Skip to main content
SpringerLink
Log in

Natural Capital, Total Wealth and Sustainable Development in Namibia

  • Chapter
  • First Online:
Implementing Environmental Accounts

Part of the book series: Eco-Efficiency in Industry and Science ((ECOE,volume 28))

  • 908 Accesses

Abstract

A country’s income and economic well-being depend on its wealth, where wealth is defined in the broadest sense to include produced, natural, human and social capital. Recognising this, international agencies have begun to shift their emphasis from economic development as Gross National Product (GNP) growth to economic development as a process of ‘portfolio management’ that seeks to optimise the management of each asset and the distribution of wealth among different kinds of assets. In resource-rich economies such as Namibia, building national wealth requires that natural capital be transformed into other forms of capital. However, there has been growing concern that economic growth, especially in resource-rich developing countries, has been achieved by liquidation of natural capital without adequate provision for replacement of these assets for future generations. Several studies have attempted to measure total national wealth or changes in wealth but have been seriously hampered by a lack of data, especially for natural and human capital. Using newly available accounts for natural capital in Namibia, total national wealth accounts are constructed and used to assess its development paths, comparing it to its neighbour, Botswana, for which total wealth are also available, albeit not for as long a time series. In Namibia’s pre-independence period (before 1990), there was significant liquidation of capital, natural and produced. With new policies and a new investment environment since independence, Namibia has slowly started to rebuild its national wealth although per capita wealth has not recovered to the level of 1980.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    Norway also includes related indicators for (1) GDP by income including resource rent from (a) renewable and (b) nonrenewable resources and (2) depletion adjusted NDP and in the national income accounts.

  2. 2.

    However, the value of human capital is still not included because there is no agreement about how to measure it. The potential bias in the measure of national wealth that results from the omission of human capital and the impact of HIV/AIDS, which is an especially important factor in development in many Southern African countries, is discussed in the concluding section.

  3. 3.

    The accounting price is the social worth of a good, which is not always reflected by its market price; indeed, some goods, notably environmental goods, do not have market prices at all. Thus, implementation of this index of sustainability requires estimation of accounting prices for at least some forms of capital, a subject taken up in the next section.

  4. 4.

    The most simple form is used because there is insufficient information at this time to estimate how well-being changes with population size. Population growth can, for example, have negative impacts due to increased congestion. Of greater concern in Southern Africa is the potential impact of population decline or the skewed age distribution due to HIV/AIDS. The impact of HIV/AIDS on human capital and productivity is directly accounted for by the stocks of human capital; the additional impact on well-being is not known at this time.

  5. 5.

    Claims on domestic and foreign assets are not explicitly differentiated in theoretical models, but empirical work on wealth has recognised that net foreign financial assets are an important component of wealth for open economies. Further theoretical work might make this distinction explicit in order to examine the impact of international trade and finance on the wealth and sustainability of open economies.

  6. 6.

    In more detailed reports, a sensitivity analysis for the return to capital was performed.

  7. 7.

    See Lange (2003b) for more detailed discussion of how fish stocks are estimated, confidence intervals for stock estimates and sensitivity analysis of assumptions used in calculating asset value.

  8. 8.

    A commercial land tax has been introduced and may provide information for land valuation in future accounts.

  9. 9.

    The wildlife accounts are being updated but were not available at the time this report was written.

References

  • Alfsen KN, Greaker M (2006) From natural resources and environmental accounting to construction of indicators for sustainable development. Ecol Econ 61(4)

    Google Scholar 

  • AngloGold. (2004, 2005, 2006) Annual report. www.anglogold.com/Reports/Financial/Annual+Reports/Archives.htm. Accessed 18 June 2009

  • Arrow K, Dasgupta P, Maler KG (2003) Evaluating projects and assessing sustainable development in imperfect economies. Environ Res Econ 26:647–685

    Article  Google Scholar 

  • Arrow K, Dasgupta P, Goulder I, Daily G, Ehrlich P, Heal G, Levin S, Maler KG, Schneider S, Starrett D, Walker B (2004) Are we consuming too much? J Econ Perspect 18(3):147–172

    Article  Google Scholar 

  • Auty RM (1993) Sustaining development in mineral economies: the resource curse thesis. Routledge, London

    Book  Google Scholar 

  • Auty RM, Mikesell R (1998) Sustainable development in mineral economies. Clarendon, Oxford

