Economic Development in Africa: The case of Botswana M.A. Gommen, F.K. Inganji and L.D. Ngcongco (eds.) Botswana's Economy since Independence. Tata McGraw-Hill Publishing Company Limited, New Delhi, 1983, 321 pp. Introduction This is the sort of book which many students of development must mdeed be proud to add to their collection. The editors bring together authoritatIve scholarship' and mdepth expert knowledge of the facts conveniently, in one readable text. The book IS a testimony of Botswana's commitment to promoting a free exchange of ideas by both cItizens and outsiders. Beginning with the Vice-President's "ReflectIOns on Botswana's Economy", this review article attempts to introduce each one of the chapters and critiques them both lr terms of their relevance to the theme of the book as well as in terms of the issues which they individually raise. In his opening address, the Honourable P.S. Mmusi, Vice-President and Minister of Finance and Development Planning, discusses how government mterventlOn and economic management has resulted in the economic "miracle" which the rest of the book documents in great detail - this despite a growing literature that argues against, or harbours fears of, State intervention. Also, contrary to the growing literature which suggests the overwhelming asymmetric preponderance of multinational corporations (MNCs) m the Third World, the "ice-President notes that a proper degree of control has been mamtained in Botswana. This fact is documented by Nchindo's and other papers. The Vice-President's paper brings out the fact that Botswana's success has not been without problems. The setting of priorities, for example, has meant that some facets of development lag behmd. Creating job opportunities by first developing the productive sectors of the economy often means adopting financially sound policies which often do not have immediate Impact on the quality of life of the people. ThiS often leaves the government wide open for criticism. In the face of such criticism, the government has displayed tolerance for politically divergent views, Includmg views of what, by African and other standards, are dubious characters who have not only participated m but have profited from Botswana's economy. In a way, this is the price which Botswana has had to pay for her stability, tranquility and rapid economiC growth. Mr. Mmusi did not reflect on how his political party, from inception, was able to mount a sound financial and political campaign (at a time when mineral wealth was not anticipated), which enabled the party to mount and mamtam the campaign promised to constituents throughout the country. ThiS would have .further revealed one of Botswana's strengths through the ruling Botswana DemocratiC Party. Even without such an elaboration, Mr. Mmusi's opening remarks set the stage for the theme of the book concisely and accurately. The Discussion Papers I. Colclough's paper serves as a good introductory background to the political context in Southern Africa. This gives a reader an understanding of how Southern African political problems could have a direct bearing on the economic development of the whole region. But the paper does not make it explicit, for example, how dependent development in Botswana has helped or hurt Botswana's economy since independence. The paper does not fairly take note of the fact that Botswana's practical economic strategies in relatIOn to Southern Africa as a whole, have transformed the country from the status of being called a "worthless piece of territory" to "one of the few success stories in Black Africa", indeed a "miracle". Colclough tends to suggest that economic disaster will be Inevitable as Southern African states become liberated. As we have pointed out, he does not explain how come, for example, despite the gloomy political picture in Southern Africa, Botswana was able to make the fundamental changes which have rapidly moved the country from "rags to riches". Thus, Colclough's paper leaves an explanatory gap - at the same time that it entertains speculation. 2. Mogae fills Colclough's gap by explaining in detail the economic benefits of the Southern African Customs Union to Botswana. He shows how, for example, doing business with South Africa is, from a purely financial point of view, a pragmatic and beneficial policy. Mogae also shows how the beef industry and the diamond industry do not only lead agriculture and mining respectively, but lead the economy in general. While this tends to exacerbate the skewness of income, they are sadly, practical ways to sustain the economy. Another practical strategy that Botswana has followed, is to involve. foreign investors, donors, expatriates, and thereby, many nationalities and viewpoints which while they have led to sweeping hostile statements by members of Parliament, prominent individuals, etc., have been a most stimulating catalyst in planning. The multiplicity of actors in the growing. centralised bureaucracy, although it has a potential of creating problems in policy implementation, seems to have had a moderating impact and developed what may be called "cool calculating cucumbers" among the civil service and therefore, a stable atmosphere for practical economic planning. Mogae's. arguments, however, tend to support domination of the country by foreigners. He prOVidestechnIcal information which has been used to justify a foreign biased economy, and a highly skewed distribution of income. Indeed, one does not get the sense that Batswana themselves have participated in the shaping of practical strategies which have produced the tremendously beneficial changes to the economy since Independence. Furthermore, the performance of Botswana's economy does not appear to have been consistently at pace with the goal of equitable growth. 