Botswana

Although Botswana’s economy was severely hit by the international crisis, especially as a result of the shocking decline in the diamond market, it appears that the authorities have ruled the country safe during the downturn. At the beginning of 2010, most indicators pointed upwards. In the political field, democracy is as strong as before. An almost impeccable election has strengthened the government’s strong position, but the formation of a new party can at the same time make Botswana politics more exciting than ever since 1966.

Political stability in Botswana persists. The Botswana Democratic Party (BDP) is the dominant party, as it has been since 1966. In the 2009 election, the party rose slightly, gaining just over 53 percent of the vote. The old opposition party BNF lost half of its representatives, mostly to new parties (BCP, BAM and independents). The turnout was high, 76.7 percent, and there were no significant irregularities in the conduct of the election.

BDP Split

The opposition parties are still weak, divisive and¬†openly hostile to each other, and there is little chance that they can join in a common front against BDP. What can threaten stability and reduce BDP’s dominance is the split within the party itself. This has existed in almost the entire history of the party, and lies more in personal contradictions than in any ideological divide. In recent years, contradictions have been sharpened, especially following Ian Khama’s takeover as president, as a result of his authoritarian stance on “different-thinking” BDP members.

While the split apparently had a limited impact on the 2009 election, in March 2010, the split faction (Barataphathi, “those who love the party”) took seriously its threat to break out to form a new party, the Botswana Movement for Democracy (BMD). However, many oppositionists have chosen to continue within the BDP.

Botswana under Ian Khama

President Ian Khama, who took over in April 2008, has a background as lieutenant general and is the son of Botswana’s first president. It was expected that he would be an efficient and actionable man, who implemented BDP’s policy with greater impact and efficiency than its predecessor.

At the inauguration after the election, he launched his 4D strategy. The first three Ds – Democracy, Development, Dignity – were well known, but the fourth, “discipline”, helped to characterize his somewhat military profile. Domestically, Khama has a somewhat more autocratic style than its predecessor, which has not always been as successful. His proposal for a 70 percent tax on alcohol sales met with stubborn resistance and was withdrawn after a few weeks. Pillars of his strategy are employment growth, combating HIV and AIDS and counteracting the “erosion of social values.”

Botswana’s only brewery, Kgalakgadi Breweries, contributed large sums of money in the last election campaign, reportedly to promote multi-party democracy. However, many view the “gift” as a demonstration against Khama’s proposal for increased alcohol taxes.

Under President Khama, Botswana has a sharper foreign policy profile, especially vis-a-vis Zimbabwe. Botswana has criticized President Robert Mugabe for undermining the current unity government in Zimbabwe, insisting that new elections should be printed. Zimbabwe, for its part, seems to be taking the opportunity to create friction vis-à-vis Botswana, most recently in January 2010, when authorities for no particular reason detained Botswana game keepers who had crossed the Zimbabwe border and seized their weapons and vehicles.

A disputed new media law was passed in December 2008. There is an ongoing debate about how the law is being enforced and about the government’s alleged attempt to destroy the opposition press by excluding certain newspapers from public advertising. The Global Survey of Media Independence 2009 recorded a decline in media freedom for Botswana. It also appears that the president has taken greater control over the public media.

Corruption is still low and, according to Transparency International, the country is the least corrupt in Africa.

Diamonds and financial crisis

Although Botswana was not vulnerable to the direct effects of the financial crisis, it became clear in 2008 that the economic crisis would have a strong negative impact, especially through the diamond market. 2009 was the most difficult year in Botswana’s economic history in decades, but ended better than it initially seemed. Equity markets and commodity prices pointed upward again, and diamond exports did so, while inflation rates and interest rates leveled out or downward. But President Khama said in his New Year’s speech that 2010 would also be difficult and that there will be no talk of “business as usual”.

The government has negotiated a $ 1.5 billion loan from the African Development Bank (the first in 17 years) and in addition loans from the World Bank, so that important planned investments can be made.

The new national development plan has been delayed by one year and will be implemented in 2010. The plan focuses on economic diversification, job creation and poverty alleviation, but one has had to cut sharply in the planned budgets due to the decline in government revenue due to crisis. The planning system has served Botswana for more than 40 years now, and was especially important during the poorest period and in the 1970-80 years, when diamond revenues grew rapidly. There are now changes in the system, and part of the delay is due to the president’s greater political control over the plan.

International comments on Botswana’s situation early in the crisis predicted dramatic consequences for a country so mineral-dependent. Eventually, there has been more or less agreement that Botswana has done well and has had solid macroeconomic management. It also helped that the country was initially creditworthy and able to borrow to mitigate the crisis. In addition, Botswana reacted fairly quickly with interest rate changes, and the state quickly imposed restrictions on travel expenses, the purchase of means of transport and the creation of new positions. Botswana is one of the few countries in Africa where fiscal policy is said to have mitigated an otherwise dramatic downturn.

Although 2009 has been tough for large sections of the population, there are no specific signs of a dramatic decline in social indicators. Click here for detailed population profile of Botswana.

China and Botswana

As in many African countries, China has a significant impact on the economy. This influence began early in Botswana, in fact in the mid-1980s, when the state invited Chinese construction companies to compete for projects during the construction boom of the time. This led to a decline in construction prices, in a market that had previously been dominated by South African and European companies. However, the competition national companies have gradually gained from China is not always as good.

Country facts:

Area: 582 000 km2 (21st largest)

Population: 1.9 million

Population density: 3 per km2

Urban population: 59 percent

Largest city: Gaborone – approx. 224 000

GDP per capita: 6108 USD

Economic growth: 3.3 percent

HDI Position: 125