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18 Pages, Grade: 78
1. Botswana's Trade
2. Incorporation and Development
3. Botswana's Economy-Based Class-Structure
4. Further Arguments
Botswana is described as the “African miracle” (Samatar, 1999), as an “exception” (Good, 1992), or as “a rare example of an African state that used its bonanza of mineral riches wisely” (Meredith, 2006:285). However, critique verbalized by Taylor (2003) and Good (1992) has shown that Botswana’s economic history is not a pure success story; even it illustrates a positive example of African development compared to almost all the other African countries. To analyze Botswana’s economic history I will date back to the beginning of the 1900s. At this time, Botswana’s eight main chiefdoms dominated regional African trade. The indigenous elite welcomed trade with European settlers who arrived in this period. While Botswana’s neighbor countries experienced the process of incorporation into the modern world-economy already, Botswana started to shift into the external arena of the global economy. This essay will show how Botswana is and has incorporated into the modern world-economy referred to Immanuel Wallerstein’s modern world-system theory. I will start with an overview about Botswana’s actual trade situation to be able to locate the country within the global division of labor. Afterwards the paper analyses the history of Botswana’s shift into the external arena of the modern world-system followed by its incorporation. Furthermore, I will illustrate Botswana’s economic development since the incorporation. A second part of Botswana’s history deals with the economy-based class structure and how it shaped the political history since Botswana achieved political independence in 1966. I will argue that the class structure, as already indicated, has to be understood in the context of pre-colonial and colonial development. After all, I will point out what important contemporary political-economic features of Botswana are not accounted for in my world-systems-based analysis. The essay will finish with a short conclusion to draw a statement about a world-system based analysis about Botswana’s political-economy.
Botswana’s national economy has a positive trade balance. In 2006, the surplus has reached 8.4 billion Pula (1 Pula = 6 US Dollar, 15. May 2007) and has been positive the last ten years except in 1998. Imports of 17.8 billion Pula stay against total exports of 26.2 billion Pula. Botswana relies mainly on imports from primary production like food (2.5 billion), fuels (3 billion), and textiles (900 million) as on high quality products like machinery and electrical equipment (3 billion), vehicles and transport equipment (1.7 billion). Noticeable, Botswana receives 85 percent of its imports from the regional hegemonic power South Africa followed by shrinking imports from the European Union with approximately 9 percent and rising imports from Asian countries (mainly China and South Korea) of also nearly 9 percent in 2006. The balance of trade with South Africa is highly negative. In 2006, Botswana imported from the common customs area goods amounting to 15,364,212 Pula, whereas its exports to the area only accounted for 1,463,362 Pula. This trade figure confirms the semiperiphery (South Africa) – periphery – relation on the basis of unequal exchange. South Africa plays out it’s regional economic domination where it produces products reaching higher economies of scale than it is possible for the surrounding peripheral countries.
Concerning exports, the government’s trade statistics illustrate a high dependence of Botswana economy on the United Kingdom as its primary outlet market. Almost 73 percent of Botswana’s total exports in 2006 went to the British island. In times of Zimbabwe’s internal crisis the neighbor country relies more and more on Botswana’s products. This is shown by an increase of exports from Botswana to Zimbabwe from 250 million Pula in 1996 to 1.4 billion Pula ten years later. Zimbabwe and South Africa both represent Botswana’s second highest outlet markets where circa 5.7 percent of Botswana’s products ended up in 2006.
* Source of trade statistics: http://www.cso.gv.bw (the official site of the Botswana government, 12 May 2007)
Botswana’s trade imbalances exist not only in terms of the direction of trade they are outstanding when it comes to “exports by principal commodities”. 74 percent or 19,432 billion Pula of Botswana’s total exports in 2006 have been diamonds. Additionally, Botswana has exported 3,619 billion Pula of copper, nickel and matte. This means that Botswana relies heavily on the export of mineral resources, which constitute 88 percent of all of Botswana’s exports. In comparison, textiles as the third largest sector of exports accounts only for 3.5 percent; meat and meat products (which represent 71 percent of all agricultural exports) account for 1.8 percent of total exports. The attempt of Botswana to introduce car production as a solution to diversify Botswana’s economy can be seen as failed. The export of vehicles and vehicle parts sank from 1,183 billion Pula in 1997 (11.4 percent of total trade) to marginal 179 million Pula in 2006 (0.7 percent of total trade). The division of Botswana’s exports has been more diversified ten years ago than today.