3•.. Oommen makes the vivid observation that a large proportIOn of productive actlvlt1es are not owned by Batswana and a large part of the GDP does not accrue to the citizens. What is more, the proportion of non-citizens share is increasing. With 45% of the rural populatIOn at any time below the poverty line, and an increasing backlog of t~,e unemployed, the. questions "who. benefits, for how long, and with what consequences. become appropriate. If, as It stands, Botswana's economy since In~ependence IS,a succes,s story, the question "success for whom", is indeed relevant. With ~Iy 18% Incre~ In baSIC payments per person for citizens and 33 percent for non-clt!zens by 1979, It would appear that the rnixedfeelings towards foreigners are perhaps not unfounded. In the ,end, Oommen attributes the apparent contradictions in Botswana's economy to capitahsm which has roots in the colonial days when the hut-tax system introduced and demanded cash from every household. Oommen argues that capitalism should be conSCIOusly tamed through planning and hard decisions to reduce the exploitation of man by man: otherwise, growth will continue to be without equity. Here is the one part of his paper which could have been much stronger in providing practical tentative hypotheses to guide actual policy. Otherwise, the problems have been adequately outlined and extensively documented in scholarly fashion but provide no immediate policy directives. 4. Harvey's paper provides, In pedagogical style, practical, tactical and strategIC components and variables that come into play in any effort to finance development projects. It is a useful background paper which is relevant within the development literature in general, but it does not detail the experience of Botswana in financing development projects since independence. As such it does not quite fall within the theme of the book. 5. The fiscal policy In Botswana is outlined in detail by Lewis and Mokgethi who argue that while government financing shows a sharp build-up of external debt since independence, it has been accompanied by an unusual drop in the debt outstanding following 1976-77. Another of the unusual features of Botswana's public finances is the level and type of government contribution to parastatal investments. Another strength of the fiscal policy is that government has Insulated the growth rate of real expenditures from the cyclical behaviour of revenues by allowing cash balances to rise and fall within the cycle of revenues. Lewis and Mokgethi find it difficult to criticise this type of overall conservatism in government spending, especially when It has resulted in rates of growth of 13-15 percent in real terms. Lewis and Mokgethi provide some of the practical poltcy suggestions miSSingIn other papers. For example, they suggest that the economy should be diversified Into other activities other than diamonds and beef so that a less vulnerable productive base is established. But the extent to which new diversified activities would be properly taxed to contribute meaningfully and equitably to the economy is not clear. Diversification raises management issues which the authors do not discuss. Overall, their paper is well in line with the theme of the book. 6. Ablo and Hudson argue that monetary policy is an important compleMent to fiscal policy in the attainment of: a. domestic price stability; b. a strong balance of payments; c. a stable exchange rate; and d. a high growth rate of output and employment. They show that In the relatively short period of running an independent monetary system, from 1976, Botswana has, by and larg~, avoided the conflICts mherent In the simultaneous pursuit of the above-mentioned objectJVes. Ablo and Hudson also bring up the fact that there is a growing excess liquidity in the banking system at the same time that banks have not adequately met the credit needs of households and small businesses. All in all, however, although this and other papers on money and banking, have shown that prudent housekeepmg can pay rich dividends, they do not address themselves to ways in which the "small man", I.e. the less credit-worthy, can be assisted to improve both the small productive sectors as well as his employment capacity. If at times of plenty the less credlt- worthy is left at the periphery, what more at times of liquidity shortage. 