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An economic or a corruption stimulus package?

As economists would say economic stimulus package is an economic package that governments adopt to financially stimulate an ailing economy by use of monetary or fiscal policy changes to kick start a struggling economy.

Some tactics that are often used include but not limited to lowering interest rates, increasing tax, increasing government spending or quantitative easing i.e. increasing money supply by the central bank to increase liquidity thus enabling financial institutions to increase lending to stimulate spending and investments in the economy.

During the 2008 recession, USA for example had a stimulus package amounting to about $790 billion that was duly approved by congress early in 2009 after long deliberations by the law makers.  The package was an anti recessionary measure designed to jump start the economy to save up to 2.3 million jobs.

The package included $290 billion in tax cuts, $220 billion in employment benefits, education and health care and $280 billion for job creation.  This is a good example of an economic stimulus package. How well it worked is up to the Americans to judge. Many other countries had their own economic stimulus packages as a result of that 2008 recession.

The recently announced Botswana economic stimulus package is very surprising coming as it does when the economy is said have largely recovered from the 2008 recession. If we needed a stimulus package it should have happened in 2008.

The manner in which this was announced is also very surprising in a country that is not only known for its strong democratic traditions but also for its strong adherence to the rule of law and its supposedly prudent economic management. How can such a package be announced at a party conference not in parliament where budgetary provisions are presented, debated, sanctioned and legislated. 

Could this be a knee jerk reaction to counter the growing strength of the opposition block in the country? Is this not an ill conceived idea to hoodwink the electorate who are now clearly fed up with the BDP government?  Is this seemingly reckless economic stimulus package not meant to drain our foreign reserves so that the next government after Khama will struggle to implement its transformative development programmes?

Reading through the comments in the private papers and social media it is clear that a lot of our people including most economists have been taken by surprise by this announcement. Most commentators if you read between the lines think this is a corruption stimulus package. 

We need to appeal to our law makers to reject this package outright especially the use of our foreign reserves as this will only serve to finance inefficiency, maladministration and corruption. Our economists must wear their professional hats and unequivocal advice against the dangers of ‘diving’ into our reserves without a clear transformative plan.

The president personally sent a card to all of us during the 2014 elections with five promises to the nation. I hope Batswana have not forgotten these promises;
Job creation
Poverty eradication
HIV & aids

Now the president is coming up with a new list of five economic stimulus promises which includes building houses, road construction, tourism promotion etc. Remember also that in 2008, he came up with yet another list of five promises which he termed the 5 Ds, Democracy, Development, Dignity, Delivery, I cannot remember the other D. It does not matter anymore. 

If the president was serious about these Ds everyone would by now not only be familiar with these Ds but also knowing precisely what progress has been made against each one of them.

This was the president’s roadmap to prosperity and dignity by 2016. I was very excited when I heard the president so eloquently describing these Ds in his inaugural address in 2008. I believed then that we were headed somewhere. I must say I am now thoroughly disappointed.

The president missed a golden opportunity when instead of briefing his party and the nation on progress on the 5 Ds and the election promises came up with a new list of promises to be sponsored by our foreign reserves.

I believe the election promises should have been at the fore front of his party loyalists and the country at large as they mostly talk to the needs and cries of most Batswana. His 5 Ds would also have shown that the president is a man of his word. What lasting legacy will the president leave at the end of his term? 

I am sure the stimulus package and use of foreign reserves was a surprise even to the party members, but the voice of their master is so strong; it is like the voice of God to them and cannot be questioned. This is wrong and will bury their party deeper into the ‘pit’ and sadly innocent Batswana may also end up in the same pit.

My advice to the president and his party is to go back to the election promises and detail them before going to parliament to seek funding and the source of this funding. It must be noted that the national funds belong to the nation not the Botswana Democratic Party. Our reserves should not be spent recklessly and hopefully parliament will stand up to protect our hard earned reserves.

The main issue which the president called priority number one during the election was employment creation it remains priority number one to the nation. Poverty eradication cannot be achieved without first addressing the employment creation challenge, so the two are twins and are together priority number one.  The question the president and BDP should be asking themselves is how do you create meaningful and sustainable employment?  I would like again to offer some suggestions:

First of all you must identify manufacturing industries that will create jobs for the citizens and name them one by one and then employ a competent non partisan team to find ways to create these manufacturing industries. 

