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Oct 18, 2009
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Poverty tarnishes sparkle of Botswana diamonds

By
AFP
Published
Oct 18, 2009

By Refentse Tessa (AFP)

GABORONE — Tshepo Mokwena had a glittering education, sponsored by the Botswana government's diamond wealth, but a year after graduating she still has no job in the tiny southern African nation.


Photo: AFP

"I only benefited from the diamonds through my studies which were sponsored by the government, but that is of no use now as I am jobless," the 26-year-old political science graduate told AFP.

Despite being one of Africa's best-governed countries, hailed for evading the resource curse of corruption and mismanagement, and one of its most successful economies, many Batswana feel they have not benefited from the gem.

With a population of nearly two million and gross domestic product of 26 billion US dollars in 2008, efforts to boost infrastructure and jobs have been slow and 47 percent of the population lives on one dollar a day.

"There is no doubt that Botswana is a rich country, but that does not translate to everyone in Botswana being rich," said Imogen Mogotsi, head of the Economics Department at the University of Botswana.

She said people in Botswana benefit from the diamond wealth through the infrastructure and government programmes, such as heavily subsidised education and free antiretrovirals to treat AIDS.

Battling the world's second-highest burden of AIDS, with 40 percent of the population infected, the country was the first on the continent to provide free antiretroviral drugs and implement routine testing.

Ahead of parliamentary elections Friday 16 October, concerns about steady jobs and the nation's economic future loom large for the ruling party, with Botswana's diamonds expected to run out in 20 years.

Unemployment is high at around 24 percent and the country has one of the world's biggest gaps between rich and poor.

"The diamond industry isn't all that labour intensive. Yes, it generates a surplus ... (but) even though government did a good job on spending in construction and related sectors, mining on its own only generated so much employment," said Razia Khan, head of research for Africa with Standard Chartered in London.

The situation has been exacerbated by the global economic crisis which saw Botswana's economy contract by 11.5 percent due to low diamond sales, although this is expected to turn around as production recovers in 2010.

Debswana, jointly owned by the Botswana government and mining giant De Beers, announced earlier this year it would slash its output by more than half, producing 15 million carats of diamonds this year, against 33.6 million carats last year.

The company is Botswana's largest private sector employer, but this amounts to only 5,263 people.

Diamonds are mostly associated with violent conflict in Africa, but Botswana -- the world's largest producer of the gem -- has bucked the trend.

"It has probably been one of the best examples of how any natural resource was managed in Africa, unquestionably," said Khan.

Botswana's economic growth rate has outpaced the economic growth of even the Asian Tigers, averaging around nine percent in the past 20 years.

"Botswana at some stage recently held the world record for the highest per capita GDP growth (average)," said economist Jan Laubscher with Standard Bank in South Africa.

But this year the economic crisis highlighted the need to diversify the economy, showing how tough life could be after diamonds. Even government's education programme was affected this year, as university scholarships were cut for 5,000 students.

"The government should try and diversify the economy as I have no doubt that that will create employment. And again, what if the diamonds get finished? What will happen to us, what will happen to the country?" said Mokwena.

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