SAR, Vol 12 No 1, November 1996
DIAMONDS AREN'T FOREVER
BY HAPPY SIPHAMBE
Happy Siphambe is a lecturer in Economics at the University of Botswana
Botswana proudly celebrated its 30th anniversary of self-rule on September 30th, its status as an "African miracle" secure. Botswana is touted in mainstream development circles as a model of stable, functioning democracy and market-driven economic success. Yet as SAR has pointed out [in "Botswana: Miracle or Mirage," vol. 7 no. 4], beneath the surface, the Botswana miracle does not look so promising. Now, as the governing Botswana Democratic Party (BDP) faces slower economic growth, a serious political challenge for the first time, and demands from other civil society actors, these new factors seem destined either to force the BDP to change its policies, or to face its first real political challenge at the next national election.
On the economic front, slower economic growth, and the failure of the previous period of rapid growth to lead to gains for the majority will shape the immediate future. With the discovery of minerals, especially diamonds, soon after independence, Botswana quickly became the fastest growing economy in the world. Its growth rates averaged 13% through the 1970s and 1980s. The growth pattern is different for the 1990s, however, with the rate slowing to between four and six percent.
Future economic growth prospects seem mixed. World recession in the early 1990s depressed the diamond market, which accounts for 75% of Botswana's exports and contributes the largest single share to the national economic accounts (GDP). The (de Beers) Central Selling Organization (CSO), which markets all Botswana's diamonds, deferred fifteen percent of Botswana's purchase quota, creating a stockpile of diamond production. The global diamond depression is compounded by large Russian diamond sales outside their agreement with the CSO, further depressing global diamond prices. A diamond marketing deal between CSO and Russia is believed to be crucial if Botswana is to escape a crisis in their foreign exchange earnings. Even so, the manufacturing and agricultural sectors will have to play larger roles in Botswana's economic future.
Drought affected arable agriculture over the last few year, but after the good rains of 1996 it is expected to do well. Manufacturing also improved over the last few years, yet no leading sector emerged. Growth is limited by the extent of the domestic market, since even successive devaluations of the Pula failed to make Botswana's goods competitive in the South African and Zimbabwean markets. Botswana's domestic market itself is limited by high unemployment in the formal sector and highly unequal income distribution.
With most growth fuelled by the capital intensive mineral sector, the employment impact was minimal. Moreover, the mineral sector has no direct links with the rest of the economy, since it does not rely on inputs from other domestic sectors nor supply other domestic industries. The establishment of two diamond processing companies had only a marginal impact on employment. Therefore, the only way for growth to be redistributed was government revenue from diamond sales. This revenue was successfully channelled into health and education but had little impact on employment or the distribution of wealth.
Statistical economic indicators illustrate part of the story. The most recent Household Income and Expenditure Survey (1994-95) shows that income distribution is very unequal, and little improved from a decade earlier. In 1995, the top 20% of income earners still earn 16.5 times what the bottom 20% earn, a degree of income inequality surpassed only by Brazil among the countries measured. The number of people below the acceptable poverty level remained at least forty percent (based on 1989 data), and some believe it is rising.
Formal sector employment also failed to keep pace with the growing population and workforce, despite the two decades of higher than 10% growth. Today, the unemployment rate stands at twenty percent or more, with significant underemployment as well. Thus the strong economic record of the 1970s and 1980s, and continuing growth in the 1990s, was not successfully translated into development in the sense of transforming the lives of the majority. If development is a transformative process which can be measured in economic gains but also political and economic empowerment, then the record of the last thirty years is not good, nor is the immediate future promising.
Statistical indicators on human development paint a more promising picture. The United Nations Development Programme index of human development (HDI), which bases its measurement of human development on health and education indicators, ranked Botswana 74th of 174 countries in its 1995 report. This gave Botswana the highest HDI score of any country in sub-Saharan African, including South Africa, reflecting the Botswana government's commitment to providing for basic health and education. Yet consistently high HDI scores in themselves apparently do not create employment or redistribute wealth, as the Botswana case shows.
Since the Botswana model mirrors precisely the latest neo-liberal advice for economic development - invest in people, but allow the market to provide investment, jobs, and the overall economic direction of the economy - the implications of Botswana's socio-economic transformation serve as a warning to the region. Neither economic growth nor investment in basic human needs has transformed the economic situation of most people of Botswana.
To date, however, the BDP has failed to acknowledge the failures of its economic policies. The major themes of previous government economic development plans, like economic diversification from the capital-intensive mining sector and employment creation, reappear in the development plan currently in preparation. Nonetheless, in these plans, actual employment creation schemes have been few, and relied on the private sector, in line with the market-oriented economic philosophy of the BDP. Consistent with the advice of international financial institutions and other neo-liberal doyens, the schemes attempted to provide an enabling environment for the private sector to take the leading role in employment creation. However, such schemes did not create enough employment for the expanding young labour force, as the statistics cited above indicate.
Thus the lessons the Botswana government and the region should draw from Botswana's post-independence history are precisely the opposite from those taught by the neo-liberals. An enabling state that supports private sector growth and merely invests in the health and education of its citizens will not create self-sustaining development that is meaningful to the majority. The government must accept a role in the economy, not just as a facilitator, but as a major participant. A government cannot continue to shy away from engaging in production, especially in areas where the private sector is not forthcoming. Going the pure capitalist route has created uneven development that can seriously threaten the stability of a country. Clearly the BDP will have to change its economic philosophy and reduce its reliance on the private sector to provide development, jobs and redistribute wealth, if it wants to remain in power after 1999.
