Like in other African states, the ongoing public sector reforms in Botswana are to a large extent reflective of the deeper problems of imperialism. Colonialism not only dispossessed Third World nations of their enormous resources it also ensured that following political independence, a legacy of dependence prevailed. Hence economic independence between the master and the servant was sustained through economic structures that still promoted imperial interests. Essentially the colonial economic policy was informed by the ideology of tying these former colonies to international capital. Such a strategy simply meant that colonial natural resources were not creating meaningful value necessary for industrialisation and employment creation. This paper argues that it is from the lack of industrial base that post-colonial countries have become vulnerable to the whims of imperialism, thus the need to embrace neoliberal ideology that sees the public sector as another avenue for attracting foreign investment and creating employment. Yet in fact the neoliberal policy is another disguise of accumulation from the poor by the rich western powers.
Increasingly, the public sector reforms that are being implemented in most African countries are shaped by the neoliberal reforms implemented elsewhere in the world. Harvey (2005:2) defines neoliberalism as a political economic practice that sees free market as the best for bringing efficient resource allocation and delivery, therefore advancing human wellbeing. Neoliberalism is viewed as a grand strategy by the world most powerful capitalists, in a period when they think (a) capitalism has defeated what it takes to be its rival socialism/communism, and (b) when labour as an organised, political, force has disappeared, bought off by the goodies of consumer society. Harvey identifies liberalization, deregulation, privatisation and flexible labour market as some of the reforms that come with neoliberalism. In his book, “A Brief History of Neoliberalism’, Harvey lists Botswana amongst industrialised giants such as, German, Japan, Taiwan to illustrate the spatial nature of neoliberalism and the pressure from what he refers as the “epicentre” (developed) to the periphery (backward). Associated with the neoliberal expansion is the volatility that stems from geographical unevenness of capitalist accumulation, a phenomenon Trotsky identified as “combined and uneven development” (http://www.isj.org.uk/index.html4?id=221&issue=111)
This paper gives an in depth discussion of the ongoing changes in the public sector introduced by the government of Botswana. It is argued that these public sector reforms have a historical tie which is mirrored in the state of the economy. The paper starts by discussing the role of British imperialism in Botswana and how colonialists influenced the economy to suit the interests of international mining capital. This is linked to Botswana’s independence and the discovery of diamonds, which are now the backbone of the country. Further, it is contended that the concentration of the economy around one sector, which depends on global markets and is highly capital intensive makes the Botswana economy rather precarious (Colclough and McCarthy, 1980; Good, 2004). Thus high unemployment, widespread poverty and inequality in a country described by the IMF as ‘one of the most resource rich countries in the world’ (See Limi, 2006) is symptomatic of the crisis of capitalist accumulation that was long set in the development trajectory in colonialist imperialist economic policy in Africa (Amin, 1982; Kimber, C. 2005: Motlhobi, 2006).
Ross (2004) investigation on “Mineral Wealth and equitable Development” showed that developing countries like Botswana which depend highly on minerals are prone to economic volatility. Botswana’s high dependency on diamond mining is widely acknowledged (Jefferis, 1998: 314), hence urgent call for economic diversification (BOCCIM, 2002). But it is Hazleton who identifies the dependency connections between government and diamonds well:
There are two statistics that further define the story of diamonds in Botswana. The most striking is that over 70 per cent of the profits of the diamond industry are paid to government. This staggering figure still underestimates the impact of the diamond industry on the economy. Two other larger sources of government revenue are also largely diamond dependent. Customs fees from Southern African Customs Union are generated to a large extent from export of diamonds, and interest on foreign investment and bank accounts is also derived mainly from diamond profits. In all, approximately 85 per cent of government revenue is derived from diamonds ( Hazleton, 20002:3).
