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The Economic Diplomacy of a Small State: the Case of Namibia

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The Economic Diplomacy of a Small State: the Case of Namibia a THE ECONOMIC DIPLOMACY OF A SMALL STATE: THE CASE OF NAMIBIA by Peya Mushelenga Submitted in accordance with the requirements for the Degree of DOCTOR OF LITERATURE AND PHILOSOPHY in the subject INTERNATIONAL POLITICS at the UNIVERSITY OF SOUTH AFRICA Promoter: Professor Jo-Ansie van Wyk Co-Promoter: Professor Clive J Napier March 2015 b Student Number: 312 887 15 I declare that ‘The economic diplomacy of small state: the case of Namibia’ is my own work and that all the sources that I have used or quoted, have been indicated and acknowledged by means of complete references. ____________________ __________________ PEYA MUSHELENGA DATE c DEDICATION I dedicate this study to the memories of my late mother Elizabeth Nashilongo Mushelenga (néé Shihepo) who passed away on 10 October 2013 while I was busy with the final chapters of this study, and my eldest sister Taimi Kamati (néé Mushelenga) who passed away on 02 August 2014. Taimi was the language editor of the first chapters of this study. i ACKNOWLEDGEMENTS This study would not have been completed without the support that I have received from a number of people. First and foremost, I would like to express my humble gratitude to my late beloved mother, Elizabeth Nashilongo Mushelenga (néé Shihepo), who constantly gave me moral support to pursue my studies. My sincere thanks go to my late eldest sister, Taimi Kamati (néé Mushelenga), who language-edited the first chapters of the study. My mother and sister have not lived to see the completion of this study, and for all good reasons, I dedicate this study to their memories. My gratitude goes to my wife Eunike, a pillar of support in my life. I also acknowledge my son Panduleni, and daughter Pamwenatse, who played with me and provided the humour needed to ease the stress of the studies. I am grateful to André du Pisani and William (Bill) Lindeke, who made critical comments on the research proposal. Sadly, Bill has not lived to see the completion of the study. I shall for ever remain indebted to Jo-Ansie van Wyk for her constructive criticism, advice and continuous encouragement. Clive Napier made critiques that enabled me to make the necessary improvements on the thesis. I am grateful to the staff of the Namibian Parliament Library, the National Library, the Namibia Chamber of Commerce and Industry, officials from the Ministries of Foreign Affairs, Trade and Industry and from Namibian embassies who provided me with the information that I needed in writing this thesis. I am further indebted to officials from the Bank of Namibia, University of Namibia, Namibia Tourism Board and the Ministry of Finance for providing me with statistical data used in this study. I would like to particularly single out Nelago Indongo, Anacy Mwanyangapo and Aloysius Tsheehama. I would like to thank all individuals whom I have interviewed, whose names appear on annex 1. They provided valuable primary information that enriched this study. I remain indebted to President Hifikepunye Pohamba, who took a personal interest in my studies and constantly encouraged me. My gratitude further goes to former President Sam ii Nujoma, for his moral support. Theo-Ben Gurirab inspired and nurtured my passion for diplomacy and international relations. Ndeutapo Amagulu provided me with his personal study materials on foreign policy. Sadly, he did not live to see the completion of the study. I would like to thank my successive secretaries, Josephine Boois, Tashiya Shivoro and Selma Hailonga for arranging my appointments for the interviews conducted during the research. I am indebted to my drivers/protection officers, Warrant Officers, Immanuel Abed and Tonata Moongo, who took me around when I was carrying out the research. Viviette Rittmann contributed to the language-editing of the thesis. I am most grateful to Professor Jairos Kangira who language-edited the final version of the thesis. iii The economic diplomacy of a small state: The case of Namibia By: Peya Mushelenga Degree: Doctor of Literature and Philosophy Subject: International Politics Supervisor: Prof Jo-Ansie Van Wyk Co-Supervisor: Prof Clive J Napier Summary This study is about the economic diplomacy of Namibia, as a small state, for the period 1990 – 2015. Liberalism, as a theory of International Relations (IR) studies, is the adopted analytical framework. Namibia’s economic diplomacy is anchored in the foreign policy principles enshrined in article 96 of her constitution, which advocate, inter alia, the maintenance of mutual beneficial relations. Namibia, further enacted laws and adopted policies that serve as domestic instruments of economic diplomacy. The stakeholders in Namibia’s economic diplomacy include