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Namibia - Towards the fourth world

Hausarbeit 2004 38 Seiten

Afrikawissenschaften - Kultur und Landeskunde



1. Introduction
1.1 The history of Namibia
1.2 Population
1.3 Wealth
1.4 Government
1.5 Climate

2. The Namibian Economy: Past and Present
2.1 Neighbours and Partners
2.1.1 The Common Monetary Union
2.1.2 Southern African Customs Union
2.1.3 Southern African Development Community
2.2 A small country
2.3 A large neighbour
2.4 Recent Economic Development
2.4.1 Labour
2.4.2 The SME sector
2.4.3 The financial sector
2.4.4 State-owned enterprises
2.5 The impact of AIDS on the Namibian economy
2.6 Key Economic Indicators

3. Objectives and strategies of the government
3.1 A key factor in GDP
3.2 Overall objectives
3.3 National Development Plan
3.4 Review of NDP
3.5 NDP
3.6 The New Partnership for African Development

4. The current political situation
4.1 Home Affairs
4.2 Foreign Affairs

5. Assessment of prospects
5.1 Hirschman’s model of unbalanced growth
5.2 Causes for core problems and resulting goals
5.3 Developmental strengths, opportunities and constraints

6. Castells Model of the Fourth World
6.1 Inequality and Polarization
6.2 De-humanization of Africa
6.2.1 Marginalization and Selective Integration
6.2.2 Technological Apartheid at the dawn of the Information Age
6.2.3 Military Power
6.2.4 Ethnic Identity
6.2.5 White Elephants
6.2.6 HIV/AIDS
6.3 The exploitation of child labour
6.4 Is Namibia a “Fourth World” Country?

1. Introduction

Manuel Castells, a renowned economist from the University of California, has discussed the rise of the fourth world in the third part of his trilogy: “The Information Age: Economy, Society and Culture”, named “End of Millennium”. This dissertation will make use of this theory and apply it to a country in Southern Africa, Namibia.

At the beginning, there will be a short overview of the country’s history, population, wealth, government and climate. It will be followed by a description of the economy, objectives of the government and the political situation.

This will be followed by an assessment of prospects for the future. Finally, the hypothesis of Castells will be applied and analysed, as to which extent Namibia is part of the “Fourth World”

1.1 The history of Namibia

The earliest inhabitants of Namibia are the San (Bushmen). Due to their adaptation to the inhospitable environment of Namibia, they were the only people able to survive. Rock paintings and carvings, believed to be made by these people have been dated back to 25000 BC.

About two thousand years ago, Khoisan speaking groups moved into Namibia from South Africa. They now form the ethnic group of the Nama and Damara.

It was only in 1485, that the first European set foot on Namibian ground. It was the Portuguese seafarer Diego Caõ on his journey around Africa to find the way to India. He erected a stone cross about 150 km north of the town Swakopmund. His mission did not succeed; he turned around after reaching the Namibian coast. It was his predecessor, Bartholomew Diaz, who managed to reach India. He also erected a cross in Angra Peqenja, the place which is now called Lüderitzbucht.

At about 1400 AD, Bantu-speaking people moved into northern Namibia to settle there. They now form the three biggest ethnic groups in Namibia, which are the Ovambo, the Kavango and the Herero.

Due to the Namib Desert, which created a barrier between the sea and the savannah, European settlers did not move into the country before the 18th century. It was as late as 1878 that the United Kingdom annexed Walvis Bay, where ships would be able to stock up.

Colonialisation started 5 years later, in 1883, when the German trader Adolf Lüderitz bought land in the southern part of Namibia. Due to a promise made by the German chancellor Bismarck, German troops moved into the country soon after to protect what was then called “Deutsch Südwest-Afrika” (German Southwest Africa).

At the end of WWI, Germany had to hand over its colonies and it was in 1920, that the League of Nation gave South Africa full power of administration and legislation for the territory. South Africa introduced Apartheid and despite of pressure from the United Nations did not grant the country Independence until 1990.

In the 1960s, the first resistance movement was founded, today’s ruling party, the South West African People’s Organisation (SWAPO). It was in 1966, that the SWAPO began guerrilla attacks on Namibia, infiltrating the country from neighbouring nations north of Namibia.

In May 1988, the United Nations drafted their resolution number 435, which ruled the way for an independent Namibia. This led to a transitional period in 1989, where the United Nations monitored the way to free and fair elections with its United Nations Transitional Assistance Group (UNTAG). The elections were held in November 1989, with a remarkable participation of 92% of all eligible voters.

In these elections, SWAPO received 57% of all votes, with the biggest opposition party being the Democratic Turnhalle Allianz (DTA), which managed to get 29% of the votes.

The Constituent Assembly met shortly after the elections to draft a constitution for Namibia. As SWAPO had received most of the votes, their leader, Sam Nujoma, became first president of the Republic of Namibia. He is still in power today.

It was on the 21 March 1990, that a symbolic South African flag was replaced by the new Namibian flag. This day is also the national holiday.

1.2 Population

Population has more than doubled since 1975, when Namibia had 0.9 million inhabitants. Namibia today has a population of 1.8 million people, which is 0.2% of Africa’s population. They are unevenly distributed over an area of 824,292 km² (3.4x the size of Great Britain). This results in a population density of 2.2 people per square kilometre. This is a very misleading figure, as about 60% of the population lives in the northern part of Namibia. The UNDP projections for 2015 estimate a population of 2.2 million. A key factor in the population growth is the spreading of HIV/AIDS, which leads to a life expectancy of 44.3 years for 2000-2005. Namibia ranks 75th worldwide with its population.

There are 12 different ethnic groups. These are the Owambo, the biggest group, which is mainly living in the central northern part of Namibia. The Kavango, which live in the north-eastern part of the country. Hereros form another group, which is mainly present in the central and the north-western part of the country. Smaller groups are the Nama in the South, the Damara in the central western area which have similar origins. Minorities are the San, the Caprivi and Baster (Coloureds). The white population is at about 50.000 people.

1.3 Wealth

In comparison to other Sub-Saharan countries, Namibia has a high average per capita GNI. As seen on the table below, it was 4 times higher than the Sub-Saharan average in 2001 as well as above the average of the SADC.

Abbildung in dieser Leseprobe nicht enthalten

Source: Bank of Namibia

Growth over the last decade has also been higher than the worldwide average. Still, it was and is not high enough in order for Namibia to become a developed country in the near future.

Another characteristic is the highly unequal income distribution. This leads to a human poverty index (Gini-coefficient) of 0.7.

1.4 Government

In the 13 years of independence, Namibia has established a stable democracy, although the leading party has won a 2/3 majority in the last two elections. This shows a certain tendency of the country towards a single-party democracy, as is the case in many other African countries. So far, the Namibian judiciary has been independent and the freedom of press adhered.

Government tries to follow a responsible course in the means of fiscal and monetary policy. Also, about 25% of the budget goes into the educational sector, whereas health is seen as an important factor too.

1.5 Climate

Due to the position of the country around the tropic of Capricorn, the country is very arid and is dominated by two deserts, the Namib at the coast as well as the Kalahari in the east. There is a rain season from November until about March which does not always provide the necessary water. There are about 300 sunny days per annum.

2. The Namibian Economy: Past and Present

2.1 Neighbours and Partners

Namibia shares borders with four countries, South Africa, Botswana, Zambia and Angola. The Zimbabwean and Namibian Borders are only separated by a 4km long strip of Botswana, thus Zimbabwe is considered as a neighbouring country. Three of these countries, Angola, Zambia and Zimbabwe are relatively poor and there is a certain political instability. The other two neighbours are Botswana and South Africa, which are relatively prosperous and stable.