    Google Scholar 

  • Bank of Namibia (2001) Annual report 2000. Bank of Namibia, Windhoek

    Google Scholar 

  • Bank of Namibia (2007) Annual report 2006. Bank of Namibia, Windhoek

    Google Scholar 

  • Barnes J, Lange G, Nhuleipo O, Muteyauli P, Katoma T, Amupolo H, Lindeque P, Erb P (2004) Preliminary valuation of the wildlife stocks in Namibia: wildlife asset accounts. Directorate of Environmental Affairs, Ministry of Environment and Tourism, Windhoek

    Google Scholar 

  • Brunnschweiler C, Bulte E (1996) National accounts 1995. National Planning Commission, Windhoek

    Google Scholar 

  • Brunnschweiler C, Bulte E (2002) Population census of Namibia. National Planning Commission, Windhoek

    Google Scholar 

  • Brunnschweiler C, Bulte E (2008) The resource curse revisited and revised: a tale of paradoxes and red herrings. J Environ Econ Manage 55:248–264

    Article  Google Scholar 

  • Central Bureau of Statistics (2001) National accounts 1990–2000. National Planning Commission, Windhoek.

    Google Scholar 

  • Central Bureau of Statistics (2007).

    Google Scholar 

  • Central Bureau of Statistics (2008) National accounts 1996–2007. National Planning Commission, Windhoek

    Google Scholar 

  • Commission of the European Communities, International Monetary Fund, Organisation for Economic Cooperation and Development, United Nations, and World Bank (1993) System of national accounts. United Nations, New York

    Google Scholar 

  • Dasgupta P (2001) Human well-being and the natural environment. Oxford University, Oxford

    Book  Google Scholar 

  • Dasgupta P (2002) Economic development, environmental degradation and the persistence of deprivation in poor countries. Beijer discussion paper series no 168. Beijer International Institute of Ecological Economics, The Royal Swedish Academy of Sciences, Stockholm

    Google Scholar 

  • Dasgupta P, Maler KG (2000) Net national product, wealth, and social well-being. Environ Develop Econ 5:69–94

    Article  Google Scholar 

  • Dasgupta P and Maler KG (2001) Wealth as a criterion for sustainable development. Discussion paper series no 140, Beijer Institute, Stockholm

    Google Scholar 

  • DeBeers Corporation (1999) Annual report. Available from website www.debeersgroup.com. Accessed 10 Nov 2003

  • DeBeers Corporation (2000) Annual review. Available from website www.debeersgroup.com

  • Hamilton K (2002) Sustainable per capita welfare with growing population: theory and measurement. Paper presented at the second world congress of environmental and resource economists, Monterey, 23–27 June 2002

    Google Scholar 

  • Hamilton K, Clemmens M (1999) Genuine savings rates in developing countries. World Bank Econ Rev 13(2):336–356

    Article  Google Scholar 

  • Hartwick J (1977) Intergenerational equity and the investing of rents from exhaustible resources. Am Econ Rev 67(5):972–974

    Google Scholar 

  • Heal G, Kristrom B (2005) National income and the environment. In: Male KG, Vincent JR (eds) Handbook of environmental and resource economics, vol 3. North Holland Publishers, Amsterdam, Chap 22

    Google Scholar 

  • International Monetary Fund (2007) International financial statistics yearbook. IMF, Washington, DC

    Google Scholar 

  • Kunte A, K Hamilton, J Dixon and M Clemmens (1998) Estimating national wealth: methodology and results. Environment department papers, Environmental economics series no 57, The World Bank, Washington, DC

    Google Scholar 

  • Lange G (2002) Environmental accounts: uses and policy applications. World Bank environment department paper no 87, World Bank, Washington, DC

    Google Scholar 

  • Lange G (2003a) The contribution of minerals to sustainable economic development: mineral resource accounts in Namibia. Research discussion paper no 54, Directorate of Environmental Affairs, Ministry of Environment and Tourism, Windhoek

    Google Scholar 

  • Lange G (2003b). The value of Namibia’s commercial fisheries. Research discussion paper no 55, Directorate of Environmental Affairs, Ministry of Environment and Tourism, Windhoek

    Google Scholar 

  • Lange G (2003c) Wealth, natural capital, and sustainable development in Namibia. Research discussion paper no 56, Directorate of Environmental Affairs, Ministry of Environment and Tourism, Windhoek

    Google Scholar 

  • Lange G (November 2004) Wealth, natural capital, and sustainable development: the contrasting examples of Botswana and Namibia. Environ Res Econ 29(3):257–283

