The Republic of Botswana is a land-locked country in the heart of southern Africa, bordered by Namibia to the west, by the latter's Caprivi Strip to the north, by Zimbabwe to the north-east, and by South Africa to the south and south-east. Botswana occupies 582,000 square kilometres of the down warped Kalahari Basin of the great southern African plateau.

Demography

The population was 1.4 million on 1992 estimates. With a 3.4% per annum estimated population growth rate, Botswana has the highest population growth rate in the world. The population under the age of 16 years exceeds 50% and there has been rapid growth in the urban population. The capital Gaborone, is projected to have grown to 137,471 inhabitants by 1991 compared with 17,718 in 1971. Over 80% of the total population are estimated to reside in the eastern region, adjacent to the South African and Zimbabwean borders.

More than half of the population is of Tsuwana origin. About 30% of the population comprise non-Tsuwana minority communities, including the Kalanga, Kalagadi, Mbukushu and Yei. There is also a Nomadic San (Bushman) community of about 25,000, mainly in the west. The main language is Setswana and its dialects, but English, also an official language, is widely spoken in the towns.

The labour force totalled some 428,000 as of 1992 and it is forecast to reach 502,000 by 1996. Formal sector employment has grown rapidly in the past decade, averaging an annual growth rate of over 10% in the period 1981-91, reflecting the economy's sustained expansion. As of March 1991, formal employment totalled 223,000 or 52% of the total.

History and Political Situation

During the 17th-18th centuries, present day Botswana was settled by mainly Tsuwana speaking people, including the Bamangwato and Bakwena, with many communities overlapping in what is now South Africa's Transvaal province and Zimbabwe. Penetration by Europeans began in the early 19th century, while the Africaner Great Trek to the Transvaal drove the Ndebele people into Zimbabwe, in turn causing the displacement of other groups such as the Begatla to Botswana. In the 1840s the British missionary David Livingstone had established a station among the Bakwena at Kolobeng, west of present day Gaborone. The most prominent indigenous leader at this time was Tshekedi Khama (the Great), who succeeded to the Bamangwato chieftainship in 1872 and built up a powerful army. Pressure from the Afrikaners, fed by the discovery of gold at Tati near Francistown, led the UK to declare the Bechuanaland Protectorate over Khama's people, while annexing the Tsuwana inhabited territory of the northern Cape in 1910 and led to continuing pressure by white South African leaders for the incorporation of the rest of Bechuanal .

Seretse Khama succeeded Khama the great after the Second World War and immediately sparked a confrontation with the British governments over his marriage to a white woman. Recent evidence has shown that his exiling by the British government from 1950-56 was imposed mainly at the behest of white minority leaders in South African and Southern Rhodesia who feared that Khama's example would undermine their own political position. But after his return from exile he took the leading role in organising the Tswana through the Botswana Democratic Party (BDP), which he founded in the 1960s. Sereste Khama's outlook was that of a moderate conservative and he favoured the creation of a multi-racial, democratic society in which traditional laws would retain their due place. One of the features of traditional Botswana society that retains an important role is the "kgotla" or village meeting place, presided over by the chief.

In the pre-independence election of 1965 the BDP won 28 of the 31 elected seats and at independence in September 1966, Mr Khama became the country's first president. His policies included the transfer of tribal land rights to elected district communities, guarantees for white leasehold farmers, encouragement of foreign investment and a neutral stance towards South Africa and Zimbabwe, reflecting Botswana's strategic vulnerability. But he actively opposed apartheid and refused to open diplomatic relations with South Africa, while allowing commercial relations to develop.

Serestse Khama held office until his death in July 1980. He was succeeded by his vice-president, Dr. Quett Masire, a co-founder of the BDP who had held the portfolio of finance and development planning since independence. Dr. Masire has broadly continued his predecessor's policies. In the last election in 1989, Dr. Masire's BDP got 75% of vote and 35 out of 38 seats in the National Assembly.

The easing of tensions with South Africa as a result of adoption of a political reform programme and the ending of the policy of destabilisation of neighbouring states by President F. W. de Klerk in 1989 and Namibia's independence in March 1990 has opened up new prospects for Botswana during the 1990s. Close bilateral relations have quickly been established with Namibia, following reciprocal visits by President Marie and Nujoma during the latter part of 1990. This could enable Botswana to lessen its dependence to South Africa by switching some of its trade flows to the Namibian coast.

Economy

At independence in 1966, Botswana was one of the 20 poorest countries in the world, with minimal infrastructural development and a predominantly subsistence economy. Government revenues were critically dependent on foreign aid and the remittances of Botswana males employed in South Africa. Moreover, there were no obvious prospects for economic development outside the beef sector, dominated by a few large-scale farmers. The commercial livestock sector was the largest contributor to GDP and export earnings.

However, the economy has expanded considerably since diamond mining began in 1971. There has been a significant switch from agriculture in favour of the mining sector, whose contribution to GDP has risen spectacularly to a little more than half of the total. The start of diamond mining initiated a new era in Botswana's economic development. Its GDP growth rate averaged 14.2% in the period of 1965-80 and 9.9% in 1980-90 which rated as the second fastest GDP growth in the world. The rapid increase in diamond export revenues during the 1980s enabled the government to finance major infrastructure projects as well as substantial improvements in educational and health provision. The country's external economic position also strengthened significantly.

With no further increase in diamond output or major new mineral projects envisaged in the near future, the government estimates that its revenues and the value of exports will not rise substantially during the early 1990s. The capital-intensive Sua Pan soda ash project came on stream in 1991 on a smaller scale than originally projected and it is not expected to make a significant contribution to GDP or government revenue before 1994. The Bank of Botswana stresses the need to achieve accelerated growth in the non-mineral and non-agricultural sectors and to overcome the obstacles caused by high land, utility and development costs, together with the small domestic market. A diversified manufacturing sector in particular is seen as having the most growth potential and capacity to absorb the growing labour force to a significant extent during the 1990s.

The Bank of Botswana predicts that with no increase in diamond exports for 1993, export earnings are likely to remain around the 1991 level at best. While the slowdown in the economy has adversely affected the visible trade balance, the current account and government revenue, government expenditure has continued to rise rapidly, partly contributing to a substantial acceleration of inflation in 1991-92 despite a substantial increase in the general level of interest rates. This may force the government to run budget deficits over the next few years, drawing down the cash balances it has been able to accumulate in the past. While this provides no immediate threat to public finances, given the accumulation of foreign exchange reserves, the expansionary impact is likely to exert further pressures on domestic prices and the balance of payments. Short-term pressures on the economy were exacerbated by a prolonged and severe drought which affected much of southern Africa in 1991 and 1992.