The principle of sovereignty over natural resources was established by a 1962 UN General Assembly resolution. It is a principle likely better domesticated in law by countries attaining their independence since that date, with already existing states existing (especially ex-colonial) having to deal with the heritage of comparative individual liberty to profit from such resource “development” with limited collective public benefits.

Namibia gained its independence in 1990, and the transition from South African apartheid control was rather unremarkable (that is, peaceful), with an economy still largely owned by South African corporations, prime property still largely owned by a white elite, and prime lands still largely owned by early German settler families. The human rights abuses and exploitation at Namibia’s foundations — whether from the period of German settlement and colonisation or from the period of apartheid — have been overwhelmingly unrectified.

The main change was to simply have the political apparatus pass into the hands of the former liberation movement and now ruling national party, SWAPO. So long as the economic status quo remains largely intact, everybody lives in peace.

But a potentially critical change has had two passing references in Crikey: both in Marcus Padley’s Morning Market Report, concerning Extract Resources’ share price movements given its Namibian operations.

But first, a more recent report that helps to set the context. On Tuesday, the African Development Bank (AfDB) released a rather small report (the 24-page The Middle of the Pyramid: Dynamics of the Middle Class in Africa) that has been getting a lot of media coverage here in Southern Africa. It puts the size of the African “middle class” at around one-third of the population of the continent, surely a remarkable statistic. The best-faring countries are those North African countries that are currently embroiled in civil turmoil, for which higher education rates and economic independence carry repercussions for states that preference national stability over democratic change (Oxford economist Paul Collier highlights this trade-off well).

Middle class is defined by the AfDB as people living on $US4-$20 per day at 2005 prices (the data used actually relate to consumption, which becomes a less reliable measure as it increases). Anybody living in any of Africa’s national capitals understands what it means to try living on $7300 per annum — beyond which one comes into the AfDB “rich class” category — let alone the $1500 per annum that sets the lower bounds of middle class.

That AfDB report puts Namibia’s middle class at abound 9%, near the middle of the list of the 44 (of 53) African countries included in the report. While other countries have lower proportions, none has the extent of economic inequality that Namibia does in having such concentrated wealth and widespread poverty. Namibia is the most economically unequal country in the world. Its “Gini coefficient” of 0.743 (UNDP’s Human Development Report 2010) puts it well ahead of its rivals, which are also mainly within Southern Africa. And yet the AfDB report ranks Namibia at sixth highest of 44 countries in GNI per capita.

Namibia’s embrace of “black economic empowerment” (BEE) has not noticeably done much more than rapidly enrich a small elite, especially in leveraging them into profit-sharing corporate partnerships with foreign investors, including mining companies, many of which are Australian. But the SWAPO government seems to have finally prodded itself into action to more determinedly tackle being both very resource rich and obscenely unequal.

In April 2011, the SWAPO government’s Minister of Mines and Energy announced to the parliament he would introduce a bill later this year to legislate that coal, copper, diamonds, rare earth metals and uranium be defined as controlled and high value (“strategic”) minerals, and that the right to own licences for the exploration and mining in those strategic minerals would only be issued to state-owned companies. Existing licences will not be affected, although the minister has not ruled out actions on long-term licence holders who seem to be doing nothing. The government will continue to welcome partnerships with foreign mining companies, and is also seeking to boost “value-adding” via domestic minerals processing prior to export.

The present situation is viewed as permitting too much foreign speculative investment and too little domestic financial benefit, exacerbated by “would-be mineral explorers”(presumably including some BEE partners wanting to turn a quick profit) selling their licences to foreign interests. In that regard, the minister has noted that the proportion of public revenue derived from domestic mining is much smaller than its contribution to GDP and is little more than the rather low royalties levied by the government.

The government has recently established the state-owned Epangelo Mining Company, to which licences for mining “strategic minerals” would be issued. The possibility will likely exist for additional state entities to be established and for other minerals to be declared strategic. The government has emphasised that the changes are not a form of nationalisation of mining. Private mining company spokespeople seem to agree. Local media editorialising has described the proposed changes as shifting Namibia from the status of resource “rent-seekers” to “meaningful participants” in a mining business that is a more secure and stable “public-private partnership”.

The private mining sector has generally welcomed the process of dialogue with government in developing the new policy and legislation. It will undoubtedly be prominent in the Chamber of Mines of Namibia’s Mining Expo 2011 and associated conference being held next week. Namibia is nowhere near the prospect of multi-billionaire mining magnates taking to the back of bakkies (utes) with megaphones, and most if not all the independent national media seem to support measures to more equitably harness natural resources for the collective benefit of the population. Accordingly, independent media reporting and editorials are not being used to obfuscate, distort or scaremonger, or to give inordinate voice to vested interests.

Rather, the proposed Namibian policy was described in yesterday’s media — by Extract Resources’ chairman Steve Galloway — as good “in principle”, so long as government ensures transparency and a suitable investment climate. He warned that, if private mining interests don’t do the right thing, the Namibian government could then resort to nationalisation. Also yesterday, the Namibian Chamber of Mines expressed concerns about the possible adverse impact on investment in “risky” exploration undertakings, instead advocating the adoption of a capital gains tax to ensure public benefits from speculative windfalls.

The government is undoubtedly determined to ensure that its bill later this year is efficient in expanding public revenue without alienating foreign investors. Hopefully it will also be matched by measures that are efficient in equitably delivering the benefits of this exercise in national resource sovereignty to the wider Namibian population.