The economic links to South Africa are by far the highest. This is due to the historic reason of Namibia having been a colony of South Africa until 1990. But there is also a strong economic integration of the country with the Southern Africa. This is due to several organizations, that Namibia is a member of.

Firstly, it is member of a Common Monetary Union with South Africa, Lesotho and Swaziland. Despite the South African Rand being legal tender, Namibia has its own currency with the Namibia Dollar. As it remains parity with the Rand, the South African currency is accepted countrywide too.

These four countries, together with Botswana form the Southern African Customs Union. This Union has been in existence since 1915, a remainder from colonial times. The SACU hence is the only integrated economic union in Africa.

The Southern African Development Community (SADC) consists of fourteen members and covers Southern Africa up to the Democratic Republic of Congo. Within the member states, the intention is to build up a free trade area until 2008.

Besides that, Namibia has joined the Lomé IV convention, assuring duty and quota free access to the European market for several commodities.

Namibia is also part of the African Union, which has recently released the New Partnership for African Development (NePAD). This will be discussed later.

2.1.1 The Common Monetary Union

The CMA was established in 1974 as the Rand Monetary Union. In keeping the inflation rate at an average of 9% during the last 5 years and due to a relatively stable exchange rate with other currencies, it helps to create a positive business environment, which can be attractive to potential investors. A huge problem for Namibia is the outflow of capital to South Africa, which influences the fiscal balance. The Rand has experienced a strong reduction in value over the last 13 years. It is now only worth 10% of the value in 1990.

2.1.2 Southern African Customs Union

As a member of the SACU, Namibia can have customs and duty free trade with the other member countries. This allows the country to reach a potential market of 47 million people with a GDP of US$ 135, 8 billion. The SACU also accounts for about 30% of the state budget.

2.1.3 Southern African Development Community

The SADC tries to integrate even more countries into an economic union. In being a member, Namibia has a comparative advantage in means of preferential access via transport and trade links to over 130 million people.

2.2 A small country

Economic theory defines a country as being small, when it has no influence on world market prices. This is similar for South Africa, which still is, compared to Namibia a giant. Being a small country is generally seen as a disadvantage, as a small country also means a small market. The result is that industrialised countries are moving towards a higher integration amongst themselves in Europe, Asia as well as America. Another problem is, that of the 192 independent states in 1995, 87 have a population of less than 5 million, 58 fewer than 2.5 million and 35 fewer than 500.000[1] thus most of these have no influence on the world market at all.

Still, this does not mean, that there is a relationship with size of country and wealth. There are many countries that are poor, irrespective of size and there are also rich countries, which are small. The per capita GNP of many countries proves this.

Looking at Southern Africa, there are six countries, which are small in respect of this definition, being Botswana, Lesotho, Mauritius, Namibia, Seychelles and Swaziland. Botswana, Mauritius and the Seychelles have a significantly higher income than the other states, whereas Namibia and Swaziland are second only to South Africa. The remaining two, being the poorest still have a higher income than a country like Zimbabwe. The per capita GNP for these six countries can be seen in the table below.

Abbildung in dieser Leseprobe nicht enthalten

Source: United Nations Human Development Index 2003

Country size plays a vital role in the economy. The most important arguments for this are as follows. Economies of scale play an important role, as they directly relate to market size. Government has to have a minimum size in order to function. Thus, small countries have a proportionally larger public sector. Another problem is the low bargaining power, which leads to higher competition. Size also matters in concern of vulnerability. Larger countries are less likely to be hit by external shocks.

An example for this is the unification of the European Market. This has given a certain boost to economic development.

On the other hand, there are also some advantages for small countries. There is a strong incentive to work efficiently, as they need open markets. An unsuccessful economic policy cannot be followed for a long time, as there is a danger of being cut off. Very often, there is a high degree of social homogeneity, cohesion and identity. This is supposed to imply costs. A higher degree of communal involvement and consensus in decision-making can be achieved.

The recent trend towards trade liberalisation downgrades the importance of large domestic markets with the world becoming one market. Also, the increasingly legal character of the world trade system diminishes the possibilities of unilateral action, thus strengthening the positions of smaller countries. Niche positions are a good chance that can be occupied by these countries. Due to the amount of small countries, worldwide liberal trade will find more and more supporters.

This means, that Namibia does not have to desperately seek regional integration, but there can be a specific gain by making conscious moves towards cooperation and integration on a regional level.

2.3 A large neighbour

The other SADC member countries regard neighbouring South Africa, which is a comparative giant, as problematic. A polarisation effect is feared. However, there are indicators that the smaller countries actually benefit from this relationship. There is actually more evidence, that neighbouring countries in conflict have a negative impact, opposite to the situation in large countries or unions. Several examples show, that small countries benefit from being neighbour to a giant (e.g. Hong Kong – China; Singapore – Malaysia, Netherlands – Germany).

Considering this for the SADC members, it can be seen, that South Africa’s neighbours are doing better than countries further away. This is particularly true for the SACU member countries.

The negative polarisation effect due to the integration with South Africa is taken as given by the small countries. However, it can be argued that the limited development of industry in countries such as Namibia is not due to neighbouring South Africa, but rather because of resource endowment as well as a poor and dispersed population, which constitutes a market limitation.

Polarisation should not be seen as a certainty, but rather as a possibility. Many factors influence the relationships between integrating regions, as models of economic geography suggest. Some of these factors are transport costs, economies of scale, production structure or even history[2] suggest that regional integration can be increased by small reductions in trade costs, whereas large reductions may not.

Easterly and Levine’s (1998) studies illustrate the importance of neighbourhood for the success of economic development. It is crucial to have economic and political stability in neighbouring countries as well as their growth record, which determines growth prospects. As from this perspective, the problematic neighbours are lying in the North, war-torn Angola and Zimbabwe, with its quasi-dictator Robert Mugabe. Good assets are the stable and growing neighbours Botswana and South Africa.

The SADC can profit from South Africa, as it can act as a conduit for external resources, including FDI. These can be channelled to the rest of the region. If a single large nation dominates an FTA or a customs are, it is not necessarily doomed to fail. The smaller members can be persuaded by side payments.

The possible impacts of the integration of a small country can be seen in the North American Free Trade Area (NAFTA). It is suggested, that the two large member states, the USA and Canada, but also the small and poor Mexico have benefited by specializing in areas of comparative advantage. This has happened despite the large disparity in size and economic development levels. It must be beared in mind that the NAFTA started from a more liberal trade system.

Thus, the neighbourhood to South Africa is principally beneficial, but there are also negative impacts.

2.4 Recent Economic Development

The Namibian economy is heavily relying on the extraction and processing of minerals for export. The country is a primary source for gemstone quality diamonds, but is also the world’s 5th largest producer of uranium. It also extracts zinc and copper. Due to the Benguela stream, which passes the Namibian coast and is coming from the Antarctic, Namibia is in possession of one of the richest fishing grounds in the world. Thus, primary industry contributes more than 26% to the GDP. Cattle and sheep raising, mainly for export, dominates the commercial agriculture. The efforts to add value to these primary commodities have recently been increased. For example the cutting of diamonds, as well as the processing of copper, zinc and fish. The mining sector alone contributes more than 54% to the total export earnings, followed by manufactured products with over 26%.

The imports are more balanced and can be divided into four sub-sectors. These are food, live animals, beverages and tobacco; machinery and electrical goods; vehicles and transport equipment; chemicals, plastic, medical and rubber. These account for more than two-thirds of total imports.