7. The first paper to address rural development IS that of Duggan who argues that the rural economy is precious because it can employ and therefore del1ver income to more people than the government can do. The rural economy, however, IS an endangered species which IS giving way to cash economy. Over the years, Batswana have lost their land to large farmers who are increasingly more commercial1sed. The main problem with Duggan's argument is In suggestmg that there IS a rural economy separate from the overall economy. Recent lIterature mdicates the futility of talking about "rural economy". Rural IS a dubious geographic deSignatIOn with suspect theoretical or conceptual significance or meanmg. To pose the mtroductlon of cash and the increasing skewness of land ownership as factors in the demise of the "rural economy" IS not correct. Why should the introduction of cash affect only the so-called rural economy and not the economy as a whole in any specific manner. It would have been more appropriate for Duggan to talk of Botswana's land distribution patterns and how they have been affected by the introductIOn of a cash economy over time. Overall, however, Duggan's paper makes a very interesting suggestion explainmg how those with lIttle cash and some cattle were able to further their nests and i:1crease their land ownership at the expense of more and more people who remained virtually landless and vulnerable to the workings of the market economy. 8. Hubbard shows how the beef cattle industry affects all classes of producers. He gives a historical account of how at some critical moments (e.g. drought) the larger cattle owners have in the short-term and the long-term benefited more than the smaller cattle owners. He shows how economic conditions, both in the rural areas as well as the urban centres, have benefited the skilled or educated who generally produced 15 or more bags in crop production, owned a herd of 40 cattle or more, and had a steady relIable monthly income. Whether in towns or villages. More than other demographically distinguishable groups, this group was able to sustain their breeding herds through the mid-sixties' drought and therefore generated savings during the rapid rise in cattle prices of 1970-74 to enable them to invest in new and additional water sources through borehole drilling. The rise in wage and salary employment, during the same period, provided further savings. Middle income and poor people who lost their breeding stock in the drought generated few savings during the rapid price rise. But while Hubbard gives a good general review of the dynamics of expansion of the beef .export industry since Independence, he does not have any suggestions for changmg, If at all desirable to do so, the continuing concentration of the industry's resources of land, water and cattle among the richer groups. Overall, however, this is a good analytical paper which accurately addresses the theme of the book. 9. The Tribal Grazing Land Policy (TGLP) is briefly outl1ned by Masalila. He notes that its stated goals are: a. to make grazing control, better range management, and increased productivity possible; and b. to safeguard the interests of those who own only a few cattle or none at all. Both these goals have not been achieved. The problem of overgrazing has yet to be directly tackled and the rangeland of Botswana has continued to be degraded. What is more, the national goals of social justice and equitable rural development have not been met along with increased productivity. Although he observes these failures, he does not make it clear whether the TGLP experiment should be abandoned. Instead, he calls for complimentary strategies in efforts to address rural development as a whole. The case of TGLP is an opportunity for making concrete alternatives or complementary policy suggestions. Masal1la fails to take thiS opportunity and therefore does not provide a new understanding of TGLP. 10. Opschoor argues that environmental constraints on arable farming do not seem to be systematically biased against particular groups or classes. The means to overcome these constraints are, however, unequally distributed. The poor are affected by economic constraints which tend to aggravate the effects of the environmental ones. He also argues that the Arable Lands Development PolICY (ALDEP) IS aimed at introducing a system that Batswana farmers have failed to adopt for at least the 'past 50 years of agricultural extension. He concludes that Botswana is unlikely to reach the goal of full self-reliance in cereal production by year 2000. It will increase productivity within the commercial sectors dominated by the wealthier classes but will not help the groups for whom ALDEP was created. Like many other authors, however, Opschoor fails to suggest ways of approaching more equitable arable lands development strategies. J 1. McCarthy documents the fact that Botswana had no bitumen roads outSide of Gaborone, Francistown and Lobatse. IN 15 years, however, it has come to have one of the best road systems in Africa having more bitumen road per capita than any other sub-Saharan country other than South Africa and MauritiUS. He argues that the fundamental reason why Botswana has had such a large road buildJng system, together with the concentratIOn of other forms of heavy Jnfrastructure, IS that It was the only practicable way of soakmg up surplus finanCial resources during the 1970s, and not for economic and strategic reasons. It is difficult to believe that a government could engage In such an undertakmg of earthshakIng proportions Without any Idea of economIC and strategIC benefits beforehand. McCarthy does not support his assertion with data which robs from his otherWise concise descriptIOn of Infrastructure development m Botswana since Independence. By and large, however, this is one of the more interesting chapters. 