Secondly in Botswana we rely on food from South Africa and should there be shortage there we will starve. One of the immediate areas to consider is development of our agriculture to produce and process enough food for the nation and for export. It is possible and this will create many jobs.

Thirdly we need to interrogate mineral beneficiation not only for sustainable job creation but to grow our economic base. You do not need immediate funding, as you already have CEDA, BDC, NDB, LEA and many others which you can redirect their efforts to these high priority areas.

However, for these to happen we will need to first invest adequately in infrastructure development which include water and electricity supply to meet and exceed all our needs for sustainability. We will need well designed and maintained road, rail and air and ICT infrastructure.

This will need foreign investment which will not happen under the current corrupt, inefficient public procurement systems. Corruption and inefficient public procurement practices is the number one enemy against requisite foreign investment.  So priority number two should be to fight corruption in all its manifestations, not just to talk about it but to put visible measures to clean the public service and make it accountable and productive.

The third priority which is also other enemy to job creation and economic growth is availability of requisite skills.  In Botswana the government has invested inordinate amount of money on education. It is high time we started harvesting this investment.

The way to do it is to make sure that all the school leavers and graduates are given industry specific training in collaboration with industry.  We should not struggle to have requisite skills in Botswana since we have multitudes of educated people. What is required is now to train these people for specific industrial needs.

When the government talks of building houses, building roads, tourism operators, do we have people trained to build these houses and the roads or are we going to rely on Chinese prisoners to do this for us? Where are we going to get the tourism operators, where have we trained them, in what specific skills and what quantities?

When we talk mineral beneficiation, what are we talking about? Which minerals and what specific beneficiation are we referring to? What technology is required for this to happen? What training is required and at what level for mineral beneficiation to be realised?  How do we get the products to the market? Without answering these questions, whatever money you have will go to waste. It will only fund corruption and no long term development and job creation will take place.

To fund the five promises announced by the president at their congress, the money currently sitting in the economy can be redirected and used to fund these programmes. How many million are returned to the treasury every year? One paper few weeks ago reported that close to P300 billion has not been accounted for since 2008. 

Debswana alone has capacity and diamond reserves to produce up to 35 million carats per year.  They have reduced their production to about 23 million currents per year, resulting in a close to 12 million carats deficit.

Why? Russia has overtaken Debswana and now produces close to 38 million carats per year. Why should we be the ones reducing production because of low market demand, which demand has been stifled by unsustainable prices imposed on these diamonds by the industry itself?  Why should we be reducing our production when everyone else is increasing their production?  Now what is the potential revenue loss as a result of this reduction?

Industry sources estimate that in 2015 Jwaneng will produce 11 million carats valued at $2.4 billion and Orapa mines will produce 12 million carats valued at $1.2 billion.  Therefore it follows that the 12 million carat deficit will result in a possible revenue loss of between $1.2 and 2.4 billion; a whooping P12-24 billion loss per year. This begs a question; instead of our foreign reserves should we not produce more diamonds and increase efficiencies in our economy in general?

The other astonishing thing that came out from the BDP congress is that the BDP president does not believe in citizen empowerment proposed by the secretary general which suggested that foreign companies should partner with Batswana for not only skills transfer but for sustainable development.

The president would rather empower the Chinese government sponsored companies in Botswana.  If the Chinese government can empower their citizens to come and do business in Botswana why can we not see the need to do the same for our own people?

I would like to conclude by saying that unless there is a paradigm shift in the way our government deals with our national development plans, any effort will be disjointed and futile. The job summit currently taking place in Gaborone will become just another talk shop and nothing meaningful will come out of it.

Call me whatever name but the recent five promises by the president and his party will soon gather dust just like all the other promises and our hard earned reserves will have sadly gone to waste. I would be happy to be proven wrong.

Bernard Busani
E-mail:   cell: 71751440

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Internal party-democracy under pressure

21st June 2022

British novelist, W. Somerset Maugham once opined: “If a nation values anything more than freedom, it will lose its freedom; and the irony of it is that if it is comfort or money that it values more, it will lose that too.”