The public sector has continued to grow since Independence, also in order to compensate for the weak private sector. The current size of the public sector, which contributes more than 23% to the GDP, is rather a brake to the economic development. Enterprises of the public sector are often less efficient in the usage of resources, especially capital. Thus, there is room for increasing their performance. A possibility in this direction is privatisation. Economic diversification has not taken place to a great extent. The declining of total factor productivity is a worrying trend, as well as the fact, that manufacturing, with food processing accounting for two thirds of production, remains very small, contributing only 11,5% to the GDP. The SME sector contributes less than 5% to the GDP.

Industrial growth had been constrained by stagnating investments for a long time. Only in recent years a substantial improvement can be seen. The situation is aggravated by a shortage of skilled labour which results in investors have difficulties to recruit staff locally. The export earnings are mainly spent on imported consumer goods. Most of the exports are going to the UK, but Namibia also has trade links with the USA and some other countries. About 33% of exports, mainly cattle, are going to South Africa, which is also the dominant trading partner, as it accounts for more than 86% of all imports.

Several donor countries, especially the EU and Germany, support Namibia. Officially, aid amounts to 4, 4% of GDP, much higher than South Africa with 0, 4% or Botswana with 0, 6%, but still low compared to other African countries.

2.4.1 Labour

Un- and underemployment in Namibia combined is estimated at 60%. This affects women to a much higher degree than men. Also, rural unemployment is higher than in the cities, 36.4% compared to 32.4%. In the first place, this is due to structural problems and there are limited prospects to solve these in the near future. There is so far no adequate social security system or labour market policies to support the unemployed. Recently, the economic growth rate has fallen behind population growth, which is increasing unemployment even further. In order to maintain current employment levels, the World Bank estimated that economic growth needs to be at least 4, 5% per annum. A key area of both National Development Plans (NDP1 & 2) has therefore been the reduction of unemployment. In 1998, the government approved the National Poverty Reduction Strategy (NPRS) and Action Programme (NPRAP). These entail an integrated approach to poverty reduction, including income generation, focussing on Agriculture, tourism and SME’s, strengthening of the social safety net as well as the promotion of labour intensive works. This is to be supported by decentralization to ensure the participation of the poor in the planning and implementation of these projects. The challenge for Namibia is to combine poverty reduction with the mitigation of un- and underemployment.

Under the NPRAP, labour based work programmes are being expanded to help the development of skills, building of community ownership as well as the encouragement to transfer technology and the provision of additional income. Recently, a Social Development Fund, which will receive N$ 35 million from the budget and an additional 20% of the social security reserve, which is currently at around N$ 600 million, has been introduced. The responsibility for the fund lies at the Social Security Commission, under the Ministry of Labour. Currently, the criteria for the usage of the fund are being developed. The policies for the labour market and employment rely on data from the Labour Force Survey, which is conducted every 4 years, but there are also considerable delays in the publishing of this data. This does not provide timely information for the adjustment of the strategies. There is only little capacity for policy-coordination and implementation, due to unclear mandates, a weak information basis and a lack of appropriate benchmark indicators.

2.4.2 The SME sector

There are about 32.000 enterprises in the SME sector in Namibia. This suggests a comparably high density in relation to the population, but still, the sector only has a low contribution to the GDP. The largest shares of the sector are micro enterprises, which are mostly informal and only trading. The formal SME’s are almost completely dependent on inputs that are imported from South Africa. A heavy constraining factor is the limited entrepreneurial acumen. This is a heritage of the social conditioning which took place during the rule of the Apartheid regime. Support structures to this sector are mostly individual and they do not necessarily form part of a concerted national effort. The consequence is that the SME sector is less dynamic than in other countries.

Productivity and incomes are remaining low. Thus the manufacturing sector has been officially emphasised as a key sector for promotion. A limited possibility to develop strong manufacturing clusters seems to appear. There is an exception for high quality niche products, but then again, there is a constraint from innovation and technology support. The service sector, especially tourism seems to have a high competitive advantage in Namibia. New investments taking place suggests that there are growing opportunities for sub-contractors of large scale manufacturers.

2.4.3 The financial sector

Namibia’s financial sector is regarded as risk-averse, with little interest in financing of SME’s but is also not sufficiently capable of supporting new investment opportunities with capital. The commercial banks are amongst the most profitable ones in Southern Africa, having often higher prime rates than South African institutes. Other sources of investment, like the stock exchange, are hardly available. There is an estimation that around 90% of the pension fund assets are leaving Namibia, which is circumventing established requirements. The commercial banks of Namibia are able to achieve satisfactory rates of return with traditional operations and see little need to enter new fields. Hence there are only few incentives for Namibian banks to develop new products or provide services for the under-served. Also, these markets are seen as high-risk with insufficient returns. The offered products are highly standardised and not appropriate for SME’s. In addition to this, there is little experience in SME lending, thus there is a lack in adequate monitoring and follow-up procedures. One reason for this is the limited size of the financial market in Namibia.

A Credit Guarantee Scheme, funded by the EU, is available for SME’s now, which grants loans to existing and potential entrepreneurs under certain prerequisites. Unfortunately, there is a lot of fraud within this scheme, as the loans are not secured in a sufficient way.

2.4.4 State-owned enterprises

Overall efficiency of the sector is insufficient, although state-owned enterprises play important roles in the economy. This has been recognised by the government, which is trying to establish a consistent policy framework in order to assess the performance. This is the basis for decisions of appropriate forms of reformation that have to be made.

2.5 The impact of AIDS on the Namibian economy

The first cases of AIDS in Namibia were reported in 1986. In that year, only four cases were reported, but the number of infections has seen a rapid growth, resulting in 14866 reported cases in 1999. This number is increasing even more today. These are only the officially reported numbers, the real infection rate being estimated at almost double this number. It is believed, that the infected part of the population will continue to rise and it cannot be estimated, when this process is going to turn around. The main cause of deaths in hospitals by far is due to this virus today. Since the beginning of the epidemic, the reported number of deaths has accumulated to 8679, and in the age group of 15-49 accounts for about 47% of all deaths.

HIV/AIDS is most commonly transmitted during sexual intercourse. This leads to a tendency of mainly affecting the part of the population, which is in the most productive and active years. The virus affects an infected person not only in his health, but also as the person being a family member, producer, consumer and community member. The result of above average illness and death within this age group has consequently social as well as economic effects. The declining health affects the economy in such a way, that productivity is reduced, health care expenditures have to be increased, savings are declining and human capital investments are being lost.

Other effects are a decreasing population growth and a changed age structure. A premature loss of well-trained, educated and experienced workers is anticipated, resulting in an increase of inexperienced, young workers.

2.6 Key Economic Indicators

The GDP is growing at around 3%, although growth for the current financial year has been estimated at 4.4%

GDP growth since 1996 in %

Source: Bank of Namibia

Development of government deficit

Abbildung in dieser Leseprobe nicht enthalten

Source: Bank of Namibia

3. Objectives and strategies of the government

3.1 A key factor in GDP

The government’s role in the economy has continually expanded since Independence. Government services alone account for about 33.4% in 2003, with it averaging at around 34% in the last 13 years. In 2000 alone, the sector grew by 4.2%. This means, that the government can take a high influence on the economy. A vital part for the government is the Human Development. Thus, more than 25% of state expenditure goes into education.

3.2 Overall objectives

The development objectives have been clearly defined in the two published National Development Plans (NDP1 & 2), which are covering the period from 1996 – 2000 and 2001-2005 respectively. The overall goal of both plans has been and still is the achievement of higher economic growth rates and increased equity. The development objectives of NDP2 are indicating this. Underlining the government’s commitment towards improving policies and strategies are specific programmes and publications.

The development plans are covering economic and social sectors comprehensively. Particularly the design of NDP2 was in a participative process, also involving non-governmental domestic institutions. In formulating these objectives, a basis for a sustainable, balanced and democratic development of Namibia is provided.

