WINDHOEK – While Namibia’s ranking on the World Economic Forum’s Global Competitiveness Report 2013/14 climbed two positions, from 92 to 90 (out of 148 countries), Minister of Trade and Industry, Calle Schlettwein, yesterday said the country can improve even further if it focusses on the fundamental quest for industrialization. This latest report places Namibia amongst the top five competitive economies in Africa.
“If we do not industrialize we cannot address the underlying issues,” Schlettwein told a gathering in Windhoek organized by the Hans Seidel Foundation and the Institute for Public Policy Research (IPPR). The Trade and Industry Minister also questioned the criteria used in the report, saying: “The usage of Gross Domestic Product (GDP) as a main indicator in the report has its own flaws. We should instead not limit our assessment to the report but we have to dig deeper to find out what the real issues are.” The minister explained that using per capita GDP in a country like Namibia can hide the real issues such as the huge income inequality. The World Economic Forum (WEF) defines competitiveness as the set of institutions, policies and factors that determine the level of productivity of a country. The level of productivity, in turn, sets the level of prosperity that can be reached by an economy. The forum further postulates that the productivity level also determines the rates of return obtained by investments in an economy, which in turn are the fundamental drivers of its growth rates. In other words, a more competitive economy is one that is likely to grow faster over time. And, the WEF also states that although the productivity of a country determines its ability to sustain a high level of income, it is also one of the central determinants of its returns on investment, which is one of the key factors explaining an economy’s growth potential.
However, the Chairman of the Economic Association of Namibia (EAN), Rowland Brown, who presented the findings of the report, also cautioned that it is a perception-based survey. “Ultimately, the report assesses the ability of countries to provide high levels of prosperity to its citizens,” said Brown. According to Brown, some of the additional indicators to determine a country’s competitiveness include unit labour costs, exchange rates, the ease of doing business and the Corruption Perception Index. He added that some of the short-term improvements Namibia should consider to improve its ranking in the future, include the affordability of financial services, transparency in government policy making, addressing favouritism in decision making by civil servants, the number of days its takes to start a business and the availability of scientists and engineers.
As expected, the top 10 in the report hail from North America, Europe and Asia, while some of the top performers in Africa include Mauritius, South Africa, Namibia, Botswana and Kenya. And although Namibia slightly improved its ranking the country’s overall score remains the same as the last ranking. Namibia was ranked 89th in 2007/8, 74th in 2009/10, 92nd in 2011/12 and now 90th in the latest release.
Overall, Namibia scored well in terms of infrastructure and basic requirements but performed poorly in categories such as education, health and labour market efficiency, plus employee/employer relations.
Minister Schlettwein also questioned the use of a market size in the research methodology, which obviously puts an isolated Namibia with a population of a mere 2 million people at a disadvantage. However, he remarked that market size should be looked at in the region as Namibia is a member of the Southern African Customs Union which has a market size of more than 60 million people.
By Edgar Brandt