Advancing economic status needs private sector diversification: Felipe

Namibia may not be trapped in a middle-income status, but there is a need for increased export and private sector diversification.

Asian Development Bank (ADB)'s Advisor for Economic Research and Regional Cooperation Department, Dr Jesus Felipe said this during a presentation on how Namibia can avoid a middle-income status trap during the Bank of Namibia's 20th Annual Symposium.

The symposium is held under the theme: 'Escaping the middle-income trap: A perspective from Namibia.'

Felipe said for progressive development to take place there must be structural processes in the economy. Namibia is doing this, he said, however, at snails' pace.

He explained that modern market economies are driven by a dynamic private sector. Government on the other hand, must play a key catalytic role in helping the private sector, or industrialisation and development in general will be very difficult.

Sharing lessons on how the East Asian economies advanced to upper-income status, Felipe said such countries involved their private sector in strategic formulation and implementation.

East Asian economies also invested in skills creation, infrastructure and support for institutions which were all carefully coordinated with interventions in product markets.

He noted that for Namibia to make it into high-income, the country should challenge itself to achieve a per capita growth rate of 3,27 per cent per annum during the next 15 years, by addressing poverty, unemployment and high inequality.

'You need a massive industrial program with the private sector, and use the capabilities you already have,' Felipe said.

Presenters from the World Bank, the Asian Development Bank and BoN will provide their perspective on the middle-income trap, as well as international experiences on how to escape it, during the one-day symposium.

The event is being attended by representatives from the commercial banking sector, the private sector, state-owned enterprises, ministries and tertiary institutions.

Source: Namibia Press Agency