Tuesday, March 9, 2021

Not all cartels are bad as Botswana benefited from De Beers’ money

Botswana has been reminded that it benefited and ripped-off diamond consumers through its partnership with De Beers as the mining company has been a cartel for a long time.

BIDPA Senior Research Fellow, Professor Roman Grynberg, observed that although competition authorities across the globe have labeled ‘cartels’ as a bad business practice, in case of Botswana, not all cartels have been bad.

He said at Consumers Day held at the Competition Authority Botswana offices on Thursday, Grynberg that although this practice is generally seen as per se violations of competition law since they have the effect of rising prices and decreasing output, the country managed to sell a bulk of its diamond through the arrangement.

Contributing to a panel discussion organised the Competition Authority (CA) under the theme, “The adverse impact of cartels on the poor”, Grynberg said that through a Debswana Mining Company joint venture with De Beers, Botswana, which was then classified as one of the poorest countries in the world managed to earn a lot of revenue which was in turn used to develop the country and its poor citizens.

The BIDPA expert has worked for the World Trade Organisation (WTO) and EPA issues with much interest in sector specific issues and commodities like as diamonds and agricultural products.

He said that even though the government set up the Competition Authority to investigate business malpractices such as cartels, consumer rights activists on Monday lamented the lack of implementation of the law and flayed the Authority to deliver desired results within the economy precisely on the poultry sector which has at the same time been reported to be monopolised.

Besides detecting cartels, taking measures in order to create a more competitive environment has also been identified as a key thing that the Authority should do.

Director of Communications at Competition Authority, Gideon Nkala, said that locals should be vigilant against cartels.

“Most importantly we implore civil society, media, prosecutors and legislators to take tough stance that will lead to the deterrence of cartels,” said Nkala.

Executives of the Authority noted at the World Competition Day celebration day that cartels are capable of affecting the daily lives of the poorest of the society and in undermining the efforts by government to provide social security.

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