Transcript The 2002/03 Budget

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
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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?
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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?
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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?
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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?
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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?