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Economics of scarce skills

Jacob Nyambe

Jacob Nyambe

While scarcity of skills is a fact as it is in some neighbouring countries, it is imperative to mention that most of the scarce skills are needed by the microeconomic fabric of the economy which serves as the nucleus of the economy’s driving force. At the international sphere, jobs are exchanged and skills are shared between countries. The proper workings of these ideals occur in integrated economies such as in economic unions where hierarchical stages of integration permits labour mobility across member states. While interest groups would argue for aggressive government intervention in influencing the labour market dynamics in less integrated economies, classical economic principles suggests minimal intervention in the workings of the economy. Can scarce skills serve as a constraint to economic growth? Of-course yes, because if inadequate, labour which is a factor of production can cause the economy to operate at a sub-optimal level.
Therefore, if there is a high need for scarce skills, the gap should be closed by all possible means which includes importation of the needed skills. As familiar in economic circles, setting the economy in a full employment mode is more theoretical than pragmatic, however, such a theoretical underpinning has a wide acceptance in setting economies in the right direction. Despite many factors that bedevil economic growth, the Namibian economy should continue to employ workable and tested solutions including some of the theoretical yardsticks.
How then should the shortage of skills shortage be addressed in Namibia? The private sector needs to be guided by detailed and realistic skills audit to convince government about the needed skills to be imported. Namibia is now at a stage where it requires employment approaches that will transform the imbedded structural unemployment challenges. This role falls at the laurels of both the government and the business sector. The stickiness of immigration policies should be seen as a consequence of delayed progress of integration across the entire Southern African Development Community level. Such delays have hand-cuffed labour mobility.  
Further, in order for the local labour market to be robust, economic development should be highly decentralised to the regions of Namibia. This will reduce the rural to urban migration which remains skewed towards the urban setting. There may be a noneconomic reason to avoiding targeted development in favour of remote areas of the country and that is for fear of confining certain jobs to certain areas.  This is a normal political choice and is common especially among developing countries. With the current high unemployment rate in Namibia, a policy shift is needed at a national level as a means to reducing the common practice of clustering along the streets by job-seekers.  Change in this regard is possible but it has to pass a means test in proving that it will transcend above the voices of economic rent-seekers who may be benefiting from available temporal workers.
This has enlightened on events beyond the lens of an ordinary eye.  Both the state and the business community should meet each other halfway with the former reforming its policies to advance the decentralisation agenda and to amend the legislation in order to allow the highly scarce skills to be imported while the latter adjusts to seek to employ Namibians who possesses the required scarce skills wherever they may be found. Thus the government and the business sector should agree to embark on a programme that will attract overseas-based Namibians to return in order to supplement the process of addressing the current skills quest. This has an advantage of wage transmission effects within the Namibian economy as opposed to repatriating the earned wages. A more flexible and transparent process of issuing out work and study permits is needed as that will facilitate the attraction of required skills and also earn the government needed revenue.  Failure to do so may lead to unabated politicking over skills shortage and placarding on policy rigidity.

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