Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Banner Left
Banner Right

A Path to Escaping the Low-Income or Middle-Income Trap

Peya Junior Mushelenga

To become a modern, high-income country is a dream shared by all developing countries.

According to the World Bank, between the end of World War II and 2008, among 200 developing economies only South Korea and Taiwan (China) moved from the status of low-income economies to become high-income economies.

Moreover, among the 101 middle-income economies in 1960, by 2008 only 13 had become high income economies.

Mainland China is likely to achieve this success by around this time in 2025.

These statistics indicate that most developing economies, including Namibia, have not been able to escape the low-income or middle-income trap.

This is in spite of half a century of development efforts by the people and governments in developing countries, as well as the support and guidance provided by various multilateral and bilateral development institutions.

FRUSTRATIONS

Potentially, a developing country can grow faster than a developed country and achieve convergence to high-income status.

The failure of most developing countries to narrow the income gap with developed countries is frustrating for developing countries and puzzling for the regional and global development community.

As the economist John Maynard Keynes said, “it is ideas, not vested interests, which are dangerous for good or evil”.

It is no secret that most developing countries’ inability to escape the low- or middle-income trap reflects the failures of existing development ideas and policy design.

Ideas in general are shaped by theories. The applicability of a theory depends on the preconditions of the theory.

LATECOMER ADVANTAGE

Most prevailing theories are generated from the experiences of developed countries and thus embedded in the conditions of developed countries.

A developing country has the latecomer advantage when it comes to technological innovation, industrial upgrading and improvements in hard and soft infrastructure.

However, for developing countries such as Namibia to improve development performance, much more needs to be done with the focus on policy design and doing away with ‘business as usual’.

Instead of just studying theories generated by the experiences of developed countries – which have different preconditions compared to developing countries – it is high time that we, as developing countries, invest effort in interrogating our successes and failures.

This includes designing policies in which modern economic growth is embedded.

In this way, we can help ensure we attain structural transformation with continuous technological innovation and upgrade our industries.

This will raise labour productivity and improve our hard and soft infrastructure, which will ultimately reduce transaction costs.

  • • Peya Junior Mushelenga is a national development adviser: National Planning Commission, and a master of public administration; he holds an MBA and a number of economics degrees. The views expressed here are entirely his own.

Stay informed with The Namibian – your source for credible journalism. Get in-depth reporting and opinions for only N$85 a month. Invest in journalism, invest in democracy –
Subscribe Now!

Latest News