Eradicating Poverty in the Era of Geingonomics [analysis]

WITH the election of Hage Geingob as the next President of Namibia, a new catchy term, in reference to the incoming commander-in-chief’s economic policy vision, has been making rounds.

Touting “Geingonomics,” coined by the economist and chief executive officer of the Namibian Competition Commission Mihe Gaomab II, as a blueprint for an inclusive and broad-base economic policy, the proponents of this doctrine see the incoming President Hage Geingob’s economic strategy as a winning formula for Namibia.

Apparently, “the reform of the non-performing State-owned Enterprises (SOEs)” would mean extra dollars to spend on the poor. This would also transform “Namibia from a maintenance economy to an expansionist economy with growth levels from 3% at current levels to 6% or 7%,” Mihe Gaomab II is quoted saying.

Whether Geingob subscribes to this notion of economic strategy so far, still remains speculative. He has not distanced himself from it either. What we know, however, is that during the election campaign, candidate Geingob hinted about creating a ministry of poverty alleviation and another for SOEs.

I admit, I am still struggling to understand the fundamentals of the “Geingonomics” but I hope that it is not based on the same old growth-led economic strategy, an approach that’s failing everywhere in the world, which in this country continues to perpetuate patterns of inequality.

In the economic lexicon, a growth strategy calls for policy interventions to grow the economy (usually measured through the GDP growth rate) through investment in companies and productive sectors.

The argument here is that when you boost and grow the economy, the result would be in the form of job creation, raised income, and therefore by extension poverty alleviation. And all is fantastic!

But guess what, a growing body of research throughout the world, especially from affluent economies, are proving wrong this thesis that a country’s economic prosperity is a consequence of economic growth. In short, a growing economy does not necessarily mean reduced income inequality, job creation and wealth equality.

What is true is that what propels any country’s economic growth depends largely on how thriving and prosperous its people on the ground are. In simple terms, when the wealth of the country is fairly and equitably shared among its citizens, the economy tends to thrive.

This also means that if your country has many poor people, your economy’s growth will immensely suffer because a lot of your citizens have no buying power. But if you put money into their pockets – expand their buying power – that would spur the growth of your economy.

So the mathematics, in terms of where a country should focus its policy interventions to grow the economy on, is clear. This would be your bottom-up economics in action that the economy grows from the bottom up, not top down.

The implication of this for a country like Namibia, which is characterised by high poverty levels, implies that if we want to grow the economy we have to address poverty first, not the other way round. Therefore, Geingonomics or not, alleviating poverty in this country will not come from strategies that prioritise economic growth at the expense of the many people at the bottom.

That is exactly what currently is wrong, despite some degree of economic growth recorded since independence. Our economy is miserably failing to move many people out of poverty. Said differently, if we want to build a prosperous Namibia, we need economic policies that focus on reducing inequality, improve equality and create jobs.

These would include the need to invest in education by reforming our non-performing public education system and levelling the playing field in education through investments in child care and early childhood education. There is a need for a national minimum wage in order to stem out poverty wages that are condemning many Namibians to an employment status of “working poor.” Our policies should also ensure that Namibia has an educated and skilled workforce in order to improve access to quality and high paying jobs.

Bottom-up economics is also instructive that our policies help families save, access financial credits and build assets. And that we promote access to quality and affordable health care, as well as policies to improve access to affordable housing, and build quality neighbourhoods.

Therefore, with a bottom-up economics, I am convinced that we can move people out of poverty to a thriving middle class which in turn would help us build a vibrant economy that works for everybody and not just for the few.

– Ndumba J Kamwanyah is a lecturer at Unam.

Source : The Namibian