By John Travolter Matali
GROOTFONTEIN - Trade and Industry Minister Calle Schlettwein believes ‘jobless growth’ is a phenomenon partly caused by an over-reliance on raw material exports, which is currently one of the most pressing problems of this era.
The resulting consequences include the economic inequality observed in Namibia today, Schlettwien said during the inauguration of the Omulunga Industrial Park in the Grootfontien district last week Friday.
“It is only through beneficiation, adding value to our own resources and creating the value chains that derive from them that we will be able to diversify our economy and strengthen our competitiveness,” said Schlettwein, who added that a lack of productive capacity and technological expertise were other factors making Namibia a captive market.
According to Schlettwein raw materials are not made full use of due to the tendency to export them to other countries, where they serve as vital inputs for the production of finished consumer goods that Namibia is forced to import thereafter.
“We have to recognise that along with the export of raw materials we are also exporting jobs. Furthermore, our dependency on imports places huge pressure on our foreign currency reserves and balance of payments. The only remedy we have in this regard is to increase our export earnings in foreign exchange through growing the value of our exports, value addition to raw materials and resulting import substitution. The way to achieve this is to create the necessary industrial base,” Schlettwein said.
The trade minister cited that for this essential transformation of the economy to occur the country needs to overcome the lack of capital, technology and skills, as well as having access to financial and other resources that would enable local entrepreneurs to become globally competitive and overcome the high input costs of business.
“If electricity and other utility costs continue to spiral upwards, if costs to acquire industrial land soar and if transport and logistics costs, including port fees, continue to surge upwards faster than can be reasonably expected, this industrialization process will be even more of a challenge,” added Schlettwein.
According to Schlettwein government has decided to take an interventionist approach in order to bring about and accelerate industrialization.
“One of the priorities this government has to address is to balance out a skew economy and the resultant income inequality, which in Namibia manifests itself through slanted ownership and distribution of economic assets, wealth and income. Empirical evidence has demonstrated that economic inequality retards the pace of long-term sustainable economic growth,” he said.
2014-07-23 09:15:40 4 years ago