Address by Hon Lt. Gen. M.S. Merafhe, Minister of Foreign Affairs and International Cooperation to The Royal African Society, London, UK

It is a wonderful thing to be introduced by an old friend. Thank you very much Richard. In you, Botswana has a good friend.

I want to say I am today honoured to be in the presence of so many distinguished personalities. The Royal African Society has played a crucial role in the promotion of understanding between the United Kingdom and our continent throughout its existence. Indeed, its existence has been justified and its historic vocation fully vindicated. The positive changes that we witness today in the posture of the British government and people towards Africa are partly due to the abiding influence of your movement. We thank you very, very much.

Chairperson, Ladies and Gentlemen,

It is a great honour and a privilege for me to have been asked to speak to this remarkable gathering on the subject of "How we did it, Botswana's Success Story."

In the last thirty-seven years of its independence, Botswana has seen many triumphs, large and small, but these have not made headline news because success stories normally do not attract media attention. The media is only interested or preoccupied with Africa's wars and conflicts. This is why little is known about the fact that between the early 1970s and the early 1990s, Botswana had the fastest growing economy not only in Africa, but in the whole world.

Tonight's address therefore offers a rare opportunity to share with you and by extension, the people of this great country, our development process and the challenges we still face as a young nation. We are proud to speak of our modest successes because at independence, no one could have foreseen that Botswana would have made such strides by this time.

The British Government Economic Survey Mission that was conducted in 1960, portrayed Botswana not only as a country "close to being the world's poorest", but also as having "dismal economic prospects based on vague hopes of agriculture, salt and coal". It is not my wish to burden this audience with data on the economic situation that prevailed in my country at the time of independence, as I am sure many of you are quite familiar with both the history of Botswana's development and the contemporary situation.

It suffices to say Botswana was one of the poorest countries in the world, a desolate and sparsely populated semi-arid country prone to long spells of drought. The poverty was expressed in the form of famine, illiteracy, lack of adequate portable water, lack of minimum health facilities and other social amenities.

Botswana, ladies and gentlemen, was a country with a per capita income of US$94 per annum; a country without enough resources to meet its government's recurrent budget; a country with virtually no infrastructure, be it physical or social, save for six (6) kilometres of tarred road; a country where 87 percent of the population was dependent on subsistence farming for sustenance; and above all, a country with less than a third of its population barely literate.

On the political front, Botswana was surrounded by hostile minority regimes in Rhodesia to the East, South West Africa to the North and West, and apartheid South Africa to the South. These regimes felt threatened by the successful transformation of an African country under majority rule. Our adherence to values such as democracy, respect for human rights and the rule of law gave a lie to their doctrine of racism and apartheid. Therefore, on a number of occasions, they visited death and destruction on our innocent citizens and infrastructure. In short, the challenges the young Batswana faced were many and varied.

Some of the major responsibilities the new government had to carry out immediately at independence included, among others, preserving the country's unity and territorial integrity; laying the foundation for economic development; enhancing social development, especially human resource development; working vigorously for the upliftment of the standard of living of Batswana in view of the poverty and prolonged drought spells that were prevalent at independence and subsequent years. This required massive mobilisation of resources, both internally and externally. Fortunately, the international community was generous in its assistance.

Chairperson, Ladies and Gentlemen,

Such, Ladies and Gentlemen, was the experience of my country during its formative years, but we have survived. Botswana has been a multi-party democracy since independence in 1966. The economy, which has always been market oriented, has enjoyed stable growth. As many observers have said, a very small number of countries the world over has been able to sustain rapid economic growth comparable to that of Botswana. Over the period 1966 to 1974/75 when more reliable and consistent GDP statistics became available, the economy grew by 8.1 percent per annum, and from 1974/75 to 2002/03, the economy grew even faster at an average annual rate of 8.8 percent per annum.

Today Botswana's real per capita GDP stands at USD3, 889. Average incomes have increased significantly to the extent that the ration of motor vehicles to people stands at 1 to 8. Our basic infrastructure is of a reasonably high standard, reliable and efficiently operated. We now have 6, 000km of tarred road linking all major parts of the country, and this has not only facilitated the movement of people, goods and services but has also promoted greater integration of the country.