3.3 National Development Plan 1

As a strategic guideline, the parliament agreed with the First National Development Plan (NDP1), which was drafted by the National Planning Commission, in 1994. NDP1 was a medium-term strategy for the years 1995-2000. The four major development goals were:

1. 5% per annum growth rate for the economy
2. The creation of ample opportunities for employment
3. The reduction of inequalities in income distribution
4. To design economic and social programmes to help alleviate poverty and to help vulnerable groups in society

Several strategies were outlined to achieve these objectives. The first one is the utilisation of Namibia’s own resources to the maximum, to ensure and maintain sustainability of economic growth and development. The development and promotion of new industries in order to increase the share locally produced merchandise, exports as well as the value added during the production process. Furthermore, the investment in human resources. The expansion and diversification of the economy would create new employment opportunities. To increase the existing resources for investments, the outflow of capital, especially the RSA, has to be reduced. The provision of an enabling environment for local as well as foreign private investment, to participate actively in the country’s open economy. The involvement of country development partners in the NGO sector to fill any remaining gaps.

3.4 Review of NDP 1

Many of the aims of NDP1 could not be achieved. The annual average growth of GDP during this time was at a mere 2.8%, 2.2% below the target. One reason for this is an investment boom after independence, which was gradually reducing and did not have such a strong effect on the GDP after 1995.

3.5 NDP 2

For the preparation of NDP 2, a mid-term review of NDP 1 indicated that the set targets could not be achieved. This important lesson was considered while drafting the second plan. The serious constraints were hampering the effective implementation of the plan. These were amongst others the institutional and human capacity and inadequate financial resources.

NDP 2 states several major development criteria. The first one is decentralisation. It is required, that an economic reform must occur evenly in all regions, in order to sustain growth and approach equity. This policy shows a clear commitment towards channelling a larger amount of resources into the rural areas as well as gradually shifting decision making powers away from the central government.

The second criterion is poverty reduction. The policy on this has resulted in a poverty strategy and a poverty action plan. These recognise the need for a monitoring system to be put in place, so that measures to reduce poverty can be assessed and improved. The strategy is probably one of the regions most-detailed.

Creation of employment is the next criteria. It is regarded as the most important instrument to reduce poverty and inequality. Government aims at the creation of a conducive environment for job creation in the formal and informal sector and at assisting the un- and underemployed. This, as well as the development of related legislation forms a part of NDP 2. Included are the promotion of labour based technologies in the economic sectors, identifying employment creation projects by conducting feasibility studies in all regions and implementing public works programmes in road construction and maintenance.

Women used to be marginalized in economic engagement under Apartheid. A consequence is, that women still have fewer opportunities to advance economically and are thus to a greater extent victims of poverty. In 1997, the gender policy was introduced and encourages empowerment and economic engagement of women. According to NDP 2, quality gains have been achieved in the fields of education and legal rights of women. Still, numerous biases against women persist, which affect their earning potential, overall income and decision making roles. These have to be overcome. In international comparison, Namibia’s HDI ranks at 101st place of 146 countries, ahead of many other African countries.

The following criterion is empowerment. One of the tools to break the social divide and create a conducive environment for the previously disadvantaged Namibians is the Black Economic Empowerment (BEE). Affirmative action is about redressing certain imbalances, whereas BEE is more about acquiring resources and enjoying equal employment opportunities at all levels. It also stretches into investment, to encourage foreign investors to form partnerships with the previously disadvantaged Namibians. It is directed especially at the fishing sector. This sector had been highly dominated by foreigners before independence, which resulted in the depletion of resources.

Another criterion is industrial development. The policies for this include special incentives for manufacturers in general, but particularly exporters. Companies with an Export Processing Zone (EPZ) status are exempted from corporate income tax and import duties. This programme of EPZ’s encourages particularly the agricultural, fishing, precious mineral processing and manufacturing sector. This initiative has positioned Namibia amongst other African “front-runners” in the flow of foreign direct investment (FDI).

One of the most important criteria for the government is the development of the SME sector. Thus the policy on SME includes the following broad measures: Deregulation, removal of bureaucratic obstacles and unfair competition and incentives for investing into small businesses. There is a special emphasis on promoting the previously disadvantaged groups and also makes provision for special loan schemes for women entrepreneurs. There are also efforts to mobilise private sector participation in this sector. To enhance skills and market access for SME’s, industrial parks are being built and facilities to enhance skills and market access developed.

Agriculture plays a vital role as well. The policy here aims at achieving growth and stability in farm incomes, creating and sustaining employment, promoting sustainable land utilisation and establishing equitable development. Taxes for imported inputs have been removed. There is a land acquisition and resettlement programme aiming at redressing imbalances in land ownership and boosting agricultural production.

The last, yet very important criterion is education. In 1999, the presidential commission was set up and found, that the objectives of equity and quality remained major challenges. Although primary education enrolment has reached 90%, secondary enrolment is only at about 50%. In order to face technological challenges, NDP 2 regards education as having a critical importance. This prioritisation is also emphasised in the national policy on research and technology. This policy is to set guiding principles for the nation in how it is generating, contributing and benefiting from scientific knowledge and technology.

In conclusion, it can be seen from NDP 2 that the Namibian government has recognised the deficits of past policies. There seems to be a clear direction for future economic policies towards opportunities and social needs.

3.6 The New Partnership for African Development

A mandate, given by the Organisation for African Unity (OAU) to the five initiating countries, Algeria, Egypt, Nigeria, Senegal and South Africa to draft an integrated socio-economic development framework for Africa, resulted in the development of NePAD. At the 37th summit of the OAU, in July 2001, the strategic framework was formally adopted. Since the first African countries reached independence in the 1960s, African leaders have realised, that a key problem is the fragmentation of the continent, with many countries having artificial borderlines, which cut through ethnic groups. Due to these reasons, the OAU was founded, which has recently been transferred into the AU. It is seen as the main instrument for further cooperation in Africa.

Many development plans have been written for Africa. What is new about NePAD is that it was developed by African leaders, not by Western technocrats. This results in a higher commitment of the African countries towards this plan. Another new aspect of the plan is, that it does not blame the colonial past and outside world but emphasises the responsibility of African leaders for the continent’s development. The integration into the world economy has also never been part of plans before, where the solution was seen as Africa developing on its own.

The structure of the NePAD strategy can be divided into three parts. First, there are the preconditions for development. These are peace, security and democracy and political governance. Economic and corporate governance, focussing on public finance management. Another precondition is the regional cooperation and integration.

The second part are the priority sectors. These are considered to be the infrastructure, information and communication technology, as well as human development, which is focussing on health, education and skills development. An important factor is also the agriculture as well as the promotion of diversification of production and exports. A focus is supposed to be the market access to industrialized countries.

The last part is the mobilisation of resources. This is supposed to be achieved by the increase of savings and capital inflow via further debt relieves as well as ODA flows and private capital. Another vital role plays the better management of public revenue and expenditure.

4. The current political situation

4.1 Home Affairs

The question of land distribution was, despite constant attempts of appeasing by the government, the biggest issue in internal affairs. Zimbabwe has shown to the Hardliners, that the problem can be solved very simple.

Also, farmers are forced to make farm workers redundant due to economic reasons, mainly the introduction of a basic salary. As many of these farm workers also own a certain cattle stock and had stayed most of their lives on these farms, they have little chance of settling at another place. Threats by the Union, to occupy parts of the farms had been vigorously declined by the government.

The farm workers union also released a list (“Names of Shames”) in November 2003, which stated all politicians, which own farms and so not adhere to the basic salary. This was already announced several months earlier, but the expected change in behaviour of the politicians had not occurred.