The dependence on mining capitalism presents vulnerability because such minerals are global exports which are governed by the vagaries of the market. Coupled with social ills, for example, rapid urbanisation, poverty, and unemployment the government is trying to find ways of addressing the vulnerability through microeconomic and macroeconomic interventions. One alternative taken by Botswana is liberalization of the economy through management strategy, what (Knights and Willmott, 2000) have termed “the reengineering revolution”. This manifests itself in Botswana in what government consultants have called public service “reengineering”, (AED, 1996). Although it is claimed that the aim of such restructuring is efficient delivery of public services, essentially, this is a strategy that promotes privatisation of the public sector and the contracting out of much government work. This way, the government hopes to provide “public services” efficiently and create stable and high employment
This paper then examines these claims this in terms of Botswana’s development pattern and argues that such micro and macroeconomic policy has not really helped to improve the quality of public sector performance (Pollitt and Bouckaert, 2000). Instead of providing social security neoliberal globalisation has brought job insecurity as more and more people have loss jobs Attention is also focused on the role of global institutions like the World Bank because of their central role in shaping public sector management policy in Botswana and elsewhere. Furthermore, it is argued that the intervention of global players has helped in facilitating the adoption of privatisation of the public sector enterprises to pave way for private sector accumulation.
Following the work of the Austrian Marxist, Rudolf Hilferding, (Finance capital), Lenin (1939) outlined the economic mechanisms that generate the tendency for imperialism to resort to accumulative modes that are in fact a negation of the fundamental principles of free market capitalism. In his theory of imperialism, Lenin showed that cartels and combines involving giant multinationals dominated the world economy. This concentration led to monopoly power not free market competition. In Africa the power of big international companies was long experienced and its driving force was the British government:
At its height the British Empire covered a quarter of the globe. Sustained by all powerful navy, British manufactured goods dominated the world trade routes, British garrisons controlled strategic positions and British finance controlled the markets. Britain at this time held an unrivalled hegemonic position: a leadership position of such pervasive dominance that it enabled Britain to determine the international, and in some cases the domestic, frameworks within which other states conducted their political domestic activity (Cochrane and Anderson, 1989:12)
The British accumulation was more pervasive in Africa, where the “scrabble for African territories “ intensified with the edge to get a foothold on natural resources, crucially gold which was a cash cow for the bourgeois in London (Gool, 1983). In Southern Africa, imperialist exploitation started around mid seventeenth when the Dutch occupied the Cape, the land of the San or Basarwa whom the Dutch called the Hottentots (Mitchison, 1970). In 1871 the British annexed Southern Botswana including the newly discovered diamond fields in and around Kimberly, now part of the Cape Province in South Africa. The Batlhaping who inhabited this region, put up a strong resistance against the British invaders however they could not match the firepower of the British led by Colonel Charles Warren. As a result Batswana in the south of the Molopo River lost most of their land to the British as crown lands (Ramsay, 1989). It was the rich mineral deposits that defined the future direction of the British colonial policy. Its subsequent expansionist strategy was based on the premise that they will be more deposits further as they moved north:
The vision was colonization northward into what became Northern and Southern Rhodesia. This colonization would be undertaken, under the protection of the British Crown, by a monopoly chartered company, led by Cecil Rhodes, which would provide the necessary administrative and political organisation and organise a full range of profitable investments. (Parson 1984:19)
Therefore it was the presumed mineral and commercial prospects that made Northern Bechuanaland, the area north of the Molopo River (now Botswana) a strategic area in terms of securing British interests in the region and Central Africa. The British were wary that the Germans who were in control of Namibia’s western coast in 1884 would invade Botswana, because that would have meant the closure of the Central African route ( Hazleton, 2002). Moreover, they eyed the Zambezi River which they feared might be taken by the Portuguese and Transvaal Boers (Maylam, 1980). Hence for the leading British imperialist and financier Cecil Rhodes, Botswana was needed to further advance British interests north as a safe passage from Cape colony to central Africa (Parson 1984; Zins 1997). And Moraze’ explains why:
The great diamond king was Cicel Rhodes, who grouped all the mines into the De Beers Mining Company. He became the head of the Chartered Company, of which the Prince of Wales was one of the chief shareholders. Then he was the Minister at the Cape in 1890, undertaking the colonization of Rhodesia. The railway pushed on and the older Boer stock-breeding was threatened on every hand by the new urban development. This was stimulated by gold in spite of the heavy taxes imposed by the Boer Administration. Johannesburg rose from three thousand to one hundred thousand inhabitants in ten years. The increase was bound up with the influx of innumerable Britons who claimed civic rights…Already India was beginning to pour in labour force which rivalled that of Negro (Moraze,1957: 296).
