…Leaves economic lessons for Namibia in view of Harambee
By Hilary Mare
RENOWNED economist and Nobel laureate, Professor Joseph Stiglitz has echoed Namibia’s development agenda and has advised government to take better advantage of its resources, diversify its economy and take on board the important lessons of development of the last third of a century.
Stiglitz who is a lecturer in economics at Columbia University in New York and was visiting the country last week together with Dr Carlos Lopes, who is the eighth executive secretary of the United Nations Economic Commission for Africa, alluded to Namibia’s potential for performing better adding that transparency rules help ensure that the country gets full benefit and proceeds are well spent.
Taking the Harambee Prosperity Plan into account, Stiglitz affirmed that wealth should be shared and should be utilised for the benefit of all in a successful economy.
“Namibia has been relatively successful in its growth but has not done so well in achieving shared prosperity with high unemployment, high Gini coefficient
“Wealth belongs to the country as a whole, should be managed for the benefit of the country as a whole. Good, well-designed auctions can maximize the value of the proceeds going to nation as a whole. Good, well-designed contracts can provide good incentives and balance risk sharing. The private sector wants to minimize what it pays government which maximizes government assumption of risk,” he said. In the same vein during his presentation, titled ‘Current Global and African Economic Trends affecting Namibia’, Dr Lopes, who is a native and former civil servant of Guinea-Bissau, expressed support for the Harambee Prosperity Plan, saying the targets within the plan are achievable during Geingob’s term of office.
“With regards to Harambee, the base where Namibia is starting is much higher than the rest of the continent. Namibia has the resources to make Harambee a success during the term of President Hage Geingob,” Lopes stated.
In a plethora of economic lessons offered by Stiglitz during his visit, the Professor outlined that single-minded focus on inflation was worse than what was realized 20 years ago when it contributed to the global financial crisis Similarly single-minded focus on interest rate is wrong and many more instruments should be considered.
“Simplistic rules such “monetarism” and “inflation targeting” don’t work. Central banks need to simultaneously use all the instruments at their disposal which are both conventional instruments and regulatory instruments. They can’t and shouldn’t separate the two but the two need to be coordinated. Capital and financial market liberalization often lead to more instability and less growth,” he stated.
He further highlighted that all countries are in need of structural transformation affirming that in all countries there is need to address problems of climate change (both mitigation and adaptation) whilst also needing to diversify away from dependence on natural resources.
Stiglitz, a graduate of Amherst College in the US, received his PhD from Massachusetts Institute of Technology (MIT) in 1967 and became a full professor at Yale in 1970. In 1979 he was awarded the John Bates Clark Award, given biennially by the American Economic Association to the economist under 40 who has made the most significant contribution to the field.
He has taught at Princeton, Stanford, and MIT and was the Drummond Professor and a fellow of All Souls College, Oxford. He is now teaches at Columbia University in New York, where he is also the founder and co-president of the university’s Initiative for Policy Dialogue. He is also the Chief Economist of the Roosevelt Institute.
In 2001, he was awarded the Nobel Prize in economics for his analyses of markets with asymmetric information and he was a lead author of the 1995 Report of the Intergovernmental Panel on Climate Change, which shared the 2007 Nobel Peace Prize.
In 2011, Time magazine named Stiglitz one of the 100 most influential people in the world. He is now serving as president of the International Economic Association.
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