Today for example we are looking at tourism as one of the engines of growth, a factor that would not have been possible without such infrastructural development. We also have one of the best telecommunication networks in Africa. Furthermore, at independence we had only three secondary schools, and today there are over three hundred. Government guarantees ten years of basic education and the net enrolment rate at the primary level is 98 percent. Secondary and tertiary school enrolment is also rapidly expanding.

The under-five mortality rate declined significantly, and until the outbreak of the HIV/AIDS pandemic, it had become less than a third of the average for Sub-Saharan Africa. The Child malnutrition rate is now less than half of that of the continent. And our health system and infrastructure are the envy of many.

Ladies and Gentlemen,

A lot has been said and a lot has been written to explain Botswana's success story. Of course, the answers are many and varied, depending on who is speaking or who is the author.

For his part, Professor J Clark Leith of the University of Western Ontario stated in his case study of Economic Policy, Prudence and Growth, that "Botswana did not have a single silver (or diamond) bullet that explains its economic record. Rather it was the whole range of policies which, working together proved growth promoting".

To my mind, Ladies and Gentlemen, there are four silver bullets that explain this development record.

The first is the strict adherence to the ideals of democracy, respect for human rights and the rule of law; the second, the promotion of the principle of social justice; the third, the application of sound economic policies; the fourth, the discovery and efficient exploitation of mineral resources, particularly diamonds.

STRICT ADHERENCE TO THE IDEALS OF DEMOCRACY, RESPECT FOR HUMAN RIGHTS AND THE RULE OF LAW

From the day Botswana was born as a nation in 1966, its people have struggled hard to preserve their democratic way of life, and at the same time take advantage of their rich cultural diversity. These values were not imported, and they certainly were not imposed from outside. In other words, participatory democracy did not come with the advent of independence. It had always been part of our culture. Our traditional Kgotla system of democracy provided a forum at which all stakeholders could sit together, consult and map out strategies for community development. What happened at independence was simply the advancement of the traditional Kgotla system to a higher level of parliamentary democracy.

The stability and social harmony that Botswana has been so blessed to enjoy over the past thirty-seven (37) years of independence is inherent in our culture of peace and tolerance. Batswana, from time immemorial have revered the saying that "it is better to jaw jaw than to war war". This has enabled us to focus our efforts on what binds us together and not what divides us.

Ladies and Gentlemen,

I must also emphasise that good leadership has been one of the strongest tenets of Botswana's success. Starting with its first President Sir Seretse Khama, his successor, Sir Ketumile Masire, to the current President, Mr Festus Mogae, the commitment to the national value system has been unwavering. These leaders have built strong institutions and pursued policies which enabled their governments to enjoy legitimacy among their peoples. They developed a sound participatory system of government that promoted nation building and national consensus on issues of national interest.

Contrary to the belief among many developing countries in the 1960s and 1970s that pluralism was not in the best interest of national unity, pluralism in Botswana proved to be a force for nation building and national consensus. This is why Botswana has been able to withstand the strong pressures of distabilisation which have prevailed in the region.

THE PROMOTION OF THE PRINCIPLE OF SOCIAL JUSTICE.

Social justice is one ideal which Botswana has paid great attention to because success would have been meaningless if it was not enjoyed by the general citizenry. We were determined to educate our people regardless of their station in life, provide them with health facilities, give them clean and easily accessible drinking water and reduce their poverty levels. We also paid great attention to the participation of women in development. We have thus introduced legal and political reforms in order to assist women live up to their full potential. This is because we believe we would not be where we are today without the active participation of such an important segment of our society.

I must admit though that, the ideal situation we aspire for is gender equality and that there are social norms and legal impediments which we still need to overcome to achieve this ideal.

Chairperson, Ladies and Gentlemen,

On education, we realised that there was nothing more crucial to economic growth and development than literacy. We therefore embarked on massive training of our young people through education and skills acquisition. We did this to ensure that our country attained a large measure, if not complete self-sufficiency in manpower for both the public and private sectors. In addition to contributing to the development of human resources, education has also promoted social harmony in our society.

On health, we took serious steps to fight the terrible diseases that afflicted our people. The solution to the health crises and killer diseases such as measles, smallpox, tuberculosis and so forth, included effective immunisation programmes.