It is against this backdrop that Bechunaland north of Molopo was appropriated in 1885, but only given serious protectorate status later in 1890 by the British government. Despite opposition from some of the chiefs the country’s administration was given to a private company with exclusive mineral rights to Cecil Rhode’s British South Africa Company (BSAC). This privilege was later withdrawn following the company’s raid on South Africa from Botswana (Colclough and McCarthy 1980; Gool, 1983). But this had little impact since the most important aspect was not affected. BSAC still possessed mineral concessions in key areas around the country. For example, the company had monopoly over big chunks of prime land in Tuli, Gaborone, Lobatse (Parson 1984).
At the heart of the collapse of agriculture in Southern Africa was an obnoxious colonial tax system ____ the hut tax. It was the introduction of this tax that created what Marx called “a reserve army of labour” which was barbarously exploited by mining capital. It was such forced labour that worked colonial plantations and mines. Hence according to Seddon (2002), ‘the term chibalo or chibaro was used commonly in central and southern Africa from the late nineteenth century onwards to describe a variety of oppressive forms of labour introduced by the Europeans.’ In Botswana, for example, man who left for South African mines were said to have gone to makgoeng (to the whites) for a period of six months as migrant labour. Part of their small earnings went to pay the tax. But the consequences of such coerced labour migration were profoundly damaging to native economies which were mainly agrarian. Again, Parson explains the forces at hand more clearly:
The late-nineteenth-century mineral revolution in Southern Africa which was dominated by British capital and organised through and expanding British Empire, had a profound effect on African society. Precapitalist tributary societies became reserves of labour supplying an inexpensive labor force in the mining, and later the manufacturing economy of South Africa. The labour was inexpensive because it was migratory...These circumstances led to the transformation of the mass of the population from being a more or less sel-sufficient peasantry to being a peasantariant, a working class of a particular kind (Parson, 1984:113).
Parson rightly identifies this key dynamic. It should be stressed however that the notion of peasantariat is confusing. On the contrary, I would argue that, what he actually describes is in effect proletarisation .Dispossession led to the creation of labour supply, which was in essence cheap migrant labour (See for example Colclough and McCarthy, 1980:21). This forced tax system was significant step in the process of the creation of a mass of working class who hitherto were peasants. It was these migrant cheap labourers who were central to transforming the industrial estate around gold and ensured colonial accumulation.
Botswana became a protectorate under British rule in 1885, and this lasted until 1966 when it gained its independence. Unlike some colonised African countries where minerals were discovered earlier, Botswana seemed to lack precious metals. Hence, colonialists regarded it as barren land. With one exception: it was a crucial link and passage through which to further British imperialism interests from the south to the north of the African continent . This was the so called ‘Cape to Cairo’ route of Cecil Rhodes, a British colonialists and diamond magnate obsessed with power and building the empire (Thompson, 1999). Rhodes vision for Africa was not only imperialist, but also patently racist, he wrote:
I contend that we are the finest race in the World, and that the more of the world we inhabit, the better it is for the human race. Just fancy, that are at present inhabited by the most despicable specimens of human beings, what an alteration there would be if there were brought under Anglo-Saxon influence (quoted in Sparks, 1990:45)
Rhodes was at the centre of the mineral exploration in Southern Africa and this lead to the first discovery of diamonds in Kimberly, South Africa in 1867. This find brought a shift in thinking about the value of neighbouring territories. The thesis was that they too could possess rich mineral deposits. Not surprisingly, therefore was the decision by Britain to grant Botswana protectorates status. Interestingly, Ramsay (1998) states that in 1889 Queen Victoria issued an order, which gave the mineral charter-company of Rhodes, called British South Africa Company (BSAC) effective control over Botswana and Central Africa. Although Rhodes could not sniff the diamonds by then, another multinational company he had earlier founded, De Beers, later discovered these just a year after the country became independent in 1967 (Colclough and McCarthy, 1980).
