Case Study Botswana: A Diamond in the Rough Essay

The Harvard Business School case study â€Å"Botswana: a diamond in the rough† deals with various reasons how Botswana became within 40 years the most successful economy in Sub-Saharan Africa. The case study leads through Botswana’s history before the colonization by the British Empire until today, stating several factors which made Botswana more successful compared to it’s neighbour countries in Sub-Sahara Africa. Within only 30 years a very rapid economical growth could be observed and in 2000 Botswana’s GDP growing rate reached a similar value as China. The political situation is stable since Botswana’s independence in 1966 and their corruption is, especially compared to other African countries, very low. The unemployment rate until 2000 never felt under 2%, which is even compared with countries outside of Africa very rare. Asking myself if Botswana is a success, I can definitely answer yes. Even if the country still has to struggle with the second highest HIV infection rate in the world and it is still a challenge for the government to diversify the economy, in order to be less dependent on the fluctuating diamond industry, Botswana is called to be the â€Å"African Miracle†. Taking into consideration that Botswana is a land-locked country and until 1968 there were no mentionable resources it seems quiet astonishing what they achieved in the short period of time since their independence. According to the case study there are several factors that made Botswana as successful as it is today. First of all, the fundament of Botswana’s highly democratic political system can be found in Botswana’s history in the 18th century. The Tswana tribe had less monarchical structures than other African countries, issues of public interest were discussed and decided by an assembly and criticisms of the policies were allowed to be expressed in public. Another reason for Botswana’s success today is, that even during the 80 years of British colony, Botswana was allowed to keep its political structures, as the British had only a limited interest in the resource-scarce country. As Botswana’s inhabitants were less oppressed by their colonial rulers, they were able to develop their democratically society more or less in freedom. In accordance with the case study Botswana’s biggest success factor was the discovery of gold and diamond mines in 1968. More mines were found in the following years and Botswana became number one diamond exporter worldwide. A very important but also controversial decision by Botswana’s government was the foundation of a Joint Venture with the South African multinational company DeBeers. As a contrast, other African countries with valuable resources decided to nationalize mines and oil fields and raised taxes unproportional. Due to Botswana’s decision to cooperate with DeBeers, they became the world’s most successful international cartel. In my opinion the discovery of the diamond mines in Botswana had a huge contribution to the country’s success today, but looking at other African countries which are rich in resources one will recognize that countries as Angola or Sierra Leone cannot document the similar successes as Botswana can do. Coming to the question if Botswana’s success is replicable on other African countries we have to remind, that only a few African countries are as rich in valuable resources as Botswana. But as I mentioned before, even countries that are provided with similar resources, weren’t able to channel the high revenues into physical, social and human capital infrastructures. Contrariwise, these countries have to struggle with civil wars and political conflicts, often initiated by the valuable resources. In my point of view the most important success factor of Botswana are the before mentioned democratically structures which were already founded in the 18th century. Most other African countries were ruled by absolutistic kings, which were replaced by dominant colonial powers. History cannot be changed, but a lesson that other African countries can learn from Botswana is the development and implementation of state institutions in order to achieve long-term oriented and sustainable governance.