Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
REPUBLIC OF NAMIBIA Ministerial Statement On the Role of the State in the Economy Calle Schlettwein, MP Minister of Finance 22 June, 2016 1 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. 2 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 3 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 4 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 5