The lack of diversification in trade reflects Botswana’s situation in its division of labor. The “2005/06 Labor Force Survey” estimated the Botswana population at 1.7 million persons. That places Botswana on place 145 in the list of the world’s most populated countries (Wikipedia, 2007). Compared to Botswana’s trade situation the country’s hierarchical division of labor is also highly unequal. Even if the agricultural sector plays a marginal role in terms of Botswana’s exports it is still the biggest employer with 30.9 percent workers of the whole (548,594) employed population. The mining industry as the biggest sector of the economy in regards to the financial output only employs 14,112 people (2.6 percent of all employed). The government remains an important employee with 10.9 percent of Botswana’s working force employed in the public administrations.
The statistics of trade and of the employment situation make clear where to locate Botswana within the modern world-system. World-System theory distinguishes three economic zones: the core, the periphery, and the semiperiphery. These three economic zones combine the same mode of production and the same division of labor but they differ in their availability. Whereas core countries feature capital-intensive production with high waged labor and its high technology production involves low labor exploitation and coercion, peripheral countries own labor-intensive production and low-waged labor and its low-technology production involves high labor exploitation and coercion (Shannon, 1989). Botswana, in this regard, illustrates a few exceptions. Nevertheless, it can be clearly described as a peripheral country. The country lacks in an economic sector producing high technological products. Botswana’s economic sector which employs most of the people relies on labor intensive products which are relatively less technology sophisticated (agriculture and textile production). In contrast, mining, as by far the most important economic sector of Botswana’s economy, is capital – rather than labor-intensive. But “the cost of diamond production in Botswana is low compared to the diamonds’ overseas sale value, diamond sales are extremely profitable to the country” (Bauer & Taylor, 2006:102). Diamond mining has not led to increased employment nor has it expanded the formal sector of the economy. Taylor and Mokhawa (2003:263) furthermore argue that diamond mining has had a “knock-on effect” of maintaining high levels of income inequality and poverty. 30.3 percent (2003) of the Botswana population lives below the poverty line and almost 24 percent (2004) are unemployed (CIA World Factbook, 2007). Even if the government has installed minimum wages, the amount of these wages illustrate that labor in Botswana is still cheap. Minimum wages for manufacturing, construction, transport, or watchmen are between 3 Pula and 3.55 Pula (equivalent to 0.5 US Dollar). The agricultural sector is not even integrated into the minimum wage policy. Besides tourism, which employs not even 3 percent of the working population, Botswana’s economy is still highly dependent on revenues from mineral extraction, in particular diamonds – the national economy remains less diversified. Nevertheless, in contrast to most other African countries, labor in Botswana has experienced improvements in living and working standards since independence. “Ordinary Botswana have benefited from the postindependence economic growth, especially in terms of access to social services and infrastructure” (Bauer & Taylor, 2006:83) Botswana has the highest African literacy rate with 78.1 percent and a GDP per capita (PPP) of 11,400 Dollar (CIA Factbook, 2006 est.). The World Bank rated Botswana as an “upper middle income country” in 2003. About the hierarchical global division of labor, Botswana only exhibits a small, high educated and wealthy elite, followed a marginal middle class who is employed mainly in the public service sector. The mass of the people, however, is still rural, earns low wages and experiences a low standard of labor rights, as the “law does not permit trade union officials to be employed on a full-time basis” (Taylor 2003:226). “The bulk of the labor force remains under-employed or actually unemployed” (Mokhawa &, Taylor, 2003:263).
