Income gap halts progress.

Author:Arnold, Guy
Position:Namibia's first National Development Plan

Namibia's first Development Plan has created considerable debate with the country. It paints a clear picture of a country perched on a precarious base and in which income disparities are staggering in scale. Guy Arnold joins the debate.

There is a strong feeling within Government circles and generally around the country that 1996 will be a crucial year for Namibia in several ways. Hard decisions will have to be taken. Considerable introspection has been generated by the publication of the Namibian National Development Plan (I) which was presented to the Paris Club of donors last October in Geneva.

The Plan, which provides a mature appraisal of the country's problems five years after independence, has given Namibians substantial food for thought. Discussions on it, postponed over the Christmas period, are now in full flow.

In essence, the Plan states that though Namibia has achieved a modest but positive average rate of growth since independence this has been upon a generally fragile base. The country has received compliments for its stability, its sensible economic policies, its democracy but otherwise has been largely ignored by the international community which may be no bad thing. The problems, nonetheless, are formidable.

First, the distribution of the economy. Although per capita GDP is high by African standards it is one of the most skewed in the world with a majority engaged in low productivity activities such as subsistence agriculture and informal employment and only a very few earning high incomes. The richest 1% of households consume the equivalent of the poorest 50%. How to alter this imbalance must remain central to all planning.

Most economic development is centred upon Windhoek, a few other towns and freehold commercial farms owned by whites. The populous rural areas in the north are severely under-developed: 150,000 people work on communally owned land equivalent to 43% of the total area, while 3,700 farmers own freehold land equivalent to another 44% of the total area. Government, in every sense, is the key to development: It accounts for 35% of formal employment, its income is equivalent to 35% of GDP and its expenditure 40% of GDP. Yet what the Government gives with one hand it takes away with the other. Thus, between 1990 and 1994 public sector salaries had declined by 50% in real terms in order to pay for the rise in public employment.

No manufacturing base

Since there is almost no manufacturing base, Namibia has to...

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