The discovery of diamonds heralded another phase of imperialist accumulation in Botswana via direct large multinational corporations, a trajectory that has characterised most of post colonial Africa. Prior to this, as the pillar of apartheid capitalism, Rhodes had created deliberate conditions for exploitation by gold and diamond multinationals by forcing peasants out of their lands. By the newly introduced tax system that forced them to look for wage labour to pay the hut-tax in cash. Without money it meant that they have to earn it and that meant working in mines (Parson, 1984; Callinicos, 1988). This process markedly altered the economies of the colonies like Botswana from relative economic independence based on agriculture to dependence on cash income. The primary vehicle for this was the reshaping of the labour process and the labour markets in favour of big corporations such as De Beers. Albeit, through brutal suppression. This monopolistic strategy is now the legacy that informs the operations of the mining empire Rhodes created. It explains the structure of the company he founded in 1888, De Beers, a giant mining conglomerate which today is the largest mining company in the world including its London based ‘single marketing’ arm Diamond Trading Company (DTC), formerly Central Selling Organisation (CSO). DTC is an international cartel operated on behalf of diamond producers by De Beers, which controls 70 percent of the world trade in rough diamonds by value. Presently the company is in the process of relocating its offices to Botswana, following the legislative pressure from the South African government to get more benefits from diamonds. For instance, a new law was introduced to charge 15 percent export duty on raw diamonds (http:www.diamondintelligenceonline.com). Some have argued that part of the pressure came from the threat of competition from the Israel diamond sorting company which wants to establish itself here (Molaodi, 2005).
In addition, persistent questions raised by the general public about the benefit of Botswana in its business relationship with De Beers has added another pressure to government of Botswana to consider a more attractive package like beneficiating from its diamonds. One such outspoken critique of the Botswana government is Todd Majaye a former Diamond Quality controller, with the Botswana Diamond Valuing Company, a subsidiary of De Beers. Majaye has consistently called for a rethink in government relationship ship with De Beers. His major concern was that Botswana is not getting much benefit from its diamond industry. Arguing that because Botswana is a major producer of diamonds globally it should derive maximum returns (See, Majaye 2004, in Mmegi 20 August 2004 and Mmegi22 December 2006). Today, Cecil Rhodes’s De Beers, the world diamond cartel, is a darling business partner of Botswana. Botswana’s formal relationship with De Beers was established in 1967 following the discovery of diamonds. Subsequently, a joint venture was formed, which gave birth to De Beers Botswana Mining Company (Debswana). This private company that now produces the world largest diamonds by value makes Botswana a major player in the international diamond market. This private company is the world leading diamond producer (Harvey and Lewis, 1990).
Although officially the diamonds were found in 1967, it is interesting to note that, in fact, this might already have been known to the De Beers- Anglo American Corporation (Jefferis, 1989). This is even more curious given that the diamond find was revealed only a year after the country assumed independence. Perhaps more important is that though Botswana Government has less influence on diamond production and marketing, it owns 15% shareholding in De Beers.
Since independence diamond mining has been central to Botswana's economy and is behind the country's survival - although this comes at a high price. This is why even though government not happy with De Beers recently renewed its mining lease by twenty five years. In this framework the public sector is subjected to various kinds of restructuring. Diamonds dominance and substantial importance is underlined by the fact that in first quarter of 2002, diamonds accounted for 85 per cent of exports (Ministry of Finance 2003). Attempts by government to diversify the economy have been minimal and disappointing. It was only recently that a positive step was taken with the commissioning of the multimillion Mmamabule coal project, with another multinational, Coal Investment Corporation Energy (CIC) from Canada (Mmegi, 29 December 2006). In spite of its size, and expected creation of 5000 jobs, the new coal project will not make any significant impact in terms of redressing the high unemployment and endemic poverty. For many years the major challenge of government will remain how to reduce its dependence from De Beers and that means breaking with what Motlhobi (2006) called the pattern set by colonialists.
Botswana’s success story has been well widely recognised and celebrated in mainstream economics (Harvey, C. and Lewis, S. 1990; Jefferis, 1998; Bhalla, et al., 2000; Stiglitz, 2002) For instance, between 1966 to 1997 the country registered an annual growth of 9.2 annual rate, leading the World Bank to rank it as the fastest growing economy in the world (Financial Times Survey Botswana, September 26, 2001). In 1992, Botswana recorded the highest human development in Sub-Saharan Africa coming forth in Africa (Botswana Review 2003). This has earned the country a number of praises worldwide and the government has been keen to ride on this limelight. In his annual “state of the nation address” to parliament titled “meeting the global challenges”, the president of Botswana, Festus Mogae, for instance, quoted a number of reports presumably showing Botswana as the “best in Africa”. Amongst them, were: United Nations Economic Report on Africa 2003, World Economic Forum 2003-04, Global Competitiveness Report and the Washington based Economic Freedom of the World, (Mogae, November 2003, www.gov.bw). More recently, Leith (2006) outlined the case why Botswana stands out in Africa.
