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Botswana – Model for Africa

botswana
Africa is a mess. Tyrants, corruption, a lack of property rights, and government incompetence are the norm and grinding poverty is the predictable result. However, there is one shining exception: Botswana. Botswana is a country about the size of France. Botswana is not only a stable democracy, but has made steady economic gains as described on the U.S. State Department’s website:

Since independence, Botswana has had the fastest growth in per capita income in the world. Economic growth averaged over 9% per year from 1966-99. The government has maintained a sound fiscal policy, despite three consecutive budget deficits in 2002-2004, and a negligible level of foreign debt. It earned the highest sovereign credit rating in Africa and has stockpiled foreign exchange reserves (over $5.3 billion in 2003/4) amounting to almost two years of current imports. Botswana’s impressive economic record has been built on the foundation of wisely using revenue generated from diamond mining to fuel economic development through prudent fiscal policies and a cautious foreign policy. However, economic development spending was cut by 10% in 2002/3 as a result of recurring budget deficits and rising expenditure on healthcare services. The government recognizes that HIV/AIDS will affect the economy and is providing leadership and programs to combat the epidemic, including free anti-retroviral treatment and a nation-wide Prevention of Mother-to-Child Transmission program.

Some attribute Botswana’s success solely to the fact that Botswana has significant mineral wealth, especially diamonds. They are the largest exporter of gem quality diamonds in the world. But Botswana has been seeking to further diversify its economy away from minerals, which account for a third of GDP (down from nearly half of GDP in the early 1990s).

Botswana’s success reaches well beyond having a lot of natural resources. Botswana relies on one key resource: Good Government. Compared to other countries in Africa, it ranks much better in terms of corruption. Transparency International ranks it the least corrupt country in Africa. Botswana is ranked less corrupt than Italy, Greece, Taiwan, and South Korea.

And of great importance, Botswana has a tradition of respecting property rights. This is in contrast to most African countries, who instead pursued socialist policies.

Botswana deserves more attention than it gets. Let’s hope that other countries of Africa begin movement toward Botswana’s example. Establishing uncorrupt and competent governments, that make sensible freedom-oriented policies, is the key step to getting there.

Personally, I hope to take a vacation to Botswana someday. It is said to be beautiful and have nice people too.

Update: Here is an excellent paper that describes both Botswana’s success and challenges for the future.

5 Responses to “Botswana – Model for Africa”

  1. Howard Veit Says:

    1. Bob Geldorf will claim an instant success.
    2. I assume a miracle, unless they had an educated class that got their learning from Britain.
    3. How do they keep invading hordes of poor people from adjoining states from destroying their economy?

  2. WILLisms.com Says:

    Trivia Tidbit Of The Day: Part 100 — Botswana.

    BOTSWANA, MODEL FOR AFRICA- Since independence, Botswana has had the fastest growth in per capita income in the world. Economic growth averaged over 9% per year from 1966-99. The government has maintained a sound fiscal policy, despite three consecutiv…

  3. Yusuf Smith Says:

    Botswana also has one of the highest AIDS infection levels in the whole region, and has recently chucked a whole load of native people out of their homes, apparently to make way for mining. How is that a model for anywhere?

  4. Dan Morgan Says:

    Yusuf Smith,

    Having the highest AIDS rate does not negate the fact that Botswana has had good policies and steady economic growth which has benefited its people, unlike the rest of Africa.

    Regarding your comment: “chucked a whole load of native people out of their homes”, I found this link:
    http://www.wpherald.com/print.php?StoryID=20050425-114729-6450r

    It says: “All the people who relocated from the CKGR were paid compensation for their properties and were assisted with vehicles to transport their belongings, including livestock, to the new settlements.”

    That does not sound to thuggish to me. If you have a link to another side of the story, please send it to me.

  5. Robert Says:

    @ Dan, thanks for a more objective view on events in Botswana. I see that the comments here are quite old, Botswana continues to be one of the few success stories of Africa.

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