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FACTORS THAT CONTRIBUTED TO THE ECONOMIC SUCCESS OF BOTSWANA by Charles Andrew Barclay B.A., Brock University, 2008 RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN INTERNATIONAL STUDIES In the School for International Studies © C. Andrew Barclay 2009 SIMON FRASER UNIVERSITY Fall 2009 All rights reserved. However, in accordance with the Copyright Act of Canada, this work may be reproduced, without authorization, under the conditions for Fair Dealing. Therefore, limited reproduction of this work for the purposes of private study, research, criticism, review and news reporting is likely to be in accordance with the law, particularly if cited appropriately. APPROVAL Name: Charles Andrew Barclay Degree: Master International Studies: International Development Title of Thesis: Factors that Contributed to the Economic Success of Botswana Examining Committee: Chair: Dr. John Harriss Professor of International Studies ___________________________________________ Dr. Alvaro Pereira Senior Supervisor Assistant Professor of International Studies ___________________________________________ Dr. Stephen Easton Supervisor Professor of Economics Date Defended/Approved August 4, 2009 ii Declaration of Partial Copyright Licence The author, whose copyright is declared on the title page of this work, has granted to Simon Fraser University the right to lend this thesis, project or extended essay to users of the Simon Fraser University Library, and to make partial or single copies only for such users or in response to a request from the library of any other university, or other educational institution, on its own behalf or for one of its users. The author has further granted permission to Simon Fraser University to keep or make a digital copy for use in its circulating collection (currently available to the public at the “Institutional Repository” link of the SFU Library website <www.lib.sfu.ca> at: <http://ir.lib.sfu.ca/handle/1892/112>) and, without changing the content, to translate the thesis/project or extended essays, if technically possible, to any medium or format for the purpose of preservation of the digital work. The author has further agreed that permission for multiple copying of this work for scholarly purposes may be granted by either the author or the Dean of Graduate Studies. It is understood that copying or publication of this work for financial gain shall not be allowed without the author’s written permission. Permission for public performance, or limited permission for private scholarly use, of any multimedia materials forming part of this work, may have been granted by the author. This information may be found on the separately catalogued multimedia material and in the signed Partial Copyright Licence. While licensing SFU to permit the above uses, the author retains copyright in the thesis, project or extended essays, including the right to change the work for subsequent purposes, including editing and publishing the work in whole or in part, and licensing other parties, as the author may desire. The original Partial Copyright Licence attesting to these terms, and signed by this author, may be found in the original bound copy of this work, retained in the Simon Fraser University Archive. Simon Fraser University Library Burnaby, BC, Canada Last revision: Spring 09 ABSTRACT At independence in 1966, Botswana was one of the poorest countries in the world, dependent on foreign assistance and poor grade cattle for economic growth. However, following the discovery of diamonds in 1967 the country has radically changed. The purpose of this paper is to explain some of the reasons why beyond simply the discovery of diamonds, Botswana was economically successful following 1966. The first reason Botswana‟s economy was successful is because of their specific history and location. The second factor to be explored is leadership, specifically the role that Seretse Khama played in encouraging the economic success of Botswana. Luck and institutions were also very important in Botswana‟s economic success. As a resource rich economy, Botswana is at risk to contract the „Dutch disease‟, but for the most part through prudent policy they have been able to achieve macro-economic stability. Keywords: Botswana; economic growth; luck; diamonds; institutions; Seretse Khama. iii DEDICATION To my parents, whose encouragement and support throughout my entire life have always given me the freedom to do what I thought best. iv ACKNOWLEDGEMENTS First and foremost I owe a deep debt of gratitude to Jessica Jordan. Your presence and encouragement have pushed me in a direction I never thought possible, and have allowed me to see things I would never have had the courage to see by myself. I would like to thank all of my colleagues who participated in this journey with me. I would specifically like to thank Jeffrey Akomah and Doug Olthof for helping me articulate my positions and shooting down the arguments that made little sense, despite my thinking otherwise. To Nicki Darbyson thank you for the encouragement, the editing, and being a genuinely good friend. I also want to thank Alvaro Pereira for giving me the freedom to research this project, and for greatly assisting me in understanding basic economics. Thanks also go out to John Kaethler and André Basson for their support and time. Finally, I would like to thank Milicia Njegovan and Andrea Martinez for supporting me and working with me on many interesting projects. v TABLE OF CONTENTS Approval ............................................................................................................................. ii Abstract .............................................................................................................................. iii Dedication .......................................................................................................................... iv Acknowledgements ............................................................................................................. v Table of Contents ............................................................................................................... vi List of Figures .................................................................................................................. viii List of Tables ..................................................................................................................... ix List of Acronyms ................................................................................................................ x Chapter 1: Introduction ................................................................................................... 1 The Country..................................................................................................................... 2 Problems .......................................................................................................................... 3 At Independence .............................................................................................................. 5 Economy.......................................................................................................................... 9 Diamonds ...................................................................................................................... 15 Chapter 2: Historical Legacy of Colonial Rule ............................................................ 21 Tswana Unity ................................................................................................................ 22 Unity through Marriage ................................................................................................. 24 Benign Neglect? ............................................................................................................ 26 Great Impact? ................................................................................................................ 30 Chapter 3: Leadership .................................................................................................... 32 Chapter 4: Luck .............................................................................................................. 39 Revenue Source ............................................................................................................. 40 Market Access ............................................................................................................... 42 Luck and Institutions ..................................................................................................... 42 Chapter 5: Institutions ................................................................................................... 47 Democracy .................................................................................................................... 49 Avoiding the Dutch Disease .......................................................................................... 53 Concluding Remarks ...................................................................................................... 62 Appendix .......................................................................................................................... 64 vi Bibliography .................................................................................................................... 75 vii LIST OF FIGURES Figure 1: Population of Botswana....................................................................................... 3 Figure
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