The commission, which was set up to solve the land question, is supported financially and with an expert by the German government. Difficulties are mainly raised by the question of what is a farm, who actually owns the farm and how much crop it can produce. The data needed is not completely present. The introduction of a land tax, which has already been passed by the parliament in 1992, has again been postponed, as again the data is insufficient. Also, the government is trying to find a way to exempt historically disadvantaged Namibians (HDN) from this tax for some years or even permanently.

In June 2003, the parliament has passed the legal basis for buying land in the interest of the public. Yet, the question of compensation is not being solved. Nevertheless, this payment will be below market price.

Solving the land question will be the biggest challenge for the country in the coming years. Three aspects are contradicting in this matter. Firstly, the economic thinking of the white owners of farms especially rentability and capacity. Secondly the emotional claim by the black population, as a return to the lost land and thirdly, the social approach by the government, meaning subsistence farming for the poor.

In this concern, it can also be looked at the claim of the Herero under Chief Riruako against German companies in the United States. As in the USA claims by forced labourers of the Third Reich had been successful, the Hereros see a good chance for their case.

The uncertainty of a fourth term of president Nujoma has been recently resolved. A fourth term by the current president would only be possible by changing the constitution, which would have not constituted a problem to the ruling party SWAPO with its 2/3 majority. Currently, there are three possible successors. The candidate will be chosen at a SWAPO extraordinary congress at the end of May 2004.

In 2003, the unseating of Prime Minister Hage Geingob had some repercussions, as the “Windhoek Observer” reported in June, that Mr. Geingob had been monitored by the secret service and had been accused of trying to establish himself as Nujomas successor at the SWAPO party congress in 2002. This had been declined by the secret service.

The opposition has been mainly engaged in internal politics. First, a foundation member of the DTA, the Republican Party (RP) left the alliance in June and declared itself an independent party. There are only speculations about why this has happened, but it seems to be concerning the alliance’s assets prior to independence. The result of this was clearly reflected in the elections of Windhoek-West, where the DTA incurred substantial losses, with the SWAPO winning the elections.

Shortly after this, the renowned Herero leader, Paramount Chief Riruako, announced, that he will lead the “National Unity Democratic Organisation” (NUDO) out of the alliance. Despite internal protests, Riruako did not change his decision and registered his party with the Electoral Commission. The remaining parts of the DTA, under the leadership of the remaining NUDO members is taking legal action against the registration. The reasons for this split seem to be of a personal nature as well. According to reports, Chief Riruako is negotiating with SWAPO about a government of national unity, in which he will own the seat of a minister.

Elder politicians around Hans-Erik Staby and Henry de Waal founded in November the “Alliance for Democratic Change” (ADC) as an alternative to the RP. This new party is claiming, in alliance with the DTA, a stronger democratic participation of the white population.

The “Congress of Democrats” (COD) was not affected by such occurrences and has used the time for consolidation of the party. Party leader Ben Ulenga declared at the beginning of December 2003, that his party will seriously challenge SWAPO. Also, a stronger cooperation with the other opposition parties will be supported. At the end of October 2003, the renowned politician Moses Katjiuongua with his “Democratic Coalition of Namibia” (DCN), as well as parts of the “United Democratic Front” (UDF) at the end of 2003, have joined the CoD.

Due to financial reasons, the government wanted to combine communal, regional, parliamentary and presidential elections in some form. Surprisingly for many, the regional councillors declined a reduction of their terms, also the current one, from six to five years. This shows a growing confidence of them. The regional commissioners are also mainly members of SWAPO. Communal elections were due at the end of 2003, but have been delayed because of financial reasons. The electoral commission is currently assessing, which elections can be combined.

Electoral reenrolment, which was due according to the constitution in July and August 2003, was successful. Overall, 930.283 people who are entitled to vote have been registered, which is an estimated 97% of all voters.

Nujoma surprised the population in May again with a reorganization of the cabinet. Protruding in this change is the appointment of the director of the “National Planning Commission” (NPC), Ms. Saara Kuugongelwa-Amadhila as new finance minister. Her predecessor, Mr. Nangolo Mbumba, was appointed as minister for information and broadcasting. The long-time minister of justice, Dr. Ngarikutuke Tjiriange, who is also general secretary of SWAPO, was appointed minister without portfolio. This led to massive protests of the opposition.

At the beginning of 2004, some ambassadors had been newly assigned. The new ambassador for Berlin is the former state secretary of the NPC, Mr. Hanno Rumpf. The new ambassador to Brussels is the longstanding vice chancellor of the University of Namibia, Mr. Peter Kadjvivi.

For the first time, all parliamentarians had to disclose their financial assets. In the public part, there were no surprises, which, according to the president of parliament, Mr. Moses Tjitendero, were due to the fact, that most politicians had lived in exile prior to independence, thus had no chance of accumulating wealth. He is expecting that this is going to change in the future, when business people are entering politics.

The longstanding Prime Minister, Mr. Hage Geingob, bid farewell to the parliament at the end of February 2003, as he has started a career as executive secretary of the “Global Coalition for Africa” in Washington.

Since mid-2003, the building costs for the new statehouse, which is estimated at around N$ 600 Mio, are being discussed. The necessity of a new building is not being challenged, yet the immense costs are causing increasing disagreement due to the economical and social situation within the country.

4.2 Foreign Affairs

Namibia has, in line with the UN peace initiative for Liberia, sent 900 soldiers there. The country wants to continue its involvement with international peace mission with this.

The changed situation in Angola has also lead to pacification of the situation in the North.

Namibia is increasingly supporting NePAD, but is trying a realistic approach. The peer review mechanism as well as the pressure on Zimbabwe is seen critically. The dominance of Africa’s great powers is seen as a further problem.

A visit by Germany’s foreign minister, Mr. Joschka Fischer, proceeded harmonically, although he pointed out, that Namibia can not expect as much foreign aid in the future. In the future, it is necessary to cooperate with the private sector in questions of business development.

Namibia has taken a clear position towards the Iraq war. It sees the war as pretence to secure American oil interests in the region.

The Brazilian president da Silva has declared during his visit, that Brazil is also in the debt of the black continent. As a sign of compensation, he wants to support economic development in Namibia.

The former Ombudswoman, Ms. Bianca Gawanas, has become commissar for social affairs of the AU.

Also at the end of September, the government has ratified the extradition protocol of the SADC. Within the scope of this protocol, police work is expected to be simplified and accelerated in the member countries.

5. Assessment of prospects

5.1 Hirschman’s model of unbalanced growth

Albert O. Hirschman devised a model for economic growth where not necessarily all parts of the economy have to be developed in order for it to grow. He argues that through the development of specific sectors of the economy, an effect on connected sectors is obtained. He calls these effects backward and forward linkages. Backward linkages mean that through e.g. developing the industrial sector, this will have a growth effect on the suppliers of the raw materials, as they will see an increase in demand as well. Forward linkages on the other hand boost output demand, resulting in this example in the growth of the sector that sells the produced goods to consumers. Hirschman argues further, that according to his model, the sector with the most linkages has to be favoured.

In a country like Namibia, the development of the SME sector could produce such effects. Due to the concentration of the population in several locations with long distances between them, the majority of the entrepreneurs have to sell their goods mostly locally. As it is easier for this sector to reach certain economies of scale within a small market, they can offer their products at a lower rate, resulting in an increase of demand. As the road infrastructure of Namibia is in a very good condition, raw materials can be easily supplied. As some companies of this sector then can grow, they can reach even more markets and increase demand for their products but also have a higher demand of raw materials. This would be in accordance with Hirschman’s model.

Looking at the development of most of the western economies, similar effects can be observed, dating back several hundred years. Due to the technical possibilities today, growth can be at an even higher rate.