12. Peat notes that as In many other countrIes It is difficult to get a clear picture of employment and unemployment due to the fact that statistics are not readily available for the Informal sector. All the same, it IS clear that there are far more Batswana seeking mcomes from employment than there are income-earning opportUnities available. Botswana has Jow labour productivitycoupJed With relatively high labour costs and this puts constraints on the development of productive activity and employment generation. Given these problems, government has done much to raise productiVity and create opportulllties for productive employment through such programs as The Arable Lands Development Programme; the rural IndustrIal programmes, subSidies, educatIOn. and traIning, and labolX intensive publiC works. Overall, It would seem, Peat prOVides nothing In the way of new solutIOns except for emphasis on labour-mtensive rather than capital-intenSive schemes. 13. Moyo briefly pomts out that statistical growth rates tell us very little about a country's development, especially when growth figures are calculated from sectors which are isolated from the rest of the economy. The poor have been. unaffected by either rises or falls in GDP. Furthermore, the country's planners and mstltutlOns have failed to use the financial and foreign exchange cushions to build productive and 99 employment creation industry. In part, this is due to the fact that there has been little advancement in technical education and the training of technical personnel. The only polytechnic established as a vocational training centre,. has been a hopeless failure. The result has been serious dependence on expatnates with at least 30% In the entire civil service and close to 100 percent in the upper echelons. Even though these proportions have been reduced, the absolute number of expatriates is one-third higher than at Independence and Botswana probably still has a world record m expatriate technical assistance workers per capita. The question which Moyo raises but which he does not address is whether expatriates are a necessary evil - one wonders whether a comparative analysis of Third World countries would have provided the framework for an answer. Overall, Moyo presents a well-balanced critique of development in Botswana. 14. Nganunu gives an historical account of the development of mining in Botswana and notes that Botswana has never framed in a single document, its mineral policy. Botswana's mining policy has been developed pragmatically to meet the demands of individual cases. The main challenge has been to combine the attraction of foreign investors with an assurance that the nation's mineral wealth benefits the country now and in the future. Nganunu's paper gives no account of citizen participation at all levels of the mining process. He therefore fails to show how Batswana have benefited from mineral extraction. 15. Nchindo outlines the diamond industry in Botswana and shows that a partnership between government and a private investor such as exists in Debswana, is not only unique, but it works. Over the years government has increased its shareholding from 15 percent to 50 percent, mainly as a result of the goodwill on both sides. What is more, although the exact profit sharing arrangements are not made public, 'the share formula has been designed to give government the substantially larger share so that not less than 50 to 70 percent of the profits accrue to government. Although the paper gives figures of citizens' participation, it does not give a detailed breakdown of citizens' involvement over the years. This would help the reader to see the growth of citizen participation over the years. 16. Tibone's paper on the Shashe Nickel-Copper Project is another of those that gives a brief history of mining in Botswana. Unlike Nchindo's Debswana, the Shashe project has proved to face several problems including failure on the part of shareholders to inform Government in advance about approaching problems, and to involve Government in all of the side negotiations. In addition, the lenders displayed inflexibility with respect to changes in loan agreements, etc. Tibone's paper could have benefited a lot from the vast literature on bargaining and decision-making when the organisational climate is complex, uncertain and turbulent. The major difference between Debswana and the Shashe project could have very well been traced to the relative stability of each organisation's environment, teChnology, input, through-put and out-put. 17. Clark's and Mortimer's paper provides valuable information on prospects for coal and present data to suggest the presence of large resources of high ash medium calonflc value bltummous coals within Botswana. They note that Botswana has more coal than it will need for domestic requirements. They also outline the history of prospecting and identify at least ten coal areas in the country. Their paper, however, .does not fall within the theme of the book. It does not evaluate the impact or contnbutlon of coal. to .Botswana's economy since independence It, however, provides some good technical mformation. 