The truism in these words cannot be underestimated, especially when contextualizing against the political developments in Botswana. We have become a nation that does not value democracy, yet nothing represent freedom more than democracy. In fact, we desire, and value winning power or clinging to power more than anything else, even if it harms the democratic credentials of our political institutions. This is happening across political parties — ruling and opposition.

As far as democracy is concerned, we are regressing. We are becoming worse-off than we were in the past. If not arrested, Botswana will lose its status as among few democratic nations in the Africa. Ironically, Botswana was the first country in Africa to embrace democracy, and has held elections every five years without fail since independence.

We were once viewed as the shining example of Africa. Those accolades are not worth it any more. Young democracies such as South Africa, with strong institutions, deserves to be exalted. Botswana has lost faith in democracy, and we will pay a price for it. It is a slippery slope to dictatorship, which will bring among other excess, assault on civil liberties and human rights violations.

Former President, Festus Mogae once stated that Botswana’s democracy will only become authentic, when a different party, other than the Botswana Democratic Party (BDP) wins elections, and when the President of such party is not from Serowe.

Although many may not publicly care to admit, Mogae’s assertion is true. BDP has over the years projected itself as a dyed-in-the-wool proponent of democracy, but the moment its stay in power became threatened and uncertain, it started behaving in a manner that is at variance with democratic values.  This has been happening over the years now, and the situation is getting worse by the day.

Recently, the BDP party leadership has been preaching compromise and consensus candidates for 2024 general elections. Essentially, the leadership has lost faith in the Bulela Ditswe dispensation, which has been used to selected party candidates for council and parliament since 2003. The leadership is discouraging democracy because they believe primary elections threaten party unity. It is a strange assertion indeed.

Bulela Ditswe was an enrichment of internal party democracy in the sense that it replaced the previous method of selection of candidates known as Committee of 18, in which a branch committee made of 18 people endorsed the representatives. While it is true that political contest can divide, the ruling party should be investing in political education and strengthening in its primary elections processes. Democracy does not come cheap or easy, but it is valuable.

Any unity that we desire so much at the expense of democracy is not true unity. Like W. Somerset Maugham said, democracy would be lost in the process, and ultimately, even the unity that was desired would eventually be lost too. Any solution that sacrifice democracy would not bring any results in the long run, except misery.

We have seen that also in opposition ranks. The Umbrella for Democratic Change (UDC) recently indicated that its incumbent Members of Parliament (MPs) should not be challenged for their seats. While BDP is sacrificing democracy to stay in power, UDC is sacrificing democracy to win power. It is a scary reality given the fact that both parties – ruling and opposition — have embraced this position and believe democracy is the hindrance to their political ambitions.

These current reality points to one thing; our political parties have lost faith in democracy. They desire power more than, the purpose of power itself. It is also a crisis of leadership across the political divide, where we have seen dissenting views being met with persecution. We have seen perverting of political process endorsed by those in echelons of power to manipulate political outcomes in their favour.

Democracy should not be optional, it should be mandatory. Any leader proposing curtailing of democracy should be viewed with suspicion, and his adventures should be rejected before it is too late. Members of political parties, as subscribers of democracy, should collectively rise to the occasion to save their democracy from self-interest that is becoming prevalent among Botswana political parties.

The so-called compromise candidates, only benefits the leadership because it creates comforts for them. But for members, and for the nation, it is causing damage by reversing the gains that have been made over the years. We should reject leaders who only preach democracy in word, but are hesitant to practice it.

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The Big Deal About Piracy

21st June 2022

Piracy of all kinds continues to have a massive impact on the global creative industry and the economies of the countries where it thrives.

One of the biggest misconceptions around piracy is that an individual consumer’s piracy activities, especially in a market the size of Botswana’s, is only a drop in the pool of potential losses to the different sectors of the economy piracy affects.

When someone sitting in Gaborone, Botswana logs onto an illegal site to download King Richard online, they don’t imagine that their one download will do anything to the production house’s pocket or make a dent in the actors’ net worth. At best, the sensitivity towards this illegal pirating activity likely only exists when contemplating going about pirating a local musician’s music or a short film produced locally.

