It is an exciting comparison: Namibia in 1990 versus today
Going into the weekend where we celebrate the anniversary of our Independence from South Africa, it is easy to pick those issues that demand celebration most. There are many elements of the local economy which were either not in existence in 1990, or so insignificant, they hardly mattered at all, meaning these did not show on the statistics radar then.
Before Independence, South West Africa was governed by an interim government with all the usual bells and whistles a government should command. But the authority lay with what was popularly known as The Administration, and in this regard it was mostly the Administration for Whites, although there were a few other ethnic administrations with limited clout, but only in their respective traditional “homeland” areas.
This changed dramatically at Independence but then the arduous process of building an independent country with independent institutions started. In development science, this is typically called the process of institutionalisation, and this big word assumes some form of credibility when viewed from the ivory tower perspective of academics and analysts. The actual, real process on the ground and in practical terms, is however, a vastly different story.
Our independence history is riddled with tales of encumbered, under-funded institutions trying to survive and to find their niche in a bewildering modern world. Given the pervasive lack of skilled people other than whites, it is understandable that the founding phase of many of these institutions is rather painful and often embarrassing. This is even more so when one considers that before Independence, it was claimed all the skills we need will be provided by the groundswell of refugees who flocked back to the motherland in 1989 and 1990. How inflated these promises were we only learned afterwards when one after the other public institution was disgraced by the incompetence and the conduct of its new leadership.
But we did not give up at that point and today many of those institutions that struggled under fools, are run by competent people, many of them surprisingly young since they only reached adulthood after Independence. The list of institutions that function properly and efficiently today, is too long to recite here. Those few institutions that still fight an uphill battle, are so rare, and the number of well-trained candidates to lead them and work in them, have increased so exponentially, that it is most often just a matter of finding the right leaders, to fix an ailing institution.
I would say that after 24 years the process of institutionalisation is mostly complete and can be rated overall as highly successful. And this is the part I find so exciting when I review our economic history, because not everybody realises how fraught with potential failures, that process was.
The highlight of our development, is to me our local capital market. It remains an open question whether this is part of the institutionalisation process or the development of the local financial services sector, but I suppose it is a little bit of both.
In 1990, there was absolutely no local capital market – zero, nichts, nil. South West Africa did not have any debt or debt instruments sold by the South African government on its behalf. The funding was always provided by South Africa as part of the grand scheme to incorporate the territory as a fifth province.
The institutionalisation part started slowly and jerkingly with the establishment of the local stock exchange but it took many years before this became a meaningful, functional institution. Meanwhile, our savings were still leaving Namibia is a fat torrent, finding investment opportunities only in the South African market. For years Regulations 28 and 15 tried to stem the tide but with very limited success, that is, until about twelve years ago when the debate on Domestic Asset Requirements took a turn for the better, and the local bond market started showing some depth, and as investment managers started seeing acceptable and reasonable returns for their precious long-term savings, in the domestic market. This brings me to the infamous Mrs Takanawa in Japan. I spoke about her earlier this week on NBC Radio. This phantom investor is popularly used in economic circles to explain the Japanese development phenomenon. The crux is that Japan was built on Japanese savings, one of the reasons why its economy can survive such a debt overload. If it takes our savings to make our economy grow, and if this economy is managed responsibly, how can one fault the argument that Namibian savings must work to build Namibia.