100 18. McFarland makes an interesting suggestion that it would be fairly difficult for South Africa to achieve the growth targets that she has set for herself without continued rapid growth of RSA exports to Botswana, Lesotho and Swaziland. In terms of the existing levels of BLS imports, loss of the BLS market would be much more costly to RSA than it would have been in 1970. The growth of Botswana's merchandise imports from RSA in the 1970s had an impact on the growth of the RSA manufacturing sector far out of proportion to Botswana's GDP relative to that of RSA - Botswana being barely more than I percent of RSA's. McFarland's paper IS a refreshing change from the dependency literature which makes the BLS countries hopelessly at the mercy of South Africa. The dominance of South Africa is balanced by her dependence on the readily available markets across her borders. McFarland's argument is however challenged by the fact that it remains true that RSA's goods and services are needed more in BLS and their absence would have a more damaging effect on BLS economies than on that of RSA. 19. The book concludes with Seidman's call for regional integration among independent Southern Afncan states. She notes that the causes of Southern Africa's pervasive poverty lies not in the lack of natural resources, but in the structure of institutions imposed during the colonial and post colonial era. None of the small individual states of Southern Africa, alone, could fully develop its extensive known resources to build modern factories and spread productive employment opportunities throughout its economy. She notes that the major share of the limited investible surpluses produced in the neighbouring regional economies are drained away by transnational and South African interests which withdraw funds directly in the form of profits, interests, dividends and high salaries of expatriate personnel; and ship out additional capital indirectly through manipulation of terms of trade. If new nations could unite, together they could transform the regional political economy into a powerful modern industrialised unit. These countries possess the essential resources to build complex basic modern industries required to provide productive employment and raise the living standards of the entire regional population. By joining together, governments could seek ways to integrate their political economies with each other, progressively reducing the institutionalised ties binding them to South Africa and simultaneously weakening the minority regime's oppressive rule over the people of South Africa itself. On the face of It, Seidman's advice is not only good but is consister.t with what Southern African states have been doing recently. It would have been helpful, however, if the experience of OAU and the East African Community could have been incorporated in Seidman's paper. To what extent Southern Africa's regional integration would suffer the same problems as other attempts at strategic mtegratlon is not anticipated by Seidman's paper. Conclusion There is no doubt that anyone seriously mterested in the subject of Development for administrative, scholarly, or even political reasons should read Botswana's Economy Since Independence. This. review has attempted . to mtroduce the book as. well as critique it. Given the variety of mdlvldual contnbutors, the task of the editors, as one can well Imagine, has been a tremendous Job of syncromsmg the flow of Ideas as they were presented chapter by chapter. The ability of each author to follow the 101 guidelines of the steering committee and the theme of the seminar on which the book was based understandably varied both with the topic and the specialised interests of each author. Some papers were relatively more theoretical or analytic, others were descriptive and factual, while yet others tended to be mGlretechnical. Some were policy oriented while others gave no practical directives to aid policy formulation. It stands to reason, therefore, that given the variety of interests, training, and specialisations among followers and readers of the development literature, some will already be more exposed to, conversant with, and therefore more interested and able to read fluently most, but not all, the chapters of Botswana's Economy Since Independence. The chapters in the volume cover six main areas: a. review of growth performance; b. finance; c. agriculture; d. infrastructure, industry, and employment; e. mining and minerals; and f. regional and international aspects. The papers, however, have not been classified into the different sections but this should not prove to be a serious shortcoming. Overall, despite the somewhat forthright critique of the book, we strongly believe that Botswana's Economy Since Independence is a major improvement over some of the recent works on Botswana and will contribute meaningfully to University teaching as well as stimulate research and reflection by all including the lay reader on problems of the so-called less developed countries. Most of all, the book contains information to show that while Botswana's story is indeed a "miracle" when looked at from the outside, there are serious internal problems which have direct economic explanations. In my view, the book anticipates and calls for equally well documented papers that address themselves to the human ~ide of development in Botswana. Thabo T. Fako Department of Sociology University of Botswana 102