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Management of the Natural Resources by the Government of Botswana - Dissertation Example

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This essay explores the management of the natural resources by the government of Botswana. The researcher tells that Botswana has one of the highest amounts of natural resources in the world…
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Management of the Natural Resources by the Government of Botswana
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Download file to see previous pages This research will begin with the statement that despite initial success, that took place just when the post-colonial era started in African continent during the 1960’s and 1970’s, in the modern context, Africa is on an on economic downslope where poverty and hunger is persistently increasing in many of its States, with a universally accepted pessimism regarding its future economic prospects Various reports show that the general Sub-Saharan countries are turning poorer at a faster rate, than any low-income country worldwide. The average economic growth rate has been persistently in the negative from round 1965, with an average 35-times difference in the US and the African per-capita income level. However, amidst this depressing picture of low economic growth one African country has performed better than any other nation in the world, in the span of the last 35 years, which is Botswana. Botswana “had a PPP-adjusted income per capita of $5,796 in 1998, almost four times the African average, and between 1965 and 1998, it grew at an annual rate of 7.7 percent”. In 2002, we find that Botswana “exported some US$ 2 billion of diamonds, nickel, copper, gold, and other resources—over 80 percent of its total exports”. The presence of diamonds had significantly backed Botswana’s strong economic growth, until the late 1990s, after which the average growth rate has fallen slightly owing to the recent diversification of the economy, where we find Botswana is now not dependent purely on the revenues that are earned from its natural resources.It is a general belief that economies that are wholly dependent on natural resources, tend to have a slow economic growth, which is often referred to as the “resource curse.” Botswana, however, did not have a favorable start right after its independence and was considered a poor country with little chances of elevation in their economic conditions. It is here that diamonds have played an important role and currently account for almost 40 % of the country's natural resource output. Even though we find that Botswana had in the past experienced strong growth owing to its rich natural resources, however such growth, as predicted by many economists, is not sustainable on a long-term basis. This is owing to the fact that the mining industry does not offer too many job opportunities. Figures show that in Botswana while the mining sector contributed almost 40 % to the total national GDP, it created only around 4 % employment opportunities. The present economic diversification has already started showing a negative impact on the national economy, and it is as Iimi framed it “specific and intensified capital investment in the primary sector has restrained Botswana from benefiting from forward and backward linkages and labor market externalities”. Besides this factor, it has been contended by many experts that geographical location where a country is far from the sea, makes it difficult to create the strong economy that is based only on the abundant natural resources. Products from the natural resources are generally exported to other countries by the sea route, thus leading to very high shipping charges. A look at the African resource-rich countries will show us many of them are landlocked, including Botswana. Almost all experts universally acknowledge the fact that Botswana achieved this unprecedented economic growth and development by adopting effective management policies, and with a stable basic legal system that functioned reasonably well.“ ...Download file to see next pages Read More
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