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Finance and Development: the Case of Botswana

  • Neva Seidman Makgetla (a1)

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It is still frequently asserted that the economic sluggishness plaguing most Third-World countries stems from a general lack of resources. The scarcity of capital in both the public and private sectors, it is claimed, prevents the investment needed to achieve development. On the other hand, a fewdeveloping countries with highly profitable exports – notably those that export oil – reap large financial surpluses, including foreign exchange, but do not invest them locally in productive activities. The problem here is supposed to be insufficient ‘absorptive capacity’ due to the absence of skilled personnel and inadequate physical and social infrastructure, restricting the translation of financial resources into real investment. The situation in Botswana provides a test for both these hypotheses, making possible a deeper understanding of the potential rôle of financial resources in the development process.

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1 Bank, Barclays, Botswana: an economic survey and businessman's guide (Gaborone, 1980), p. 40.

2 Bank of Botswana, Annual Report, 1977 (Gaborone, 1978). p. 11.

1 On the failure to raise productivity and employment throughout the country, see Ministry of Finance and Development Planning, Botswana National Development Plan, 1979–85 (Gaborone, 1980); and Enger, E. B. and Klausen, A.-L., ‘Poverty in Botswana’, N.I.R. Working Paper No. 29, University College of Botswana, Gaborone, 1980, a study commissioned by the U.S. Agency for International Development.

2 See Karl Marx, Capital, Vol. II, for a fuller discussion of these questions.

1 See Botswana National Development Plan, 1979–85, Table 4d, p. 203, for figures showing the pitiful extent and extreme foreign domination of Botswana's manufacturing sector.

1 See Egner and Klausen, op. cit. Aiso Paul Mosley, ‘The Southern African Customs Union: a reappraisal’, Occasional Paper in Economics, University of Botswana, Lesotho, and Swaziland, Gaborone, June 1976.

1 I.B.R.D., East African Regional Office, Economic Memorandum on Botswana (Nairobi, 1978), Report No. 1832-BT, p. 11.

2 Botswana National Development Plan, 1979–85, p. 33.

1 Bank of Botswana, Annual Report, 1976, p. 19.

2 Ibid. 1979, p. 16.

3 Ibid. 1976, p. 3. See also ibid. 1978, p. 5, which explains the marginal increase in bank lending by noting that the Government and Debswana, the DeBeers affiliate in diamond mining, ‘the two institutions which planned large increases in expenditure, had adequate tinance available’.

1 Source: Botswana, , Statistical Bulletin (Gaborone, 1980), V, 1, 03 1980, Tables 24 and 25.

1 Bank of Botswana, Annual Report, 1977, p. 25, and 1978, p. 5.

2 Ibid. 1979, p. 16.

3 Botswana National Development Plan, 1979–1985, p. 61. Cf. p. 207: ‘The Govenment aims to encourage the private sector's development and recognises that there is a need for foreign investment in Botswana, especially in larger, specialised industries for which the necessary capital and technical resources are not available locally. Accordingly, the Government's major [sic] concern is to create a climate that encourages private sector involvement. At the same time, Government also has a more direct role to play, particularly in areas that are less attractive to private investors.’

1 Jones, Keith F., ‘Financing the First Decade of Development: an analysis of Botswana's public debt, 1966–1976’, N.I.R. Working Paper No. 13, University College of Botswana, Gaborone, 09 1977, p. 54.

1 U.S. A.I.D., Botswana: country development strategy statement, FY 82 (Washington, D.C., 1980), p. 34. The same report praises Botswana for being ‘oriented toward the West’, and adds that ‘Efforts will also be made to find ways in which AID can assist in building up the very weak indigenous private sector’.

2 Bank of Botswana, Annual Report, 1978, p. 13.

3 Masire, Quett, Budget Speech, 1980 (Gaborone, 1980), p. 3.

1 Enger and Klausen, op. cit. p. 51. See also, Bank of Botswana, Annual Report, 1976, p. 4.

2 See, for instance, Economic Memorandum on Botswana, p. 31.

3 Masire, op. cit. p. 8.

1 See Mmusi, P. S., Budget Speech, 1981 (Gaborone, 1981), delivered to the National Assembly on 23 02 1981, passim.

2 Botswana National Development Plan, 1979–1985, p. 62.

3 For information on the effects of the first two revaluations, see Bank of Botswana, Annual Report, 1977, p. 16, and 1979, p. 16.

1 Cf. the Reserve Bank reports, which claimed that lower-income groups import a higher share of their consumption, but cited no evidence. In fact, lower-income groups consume fewer imported consumer durables and luxuries, and more locally produced food.

2 Jones, op. cit. pp. 25–6.

3 Mmusi, op. cit. p. 6.

2 National Development Bank, Annual Report, 1979 (Gaborone, 1979), p. 6.

3 Mmusi op. cit. p. 8.

1 National Development Bank, Annual Report, 1977, pp. 1314.

2 Botswana National Development Plan, 1979–1985, pp. 15 ff.

3 Egner and Klausen, op. cit. p. 59.

1 See Makgetla, Neva Seidman and Seidman, Ann, Outposts of Monopoly Capitalism (Westport, Conn., 1980), pt. III.

Finance and Development: the Case of Botswana

  • Neva Seidman Makgetla (a1)

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