Download REPUBLIC OF NAMIBIA Ministerial Statement On the Role of the

REPUBLIC OF NAMIBIA
Ministerial Statement
On the Role of the State in the Economy
Calle Schlettwein, MP
Minister of Finance
22 June, 2016
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Honourable Speaker,
Honourable Members of Parliament,
1. I wish to take this opportunity to clarify the role of the State and
Government in the socio-economic development of our country. I
wish to make a Ministerial Statement on this matter because
there has been disparate and often times misleading views on the
extent to which Government should support and intervene in the
domestic economy and social development.
2. The Constitutional principles on the economic order for Namibia
bestows principles of a mixed economy in which the State plays a
developmental role. This is in regard to the trinity of (i) providing
an enabling policy and institutional environment, (ii) investment
in critical economic infrastructure and (iii) the provision of social
services.
3. In order words, the Constitution anchors the role of a
Developmental State as the role that the Government should play
in order to bring about accelerated social and economic
transformation agenda.
4. In the context of Namibia, this Developmental State role is
especially called for, given the lopsided nature of our economy
and the historical past of unequal distribution of resources,
social and economic exclusion and the inability of the private
sector to, on its own, and within a free market economy, grow the
economy and, at the same time, address the economic and social
disparities.
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5. This is the fundamental basis for the economic order of a mixed
economy and the developmental role which the Government plays
in the socio-economic transformation.
Thanking International Experts and Development Partners
6. In executing this developmental role, the Government has,
amongst others, put in place national institutions, Public
Enterprises and Regulatory bodies as well as national policy
frameworks developed through a participatory process. As a
responsible and participatory Government, we also leverage
domestic and international expertise to engage, assess and
critique the development policies. Domestically, consultation is
held with the legislature, private sector, academia and civil
society at different levels as it was done during the formulation
stage of the Harambee Prosperity Plan. This participatory
approach enhances the inclusiveness and effectiveneness of the
policy interventions.
7. In May this year, we have had the privilege to host two eminent
personalities and renowned international experts, namely
Professor Joseph Stiglitz and Dr Carlos Lopes who spared no
effort to share with us their experiences and perspective on the
achievements, developmental opportunities and challenges
confronting Namibia. These experts and other stakeholders were
also consulted on other development policies and plans such as
the Growth at Home Strategy as well as social development
programmes such as Mass Housing, Skills Development and
Social Safety nets.
8. Let me also take this opportunity to thank Professor Stiglitz and
Dr Lopes for their objective analyses and the input they provided
on our economic and development policies. I thank them on
behalf of the Government and all Namibians who had, and will
have opportunity to tap on their wisdom and analyses. I
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especially wish to thank them for providing their expertise free of
charge. Equally, let me also extend our appreciation for the
expert views provided to the country through various
engagements with the development partners.
The Role of the State and Government in the Economy
Honourable Speaker,
9. The narrative of the extent to which the Government has played a
meaningful role in the economy is engendered in the rack record
of achievements that we have recorded to date, the
developmental opportunities that we face and the structural
challenges we confront.
10. On the economic front, we have been able to grow and cushion
the economy from severe external shocks, thanks to Government
fiscal policy. As such, economic growth has averaged around 4.6
percent in the last 10 years, in spite of the severe effects
stemming from the global financial crisis.
11. The Government has invested heavily in economic and other
logistical infrastructure which facilitate investment, trade and
economic expansion and, therefore, the creation of jobs. We have
grown incomes and closed the inequality gap by about 15
percentage points since independence.
12. On the social sector, over one-quarter of the national budgeted
is consistently allocated and spent on the social sectors of
education and health. Poverty has been has been more than
halved over the same period, from 69 percent in 1993 to less
than 30 percent by 2010.
13. Namibia is one of the only three countries in Sub-Saharan
African region which provides social safety nets to the vulnerable
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members of society. The social safety nets serve as the first line
of defense against poverty and vulnerability.
14. These achievements were made mainly through the mobilization
of our own resources, given the record expansion of income to
an Upper Middle-Income country. Our budget is mainly funded
from our own resources by about 98 percent, with grants only
forming a small fraction of the budget.
15. The Government, therefore, believes that its Developmental State
role has delivered results in the core areas of socio-economic
development. We do not believe in the by now widely discredited
neo-liberal economic thinking, which assumes that economic
benefits will trickle down from the well-off to the poor, through
the operations of the invisible hand in the economy.
Honourable Speaker,
16. Going forward, we have to step-up these efforts through
implementing the Harambee Prosperity Plan and the long-term
National Development Plans and Vision 2030. We are
implementing the Growth at Home Strategy as a mechanism for
implementing our national Industrialization Policy.
17. We are confident that we are on the right track. This confidence
sprouts from the fact that all parties consulted; the private
sector, the civil society and external experts through bilateral
and multilateral partnerships as well as eminent economic
experts have assured us that we are correct in our approach and
all have embraced our development plans.
Thank you
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