**2. History of Ramatex and Dinapama**

In 2001, Namibia successfully landed an investment in textile which was worth over N\$1 billion at the time, and was envisaged to create close to 10,000 jobs. Ramatex, a fully owned Malaysian company has chosen to open a production plant in Namibia after the Namibian Government offered a generous incentive package and spent over N\$100 million in public funds for the setting up of the infrastructure. The production plant was importing cotton from West Africa and turning it into textiles for the US market.

Africa. Ramatex successfully started production in 2002, and employed about 6000 workers. There has been series of labour unrest after alleged poor labour practices and environmental breaches. Eight years into operation, Ramatex claimed that they are experiencing reduced demand as some buyers allegedly withdrew from doing business with them due to labour concerns raised by the unions. Ramatex filed for bankruptcy, and many people lost their jobs

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when it shut down its operations in 2008 (**Figure 1**).

**Figure 2.** Dinapama Manufacturing and Supplies.

**Figure 1.** Ramatex factories in Windhoek, Namibia.

It has been claimed that the Africa Growth and Opportunity Act (AGOA) which allows for duty free exports to the US from selected African countries who meet certain conditions set by the US government was the motivation for Ramatex' decision to locate production in Southern

**Figure 1.** Ramatex factories in Windhoek, Namibia.

groups, due to its inability to provide basic services for the increasing population i.e. serviced land, clean water, sanitation, and electricity. The Namibian government has substantially cut its expenditure in efforts to remedy the economic downturn it has recently been facing, thereby compromising provision of basic services to its people. However, due to globalisation a lot of achievement in terms of cooperation has been made possible, as today Namibia has bilateral relations with over 38 countries and continues to advocate for greater regional integration. Efforts have also been directed at attraction of investors and calls for public-private partnerships intensified as the Namibian government cannot solely solve the

Globalisation has been praised and embraced all over the world, as it opens up barriers and increase trade and cooperation between nations. However, due to enormous implications of globalisation, questions regarding the ethics of globalisation are rife. The business world is faced with many ethical issues today i.e. companies breaking environment laws, unfair labour practices, consumer exploitation, intellectual property and patent thefts, etc. These issues are however more common in developing countries, as governments struggle to achieve compliance due to weak law enforcement. It has been widely reported that globalisation brings about imbalances between developed and developing nations. These imbalances stems from the fact that developed countries have developed advanced systems and products/services, and are wealthier, therefore in better bargaining position compared to developing countries. This position allows them to enter into bilateral agreements that are more favourable to them, at the expense of the developing countries. This creates loopholes for exploitation and self-advancement by some nations and/or profit driven multinational companies. Ramatex's investment in Namibia is one of a kind and has opened the eyes of Namibians about the real impact of globalisation. This paper focuses on the economic aspect of globalisation, and is further narrowed down to foreign direct investment (FDI), international trade, and the well-

The following section highlights the history of Ramatex and Dinapama. Thereafter, globalisation is defined, methodology outlined, and discussions and findings presented. The chapter

In 2001, Namibia successfully landed an investment in textile which was worth over N\$1 billion at the time, and was envisaged to create close to 10,000 jobs. Ramatex, a fully owned Malaysian company has chosen to open a production plant in Namibia after the Namibian Government offered a generous incentive package and spent over N\$100 million in public funds for the setting up of the infrastructure. The production plant was importing cotton from

It has been claimed that the Africa Growth and Opportunity Act (AGOA) which allows for duty free exports to the US from selected African countries who meet certain conditions set by the US government was the motivation for Ramatex' decision to locate production in Southern

concludes with a summary of discussions and conclusion and recommendations.

economic and social issues the country is facing.

92 Globalization

being of the Namibian poor.

**2. History of Ramatex and Dinapama**

West Africa and turning it into textiles for the US market.

**Figure 2.** Dinapama Manufacturing and Supplies.

Africa. Ramatex successfully started production in 2002, and employed about 6000 workers. There has been series of labour unrest after alleged poor labour practices and environmental breaches. Eight years into operation, Ramatex claimed that they are experiencing reduced demand as some buyers allegedly withdrew from doing business with them due to labour concerns raised by the unions. Ramatex filed for bankruptcy, and many people lost their jobs when it shut down its operations in 2008 (**Figure 1**).

During Ramatex operation, many local entrepreneurs saw an opportunity to venture into textile and garment manufacturing to get their hands on the now locally available textile materials. Some of those entrepreneurs are Namalenga and associates who founded Dinapama Manufacturing and Supplies in 2006, a garment and clothing manufacturing company, in Windhoek, Namibia. The company started with 6 employees and today employs over 300 local employees, thereby filling the gaps left behind by the closure of the large-scale Ramatex factory.

have suggested improvement of education system, attraction of investments that produces sustainable jobs, progressive tax system, and a comprehensive welfare system to address

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To that end, Namibia has enacted policies to redress the income inequality—the New Equitable Economic Empowerment Framework, Black Economic Empowerment policy, and Affirmative Action policy, but only a few people have been benefited. Namibia has also enacted an industrial policy—a driving force to make Namibia a developed and industrialised nation by 2030. The industrialisation policy is geared towards openness, to ensure market access. Clearly, Namibia needs new pro-poor interventions to aggressively address

Nevertheless, the economic returns from open trade are unquestionable, but the perceptions about uneven distribution of returns between nations remain [5]. For some, globalisation is perceived as a vulnerability, while for others as an economic emancipation. Globalisation opened doors for multinational companies to practice what is termed "offshoring". Offshoring is when a company shifts the location of part of service or production to a location abroad. Many multinationals have adopted this strategy in order to avoid paying high labour and production costs. At the time, Namibia was struggling with the high unemployment rate of 20.2% [1], hence the Ramatex investment was highly commended because it was believed to positively impact Namibia's macroeconomic performance as the investment was said to create over 10,000 jobs, and raking in millions of dollars in taxes. Namibians from all across the country flocked to the capital city: Windhoek with the aim of improving not only their personal lives, but also those of their extended families. But, all these dreams, hopes and aspirations were short lived as the Malaysian company only operated for a little over 8 years. This had a very big impact on Namibia, as the economy had to find new ways to survive. A substantial number of citizens lost their jobs, and the psychological impacts of recovery were very detrimental on the families. The holes left behind by Ramatex are still haunting Namibians today, thus the fear among the people that despite the fact that globalisation is intended to open trade barriers for the betterment of economies, it brings with it social challenges such as unemployment and social collapse. Many a times, activists and anti-globalists have slammed transnational companies' disregard for the welfare of the people. Business ethics and moral principles supposed to be at the centre of every business' operation. But as was the case with Ramatex in Namibia, big corporations only seem to be interested in the profits. There does not seem to be a regard as to how their operations affect the lives of the people or communities in which they operate. Back then, the Namibian laws were somewhat lenient, as there was no pressure on corporations to fulfil their corporate social responsibility. Fortunately, the unions exerted pressure on Ramatex through orchestrated protests and strikes, causing reduced product demand in the US and eventual Ramatex shutdown.

There are two schools of thought regarding globalisation. One that perceive globalisation as the key to international trade which promotes global economic growth, jobs, and low prices,

inequality and help scale-down high poverty rates.

wealth redistribution.

**4. Globalisation in Africa**

With increasing demand and a customer base all over Namibia, Dinapama continues to thrive despite the financial constraints Namibia is facing, manufacturing a range of products, from clothing to bags and corporate items. It has secured business deals with notable institutions in Government, private, and NGOs due to the quality of their product. The company imports textile materials from abroad, as there are no reputable textile factories in Namibia at the moment (**Figure 2**).