5.2 Causes for core problems and resulting goals

There are three major problems in Namibia. These are inequality, the high levels of unemployment and poverty and the impact of HIV/AIDS. Deep social and political divide and unrest can result from inadequate or delayed solutions. On the other hand, Namibia has substantial opportunities, which can be found in new trade opportunities, internationally as well regionally and the value-adding process to the huge natural resources, including the touristy appeal, which Namibia has.

Thus the task appears to be to connect these opportunities with the severe needs. The strength to facilitate such connections exists, but also a number of weaknesses, which have constrained these linkages.

This leads to the assumption of a core problem for economic development. There are inadequate structures and insufficient capacity of political and economic actors to make full use of opportunities in order to address and mitigate social and economic needs.

Hence the resulting goal is to create an appropriate structure and strengthen the capacities which facilitate equitable growth, i.e. the usage of opportunities to create employment and reduce poverty. With a better basis for employment and income, the development of skills, which again results in a more stable platform for economic growth, can be established.

5.3 Developmental strengths, opportunities and constraints

The outcome of connecting strengths and opportunities is development and growth. The strengths of Namibia are in its political and economical potential, which are based on democratic principals and the rule of law. Neighbouring Botswana has similar strengths, but not such a good location for intercontinental trade, as it has no direct access to the sea. Also, Namibia has a more diversified economic base. Good infrastructure, especially in telecommunication, its harbours, for long-distance transport and energy are another Namibian strength. Namibia has the best geographical and logistical position to make use of new trade opportunities with Angola and the DRC. The good transport infrastructure facilitates direct market access to all neighbouring countries.

Underpinning these strengths are substantial resources, in means of natural and mineral resources but also a large workforce. But the workforce is not highly skilled and also dispersed over a large area. A comparative advantage relative to many countries in the region is the favourable policy framework for economic development. These policies are conducive to investment, with industrial and SME policies, the Investment Act and others as well as to socio-economic development.

Close connections to these strengths are the outstanding opportunities being more available to Namibia than other countries in the region. Due to the attraction of some flagship foreign investments, there are more investments coming in and the country is in a good position to emulate Botswana as a foreign direct investment destination. Looking at Hirschman’s model of unbalanced growth, these large-scale investments can provide opportunities for backward linkages. These could be investments in production and services which then will be an input to the production of these larger companies. There are also opportunities for horizontal linkages between similar SME’s. Such links could start with an intensified cooperation, but can later be extended to clustering, which can be supported by joint procurement and marketing ventures.

The domestic market is small. Still, economies of scale can be reached for some products like basic products, building hardware, household items, shoes garments and others and in the services sector, particularly tourism. The greater opportunities are existing in the value-adding industries, for example the cutting of diamonds, the copper and zinc processing and the further processing of fish and meat for export. The two development corridors, which are connecting the capital with the South African Gauteng Province, which includes Johannesburg and Pretoria and the corridor through the Caprivi Strip in the north towards Zambia and Zimbabwe are presenting opportunities for locating modern service industries.

Without overcoming important weaknesses, these strengths cannot be fully used and opportunities not accessed. Entrepreneurial competencies are being blocked by the social conditioning of the majority of the population by Apartheid. This has caused certain attitudes of dependency but also fears of engaging economically. It is a phenomenon that reinforces prejudice and hinders an emergence of better trust between the social-ethnic divide. Inherent strengths that could be fed into the economy can be achieved by efforts to destigmatise the informal sector.

The low population density is a further weakness. This results in long distances and a comparably expensive infrastructure to connect the communities. Some of these problems could be overcome by modern communication. Unfortunately, these are not yet fully in place.

Although there are many institutions to promote economic development, they are very weak. Investors seeking advice or support in order to elaborate good investment projects would not be able to find an institution with adequate capacities for supplying such services. The institutional structure for SME development which is required is still too weak. While these institutions, which support private sector development are weak, the public sector has a high share of the GDP, resulting in the reduction and slowing down of opportunities for the private sector and SME development.

These institutional weaknesses are also relating to social development, particularly poverty reduction and labour market policy implementation.

The government is weak in coordinating and implementing policies that would strengthen institutions but is on the other hand eager to overcome these institutional weaknesses. Although the policies are well written, they are not sufficiently communicated between economic actors. Joint strategies to implement them cannot be devised and pushed through. The missing trust between economic actors, being mainly the rich white population and the political actors is hindering joint strategizing between political decision-makers, investors and the labour union.

These deficits and potentials are existing within a volatile global economic framework, in which trade concessions like AGOA can be withdrawn and the political development of the Southern African region can have impacts on Namibia’s stability. If they are not properly managed, they can be a threat to Namibia.

6. Castells Model of the Fourth World

“The rise of informationalism at the turn of the millennium is intertwined with rising inequality and social exclusion throughout the world.”[3] This is the beginning statement of Castells theory about the rise of the fourth world. The theory distinguishes several processes of social differentiation, which are “on the one hand, inequality, polarization, poverty and misery” and “all pertain to the domain of relationships of distribution/consumption or differential appropriation of the wealth generated by collective effort. On the other hand, individualization of work, over-exploitation of workers, social exclusion, and perverse integration are characteristic of four specific processes vis-à-vis relations of production”[4]. The following analysis details these points and assesses, whether Namibia is moving towards being a fourth world country or is situated in a position of moving towards the developed world, or as Castells calls it, integrating itself into the network society.

6.1 Inequality and Polarization

According to Castells, there has been an increasing inequality and polarization in the distribution of wealth over the past three decades[5]. Per capita income differences strongly between the industrial and the developing world. In the latest UNDP Human Development Report (HDR) of 2002, the average GDP per capita in 2000 for all OECD countries had an average of US$ 23,569, whereas the Sub-Saharan African countries were at an average of US$ 1,690. Namibia had an average per capita GDP of US$ 6,431[6]. This is almost four times as high as the average of the region, but still only about a quarter of the OECD countries. GDP growth had an average of 2,8% during the years 1998-2002, with the OECD countries averaging at 3%. Even with a forecasted 4,4% for the year 2003 and 3,7 for 2004, it is unlikely for the country to close the gap in the near future[7]. Also, the forecasts for Namibia are made with a rather optimistic outlook, so it is questionable, whether the gap is not likely to increase.

Income inequality in a country is measured with the so-called Gini-coefficient. Namibia is at one of the highest positions with a coefficient of 0.7 in 2000. The coefficients for the OECD countries are mostly below 0.4, although some of them are rising as well. Still, they are far away from the Namibian situation. This is one of the major development goals of the Namibian government, but again, there is little hope, that there will be significant changes in the near future.

The extreme poverty line is set at US$ 1 per day. According to the HDR of 2002, 34,9% of the Namibian population is living below this line. Still, the country is ranked 122nd in the Human Poverty Index and has one of the lowest levels in Sub-Saharan Africa[8].

But there are other dimensions of poverty: illiteracy, access to safe water, access to health services and life expectancy.

Illiteracy in Namibia is at 18%, which by far is below the African average of 41%. Also, about 25% of the government’s budget are going into this sector. The only country with a higher percentage in Africa is Senegal, with 33,1%[9]. Net primary enrolment is at 86%, with 86% of the children reaching Grade 5. The problem in developing countries is the high proportion spent for primary education, whereas expenditure for tertiary education is much lower than in industrialized countries. In Norway, the country with the highest HDI rank, 27,9% of the educational budget is spent in this sector, in the UK, ranked 13th, it is at 23,7%. Namibia only spends about 13,1% for tertiary education. As a young nation, Namibia’s education policy tends to focus on primary education. The main problems are in the area of school management and these problems tend to increase with the decentralisation in progress. There are not enough schools or teachers and there is a drop-out rate of 60% until Grade 12.

