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BOTSWANA

BOTSWANA. How and why it is unusual. Pre-colonial period. Relevant points Chiefs accountable to the people Land available elsewhere for dissidents Effective use of technical advice Eg missionaries in 1885. SA Act of Union 1909. Three small countries (BBS) to be incorporated

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BOTSWANA

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  1. BOTSWANA How and why it is unusual

  2. Pre-colonial period • Relevant points • Chiefs accountable to the people • Land available elsewhere for dissidents • Effective use of technical advice • Eg missionaries in 1885

  3. SA Act of Union 1909 • Three small countries (BBS) to be incorporated • So UK and SA both did nothing • SA used Bechuanaland as labour and cattle reserve • BUT no incorporation without consent of the people • Meaning all the people • UK stood by this, the only good thing it did

  4. RESULT OF NEGLECT • No capital city, administration in SA • No tarred roads, no abattoir until 1955, almost no education, negligible health services • Some started in mid 1950s • But by 1964 27 got to “Cambridge” (GSCE) • Of which 13 grade 1 or 2 (Univ entrance) • A railway (to link Cape with S Rhodesia)

  5. Initial high dependence on aid • Aid for 50% of recurrent budget, all of development budget • Huge dependence on expats • Govt worked to get more aid initially • Spent wisely to please the donor(s) • Intention to build the economy and reduce need for aid eventually • Careful planning of govt spending

  6. Basics of planning • Never intended to plan the private sector • To get in the Plan projects required • To fit with overall and sectoral policies • To forecast recurrent spending costs • To forecast skilled manpower needs • The totals had to be within forecast revenues, skilled people available and tolerance of expats

  7. From deficit to surplus • Botswana got lucky • Big copper nickel mine (project was 150% of GDP) • This mine almost never profitable, but big boost to GDP and tax revenue from building it • Diamonds – very profitable indeed • Overall surplus by 1984 • Build-up of financial reserves

  8. Why was Botswana different from other mineral boom economies? • Luck: SeretseKhama and Quett Masire • Both were good at picking good people, and, crucially, not nervous of them (or each other) • It helped when the President was an ex-minister of finance (it happened twice) • The ruling class owned cattle (or acquired some) • Recent finance ministers: ex-PSs finance

  9. Future prospects • Reserves used up in 3 years • But budget back in surplus next year • Diamonds run out in late 2020s • But if non-diamond private sector grows at 7% (currently 7.9%), and govt spending at 3% • Budget surplus by 2030 • Huge investment in education creates service exports (essential in a land-locked country)

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