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China threatens Botswana’s diamonds

First it was the South-China Sea controversy and now it is the impending visit by the Dalai Lama to Botswana, and China is not amused. The Asian giant is telling Botswana to block the Dalai Lama’s visit.

Relations between Botswana and China have taken yet another knock as China disapproves of Botswana’s decision to allow the Dalai Lama to visit Botswana and give talk as a guest at a three day conference entitled “Botho/Ubuntu: A Dialogue with the Dalai Lama Spirituality, Science and Humanity”, scheduled for 17-19 August 2017.

Chinese officials at the time of the controversy surrounding the South China Sea had adopted a diplomatic approach to Botswana’s criticism of their country. The diplomatic relations between Gaborone and Beijing which had been simmering for sometime had boiled over last week after Botswana issued a press statement accusing China of imposing “its power over others to make claims because of “its economy or military.”

But on the question of the Dalai Lama, China is very clear, it is uncompromising and “Botswana will pay a heavy price should the renowned spiritual leader be allowed to visit.” Botswana government has insisted that the Spiritual Leader is indeed visiting Botswana but not on official ticket. It states President Lt Gen Ian Khama could attend the Conference should his schedule allow.

Statistics show that Botswana’s export to China grew from US$2.86 million in 2004 to US$65 million in 2009. During March 2017, exports destined to Asia were valued at P2, 177.1 million, representing 53.4 percent of total exports (P4, 076.8 million) hence China accounting for the bulk of the exports. India received exports amounting to P592.3 million, 14.5 percent of total exports during the month. Israel and UAE followed with 11.2 percent (P457.9 million) and 10.6 percent (P431.4 million) respectively, of total exports during March 2017. Singapore and Hong Kong received 9.8 percent (P399.2 million) and 5.3 percent (P215.9 million) respectively of total exports during the period under review.

This is where China is said to be threatening to hurt Botswana should the Dalai Lama be allowed entry into Botswana. Botswana economy is dominated by diamonds, they are the biggest revenue earner. The major commodity exported to Asia is Diamonds, representing 99.7 percent (P2, 170.5 million) of all goods exported to the region during March 2017.

Why does China despise the Dalai Lama so much?

China considers the Dalai Lama a separatist and a political trouble maker, and the history latent in this distaste is convoluted and problematic. The Dalai Lama, Tenzin Gyatso, is the traditional religious and temporal head of Tibetan Buddhists. He was made head of state at age 15 in 1950, the same year that Chinese troops occupied Tibet.

The Dalai Lama has held negotiations with Chinese officials on Tibetan self-rule with little success. In 1959, he fled Tibet for exile in India after a failed uprising against Chinese rule. Over the years, the Dalai Lama has continued to lobby for self-rule in Tibet. Tibetans around the world revere him as their spiritual leader and cultural icon. He has traveled the globe, attending meditation conferences, giving speeches in universities and parliaments, and meeting people from all walks of life, from CEOs to Hollywood stars to heads of state. He received the Nobel peace prize in 1989.  Overseas, the Dalai Lama is a celebrated figure. In China, he is a despised troublemaker.

Botswana’s Minister of Foreign Affairs and International Cooperation, Dr Pelonomi Venson-Moitoi has in the recent past called for introspection on the bilateral cooperation between Botswana and China to see how best they can move ahead in the journey of strategic partnership.
She had observed that 40 years signified a period of maturity hence the expression ‘life begins at 40’ and said this was an opportune time to reflect on the successes and challenges so that the two countries could chart a path to long lasting beneficial relations.

Speaking at the occasion of the 40th anniversary of the establishment of diplomatic relations between Botswana and China in Gaborone on February 10, Minister of Foreign Affairs and International Cooperation, Dr Pelonomi Dr Venson-Moitoi said Botswana admired the great strides china had made in recent decades. China and Botswana relations can be traced to January 6, 1975 when the two countries formally established diplomatic relationship, which unveiled a new chapter for friendship and cooperation between the two.

For over 40 years, China-Botswana relations have been developing soundly and steadily on the basis of their traditional friendship, and the two countries’ peoples have benefited from the expanding cooperation in various fields. Growing economic and trade cooperation has served as the driving force in boosting bilateral ties between the two countries and the total trade volume between the two countries has jumped from less than US$ million in early 1980s to US$343 million in 2013, which is almost 700 times increase.
China has become the second largest consumer of Botswana’s diamonds; consuming 15 per cent of the total diamond output and said his country’s demand for Botswana’s diamonds is also growing by more than 10 per cent every year.

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13 AUGUST 2022 Publication

12th August 2022

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DIS blasted for cruelty – UN report

26th July 2022
DIS BOSS: Magosi

Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.

Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.

She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”

Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.

On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.

“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.

One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.

The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”

The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.

Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.

Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.

The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.

The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.

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Stan Chart halts civil servants property loan facility

26th July 2022
Stan-Chart

Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.

This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.

He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.

Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”

He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.

Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.

“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.

In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”

In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.

He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.”  Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.

Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.

He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”

Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.

“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.

“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said.  Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.

Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.

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