The virus has without doubt and in a major way, dislocated economic activity. That many ordinary people may find it difficult to fathom the scale of the problem we face when they juxtapose that against government’s recent announcement of a pay raise for its bloated workforce, is of course not lost on me.
However, the experts inform us that growth is projected to contract by 9% this year and this obviously translates into diminished economic opportunities. Diminished economic opportunities mean less jobs and a reduced tax base. A reduced tax base in turn reduces the state’s capacity to build or maintain critical health and education infrastructure. I could drag that genealogy a bit longer but you get the drift.
The downturn has a direct bearing on our quest to beat the middle income trap and become a high income economy. However many of our compatriots in very influential political positions feel safe with what they already know. And what, you many ask, do they already know? What they already know in our case happens to be big government which, for all intents and purposes, feeds on diamond mining revenues. They are yet to get around the fact that the diamond bonanza days are over. Not surprisingly, this spans across the political aisle.
With a few exceptions, our members of parliament invariably compete on the basis who can shout the loudest for money to be spent in their constituencies. They are not used to being asked to justify whether or not such expenditure is affordable or sustainable. The legislators never ask the fundamental question of who and how those expenses will be paid for. Because it’s about spending other people’s money, they merely drool over engineered buildings in the middle of nowhere, complete with tennis courts and want the same for their constituencies. In the process, some of these legislators become petulant, throw tantrums and even infer tribal prejudice when they cannot get their way. Although many analysts have dispelled the notion of a Dutch disease in Botswana, surely a case to investigate possible bouts needs to be made.
So in the interest of recovering from the economic damage of the coronavirus on jobs and livelihoods, we have to do a few different and difficult things, if we want different results. Top of our list should be the need to allocate scare resources to projects that yield good returns. Examples of such projects include servicing of agricultural production areas including roads to enable famers to ferry produce to market. It means recognizing that all areas are not suited for crop farming. In the same vein some areas do not do well with livestock farming. In addition, it will be imperative to limit the number of people who have hitherto been eligible for handouts such as seeds and draft power. That would obviously be akin to cutting voters off from the umbilical cord of dependence on the state.
Prioritisation and allocation of scarce resources would also mean implementing the special economic zones (SEZ) to promote export competitiveness. In developing the zones , it will not be necessary to wait for a political big bang approach but start with areas where the project is likely to succeed and Gaborone is such a place. So there is no need to try to impress MPs by making out SEZs to be everything to everyone.
We cannot afford to postpone the reality of privatisation, but take the bull by its horns. We just have too many state-owned enterprises which not only drain the fiscus but crowd out the private sector too. Of course we would be naïve not to expect privatisation to be met with fierce resistance by politicians in both the ruling party and opposition let alone unions and civil servants. So privatisation would lead to loss of political support to whoever is leading the charge but it’s a price worth paying for the sake of building a resilient private sector driven economy.