Wednesday, October 28, 2020

Without a rise in productivity, NDP 11 is doomed

As the national Assembly continues to discuss the National Development Plan 11, all red flags are there for all to see.

The sad thing about it all is that our political leaders, without exception are treating the NDP 11 as just one of the many national rituals that have to be fulfilled.

Listening to them, one does not get a sense of economic urgency facing the nation.

Admittedly, that can be easily traced to the founding document itself.

Replete with statistics and figures that in the end create a fog instead of clearing the air, the document falls too short in enunciating in detail just what options the country faces going forward.

To tell the truth there are not many options.

Diamonds, which used to be the lifeline of the country’s economy can no longer be relied on to take this country much further.

This one would have hoped, should have been the bold and most recurring theme of the NDP 11.

Additionally, one would have hoped to hear from the minister of finance in clear terms just what would act as a replacement for diamonds’ diminishing potency.

Botswana has to wean itself from the debilitating reliance on diamonds.

The diamonds we have to admit have been good for Botswana.

But they have run their course.

Unlike many other countries, Botswana has used diamonds to propel developments.

The discovery of natural resources in other countries has led to what economists often call a resource curse.

In other instances, the discovery of such resources has led to what economists have called Dutch disease, so called because of a sudden collapse of the Dutch economy following the discovery of oil.

In Botswana ours has been different.

The discovery of diamonds has propelled the economy of Botswana to heights that only a few years before their discovery was unimaginable.

To give credit to political of the time, they have done everything there was to be done.

The word that often comes to mind is “prudent.”

While their peers across the continent resorted to what amounted to plunder, political leadership in Botswana went to great lengths to use proceeds from diamonds to build a strong economic base for the country by investing in infrastructure and also in human resource. In a big way diamonds have been a boon to Botswana.

But truth be told there has been a price to be paid from the excessive dominance of the country’s economy. One of those to suffer has been a collapse or should we say neglect of cultivating other economic alternatives.

For example the discovery of diamonds, while propelling the economy has undermined all efforts to boost productivity.

In fact because diamonds always brought money on the table, a false impression has over years been created to exaggerate Botswana’s true levels of productivity.

Diamonds have to Botswana often served like the way that performance enhancing drugs do to athletes.

In very much the same an athlete who relies on drugs to win, will be a terrible loser if they stop taking drugs.

This allegory is applicable to our current economic situation.

This is what our leaders, with NDP 11, which is effectively the start of a post diamonds economy, should be concentrating on.

Without boosting productivity, Botswana’s economy is set to lose ground to other more innovative countries.

In fact we are beginning to see that happen. Dynamic economies like that of Mauritius are showing much more resilience to chokes as those that hit the global economy starting in 2008.

With diamonds becoming more expensive to extract from the ground owing to increasing depths, the demand in enhanced productivity can only grow.

Only countries that are productive will be able to weather the storm that is clearly coming our way.

Productivity, there is ample evidence is an integral component of derivatives that a key to economic growth, much more so than natural resources could ever be.

Our political leaders have duty to ensure that red tape, which undermines business is eradicated.

We do not hear much of that in the ongoing discussion at the National assembly.

The thousands of jobs in the public sector have been created and maintained not by productivity, but by excess money from diamonds over the years. NDP 11, and the debates following from it in parliament should recognize that with time such jobs will become unsustainable.

This is so because by definition such jobs are unproductive, and with time it will become clear.

To avert the shocks that will be created by the otherwise inevitable retrenchments, we have to work at productivity.

There is no shortcut about it.

Running away from cultivating productivity will mean that NDP 11 will die before it takes off, not least because there is no longer money from diamonds.

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