Monday, September 21, 2020

Batswana who continue to “Play by the rules” perpetuates economic inequalities

BY VICTOR BAATWENG

If an imaginary economic detective was to summon Botswana to the “International Inequality Court” (also imaginary) and asked her to identify the culprit behind the growing wave of economic inequality in this country ÔÇô what could possibly be Botswana’s answer?

Globally, Thomas Piketty – a French economist, in his 2014 book titled Capital in the 21st Century, says that inequality is increasing again as old wealth accumulated over the year’s yields higher returns than the overall rate of economic growth.

Could this also be the reason why the gap between the “Haves and Have-not” in Botswana is growing at an alarming rate? ÔÇô Or perhaps we have our unique contributor to the income inequality growth?

If you stay in Botswana, you don’t have to navigate the tense prose of Piketty’s book to figure out that wealth is getting concentrated. All you need is one hour at a village called Mogoditshane which is flanking the capital Gaborone. You might also want to do and a drive to a sub district called Boteti District some five hours away from the capital. The two areas and dwellers there will certainly paint a picture for you relating to the well being of the indigenous people of this country.

Too many Batswana, particularly those from remote areas such as Samochima in the Okavango District feel left behind and indeed they have been turned into sweepers.

The long and short economic story that the imaginary economic detective would have to know about the local economy would be our failure to distribute wealth that we accumulated during the years we recorded miracle GDP growth.

The detective will easily pick that during those years that we experienced uninterrupted diamond sales we failed to pick up productivity in other sectors of the economy. On the other hand, we spent time repeatedly begging the international investors to come and invest in our country. Too a larger extend they shunned us and only a few of them responded with green light. In the process we find ourselves in a situation where we are faced with so many economic challenges key amongst them high unemployment rate, high income inequality, lack of service land for the indigenous people etc.

But as we have repeatedly stated on this space before, an economic system that doesn’t “deliver” for large parts of the population is a failed economic system. 

For a very long time, Botswana has been priding itself as one of Africa if not the world’s prosperous countries. This prosperity however seems to be only virtual or theoretical as we all know that our country has one of the highest income inequalities in the world.

Inequality in Botswana is real, but the answers lie not in soaking legitimately earned wage, salary and skill-related incomes, but unearned wealth.

If the imaginary economic detective goes further and asks ÔÇô now what’s next? Here is what we need tell him.

We need to give the detective assurance that we will find ways of transferring economic wealth to the owners of this country ÔÇô Batswana.

To be successful on this venture, we need to have the government on one side providing credible economic leadership (which entails indigenous people business funding) and the business on the other end make formal pledge to create sustainable jobs that will enrich our people. A government with credible economic leadership working together with responsible capitalists will surely deliver a strong and inclusive economy. Still on that, the business community need to make, as part of the pledge, a promise to gradually reduce the wage gap by increasing the wages of the lowest paid and dealing with excessive executive pay. On the government side, a regulatory reform must move beyond limiting the damage that the business community can do and ensure that the private sector genuinely serves the society.

We certainly admit and recognise the fact that the problems posed by the economically excluded Batswana such as those in Boteti, Ghanzi and Ngamiland districts ÔÇô resulting from decades of neglect ÔÇô will not be solved quickly or by conventional tools. Much has changed since the days that we used to sell a large chunk of diamonds to the world and in turn earn huge revenues. Those were the times that we could have serviced a lot of land and allocated it to the indigenous citizens of this country.

Given this fact, we therefore need to ask ourselves whether Botswana’s current state of Social Justice is leading us towards stability or instability. It is a well known fact that Botswana has been classified as a peaceful nation for so many years. This – to a larger extend is due to the people who, despite being discriminated by the system chose to “play by the rules”. The question is whether these people can afford to continue playing by the rules when it is no longer a rewarding undertaking. Can they continue to play the rules when a battle line between the haves and the have-nots has already been drawn?

In the end, when all questions have been asked and probably partially answered the #Bottomline remains – without tackling ‘gross inequalities’ Botswana’s major issues will go unsolved.

RELATED STORIES

Read this week's paper

Sunday Standard September 20 – 26

Digital copy of Sunday Standard issue of September 20 - 26, 2020.