The Impact of Globalisation on Namibia A presentation

The Impact of Globalisation on Namibia A presentation by Robin Sherbourne of the Institute for Public Policy Research to VSO 23 May 2003

3 Key Questions Plus • • • What is globalisation? Why is it important? How does it impact on Namibia? What we can and can’t influence The Big Debates

What Is Globalisation? • • Increasing (economic) interaction between countries including: Trade Investment Labour (Culture) (Values) (Diseases) (Terrorism)

Why Is It Important? • How do poor countries become richer? • Economic theory • Economic evidence

Economic Theory • The “Catch Up Effect” – poorer countries have potential to grow faster • Theory of Comparative Advantage – specialise in what you are good at and trade the rest

Economic Evidence • Fastest growing economies have started poorer • Rich economies have not grown fast • Poor economies in EU converge • High growth economies have been more highly integrated • Recessions exacerbated by trade protection • Rapid growth in small countries needs world economy

Impact on Namibia? • • • Meat and livestock (~3%) Diamonds and minerals (~13%) Fish products (~6%) Beer (~1%) Tourism (~2%) Imagine these industries without international trade, investment and labour mobility

Positive Impact on Namibia? • Imagine “North Korean” style economic policies • Imagine a large city in Europe • Plus no big inefficient industries grown under protection

Negative Impact on Namibia? • • National sovereignty Economic autarky vs integration Regional integration vs global integration Brain drain Exploitation of resources Labour standards “Race to the bottom” Inequality

What Can’t We Influence? • Monetary policy (interest rates and exchanges rate) determined by CMA • Trade policy (tariffs and non-tariff barriers) determined by SACU and WTO

What Can We Influence? • • Domestic taxes Fiscal policy Education and training Health Labour laws Social security Business regulations

The Big Debates • Too much globalisation or too little? • Freeing up international labour market would bring much greater benefits • Environmental impact of wealthier planet • Political consequences of wealthier planet • Industrial development and infant industry • Rich country agricultural protection • Intellectual property rights

Final Thought Is Namibia helping to lead the international debate on globalisation?