Time to rethink economic strategies, says Rukoro

21 January 2010, The Namibian
URL: http://www.namibian.com.na/news/marketplace/full-story/archive/2010/january/article/time-to-rethink-economic-strategies-says-rukoro/

Windhoek:  Business  experts yesterday criticised Government's reluctance to follow private-sector advice on how to boost economic growth in Namibia.  In this regard, participants at a employers and labour workshop singled out the Presidential Economic Advisory Council (Peac) and the task force set up last year in response to the global financial meltdown under Trade Minister Hage Geingob as Chairman of the Cabinet Committee on Trade and Economic Development.

Opening the workshop, Namibia Employers' Fedederation (NEF) President Vekuii Rukoro said "new ideas, democratic debate, transparent policy formulation, peaceful political renewal and tolerance for political pluralism are key drivers for shaping a new Namibia, SADC and Africa".

"A new type of people-centred politics will (then) necessarily have as its agenda and ultimate output for the tangible and sustainable improvement of the social and economic condition of our citizens.  We must step out of our traditional comfort zones and be bold, think out of the box and help put our country, region and continent on a path of sustainable recovery and competitive success in a rapidly changing global landscape," Rukoro said.

He noted that a year ago, Government organised a national dialogue on how Namibia should buffer the impact of the global crisis.  "We understand that immediately thereafter a ‘task force' was set-up under the Ministry of Trade and Industry to consolidate the recommendations of that conference. So far as we know, the findings of that ‘task force' have not been released.  There was a tax holiday on retrenchment packages introduced by Government, but other relief, such as removing Value Added Tax (VAT) on some basic commodities still has not been gazetted," Rukoro criticised.

During the discussion, former Namfisa CEO Rainer Ritter, an economist, said that it appeared as if the Presidential Economic Advisory Council (Peac) had diminished into the oblivion.  "Mr Rukoro and I served on the Peac, but it seems that politics are driving the agenda, although the knowledge what to do to increase economic growth is there.  When serving on the Peac, it sometimes happened that people there were not trusted or regarded as imperialist or an enemy of the State. Often advice given via Peac was not followed and no feedback given," Ritter said.

Rukoro said it is high time to start to rethink and overhaul the growth strategies of African countries.   "It is high time that we face the hard reality that the many old and sterile ways of doing things will simply not propel Africa to the next and higher level of competitiveness," Rukoro challenged.

The Permanent Secretary in the Finance Ministry, Calle Schlettwein, said that Namibia luckily had not been too badly hit by the financial crisis, which started in the US.   "Our primary sectors such as diamond and copper mining were affected and resulted in job cuts, but in Namibia funds are available to spend on the economy. The question is how to spend the money in such a way that jobs a recreated," Schlettwein said.

Namibia has an estimated unemployment rate of around 40 per cent.  According to Rukoro, an estimated 26 000 young Namibians complete school each year and 4 000 students graduate annually. The formal sector of the economy only creates 4 000 new jobs annually and a further 6 000 vacancies through natural attrition. That leaves 20 000 youths joining the unemployment lines every year.

"Therefore it is hardly surprising that youth unemployment is 60 per cent for ages 15 to 24 and as high as 76 per cent for urban females," the NEF Chairman said.

The workshop was organised by the SADC Employers' Group (SEG) and the International Labour Organisation's (ILO) Bureau for Employers Activities (ACTEMP). Both organisations are conducting a study on the impact of the recent global economic crisis in ten SADC countries, including Namibia.