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How does a broke government look like?

Fri, 17 February 2017 23:46
by No Holds Barred
News Flash

 

It appears there is a small issue of semantics when it comes to the state of Namibia’s economy. Finance minister Calle Schlettwein is always at pains to deny that the country is broke yet says expenditure needs realignment.

Being broke means running out of money completely or being insolvent. Some would say being broke means having no cent or being down and out. Whatever the definition of being broke is, the simple matter is that when one fails to pay for what they never had problems paying for; then they are broke.

The inability to pay for services or whatever other necessities points at a situation where there is no money. If there was money, then why would the government fail to pay the Public Service Emergency Medical Aids Scheme? This service is not just another small issue that can be brushed aside by talk of the government not being broke.

This is about workers’ health. If workers are sick and cannot be treated because the doctors are demanding cash up front, surely why would Schlettwein still maintain that the government is not broke? Maybe the reason is that the government can still manage eking out a living from hand to mouth and living for a day, but still the uncertainty of such a situation points at a state of being broke. In any case, how does a broke government look like?

Is cutting expenditure to the bone not a good enough sign of being broke? This is what has happened. Teachers cannot take study leave and if they do, their classes will not have a replacement. Such a move compromises the already fragile education system in the country. The police too will have to spend longer periods of time sitting, doing nothing because there is no money. They too will not be on paid study leave. In any case, if they choose to go, then they will have to pay for themselves.

This too works against the spirit of improving skills for those serving the country. When home affairs says they will not be able to do a lot of things they used to do when the country had money, does this not point at a state of being broke? It could be true that the government has some money – maybe from the asset swap deals with GIPF or other parastatals – but it is also true that there is a problem of money. The minister has an issue with the use of the word broke.

This is understandable because to most people when you still have something in your pocket you are not broke. In this case, being broke means that Namibia cannot do what it used to do. It cannot do what it had planned to do. It also means that it may not be able to do all the things that have been suspended now in a long time to come.

There are many such things the government has shelved hoping that when the weather allows, those things will be done. One would have thought this is as simple as that and using the word broke then would sum up the current

How does a broke government look like? situation in one breathe.

In case, the minister still has a problem with the above simplified definition of broke, then he should equate being broke to being unable to pay for services rendered to government by lawyers, the construction industry and the doctors. It does not matter that the minister managed to pay some of these service providers later but the fact is that such payment was made way beyond the agreed time. In some cases, livid and cheeky service providers had to throw tantrums to attract attention and draw the minister out of his air conditioned offices to grudgingly admit that the government owes money and that the government will pay as and when the money comes in. In other words, being broke means surviving from hand to mouth.

This also happens when the deficit is wide and every month the government has to make a plan to pay salaries. We have already seen this happening with the recalling of foreign invested funds that were swapped for government bonds. The minister has admitted that they asked GIPF and NamPower among other outfits to bring back the money. Everybody understands how embarrassing it is to admit being broke. But in 2009, former US president Barack Obama came out in the open, telling the nation that there was no money.

“Well, we are out of money now. We are operating in deep deficits,” he Steven Scully, the senior executive producer and political editor of the C-Span television network. So if Namibia is also operating in deep deficits, does it n o t mean that the government is broke? The other thing is that cutting expenditure does not create wealth. It simply means that there is no money to spend.

Otherwise what is the use of saving money [if the country is not broke] while people are dying of treatable disease because they cannot be treated by doctors who are demanding cash upfront? Why would people lose jobs [if the government is not broke] just because the minister says expenditure should be contained? It does not make an economic sense to pretend that we are saving when essential services are being neglected.

By the way, is there sny difference to say that the country has encountered some headwinds or that we are experiencing some economic hardships and just saying we are broke? Whatever headwinds mean or experiencing economic hardships, looking at it means the same thing as saying we are broke. In any case, how does a broke government look alike?

Is it one that admits experiencing economic challenges or facing headwinds? Come on gentlemen, let us be simple and straight forward. Being broke is being broke. There are no two ways about it because that is what it is. Whether there are headwinds coming or experiences of whatever nature, the bottomline is that there is no ready cash.

The fact that the money eventually comes in drips and drabs does not mean it is always there. For once, the clarity and honesty Geingob spoke about when he addressed his Cabinet on Tuesday and then when he officially opened parliament on the same day should apply here. There is no money and the government is managing and that is what matters for now. All what the government needs is our full support at these trying times.