that regional integration will be hampered to concerns about infant industries, food security, loss of customs revenue and dwindling South-South trade.
‘The European Commission (EC) has been much more aggressive than the ACP in pushing the agenda,’ Prof Katjivivi said.
Dr Beckers said his visit to Namibia has opened his eyes to many issues that Europeans regard as distant concepts.
‘Here it is very real,’ Dr Beckers said, mentioning the EPAs.
‘It is much more than just words,’ he said.
jo-mare@namibian.com.na