The ripple effects of piracy at whatever scale reach far beyond what the average consumer could ever imagine. Figures released by software security and media technology company, Irdeto, show that users in five major African territories made approximately 17,4 million total visits to the top 10 identified piracy sites on the internet.

The economic impact of this on the creative industry alone soars to between 40 and 97.1 billion dollars, according a 2022 Dataprot study. In addition, they estimate that “illegally streamed copyrighted content consumes 24% of global bandwidth”.

As Botswana’s creative industry remains relatively slight on the scale of comparison to industries such as Nollywood and Nilewood where the creative industry contributes a huge proportion to West and East Africa’s respective GDPs, that does not imply that piracy activities in Botswana do not have a similar impact on our economy and the ability of our creative industry to grow.

When individuals make decisions to illegally consume content via internet streaming sites they believe they are saving money for themselves in the name of enjoying content they desire to consume. Although this is a personal choice that remains the prerogative of the consumer, looking beyond the fact that streaming on illegal content sites is piracy, the ripple effect of this decision also has an endless trail of impact where funds which could be used to grow the local creative industry through increased consumption, and revenue which would otherwise be fed back into Botswana’s economy are being diverted.

“Why can’t our local creative industry grow?” “Why don’t we see more home-grown films and shows in Botswana?” are questions constantly posed by those who consume television content in Botswana. The answer to this lies largely in the fact that Botswana’s local content needs an audience in order for it to grow. It needs support from government and entities which are in a position to fund and help the industry scale greater heights.

Any organisational body willing to support and grow the local creative industry needs to exist and operate in an economy which can support its mandates. Content piracy is a cycle that can only be alleviated when consumers make wiser decisions around what they consume and how.

This goes beyond eradicating piracy activities in so far as television content is concerned. This extends to the importation and trade in counterfeit goods, resale of goods and services not intended for resale across the border, outside its jurisdiction, and more. All of these activities stunt the growth of an economy and make it nearly impossible for industries and sectors to propel themselves to places where they can positively impact society and reinvest into the country’s economy.

So what can be done to turn the tide here in Botswana in order to see our local production houses gain the momentum required to produce more, license more and expand their horizons? While those who enforce the law continue to work towards minimizing piracy activities, it’s imperative that as consumers we work to make their efforts easier by being mindful of how our individual actions play a role in preventing the success of our local creative networks and our economy’s growth.

Whether you are pirating a Hollywood Blockbuster, illegally streaming a popular Motswana artist’s music, or smuggling in an illegal decoder to view content restricted to South Africa only, your actions have an impact on how we as a nation will make our mark on the global landscape with local creative productions. Thembi Legwaila is Corporate Affairs Manager, MultiChoice Botswana

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Our Strength is our Unity

18th March 2022

Putin Chose War.  We Remain United with Ukraine.

U.S. Ambassador Craig L. Cloud

This is a dangerous moment for Europe and for freedom-loving people around the world.  By launching his brutal assault on the people of Ukraine, Vladimir Putin has also committed an assault on the principles that uphold global peace and democracy.  But the people of Ukraine are resilient.

They’ve had a democracy for decades, and their bravery is inspiring the world.  The United States, together with our Allies and partners across the globe, will continue to support the Ukrainian people as they defend their country.  By choosing to pay for a war instead of investing in the needs of Russians, Putin’s invasion of Ukraine will be a strategic failure for the Kremlin and ravage the future of the Russian people.

When the history of this era is written, it will show that Putin’s choice to launch an unprovoked, unjust, and premeditated attack left the West more unified and Russia exponentially weaker.

United in Our Response

This will not end well for Vladimir Putin.  Together, the United States and our Allies and partners are taking action to hold Russia accountable.  As a result of unprecedented global sanctions coordination, the United States, the United Kingdom, the European Union, Japan, and Canada have removed selected Russian banks from the SWIFT messaging system and imposed restrictive measures on the Russian Central Bank.

President Biden announced sweeping financial sanctions and stringent export controls that will damage Russia’s economy, financial system, and access to cutting-edge technology.  After Putin began his invasion, the ruble hit its weakest point in history, and the Russian stock market plunged.

Along with the United Kingdom and European Union, the United States imposed sanctions on the architects of this war, including Putin himself.