These commendations are mostly ascribed to two factors. One of this is the economic policy, which has since independence been based on free enterprise philosophy (UNDP, 2000) ___ a euphemism for what I described briefly above as neo-liberalism. As Jefferis (1989) has pointed out compared to other African countries Botswana has been quite open about its capitalist orientation. To this extent government officials assert that part of the success is a result of prudent economic management or good governance. Hence they cite other African countries endowed with similar resources but are in economic doldrums.
However, the main factor to this performance is primarily attributable to diamond’s sparkle, which some suggest is mere luck of a natural resource like oil. This dependence on diamonds bears resemblance with pre-apartheid era in South Africa. Although the mining industry depended on black cheap labour, overall the economy was highly capitalised. This rapid accumulation strategy has had structural limitations caused by what Marx identified as the organic composition of capital (Callinicos, 1988), which can be thought of as the capital to labour ratio. Hence firms in the extractive sector typically tend to have a highly capital intensive production (like diamond mining) substitutes machinery (capital) for labour (Ross; 2004). This leaves a lot of labour out in favour of machinery. The consequence for the labour process is unemployment. Despite its enormous contribution to the Botswana’s economy, diamond mining production structure is itself the undoing because it is based on high capital intensity with little downstream local processing industry hence employing only a few people. As Hazleton, (2002) has noted the expansion of Botswana diamonds has been accompanied by “increasingly sophisticated technology” which in turn resulted in rapid displacement of labour. This means the country has a large reserve army of the unemployed, which cannot be absorbed by marginal contributors such as tourism and manufacturing. However, it must be clarified that it is not technology per se that is the cause of unemployment, but rather its use for accumulative purposes.
According to the gross domestic product, Botswana is one of the richest countries in Africa (See Table 5). Unfortunately such indices obscure the reality on the ground, as Botswana is indeed a rich country but ironically with a poor people. From this context the achievements made by Botswana are not that glamorous. The so-called rapid economic growth and impressive performance is increasingly being challenged in light of the real living conditions of ordinary Batswana, which are not mirroring the official story. On the ground life remains difficult. Even the official think tank, BIDPA, acknowledged this in their poverty study of 1997 that about half of the population were below the poverty datum line. Clover (2003) has argued that Botswana’s economy is paradoxical because while it has made progress it is still characterised by uneven development marked by skewed income distribution and inequality. In this sense, Harvey and Lewis (1990) suggest that Botswana’s wealth has largely benefited the minority because the considerable majority remain in poverty. Table 4 shows one aspect of the irony of the supposed exceptional performance.
Table 4: Trends in Botswana Labour Force, 1991-2001
These statistics have been contested. The opposition and unions, for example, accuse government of cooking them to transform a bad scenario into a good story. In a way their concerns are genuine. As Siphambe (1996) has argued Botswana’s “statistical economic indicators illustrate part of the story”. Recent studies suggest that 'unemployment and underemployment' remains a problem faced by the majority of the labour force (Bond and Mhone, 2003). Another reason that gives credence to this scepticism are economic indicators. While Gross National Product (GDP) and income per capita show relatively high growth, in reality however life for majority does not seem to measure with the statistics (Table 5). Thus some have the argued that poverty, unemployment and inequality are in fact not decreasing but growing (Edge, 1998). Considering that the population of Botswana is just fewer than 2 million, it is worrying that so many people are unemployed.
Table 5: Social and Macroeconomic Trends - Regional Comparisons
One problem with the employment figures is that they include both informal and formal employment. Though the informal sector do create some form of employment, however the employment generated by this largest sector does not offer much owner managers and workers because profit and pay is relatively low, the threat to bankruptcy and loss of employment are major problems that make the informal employment not sustainable. Hence they actually resemble disguised unemployment. It is just for survival for many in the informal sector traders as they are trying to combat poverty and unemployment (Mmegi 05, March 2004). The same applies to the many domestic workers and farm workers because although they may be classified as employed their minimum wage is below the cost of living thus entrapped in poverty.