We also developed a sound infrastructure and today, health facilities are accessible to every individual within a radius of fifteen kilometers. These achievements in the health sector have given our people the energy to develop themselves and their country.

Ladies and Gentlemen,

The developments in the social sector were complimented by massive construction of the physical infrastructure which has not only facilitated the movement of people, goods and services, but has also promoted greater integration of the country. Today for example, we are looking at tourism as one of the engines of growth, a factor that would not have been possible without such infrastructural development.

SOUND ECONOMIC POLICIES

Economic management and governance has been the hallmark of Botswana's economic success. As a country, we never lost sight of the fact that minerals were neither finite nor renewable and that they were susceptible to the vagaries of market prices. We therefore developed a planning system that ensured sound macroeconomic strategies and a disciplined fiscal policy. There was urgency to weigh and balance competing demands against the limited resources at our disposal.

This was done through the promulgation of National Development Plans underpinned by stringent budgeting and procurement procedures. Through these National Development Plans, Government articulated development targets which were then ranked in order of priority for funding under annual development budgets. This planning system has offered transparency and openness. It allows for reviews and ensures reprioritisation of development programmes on the basis of their viability.

The system has also made it easy for Botswana's development partners to assess the development projects and programmes and determine not only which ones are viable and worthy of support, but also the likely benefits that would accrue to the intended beneficiaries in the different communities. This has resulted in enhanced and increased official development assistance from the donor community.

Coupled with this, government enacted legislation which provided a framework for the management and legal use of public funds and properties. This ensured effective public monitoring of the use of public funds as well as accountability by the public sector. The Audit Act in particular, which forms part of this legal framework, has ensured that both revenue generation and expenditure policies are consistent with the nation's development goals and objectives.

We also created institutions to monitor and ensure strict adherence to established management practices. These are the Auditor General's Office and the Directorate on Corruption and Economic Crime (DCEC).

The Auditor General's Office serves to ensure that Government departments and agencies, as well as parastatals and other public bodies, strictly adhere to best financial and performance practices. The DCEC on the other hand, is empowered with a legal mandate to investigate alleged or suspected contraventions of the country's fiscal laws.

The audience may be aware that Transparency International recently declared Botswana the least corrupt country in Africa and ranked it number twenty-four (24) among the world's least corrupt countries.

Ladies and Gentlemen,

Government also considered it necessary to invest heavily in rural infrastructure, agricultural research, and the provision of agricultural extension services to stimulate agricultural production which was the economic mainstay of the country at the time, and also invest heavily in drought relief programmes to assist farmers with alternative sources of income during drought periods.

Recently, we adopted a National Master Plan for Arable Agricultural and Dairy Development to further boost agricultural production for both local consumption and export.

Ladies and Gentlemen,

Of fundamental importance in our economic management policies was the spirit of self-reliance which took into account our limited resource base. In this regard, in the 1970s and 1980s many community-based projects were initiated and, I must say, many were successfully completed.

The building of the University of Botswana in 1975 for example, was one such initiative where the general population contributed to the Botswana University Campus Appeal (BUCA), under the slogan "Motho le motho kgomo", literally translated to mean "One person one beast"

Furthermore, given that dependency on a single commodity is fraught with many risks, we made it our number one priority to adopt and vigorously implement strategies for sustainable economic diversification. Serious efforts were made to ensure that macroeconomic conditions were supportive of the economic diversification strategies.

Measures put in place included, among others, the management of the exchange rate regime in order to maintain the competitiveness of domestic producers. We also liberalised foreign exchange controls to allow foreign investors to repatriate their earnings. In addition, we lowered tax rates to encourage foreign direct investment and business development. This was supported by legislation and a regulatory framework to govern the security of private property.

Chairperson, Ladies and Gentlemen,

To manage risks associated with fluctuations in the international commodity markets, particularly in the mining sector, we accumulated healthy levels of foreign exchange reserves and savings, part of which we use to cushion the economy during the slump years. Such healthy levels of foreign exchange reserves have also boosted investor confidence and allowed the country to pursue a free market economy.

Underlying the government's development strategy was also a policy committed to reinvesting the returns from minerals into other areas in the economy to foster income-generating opportunities, which are widespread and sustainable.