In an arid country, the access to safe water constitutes a certain problem. Still, about 77% of the population have access to improved water and the government is trying to improve this figure. Looking at the least developed countries, only about 50% or less of the population have this possibility.

Of the government’s budget, 3.3% are being spent on health, which amounted to US$ 142 per person in 1998. There are about 30 physicians per 100,000 inhabitants, which is a very little figure, considering that in the countries with a high HDI, this number is between 100 and 400. Life expectancy for Sub-Saharan Africa is 48.8 years. Namibia has one of the highest AIDS infection rates, thus life expectancy is with 45.1 years slightly below the average. This figure is not likely to improve, as the spreading of AIDS is increasing, as will be discussed in a later chapter.

The figures seem to show, that in some respect, Namibia is drifting towards being a least developed country. This supports the theory of polarization. Then again, some of the figures, like the GDP per person show, that this drift would still take some time.

Income inequality is one of the major problems in the country. This can not be overcome by expropriating the wealthy people, but by rather economically activating the poor. The targets of NDP 2 are going into this direction, but as experiences with NDP 1 have shown, this is a very high aim.

6.2 De-humanization of Africa

“The rise of the informational/ global capitalism in the last quarter of the twentieth century coincided with the collapse of Africa’s economies, the disintegration of many of its states, and the breakdown of most of its societies. As a result, famines, epidemics, violence, civil wars, massacres, mass exodus, and social and political chaos are, in this turn of the millennium, salient features…”[10] of the continent.

Castells excludes in this concern the countries Botswana and South Africa, which are both neighbours of Namibia. As a young country, Namibia has not yet experienced these problems, with the exception being the HIV/AIDS epidemic, but then again, this has also affected the two excluded countries. The interplay between economy, technology, society and politics will be analyzed to assess, whether Namibia is going into the direction of the “Fourth World”.

6.2.1 Marginalization and Selective Integration

A heritage from colonial times is, that exports from Africa are mainly primary commodities, which amount, according to Castells to 92% of them. Also, these exports are mainly agricultural, contributing 76% of the earnings. Another interesting fact is, that the products sold are being confined to a decreasing variety of commodities, like coffee and cocoa. As prices for primary goods have been decreasing in the last couple of decades, the deterioration in the terms of trade Africa is experiencing more and more difficulties to grow on a basis of outward orientation of its economies[11].

On the other hand, the weak domestic markets have not made it possible to sustain import-substitution industrialization. The ratio of total manufacturing value added to GDP did not rise above 11% between 1965 and 1989, and was at 8% in the year 2000 for Sub-Saharan Africa, whereas it has been at around 40% for the OECD countries.

Also, Africa’s economy has consistently grown at a lower rate than the rest of the world in agriculture, industry and services. The crisis of its industrialization seems to have appeared at the same time when technological renewal and export-oriented industrialization characterized most of the world. This lead to a high dependency of Africa on international aid and foreign borrowing. In some countries, this contributes more than 50% of GNP and amounted to 12,4% of GNP for Africa in 1994. The result is that Africa has become the most indebted area of the world.[12] In fact, total external debt has risen from 76% in 1985 to 108% in 1997 for Sub-Saharan Africa excluding South Africa.

Another factor is the ever decreasing FDI into the region. In 1998, only 0.7% of FDI went into Sub-Saharan Africa.

These statistics look similar for Namibia. There is also a high dependence on world commodity prices, as primary products constitute for 80% of all export earnings. The main export products are diamonds, uranium, other minerals, fish and meat. The mineral resources are estimated to last for another ten to fifteen years, which gives the country only a limited period of time to find alternative export sources. Positive figures are the terms of trade. They have steadily been increasing over the last couple of years. The figure for 1993 is at 96.4 and has grown to 129.1 in 2000.

The Namibian domestic market is very small. The opportunities lie in the trade areas that Namibia is in. With the SADC, there is a large potential market at hand. Also, certain trade arrangements, like the AGOA, Lomé IV provide access to foreign markets. Still, the problem remains that mainly primary commodities are being produced. The support of SME development, as suggested in NDP 2 can provide the path into that direction. The composition of GDP sees a share of 16.4% in the secondary sector, which is more than double the average of Sub-Saharan Africa. At Independence, Namibia, as South Africa, had no debts and had not participated in the massive debt accumulation of the rest of Sub-Saharan Africa. Still, the country has incurred some debt, which currently amounts to about 27% of GNP. Considering the developmental goals after decades of marginalization from South Africa, this seems reasonable and is less than a quarter of the regions average.

Namibia receives 0,013% of the total FDI, amounting to US$ 114 million. This is about 10% of GDP, which is a substantial amount.

Castells summarises the marginalization of Africa under three main headings: “an unreliable institutional environment, lack of production and communications infrastructure, as well as of human capital; and erroneous economic policies”[13]. Thus, he sees investing in Africa as a highly risky venture.

“However, not all of Africa is marginalized from the global networks. Valuable resources, such as oil, gold, diamonds, and metals, continue to be exported…The problem is the use of earnings from these resources, as well as of international aid funds received by governments.”[14] This is a reference to the personal enrichment of African leaders, like Robert Mugabe of Zimbabwe or the deceased Mobutu Sese Seko of the former Zaïre. Castells further states, that there is a selective integration of small segments of the African economy, whereas the rest is left to its own fate in bare subsistence.

This does not seem the case in Namibia. Despite the high majority of the leading party, there are certain factors that prevent such behaviour by leading political figures. As a young democracy, the country had the chance to see the mistakes of others. As there is a free press, plans of prebendalism or pillage usually get uncovered during the beginning of their construction. A concern should be the increase in nepotism. Many important positions can only be obtained with the right family connections. Yet, it can be argued, that many countries have systems like that.

Earlier attempts of establishing linkages with African countries have destroyed the former basis of subsistence agriculture. This is a result of export-oriented agriculture and specialized cash crops in a desperate attempt to sell into foreign markets. What is marginal to the global economy is central in Africa and has substantially contributed to the disorganization of traditional economic forms.

A substantial part of Namibia’s farming land is being owned by white farmers, these economic forms are only existent in the remaining areas. This has been the case for almost a century, thus there are both types of economic behaviour in the country. This is advantageous for the country, as it has the linkages into the foreign markets, but not destroyed the traditional economies, thus making it possible for the indigenous people to integrate into the new economy. However, there is a shortage of land for these people. Thus, the government is buying farms to provide people with land. Unfortunately, the plan for these people is to go into subsistence agriculture, which is actually a step backwards.

6.2.2 Technological Apartheid at the dawn of the Information Age

With a few exceptions, Africa seems to be excluded from the informational technology revolution. Internet access is very rare and energy consumption per capita has only increased from 251kW to 288 kW (excluding South Africa) from 1971 to 1993 and was in 1999 at 469kW (including South Africa with 3776kW per capita). In 1991, there was just one telephone line per 100 people in Africa, and has not increased substantially, with 1.5 connections per 100 capita. The problem with the computer age is the lack of knowledge in programming. One reason being, that Africa has become the dump for out-dated computer hardware and another lack of training possibilities. With the added value of technology-intensive goods and services increasing and the decreasing of world prices for commodities, the balance of trade for many countries becomes unsustainable, making it even more difficult to close the gap with the developed world.

As this is a crucial part to development, Namibia has a relatively good position. The existing natural resources provide it with enough energy to sustain growth in this sector, as about 70% of the population do not yet have access to power transmission grid, but many of them produce energy with power generators. Unfortunately, there is no official figure for per capita energy consumption.

