2008-04-18Staff Report 2 LIKE the rest of the world, Namibia is in the grip of soaring prices on basic foodstuffs and oil. For some time now, price increases have been going up with no let up, from fuel to consumer goods. So have bank rates and the general cost of living. The price increases were passed on to consumers without any kind of relief at all. Resilient as usual, consumers have tended to absorb these pocket-busting increases at all times. The latest price hike for consumers is on electricity that goes up by 18.06 percent effective July 2008, and early this week fuel went up by a massive 50 cents a litre. To the contrary, the increases and high cost of living are not in keeping with individual incomes that have shrunk drastically. Personal incomes have dwindled with little prospects for substantial salary increases with the result that personal debts have soared. The situation is near crisis point. The price increases could pose a threat to peace and stability. The price hikes are a threat to cohesion in families and communities. It goes without saying that when families can no longer afford food or lose their homes owing to spiralling costs they cannot remain intact. Chances are that previously stable families will break up because of pressure wrought by a high cost of living. The pressure created by tough living conditions tends to create tension and conflict that is not compatible to family cohesion. It is also true that where families cannot stick, the community and general social fabric is affected. Far beyond our shores in Haiti, the government in that country collapsed last week when its Prime Minister was forced out of office by hungry citizens who took to the streets in protest at soaring food prices. In neighbouring Zimbabwe, the ruling Zanu-PF suffered massive defection of voters during the recent elections because of the dire economic situation in that country. The elections in Zimbabwe were in essence a contest between Zanu-PF or President Robert Mugabe and the economy and not so much a contest between parties and their candidates. The Movement for Democratic Change's Morgan Tsvangirai is simply riding on a wave, hitch-hiking on the general discontent over the economy. He did not need to offer much in terms of policy except to lambast President Mugabe over the management of the economy. Former Zambian President Kenneth Kaunda went down on the same basis - a weak Zambian economy at the time that generated revolt against his rule. US President George W Bush is very unpopular today with some of the lowest ratings because of mismanaging the economy and the Iraq conflict. His party has lost both houses of parliament to the Democrats mainly because of the two factors. These examples illustrate how the economy or high prices on food and other essentials, to be precise, can play into general politics and undermine public confidence in governance and government. And, it is for this very reason that Namibia cannot afford to be complacent. It must deal with this problem head-on. President Hifikepunye Pohamba recently outlined the state of the nation and gave the assurance that the fundamentals of the economy are intact and things will be all right. But without downplaying the President's assessment, conditions on the ground indicate the need for short- to medium-term intervention if the country is to avert massive suffering by the poor. The soaring prices have pushed basic necessities beyond easy reach and there does not seem to be a quick end to this problem in the short-term. Companies and individual employers are likely to lay off workers due to the economic crunch. Employers may no longer be able to bear increased production costs due to the increases in oil and electricity tariffs vis-??????'?? 2008-04-18Staff Report 2