Chairperson, Ladies and Gentlemen,

On trade, our policies have not only ensured that the economy remains a free market economy, but also take into account the small size of our market. The policies give great emphasis to the promotion of regional trading blocks. For example, we remain an active member of the Southern African Customs Union (SACU) whose revenues have become a significant part of the Government revenue pool. We also managed to successfully negotiate preferential terms for one of Botswana's major exports, that is, beef, to the European market under the Lome Conventions.

A decision was also made to pursue a pragmatic foreign policy that took cognisance of Botswana's geopolitical situation. In that way, we enjoyed the support and sympathy of the international community, a factor which enabled Botswana to benefit for quite sometime from significant development assistance from abroad.

Although such assistance has since dried up because of our elevated development status, Botswana still enjoys cooperation in other forms from many countries. More significantly, the private sector which is dominated by foreign companies, has grown to the extent that it now accounts for more than 50 percent of formal sector jobs.

THE DISCOVERY AND EFFICIENT EXPLOITATION OF MINERAL RESOURCES, PARTICULARLY DIAMONDS

Mining activity was identified as a potential engine of growth even prior to independence in 1966. Following independence, the mining of diamonds, copper-nickel, coal, and soda ash was accelerated. In order to ensure maximum benefits from the mineral revenues, Government moved quickly to adopt a minerals policy which appropriated all mineral rights to government. This enabled Government to charge modest royalties and to secure a larger portion of the equity in the mining operations.

Mining output became significant in 1971/72 and by 1974/75 it constituted 7.4 percent of GDP rising to 12.4 percent for the period 1974/76 and 2002/03.

While at independence and subsequent years up to 1982/83, Botswana recorded balance of trade deficits, the growth in diamond exports ushered in a period where exports consistently exceeded imports. The surplus on the balance of trade as a percentage of GDP reached 35.7 percent in 1987/88. From 1993/94 to 1999/2000 trade surpluses exceeded 10 percent of GDP. The revenue generated from diamonds was used to fuel the development of infrastructure that I referred to earlier. A nation with a begging bowl was immediately transformed as the country experienced phenomenal growth averaging 8.8 percent.

Finally Chairperson, Ladies and Gentlemen, earlier in my presentation, I referred to the contribution of the international community. I want to acknowledge this assistance which came in different forms, be it direct grants, loans, technical assistance, investments and services by individuals who came to plough their traits in our country. Botswana used this assistance well and will forever remain indebted to those who rallied to its call for assistance during its time of critical need.

Chairperson, Ladies and Gentlemen,

I hope I have done justice to the topic I was asked to address this evening. I have tried to highlight some of what, in my view, are the critical determinants of our economic success. So far, we have performed fairly well, but we shall need to redouble our efforts if we are to sustain our level of success. No one in Botswana is under any illusion that we have done enough. There is a lot of work still to be done, and hardly anyone disagrees about what has to be done. We face serious problems associated with the level and depth of poverty. The persistent and rising unemployment also remains one of our biggest challenges. We have also become fully aware that our economic destiny is closely tied to developments in the global economy.

We also have to contend with the staggering statistics of the HIV/AIDS pandemic and its far reaching and devastating effects on our people and on our economy. I must say we are doing all in our power to combat this pandemic. Some of the measures we have put in place include a national information and communication strategy; the establishment of voluntary testing and counselling centre throughout the country; the prevention of mother to child transmission programme; the prevention of tuberculosis on HIV/AIDS positive persons programme; house-to- house community mobilisation programme; and the Anti-Retroviral Drug Therapy programme which is being rolled out to major parts of the country. It is our hope that in the not too distant future, we can have an AIDS free society.

These, Ladies and Gentlemen, are among some of the major challenges we face today. Our national efforts aimed at addressing these challenges are directed and inspired by our Vision 2016, which we adopted seven years ago.

By it, we have pledged to build a prosperous, caring, healthy, educated and informed, compassionate, safe and secure, open, democratic and accountable, moral and tolerant and a united and proud nation among other attributes, as we move towards the year 2016 and beyond.

Chairperson, Ladies and Gentlemen,

I am honoured that you gave me this opportunity to share with your audience the story of the efforts of our people at development and at the quest for a better life.

I thank you for your attention.