both state and non-state actors. The study adopts a population of 8 million as the benchmark for small states, plus one of the following characteristics of small states: small size of the territory; low economy and the perception by the government leaders and nationals. Namibia’s bilateral economic diplomacy covers over one hundred countries. Her major trade partners, in terms of export trade and inward investments are Angola, Canada, China, Germany, The Netherlands, Spain, South Africa, Switzerland, The United Kingdom and the United States. Bilateral economic diplomacy is further pursued through the Export Processing Zone (EPZ) exports. The Namibian Government pursues multilateral economic diplomacy with the European Union, as part of the Africa Caribbean Pacific states and with regional and international economic and trade organisations such as the Southern Africa Customs Union, the Southern Africa Development Community, the United Nations Conference in Trade and iv Development and the World Trade Organisation. Namibia also adopts conference diplomacy as a form of multilateral economic diplomacy. The study makes an epistemological contribution to the study of IR, that the world is constructed under the hierarchical order that constrains power-based relations and minimises conflicts in international trade. A minimal trend of pursuing interests is, however, observed. The study further makes an ontological contribution to the study of IR, that the behaviour of state and non-state actors are inclined to cooperation on the continuum of conflict and cooperation. The study concludes that, contrary to the assumptions in small states literature, that small states have limitations of capacity and play an insignificant role in multilateralism, Namibia has skilled negotiators who have led negotiations in regional and international organisations. Ten key terms: Bilateral economic diplomacy; economic diplomacy; economic partnership agreements; foreign policy; liberalism; multilateral economic diplomacy; Namibia; small states diplomacy; trade partners; and international relations studies. v TABLE OF CONTENTS Page Chapter One Introduction 1. Introduction 1 1.2 Namibia in the world economy 1 1.3 Conceptual clarification 3 1.3.1 Foreign policy 3 1.3.2 Foreign policy doctrine 4 1.3.3 Economic diplomacy 4 1.3.4 Economic statecraft 5 1.3.5 Re-circling diplomacy 6 1.3.6 Deep-pocket or cheque book diplomacy 7 1.3.7 Developmental diplomacy 7 1.3.8 Public diplomacy 8 1.4 A historical overview of Namibia’s economic diplomacy 9 1.5 Economic diplomacy as a foreign policy principle and objective 10 1.6 Literature survey 13 1.7 Gaps in the existing literature on Namibia’s economic diplomacy 18 1.8 Statement of the research problem 19 1.9 Analytical framework and research methodology 21 1.9.1 Theoretical approaches to the International Political Economy and economic diplomacy 21 1.9.1.1 Realism 22 1.9.1.2 Constructivism 22 1.9.1.3 Post-structuralism 23 1.9.1.4 Marxism 24 1.9.1.5 New theories 24 1.9.2 Theoretical perspective of the study: Liberalism 25 1.9.3 Research methodology 29 1.10 Importance of the study 32 vi 1.11 Scope and limitations of the study 35 1.12 Chapter outline 36 1.13 Summary 38 Chapter Two The diplomacy of small states: a conceptual analysis 2.1 Introduction 40 2.2 The importance of a conceptual analysis in the study 41 2.3 Small states: a definition 42 2.4 Middle powers and large states 48 2.5 Diplomacy as an instrument of foreign policy 50 2.6 Nature and scope of small states 55 2.6.1 Small states diplomacy and multilateralism 57 2.6.2 Distinct diplomatic behaviour and preference for multilateralism 58 2.6.3 Dependence and limitations 60 2.6.4 Scarcity of human resources 60 2.6.5 Preference for negotiation rather than conflict 62 2.6.6 Limited use of economic statecraft 63 2.7 Factors affecting the diplomacy of small states 63 2.7.1 Identity 64 2.7.2 Size of national market and a limited domestic resources base 65 2.7.3 Vulnerability 65 2.7.4 Limited scope of public policy 67 2.8 Limitations of small states’ diplomacy 68 2.8.1 Attitude of large states 68 2.8.2 Constraints in influencing international agenda 69 2.8.3 Invisibility and weakness in the international political system 70 2.9 Diplomatic opportunities for small states 71 2.9.1 Asserting the role of small states 71 vii 2.9.2 Macro-economic stability 73 2.9.3 Resilience of small states 74 2.10 The contribution of the study of small states to the study of diplomacy and International Relations 75 2.11 Summary 81 Chapter Three The formative years of Namibia’s economic diplomacy: 1990 to 1995 3.1 Introduction 84 3.2 Namibia’s economic status at independence 85 3.3 Independence and economic diplomacy 88 3.3.1 Economic diplomacy as a new phase of post-independence struggle 89 3.3.2 Promotion of manufacturing industry 91 3.4 Regional economic diplomacy
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