“To analyze whether the production processes of a given zone are integrated in the larger divisioning of labor of a world-economy, we should enquire into the nature of the structures of economic decision making, the ways in which labor is differentially available for work in these productive processes, the degree to which governance units relate to the requirements of the political superstructure of the capitalist world-economy, and finally, the emergence of the necessary institutional infrastructure, or rather the extension of that which already exists in the capitalist world-economy to cover the zone being incorporated” (Wallerstein, 1989:131).
Incorporation into the modern world-system is not static; it has to be seen as a process. According to Immanuel Wallerstein (1989), the process of incorporation of a “zone” into the world-system is illustrated by three successive moments: the shift of a “zone” into the external arena followed by incorporation into the capitalist world-economy and, finally, the location as periphery (some states even incorporated as part of the semi-periphery).
Botswana’s shift into the external arena can be dated back to the beginning of the nineteenth century (Bauer & Taylor, 2006:85). When the first European explorers visited Botswana’s south and south east they hit on economically active Tswana chiefdoms, who controlled the regional population and trade “of goods to African people north and east of their area” (Bauer & Taylor, 2006:84). The domestic economy was a simple one based on local products and manufactures (Sillery, 1974:73). Cattle was the principal form of wealth in the region and became a trading good soon after the first European settlers arrived. Besides cattle, ivory, feathers and skin became demanded goods in exchange for European guns, ammunition, cloth, salt, blankets, cooking utensils, knives or tobacco. By 1870, “relatively permanent trading and missionary settlements had been developed” (Keulder, 1998:98) between mainly four larger chiefdoms and European traders.
“The economy had been stimulated by mercantile contract with the world economy into a phase of productive growth, which reached its climax when Khama’s Country [Khama III, the Ngwato king] served the Cape-to-Rhodesia wagon transit trade. But the railway removed this pole of growth, and the terms of trade turned against the local economy (by the end of the century)” (Samatar, 1999:43).
The decline was also dependent on several droughts at that time. One of Botswana’s consistent problems is that its domestic economy lies under the perpetual treat of an arid climate, with uncertain and badly distributed rainfall, a general scarcity of water and not infrequent droughts (Sillery, 1974:138). Cattle trade as the main source of export revenues subject to these irregularities. Nevertheless, the involvement in capitalist world-trade has led to changes in the Tswana society. “Khama III […] changed his relationship with many of his subjects by ‘disowning’ the cattle kept by his clients or ‘freeing’ the serf communities” (Samatar, 1999:43). Large and middle-size herds became concentrated in the hands of the chiefs and his fellows to increase the trade. Until 1954 cattle would remain as a purely export orientated commodity. However, the export of cattle was addressed regionally but had changed its orientation towards the more developed South African region.
The beginning shift of Botswana’s economy towards concentration and outward orientation was reinforced by the colonization of Botswana. Because of an absence of resources and unfavorable agricultural conditions, Botswana was not of high interest for the modern world-economy. Botswana’s economic features were cattle trade and its geographic position, as it “provided the best way from the Cape into the interior” (Sillery, 1974:80). In addition, the rural population was seen as a “labor reserve” for the industries in neighboring colonies like the mining industry in South Africa. Labor migration already occurred in the 1870s, but had increased significantly after colonization. The colonization of Botswana can be defined as the beginning of its incorporation process into the modern world-system (Parson, 1992, Wilmsen, 2002). Samatar (1999:51) describes this transformation with the commoditization of cattle, labor, and land which, in parts, already has started (cattle, as I described, was already a trading product and commoditized by disowning) but this process was reinforced since British declaration of the Bechuanaland Protectorate in 1885. The special case of Botswana had been that the British and the Tswana chiefly elite both were the driving forces towards an integration of Botswana’s economy into the capitalist mode of production. Because of an absent of business opportunities, colonial rule was hold relatively mild. Keulder (1998:100) described colonial rule in Botswana as a system of “parallel rule”, whereby each of the chiefs were allowed to rule and to cultivate their land, as before.
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