The Impact of Globalisation on Namibia A presentation by Robin Sherbourne of the Institute for Public Policy Research to VSO 23 May 2003
3 Key Questions Plus What is globalisation? Why is it important? How does it impact on Namibia? What we can and can’t influence The Big Debates
What Is Globalisation? Increasing (economic) interaction between countries including: Trade Investment Labour (Culture) (Values) (Diseases) (Terrorism)
Why Is It Important? How do poor countries become richer? Economic theory Economic evidence
Economic Theory The “Catch Up Effect” – poorer countries have potential to grow faster Theory of Comparative Advantage – specialise in what you are good at and trade the rest
Economic Evidence Fastest growing economies have started poorer Rich economies have not grown fast Poor economies in EU converge High growth economies have been more highly integrated Recessions exacerbated by trade protection Rapid growth in small countries needs world economy
Impact on Namibia? Meat and livestock (~3%) Diamonds and minerals (~13%) Fish products (~6%) Beer (~1%) Tourism (~2%) Imagine these industries without international trade, investment and labour mobility
Positive Impact on Namibia? Imagine “North Korean” style economic policies Imagine a large city in Europe Plus no big inefficient industries grown under protection
Negative Impact on Namibia? National sovereignty Economic autarky vs integration Regional integration vs global integration Brain drain Exploitation of resources Labour standards “Race to the bottom” Inequality
What Can’t We Influence? Monetary policy (interest rates and exchanges rate) determined by CMA Trade policy (tariffs and non-tariff barriers) determined by SACU and WTO
What Can We Influence? Domestic taxes Fiscal policy Education and training Health Labour laws Social security Business regulations
The Big Debates Too much globalisation or too little? Freeing up international labour market would bring much greater benefits Environmental impact of wealthier planet Political consequences of wealthier planet Industrial development and infant industry Rich country agricultural protection Intellectual property rights
Final Thought Is Namibia helping to lead the international debate on globalisation?
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