Tuesday, October 26, 2021

Here is what Botswana need

Thomas Piketty, a French economist, in his 2014 book, Capital in the 21st Century, says that inequality is increasing again as old wealth accumulated over the years yields higher returns than the overall rate of economic 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 in the capital Gaborone and a 2 hours drive away from Serowe village into Boteti District. The two areas 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 Mosu feel left behind and indeed they have been turned into sweepers. The long and short economic story of ours is that we have failed to distribute wealth that we accumulated in those 30 years that we recorded miracle GDP growth. During those years that we experienced uninterrupted diamond sales we failed to pick up productivity in other sectors of the economy. We repeatedly begged the international investors to come and invest in our country but they shunned us ÔÇô well a few 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 argued repeatedly 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. 
Inequality in Botswana is real, but the answers lie not in soaking legitimately earned wage, salary and skill-related incomes, but unearned wealth. Here is what we need. We need to find ways of transferring economic wealth to the owners of this country ÔÇô Batswana. It is quite clear that even with economic growth, however, the country continue to fail to create enough jobs. The problem is getting worse daily. It does not end there, even those who think they are working, their wages are low. The wage gap is exorbitant and young people are justifiably frustrated with their prospects. 
That is why we need to do this. We need to have the government on one side provide credible economic leadership 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. 
Here is what we need, and it is the #Bottomline. We need our policy makers to take a “wise-up pill” to avoid any further economic damage to the people of this country. That “wise up pill” will certainly help them realise the need to immediately scrap the Citizen Economic Empowerment (CEE) policy and replace it with a CEE law. 

 

RELATED STORIES

Read this week's paper