    Article  Google Scholar 

  • Lange G, Wright M (August 2004) Sustainable development in mineral economies: the example of Botswana. Environ Develop Econ 9(4):485–505

    Google Scholar 

  • Lange G, Barnes JI, Motinga J (1998) Cattle numbers, herd productivity, and land degradation in Namibia. Develop South Africa 15(4):555–572

    Article  Google Scholar 

  • Lange G, Hassan R, Hamilton K (2004) Environmental accounting in action: case studies from Southern Africa. Edward Elgar Publishers, Cheltenham

    Google Scholar 

  • Mäler KG (1991) National accounts and environmental resources. Environ Res Econ 1(1):1–15

    Google Scholar 

  • Mäler KG, Aniyar S, Jansson A (2007) Accounting for ecosystem services – a way to understand the requirements for sustainable development. PNAS 105(28):9501–9506

    Article  Google Scholar 

  • Ministry of Finance (Norway) (2005) Indicators for policies to enhance sustainable development. Ministry of Finance, Oslo

    Google Scholar 

  • Ministry of Mines and Energy (2000 to 2005) Annual report. MME, Windhoek. www.mme.gov.na

  • Pearce D, Atkinson G (1993) Capital theory and the measurement of sustainable development: an indicator of weak sustainability. Ecol Econ 8:103–108

    Article  Google Scholar 

  • Pezzey J (1992) Sustainable development concepts: an economic analysis. World Bank environment paper no 2, World Bank, Washington, DC

    Google Scholar 

  • Sachs J, Warner A (1995) Natural resource abundance and economic growth. Discussion paper no 517a, Harvard Institute for International Development, Harvard University, Cambridge

    Google Scholar 

  • Solow R (1974) Intergenerational equity and exhaustible resources. Rev Econ Stud 41:29–45

    Article  Google Scholar 

  • Solow R (1986) On the intergenerational allocation of natural resources. Scand J Econ 88:141–149

    Article  Google Scholar 

  • Turpie J, Lange G, Martin R, Davies R, Barnes J (2004) Strengthening Namibia’s system of national protected area: economic analysis and feasibility study for financing (with). Report to UNDP/GEF and Ministry of Environment and Tourism, Windhoek

    Google Scholar 

  • Turpie J, Barnes J, Arntzen J, Lange G, Nherera B, Buzwani B (2006) Economic value of the Okavango delta, Botswana. Report to IUCN-Botswana the Department of Environmental Affairs, Gaborone, Botswana

    Google Scholar 

  • United Nations, Commission of the European Communities, International Monetary Fund, Organisation for Economic Cooperation and Development, World Bank (2003) Handbook for integrated environmental and economic accounting. United Nations, New York. Draft available from the website of the UN Statistical Division, www.un.org

  • United States Geological Survey (2008) Minerals information: commodity statistics and information. www.usgs.gov/minrals/pubs/commodity. Accessed 12 Mar 2010

  • World Bank (1995) Namibia public expenditure review. The World Bank, Washington, DC

    Google Scholar 

  • World Nuclear Association (2002) World development report. The World Bank, Washington, DC

    Google Scholar 

  • World Nuclear Association (2005) Where is the wealth of nations? The World Bank, Washington, DC

    Google Scholar 

  • World Nuclear Association (June, 2008) World uranium mining. Information and issue briefs. www/world-nuclear.org/info

Download references

Author information

Authors and Affiliations

  1. Policy & Economics, Environment Department, The World Bank, 1818 H St., N.W., Washington, DC, 20433, USA

    Glenn-Marie Lange

Authors
  1. Glenn-Marie Lange
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. Centre for Environmental Economics and P, Agricultural Economics, University of Pretoria, Lynnwood Road, Pretoria, 0002, South Africa

    Rashid M. Hassan

  2. Centre for Environmental Economics and P, Agricultural Economics, University of Pretoria, Lynnwood Road, Pretoria, 0002, South Africa

    Eric D. Mungatana

Rights and permissions

Reprints and permissions

Copyright information

© 2013 Springer Science+Business Media Dordrecht

About this chapter

Cite this chapter

Lange, GM. (2013). Natural Capital, Total Wealth and Sustainable Development in Namibia. In: Hassan, R., Mungatana, E. (eds) Implementing Environmental Accounts. Eco-Efficiency in Industry and Science, vol 28. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-5323-5_1

Download citation

Publish with us

Policies and ethics

Search

Navigation