3/6/2018 Political Stability vs Economic Development | New Era Newspaper Namibia

Political Stability vs Economic Development

March 13, 2015

The Namibian General Election 2014 was conducted peacefully. This is an important sign of political
stability. Political stability requires that the public interact freely and openly with legislators on a
regular basis. Granting individuals a say in how a nation is run enhances the stability of the region.
A stable political scene is one where the ruling government is favoured by the population and does
not experience strong indicators of social unrest.

Political stability and economic development are deeply interconnected. The relationship between
economic growth and stability refers to the manner in which the political stability of a nation can
lead to its economic growth. The common denominator and the most obvious relationship between
economic growth and stability is the fact that a stable environment fosters economic growth.

The uncertainty associated with an unstable political environment may reduce investment and the
speed of economic development. On the other hand, poor economic performance may lead to
government collapse and political unrest. A politically unstable environment usually means that the
government is misusing or mismanaging the country’s resources: resources are not being used to
their full capacity, or in a manner whereby economic development could be maximized. It is also
right that if a country’s political environment is volatile, this will deter investors, foreign trade and
economic development.

One of the ways in which economic growth and political stability are related is in the area of
investment. No company or individual, whether local or international, will feel comfortable making
any kind of capital investment in any country where the political climate is characterised by
upheavals and a lot of uncertainty. This is because such a risky investment would go against the
main aim of making profits since there would be a marked lack of guarantee as to the safety of the
investments. When local businessmen refrain from making any significant investment in their
economies, such a situation will affect the economy as a whole.

Foreign direct investment also plays an important role in the development of an economy. This
shows a link between economic growth and stability because a country with a low rating in terms
of stability will not be a source of attraction for investors looking for international markets in which
to invest. An example can be seen in the area of tourism, because when there is a lack of stability
in the economy there will be little investments in the form of hotels, tourist attractions and
commercial airlines. The result of this is a reduction in the number of employed people and a lower
turnover rate for much-needed finances to facilitate economic development.

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3/6/2018 Political Stability vs Economic Development | New Era Newspaper Namibia

Namibia enjoys political stability for the past 25 years, which encouraged many foreign investors
including Chinese ones. A typical example of this is the rapid growth of the town Oshikango where
foreign investors, mainly Chinese, contributed to fast infrastructure development and prosperity of
the border town.

China’s political stability attributes to the great social, economic and cultural development. The
first thing the Chinese did in 1949 when Chairman Mao’s Communist Party took over was to create
political institutions to cater for one unitary state out of all the diverse populations in the country.
The communist political ideology was paramount to build that unitary state. The Chinese ruling
Communist Party and other political parties (China doesn’t have opposition parties as in Namibia or
elsewhere) work together for the same goal to establish a prosperous and stable society for the
benefit and wellbeing of the people. To the Chinese government, unity and a politically stable
environment are always first items on their agenda. Chinese as a culture value more than any
other nations unity, stability and integrity. Building stable political institutions and environments
make it possible for China to concentrate on economic development resulting in it being the largest
economy in the world now.

In Africa in general, political instability is the biggest challenge to African governments and people.
Many African countries are rated low in terms of stability. There are types of political instability in
Africa: revolutionary movements to change the rules of the political game and redistribute power
and property, separatist movements, political assassinations, mass murders, kidnappings,
extortion and violence, strikes, especially politically motivated strikes, demonstrations for regime
change or specific issues, complete political breakdown and civil wars. The leading causes of such
instability include ethnic fragmentation and/or historic friction; ethnic dominance and historic
friction; the strength of “primordial loyalties” (kinship and clan); secessionist impulses; conflict
over resource wealth; ineffective or predatory government actions; political inexperience and
worsening economic difficulties.

African instability itself explains why Africa still lags far behind other parts of the world in terms of
economic development. Thus we need to develop political institutions in such a manner that there
is an even playing field and accountability.

Where stability prevails, economic development prospers as we witness in Namibia. Since political
instability has a major impact on development, policy formulation should therefore attempt to be
“stabilizing”. That is, policies should not disrupt political stability; policies should be fair and
equitable across regions, ethnic and income groups; implementation of policies must be careful
and politically wise. This done, we will lay a solid foundation for potential economic development.

• Professor Ganfu Yang is an expert on intercultural communication and previously worked as a

Chinese language lecturer at the University of Namibia.

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