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Fiscal policy stabilises economy

Mon, 27 June 2016 16:45
by Staff Writer
Business

The Government’s fiscal policy fared well, showing positive results which can be estimated from growth in the economy, averaging economic growth to around 4.6% in the last 10 years, in spite of the severe effects stemming from the global financial crisis, Minister of Finance, Calle Schlettwein has said.
Delivering the State of The Economy address in Parliament recently, Schlettwein said the policy saved the economy from severe external shocks.
 The Government has invested heavily in economic and other logistical infrastructure which facilitate investment, trade and economic expansion and, therefore, the creation of jobs. We have grown incomes and closed the inequality gap by about 15% since independence.
“The Government has invested heavily in economic and other logistical infrastructure which facilitate investment, trade and economic expansion and, therefore, the creation of jobs. We have grown incomes and closed the inequality gap by about 15% since independence. On the social sector, over one-quarter of the national budgeted is consistently allocated and spent on the social sectors of education and health. Poverty  has been more than halved over the same period, from 69% in 1993 to less than 30% by 2010,” Schlettwein said.
The Minister said that in the Namibian context, developmental state role is especially called for, given the lopsided nature of the economy and the historical past of unequal distribution of resources, social and economic exclusion and the inability of the private sector to, on its own, and within a free market economy, grow the economy and, at the same time, address the economic and social disparities.
This is the fundamental basis for the economic order of a mixed economy and the developmental role, which the Government plays in the socio-economic transformation, Schlettwein said.
“The Government has invested heavily in economic and other logistical infrastructure which facilitate investment, trade and economic expansion and, therefore, the creation of jobs. We have grown incomes and closed the inequality gap by about 15 percentage points since independence. These achievements were made mainly through the mobilization of our own resources, given the record expansion of income to an Upper Middle-Income country. Our budget is mainly funded from our own resources by about 98 percent, with grants only forming a small fraction of the budget,” he added.
Schlettwein added that the Government, believes that its Developmental State role has delivered results in the core areas of socio-economic development, as it does not believe in the widely discredited neo-liberal economic thinking, which assumes that economic benefits will trickle down from the well-off to the poor, through the operations of the invisible hand in the economy.
In executing this developmental role, the Government has, amongst others, put in place national institutions, Public Enterprises and Regulatory bodies as well as national policy frameworks developed through a participatory process.
“Domestically, consultation is held with the legislature, private sector, academia and civil society at different levels as it was done during the formulation stage of the Harambee Prosperity Plan. This participatory approach enhances the inclusiveness and effectiveness of the policy interventions,” he said.