Defying norms: Botswana’s success amid an abundance of diamonds

In the debate over the roles of scarcity and abundance as contributors to political instability and civil strife, two differing narratives emerge involving the views of the Neo-Malthusians and the neoclassical economists. The former, Neo-Malthusians, see the lack of natural resources as the main problem whereas the latter, neoclassical economists, see problems arising from an abundance of resources. The landlocked South African nation of Botswana, with its representative democratic republic, has thus far seemed to buck the trend of having civil strife in the wake of possessing an immense quantity of non-renewable diamonds, and therefore, I believe that this case requires a closer examination into how it achieved its successes. I believe that the success of Botswana in managing, and flourishing from its abundance of diamonds, provides evidence that specific factors, like political institutions, play an equally as important role in determining prospects for conflict.

 In relation to abundances of resources, neoclassical economists tend to further argue that resource abundance tends to lend to the “honeypot” effect where resource abundance causes individual factions within the state to try to seize control of the limited resource, thus causing conflict, but this idea did not hold true in Botswana. In the fifty years since the discovery of diamonds in the region, Botswana was able to take the abundance of this resource and transform it into immense social and capital gains for the state, while still managing to avoid copious amounts of statewide corruption that typically follows with such a rare resource. Specifically, Botswana has been able to rapidly expand its economy by “harnessing around 3 billion a year in diamond sales” to take its place as the world’s top diamond producer (Reuters). To understand the sheer volume of revenue Botswana is capable of producing, it is necessary to understand that in 2013 alone, the nation was estimated to produce over $1.6 billion worth of diamonds (Kitco).

It is worth mentioning that although this production revenue doesn't translate to the exact amount of money the nation receives, it does go to show that this developing nation has proved its capability of managing such a vast, valuable, and rare resource in an organized and beneficial manner, and I believe that this has a lot to do with the stability of the government. Arguably, weaker governments and governments suffering from significant internal corruption would have a harder time than Botswana in sustaining such a valuable resource because they wouldn't have the infrastructure to ensure that the resources are distributed in ways that would promote nationwide economic growth. Further, governmental stability and strength, compared to other African nations with similar natural resources, has allowed the government of Botswana to avoid total exploitation from outside corporations by continuing to maintain around 50% ownership of the diamond mining venture with the infamous DeBeers cartel (NY Times). From the vast amount of revenue, the government has been able to provide significant improvements to its education system and has allowed the nation to maintain a fairly steady stream of revenue and economic growth, while relying primarily on this non-renewable resource (Reuters).

While economic growth or stability is not always guaranteed with the often volatile state of international markets and non-renewable, luxury items like diamonds, it is necessary to further explore how the role of the institutions in Botswana helped facilitate success in the face of this abundance, and bypass immense governmental corruption. According to 2013 projections from Transparency.org, Botswana has continued to hold its place as the “least corrupt” African nation, and I believe that this speaks volumes as to how they've been able to avoid conflict and not succumb to the fates of similar African countries. Within states that partake in the democratic process, transparency becomes increasingly important because political leaders are held personally accountable for their actions, and must justify their actions to their public. Botswana’s government, arguably, avoided immense corruption because of the ability of democratic transparency to act as a deterrent for poor, corrupt behavior. If the government acted in a way that blatantly exploited the resources for individual power and wealth, leaders would have to deal with backlash from the public, particularly during times of election or re-election. Also, the relative stability of its representative democracy, without interruptions to its electoral processes, upheaval from the public, or the influence of corrupt leaders, helped to ensure that Botswana’s government could focus its efforts towards strengthening the nation’s infrastructure and continuing economic growth, rather than dealing with bouts of nationwide unrest or other instances of local instability.

Although there aren't many cases of countries like Botswana that have been able to flourish amid an abundance of a non-renewable, natural resource, it is important to acknowledge the successes of this nation, and the role of political institutions in allowing this nation to avoid the conflict that we typically see with other African nations. The example of Botswana, and the success and stability it has had in the wake of diamond abundance, shows that it is absolutely necessary to devote ample attention to the role of political institutions when analyzing prospects for conflict and instability. 

Sources:

http://uk.reuters.com/article/2014/10/28/us-botswana-economy-analysis-idUKKBN0IG1GW20141028

http://www.kitco.com/ind/Zimnisky/2013-08-20-Ranking-Of-The-World-s-Diamond-Mines-By-Estimated-2013-Production.html

http://www.nytimes.com/2008/08/09/business/worldbusiness/09nocera.html?ref=business&_r=0

http://www.transparency.org/country/#BWA

Image:
http://www.newsdzezimbabwe.co.uk/2013/04/botswana-miner-snubs-zimbabwe.html