For the socio-economic problems indeed have shifted the political terrain. Perhaps the most significant change was the emergence, for the first time in Botswana's post-independence history, of an opposition party with real prospects to influence the direction of the country, perhaps even take power. In the 1994 elections, the opposition Botswana National Front (BNF), formed immediately after independence, made significant gains for the first time, now filling thirteen of forty seats. The party is led by Moscow educated Dr. Kenneth Koma, a member of Parliament for Gaborone South since 1984, and the Vice President is Mike Dingake, who served with Mandela and other prominent South African political prisoners on Robben Island.
Initially advocating socialism, with a very limited private sector, today the party sees itself as `united front' of people with mixed ideologies, including Dr. Koma's self-proclaimed socialism, brought together to overthrow neo-colonialism, feudalism and foreign domination. They proclaimed a "National Democratic Struggle": national, they claim, because the interest of the nation is at stake, and democratic because it seeks to replace political oppression with political freedom, economic exploitation with economic prosperity. Yet their major programme document argues that national democratic tasks are not to be confused with the tasks of a socialist revolution. A dynamic market economy, they claim, also serves the public interest, but the private sector must be harnessed by the government. Thus while the BNF portrays itself clearly as anti-capitalist, it is not clear to most of its supporters whether they advocate a socialist programme.
The BNF argues that Botswana's economic growth has been impressive but its inequitable distribution is unfortunate. Their main economic proposal, therefore, is to adopt measures to ensure equity and social justice accompany growth. They have long proposed economic empowerment through employment provision, and the "right" kind of education.
Certainly, no one can deny their growing influence. The BNF's share of national polling rose from 12% to 36% between 1974 and 1994, while the ruling BDP saw its majority fall from 77% to 56% over the same period (Botswana's 6 other political parties have not drawn sufficient support to pose a challenge to the BDP) . The BNF's support base is the urban working class, enjoying close ties to worker's unions, and it has a stronghold at the University of Botswana. Ten of the BNF's thirteen seats are in urban and peri-urban areas, where, it has been suggested, voters are more politically conscious and literate, concerned about the level of unemployment (particularly acute in urban areas), income inequalities, poverty, corruption, poor accountability of ruling party members including the leader, internal division in the BDP and the impact of the economic recession. While some of their support may be because they are not the BDP, I would argue that the policies they advocate are an important magnet for support
Rural people also have begun to challenge the paternalism and bona fides of the ruling party, for example in the North West where a cattle lung disease jeopardizes pastoral farming. The government has proposed that all cattle be killed to prevent the disease from spreading, a proposal which has been mired in political controversy, and hotly contested by pastoral cattle owners, who want solutions to be considered other than 500 Pula per head compensation for the slaughter. The issue also is at the centre of debates between the BDP and the BNF, with some groups in civil society even speculating that the government is using the lung disease to push farmers out of the region so it can expand the wildlife area in a bid to promote tourism, a growing component in Botswana's GDP with considerable future potential.
With its new, stronger oppositional voice in Parliament, the BNF was able to push for major political reforms. These culminated in the recent proposals by the BDP to allow 18-year-olds to vote in the next elections, to limit the presidential term in office to two terms, and to introduce an independent electoral committee. Previously, the BDP easily dismissed such demands, but now, with its political survival is in jeopardy, it cannot.
Social movements have taken the lead in promoting human rights and equity issues. One contentious constitutional rights issue is the "majority-minority" clause, which guarantees permanent seats in the House of Chiefs (Botswana's upper house of Parliament) to eight powerful ethnic groupings. Other ethnic groupings, constituting perhaps a majority of the population, elect but four between them. Although the role of the House of Chiefs is advisory, the provisions entrench stronger group rights for the permanent members. The numerous and economically powerful Bakalanga, organized into the Society for the Promotion of the Ikalanga Language, were instrumental in pushing for the removal of the constitutional clauses, now under consideration in Parliament.
The gender equality struggle is waged by "Emang Basasdi" (literally "Stand Up Women"), a pressure group primarily of educated women. The group has been hampered by a seeming insularity and illegitimacy in Botswana society, as most either are unmarried or married to foreign men. As a result, they are often seen as a group of frustrated women, unable to secure a Motswana (Botswana citizen) man for a husband. To date, this group has had little impact on the lives of ordinary rural Botswana women, who are most hampered by gender inequality, but individuals associated with the group have made gains. Best known is the Unity Down case, where a woman won a court battle against the government when she was denied the right to pass her citizenship on to her children born with a foreign father. As a result of the court case, women's legal equality of citizenship was introduced. Dr. Attaliah Molokomme campaigns to make women aware of their rights to child maintenance, and the advantages and disadvantages of different marriage arrangements, since `in community of property' marriage law makes women legal minors while `out of community of property' does not.
With challenges on several fronts, the indications are that the people of Botswana may now be ready to test a different political party. If the opposition BNF can continue to campaign as a `united front' of popular discontent to government policies, and avoid major political blunders, then a change of government is possible in 1999.
Disclaimer: Opinions expressed in this article are those of the writer(s) and not do necessarily reflect the views of the AfricaFiles' editors and network members. They are included in our material as a reflection of a diversity of views and a variety of issues. Material written specifically for AfricaFiles may be edited for length, clarity or inaccuracies.