An Analysis of Strategic Intervention Policy in Namibia

Namibia, the last colony in SubSaharan Africa to obtain independence (in 1990), set a precedent by becoming the first to specifically base its economic future on the small business sector. The government is relying on strategic interventionist policy to encourage new venture creation and a healthy small business sector. In contrast to neighboring states which have pursued principles of African socialism, Namibia has adopted a policy of promoting entrepreneurship via intervention in the marketplace. This study examines this intervention concluding with an evaluation of such policy in Namibia and generalizations for future application. Background In 1884, the German colony of Sudwest Afrika was annexed to Germany and remained so until 1915 when South Africa, an allied power, obtained the surrender of the German troops during World War 1. The League of Nations put the Union of South Africa (later the Republic of South Africa, RSA) in charge of administering the land which would be known as South-West Africa (SWA). In 1968, RSA declared SWA free to be independent, but tension spilled over from neighboring Angola when Portugal abandoned the latter and a Marxist government took control of it with military assistance from the U.S.S.R. and Cuba. Angola was subsequently used by the South West African People's Organization (SWAPO), a leftist organization with strong communist affiliation which pursued a violent campaign in SWA. Finally, in 1984 a Bill of Fundamental Rights and Objectives was compiled in SWA, specifying the right to own private property. In 1985, the Transitional Government of National Unity was established as an interim government of SWA, and RSA continued steps for the creation of the necessary infrastructure for eventual independence. The new country would be called Namibia," its new name meaning "great arid desert. " In contrast to the National People's Congress of Zimbabwe which adopted the Zanu Constitution in 1989, reaffirming its commitment to socialism guided by Marxist-Leninist principles, policymakers in SWA did not wish to take the path of African socialism. Under colonial rule most African states including Rhodesia (as Zimbabwe was known) had been self-sufficient in food production and many exported food; after their independence, despite foreign aid, debt increased and per capita gross national product (GNP) usually fell considerably. Seeing repeated failures of attempts at African socialism, policymakers in SWA decided instead to pursue free enterprise ideals with an emphasis on small business. Up to its independence in March 1990, SWA obtained its wealth from free enterprise, mostly from big business--with large capital investments in mining, fishing, livestock farming, and tourism. In 1987, 60 percent of its exports were in diamonds and uranium, with a value of approximately $1 billion U.S. dollars. However, as reported by The Economist (1988), after six decades of intense mining, the diamonds may be running out. Furthermore, the exodus of many white residents has coincided with the flight of substantial capital and expertise. The economic future of the new country will henceforth depend "on the small entrepreneur who has the potential to provide goods and create jobs for most Namibians (Deacon 1989). " The purpose of this article is (1) to demonstrate how Namibia is using what Peterson (1988) describes as the "strategic interventionist approach" with the objective of modifying the environment such as to encourage the development of small enterprise culture and (2) to evaluate such a policy in that setting. Methodology This article is the result of primary research conducted by the author in SWA/Namibia. In the case of a newly born country, primary research is essential, as secondary sources are almost nonexistent, and when the latter are available, reliability is at times doubtful. (1) Apart from the fact that it is too early for many reliable sources to have been published, the lack of published field research is understandable--visa formalities, malaria tablets, broken telephones, roadblocks, and unbearable temperatures are but a few of the deterrents which the author had to contend with. …