Coen Welsh | Nov 14, 2017 | 0
Down a few more rungs on the ranking ladder
What makes Namibia persistently move down in the rankings of the Global Competitiveness Report while our next-door neighbour, Botswana, has managed to consolidate its ranking and actually moved up one notch in the latest report.
The answer to this vexing question is neither straightforward nor simple. An answer of sorts will probably consist of as many nuances as there are analysts and policy makers trying to dissect and understand the growing anomaly between two economies that are very similar in constitution and prospects.
First, it must be pointed out that Botswana also experienced a general decline in rankings from 2008 to 2011. From 2007 to 2008, Botswana jumped 20 places to position number 56. Then it slid back every year to end in position number 80 last year. In this year’s report, it managed to edge up one place and is now ranked 79th.
But Namibia only managed to achieve position number 92, falling 18 places over the last two years. Namibia is now ranked 13 places lower than Botswana, presenting an obvious paradox as the similarities between the two sister countries far outweigh the few isolated asymmetries.
In the section on Botswana, the Global Competitiveness report states “Among Botswana’s strengths are its relatively reliable and transparent institutions with efficient government spending, strong public trust in politicians and low levels of corruption.”
Namibia does not get such a glowing reading. Discussing our performance, the report notes : “continues its downward trend and falls nine places this year to 92nd place, with weakening across most areas measured by the Index. The country continues to benefit from a relatively well functioning institutional environment (52nd), with well- protected property rights, an independent judiciary, and reasonably strong public trust in politicians. The country’s transport infrastructure is also good by regional standards (59th). Financial markets are developed by international standards (47th) and buttressed by solid confidence in financial institutions (23rd), although their overall assessment has weakened for three years in a row. With regard to weaknesses, as in much of the region, Namibia’s health and education indicators are worrisome. The country is ranked a low 120th on the health subpillar, with high infant mortality and low life expectancy—the result, in large part, of the high rates of communicable diseases. On the educational side, enrollment rates remain low and the quality of the educational system remains poor, ranked 127th.”
The Employers Federation was quick to react to the disappointing ranking saying that a “massive drop of 17 positions in the category for labour market efficiency” was to blame for the overall slide. Criticising government policies for one-sidedness and accusing policy makers of bulldozing through legislation that favours only trade unions, the NEF argues that the impact of Namibian labour laws were not properly researched before being drafted and promulgated. This week the NEF stated: “this calls for an end to government paying lip service to cooperation with the private sector while at the same time continue to ignore reliable and well-researched policy inputs of the private sector.”
The impact of labour may or may not be the main driver of the regressive ranking. As quoted above, it also shows how low we score on health and education. All these factors combined, contribute to our slide, so it is quite possible that the NEF, driven by its mandate, is overplaying the importance of the labour component in the index. Nevertheless, health and education are the two sectors that devours the lion’s share of the national budget, so whether it is a single index pillar (labour) or a combination (labour, health and education), it becomes rather immaterial.
Our population is comparable to that of Botswana where there are slightly fewer people but also on a somewhat smaller territory. We share equal constraints in education and we both always have to reckon with small populations dispersed over vast areas of undeveloped territory. Also, in terms of communicable diseases, the statistics from Botswana are slightly worse than here. From this, it follows that if Botswana is in position number 79, Namibia must occupy the slot immediately below or above that.
I suspect a reasonable answer will take into consideration that the role of government in the local economy has become disturbingly big. This trend started many years ago, and as it seemingly remains official policy to grow the government’s stake in all sectors and enterprises, I do not see us improve in rankings. Nor do I see an improvement in employment statistics as long as government is the overbearing dominant force in the economy.