{"id":436795,"date":"2011-06-06T12:46:39","date_gmt":"2011-06-06T12:46:39","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/06\/06\/the-dutch-disease-economic-lesson-for-the-country\/"},"modified":"2011-06-06T12:46:39","modified_gmt":"2011-06-06T12:46:39","slug":"the-dutch-disease-economic-lesson-for-the-country","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/06\/06\/the-dutch-disease-economic-lesson-for-the-country\/","title":{"rendered":"The Dutch Disease – Economic Lesson for the Country"},"content":{"rendered":"
\n
\n
\n

\"The<\/a><\/p>\n

Elia Paavo<\/p>\n

3 June 2011<\/p>\n

\n

opinion<\/p>\n

This notion refers to a situation whereby the country’s currency is backed by the strongest sector in the economy, therefore neglecting the other sectors. This notion originated from the Netherlands, when the manufacturing sector in the Netherlands declined after the discovery of a large natural gas field in 1959.<\/p>\n

Zambia is one country that can be said to be suffering from a Dutch disease. The Zambian economy heavily depends on the export of copper. Zambia, a country with a population of more than 13 million has one of the worst neglected manufacturing sectors that only contributes 10.2 percent to GDP, and is heavily indebted. However, Zambia managed to record a trade surplus in their balance of payments in 2006, thanks to the improvement in the commodity of copper that year. Now the question is why is the Zambian Kwacha one of the weakest currencies in Africa?The answer is simple, no demand for copper, no Zambian Kwacha, and in fact copper is not that much of a valuable product to be trusted with the whole economy. But what do you do when it is the only trusted source of income you have?<\/p>\n

Now unlike Zambia, Namibia is one of the blessed countries with a variety of natural resources such as diamond, uranium, gold etc. But the fact remains that we cannot mine forever. Despite all these sustainable mining initiatives, someday we will run out of natural resources. So my emphasis is on developing our manufacturing industries that will save the future of this country in the long run. As it appears now our government seems to focus more on mining as all you hear and read about is Epangelo Mining while turning a blank eye on manufacturing sector that has the capability to make vision 2030 a reality.<\/p>\n

History has it that, with exception of Hong Kong, no any other country has managed to industrialise without adopting the policy of infant industry protection. Of course Namibia adopted this policy under the 2002 SACU agreement but up to date only two processed food products are protected, namely pasta and milk. Protecting your home market will obviously come with high consumer prices but that is the price you pay, nothing comes easy. That is the only way we can think of economic growth in the long run.<\/p>\n

Thanks to the export of fish, beef and uranium we are not suffering from a diamond Dutch disease, or else we would have to thank the one to one ratio pegging of our currency to that of SouthAfrica, otherwise our dollar would have became weaker than the Zambian Kwacha after the 2009 recession.<\/p>\n

Elia Paavo is an Economics student.<\/em><\/p>\n

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Elia Paavo 3 June 2011 opinion This notion refers to a situation whereby the country’s currency is backed by the strongest sector in the economy, therefore neglecting the other sectors. This notion originated from the Netherlands, when the manufacturing sector in the Netherlands declined after the discovery of a large natural gas field in 1959<\/p>\n","protected":false},"author":0,"featured_media":436796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":{"0":"post-436795","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\nThe Dutch Disease - Economic Lesson for the Country - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/06\/06\/the-dutch-disease-economic-lesson-for-the-country\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"The Dutch Disease - Economic Lesson for the Country - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Elia Paavo 3 June 2011 opinion This notion refers to a situation whereby the country's currency is backed by the strongest sector in the economy, therefore neglecting the other sectors. 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