There are 6 telephone lines per 100 inhabitants, 4 times more than for the average of Sub-Saharan Africa. There are about the same amount of internet connections, so access to the rest of the world is provided. The University of Namibia offers degrees in Computer Sciences, albeit at a low level. As these courses are relatively new to the country, the effect is only likely to start in some years. The advantage of the high income disparity is that the rich population has a high income, which it can also invest into new production methods, using IT. This leads to the country being in a relatively good state considering computer development. Yet, this is mainly restricted to the urban areas, although internet access is possible at any telephone line, as Namibia has one of the most modern telephone networks in Africa.

6.2.3 Military Power

About 3.3% of GDP is going into the military. Yet the military is, due to the population size, relatively small. With close links to politicians and again previous experiences, the likelihood of a “putsch” is rather inconsiderable. Thus, it does not constitute a threat to the government and mainly serves the purpose of supporting peace missions.

6.2.4 Ethnic Identity

“The plight of Africa is often attributed, particularly in the media, to inter-ethnic hostility. Indeed, in the 1990s, ethnic strife exploded all over the continent. Leading in some cases to massacres and attempted genocides”[15] Castells hypothesises, that this ethnic identity struggle was actually introduced by colonial powers and then taken over, when the countries reached independence. This is due to the fact, that the customary state became a fundamental source of control over land and labour.

Again, this is only partially true. There is no racial hatred between the different ethnic groups, but with the majority of the population belonging to the Ovambo, there is a strong power difference towards the rest of the population. Government tries to overcome this by representing most of the ethnic groups in their department and also the parliament has a disproportional representation of them. Thus, there are not too many racial discriminations, although some key positions are rather occupied by the Ovambo.

6.2.5 White Elephants

Many African leaders have built so-called “White Elephants”, projects of little use at high cost, like the construction of Yamassoukro, the dream capital of Houphouet-Boigny, leading many African countries into bankruptcy.

The construction of massive projects like this has not occurred yet, although the cost of the new state house does cause some protests, due to the high costs involved and the non-local building contractor from North Korea.

6.2.6 HIV/AIDS

The epidemic is one of the fastest growing in Sub-Saharan Africa. With the migration of workers, the mainly patriarchal structures and the position of women in society, it is expected to grow at a very fast pace. Poverty and distress also contribute to the rapid spread of HIV/AIDS.

This is affecting Namibia to a great extent, with the infection rate being very high, 22.5% of all adults have acquired the virus. There are a lot of awareness campaigns, yet the acceptance is very questionable. The use of condoms is seen as a loss of manhood. A new approach towards providing women with so-called femdoms is currently employed, yet there is no feedback on the efficiency.

6.3 The exploitation of child labour

Child labour is a major problem worldwide, yet “Africa has the highest incidence of child labour, at around 40% of children aged 5-14”[16].The rapid growth of worldwide tourism is also a major source of child labour.

A Namibian child labour survey revealed, that a substantial proportion of children aged 10-14 were economically active. 9.9% of male and 5.8% of female children in this age group are working in some form. In the age group of 15-19, numbers were even higher, 27% of males and 20% of females.[17]

Child labour mainly occurs in the urban areas, the children being used to help their parents during agricultural seasons or herding cattle. For children attending school and being economically active, 12.7% stated, that working affects their school attendance. Education in Namibia is free and even intended to be compulsory for primary school. This can not easily be monitored, thus the gaps are existing. Yet, there are no reported cases of prostitution. Thus, these children are mainly used to support their parents, which, considering the poverty existing is not an unusual case.

6.4 Is Namibia a “Fourth World” Country?

Many of the economic figures are showing a move towards this situation and looking at the urban areas, they can be identified as being part of the “fourth world” already. Yet, the gap to the other African countries is still large and the figures can also be regarded as being an effect of a still young nation. The strong connection with South Africa can be seen as an opportunity, although Namibia also tries to diversify its export markets. The involvements in several economic blocs, opening wider markets are an opportunity as well. As nepotism is not at a too high level and with the stepping down of the current president, which is not very common on the continent, the country can be regarded as democratic. The free press and other, non-governmental powers can fulfil their function as watchdogs, thus preventing severe damages to the economy.

The employment of NDP 2 is a good basis for developing the country, albeit some of the targets set can not be achieved. With the first ever African development plan written by Africans, NePAD, there is a chance of better adherence to it by the continents leaders, which could improve the overall situation, of which Namibia is benefiting as well.

Problems are the high dependency on primary commodities, with the mineral resources being finite and the agricultural products highly dependent on climatic conditions. Thus, in order to become a developed country, the next step is to increase production and service, i.e. the secondary and tertiary sector. This can only be achieved by higher educational standards of the people, which the government is pursuing with its substantial spending on the sector. There are several NGO’s engaged in the training for school management, which might help to solve the organisational problem currently existing. Fourteen years after independence, the education policies are showing some effect, so that the current state might only be temporary and will improve in the future.

With the building of a clothes manufacturing company, a first step towards increased manufacturing is being achieved, yet this is also a large source of controversy.

It is hard to assess, in which way the country is going. The economic figures support the theory of moving towards a “fourth world” country and the other reasons stated rather project a mixed image. It has also to be kept in mind, that the country has a very diverse geography and population distribution, which makes governing a country like this rather difficult. In comparing all these factors, there seems to be a rather positive outlook for the country, it has some difficulties to face, thus there is a good chance for the country not to be part of the “fourth world”. However, it will not reach the industrialized countries in the near future. This will raise the question whether a new Africa in general is evolving, with South Africa at the forefront.


Castells, M. (2000) ‘The Information Age: Economy, Society and Culture Vol. III

End Of Millenium

National Planning Commission: National Development Plan 1 (1995)

National Development Plan 2 (2000)

Mid-Term Review of the First National Development Plan (1999)

Ministry of Labour: Namibia Child Activities Survey (1999)

UNDP: Human Development Report (2002)

Alesina, Alberto, and Roman Wacziarg: Openness, Country Size and Government. (1997)

Journal of Public Economics 69: 305-321.

GTZ (2002): Namibia: Sectoral Study on Economic Reform and Development of the Market Economy

FAO: Nutrition Country Profile: Namibia (2001)

Lori Bollinger; John Stove: Economic Impact of AIDS on Namibia (1999)

Timothy W. Luke, Gearoid O Tuathail: The Fraying Modern Map: Failed States and Contrabrand Capitalism (1997)

Deanna Swaney: Lonely Planet Travel Guide Namibia (2002)

Alan Mc Clelland & Vincent Gribbin Gini Coefficient Analyses (2002)

Oyejide, Elbadawi and Collier: Potential of regional integration in Africa (1997) Pictures from the country


[1] Alesina and Wacziarg (1997)

[2] Oyejide, Elbadawi and Collier (1997)

[3] M. Castells: „The End of the Millennium“ (2000); p. 68

[4] M. Castells: „The End of the Millennium“ (2000); p. 69

[5] M. Castells: „The End of the Millennium“ (2000); p. 78

[6] UNDP: Human Development Report (2002)

[7] OECD Economic Outlook; Bank of Namibia

[8] UNDP: Human Development Report (2002)

[9] UNDP: Human Development Report (2002)

[10] M. Castells: „The End of the Millennium“ (2000); p. 83

[11] M. Castells: „The End of the Millennium“ (2000); p. 85

[12] M. Castells: „The End of the Millennium“ (2000); p. 87

[13] M. Castells: „The End of the Millennium“ (2000); p. 90

[14] M. Castells: „The End of the Millennium“ (2000); p. 91

[15] M. Castells: „The End of the Millennium“ (2000); p. 105

[16] M. Castells: „The End of the Millennium“ (2000); p. 153

[17] Namibia Child Activities Survey; Ministry of Labour (1999)


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Namibia Towards




Titel: Namibia - Towards the fourth world