By moving in close coordination with a powerful coalition of Allies and partners representing more than half of the global economy, we have magnified the impact of our actions to impose maximum costs on Putin and his regime.  In response to Putin’s war of choice, we will limit Russia’s ability to do business in U.S. dollars.

We will stunt Russia’s ability to finance and grow its military.  We will impair Russia’s ability to compete in the global economy.  And we are prepared to do more.

In addition to economic penalties, this week President Biden authorized an additional $1 billion over the $350 million of security assistance he recently approved, and a $650 million in 2021, to immediately help Ukraine defend itself, bringing America’s total security assistance to Ukraine over the past year to $2 billion.

We also stand ready to defend our NATO Allies.  President Biden has coordinated with Allied governments to position thousands of additional forces in Germany and Poland as part of our commitment to NATO’s collective defense.

He authorized the deployment of ground and air forces already stationed in Europe to NATO’s eastern and southeastern flanks:  Estonia, Latvia, Lithuania, Poland, and Romania.  Our Allies have also added their own forces and capabilities to ensure our collective defense.  There should be no doubt about the readiness of the greatest military Alliance in the history of the world:  NATO is more united than ever.

The United States has also coordinated with major oil-producing and consuming countries to underscore our common interest in securing global energy supplies.  We are working with energy companies to surge their capacity to supply energy to the market, particularly as prices increase.

Putin’s Unprovoked and Premeditated War

This was an attack that Vladimir Putin has planned for a long time.  He methodically moved more than 150,000 troops and military equipment to Ukraine’s border.  He moved blood supplies into position and built field hospitals, demonstrating his intentions all along.

He rejected every good-faith effort by the United States and our Allies and partners to address his fabricated security concerns and to avoid needless conflict and human suffering by engaging in diplomacy and dialogue.

Putin executed his playbook exactly as we had warned he would do.  We saw Russia’s proxies increase their shelling in the Donbas.  We saw the Russian government launch cyber-operations against Ukraine.  We saw staged political theater in Moscow and heard outlandish and baseless claims made about Ukraine in an attempt to justify Russia’s aggression.

Russia continues to justify its military aggression by falsely claiming the need to stop “genocide” in Ukraine – despite there being no evidence that genocide was occurring there.  We saw Russia use these tactics before when they invaded Ukraine in 2014 and Georgia in 2008.

And then, at almost the very same moment the United Nations Security Council was meeting to stand up for Ukraine’s sovereignty and forestall disaster, Putin launched his invasion in violation of international law.  Missiles began to rain down, striking historic cities across Ukraine.  Then came air raids, columns of tanks, and battalions of troops, all riding a renewed wave of disinformation and outright lies.

We have been transparent with the world.  We declassified our intelligence about Russia’s plans so there could be no confusion and no cover up.  Putin is the aggressor.  Putin chose this war.  And now his people will bear the consequences of his decision to invest in war rather than in them.

Transatlantic Unity and Resolve Stronger Than Ever

Putin’s goal of dividing the West has failed.  In the face of one of the most significant challenges to European security and democratic ideals since World War II, the United States and our Allies and partners have joined together in solidarity.  We have united, coordinating intensively to engage as one with Russia and Ukraine, provided assistance to Ukraine, developed a broad response, and reaffirmed our commitment to NATO.

Putin has failed to divide us.  Putin has failed to undermine our shared belief in the fundamental right of sovereign nations to choose their destiny and their allies.  And Putin will fail to erase the proud nation of Ukraine.

The next few days, weeks, and months will be incredibly difficult for the people of Ukraine.  Putin has unleashed great suffering on them.  But the Ukrainian people have known 30 years of independence, and they have repeatedly shown they will not tolerate anyone who tries to take their country backwards.

The world is watching this conflict closely, and if Russian forces commit atrocities, we will explore all international mechanisms that could be used to bring those responsible – whether members of the military or their civilian leadership – to account.

Putin’s aggression against Ukraine will cost Russia profoundly, both economically and strategically.  The Russian people deserve better from their government than the immense cost to their future that this invasion has precipitated.

Liberty, democracy, and human dignity are forces far more powerful than fear and oppression.  In the contest between democracy and autocracy, between sovereignty and subjugation, make no mistake:  Freedom will prevail.

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