The vulnerability arising from over reliance on diamond mining and the inability of this huge resource to absorb a large pool of unemployed and underemployed labour underpins the crisis of deepening unemployment and poverty. This is a causal factor in escalating crime, which the police are presently grappling with.
It is this dependency on the diamond sector which explains the long strategy of government of economic diversification based on private sector investment. And it is from this context that the transformation of the public sector is taking place, as a way of promoting private sector to diversify the economy way from diamonds and create jobs:
Botswana’s economic performance has been remarkable….but the country faces a crucial test as attempts are made to develop the economy away from rapid diamond-led growth (Botswana is the largest exporter of gemstone diamonds) to a more diversified and sustainable economic structure. Furthermore, recent difficulties including international recession, depressed diamond market, crippling drought in the country, high inflation, an alarming growth in unemployment, the spread of HIV/AIDS and poverty all pose new challenges to Botswana. (Ayeni, 2001: 11)
The government policy direction towards was articulated by an official from the Ministry of Finance and Development Planning at the Botswana Confederation of Commerce, Industry and Manpower (BOCCIM), Sixth conference, whose theme was “ Public Private Partnership in Development Towards Vision 2016”. He stated:
Both the domestic and international pressures dictate that Botswana PUBLIC Sector be reformed so that it becomes more efficient, resilient and competitive and therefore customer satisfying. Reforming the Botswana’s Public Sector would require paying particular attention to maintaining lean and efficient institutions; relating inputs to outputs, rationalising responsibilities, regulatory systems and departmental operations and also strengthening monitoring and evaluation of performance of Government Ministries/Departments…..In the long run, some of the management functions will even be devolved the private sector when the privatisation policy is implemented (Kahiya, 2000: 135-6)
As the (DPSM 2001) put it in their PMS publication, ‘privatisation is about increasing private sector participation in the economic activities that have previously been undertaken by government’. This is why the minister of finance and development planning, Mr Gaolathe, told parliament in during the 2003 budget speech that:
Mr Speaker, it is pleasing to note that after the initial assignment of high investment grade sovereign credit rating by Moody’s and Standard and Poor’s in 2001, both rating agencies maintained the same rating for Botswana in the A grade in 2002. This rating, which places Botswana ahead of all African countries, reflects the strong external position of the country and the pursuit of a development strategy that has successfully balanced the provision of social services with prudent fiscal and monetary management over the years. The rating enhances Botswana’s international stature and ability to attract foreign capital to support the process of economic development. (http://www.gov.bw)
But it is doubtful if such awards by international capitalist investment rating agencies will make a difference. In the past government took deliberate attempts to attract private foreign investment including offering companies financial and tax incentives. Government initiatives aimed at attracting foreign investment like the Financial Assistance Policy (FAP) have had less impact. Even the economic regional free trade zones model, which was targeting transnational corporations in the Northern town of Selibe-Phikwe have not been successful in attracting foreign investment. A few private companies that relocated to Botswana only took advantage of generous incentives offered by government and soon left the country, leaving many workers in the cold. For example, the South Korean Hyundai assembly plant, which was hitherto celebrated as model of diversification also left to the dismay of government. With neoliberal globalisation, competition has intensified not only between companies but also amongst governments who see companies as an ally in develoment. For companies it means assessing what governments are offering and moving to places where they can make the most from their investment. Botswana might have good incentives like low tax rate and stable but with a small population, it has a limited market-----a key determining factor for business sustainability.
As pointed out earlier today's neoliberal globalisation is rooted in the old imperialism of primitive accumulation and colonialism. Imperialist expansion has always transformed the world economy in one way or another, at one time or another, as it expanded in search of new markets. This trajectory, which is an expression of the crisis of capitalist accumulation, is now profoundly transforming the public services. Through notions, such as good governance and the new public management the neoliberal ideology seeks to remove any obstacles to the creation of profit and the accumulation of capital in the public sector. This is the case now with the privatisation programmes as they aim to give the private sector more control and power in the economy. This is reflected in the Ministry of Commerce and Industry annual publication, which mainly targets foreign investors:
Thus, current macroeconomic focus on increased liberalisation of the economy in order to broaden and strengthen the foundation for accelerated economic diversification, with promotion of the private sector activities and the implementation of government’s privatisation policy important elements. ( Botswana Review of Commerce and Industry 2002-2003:8)
Initiatives for neoliberal reforms in both developed and developing countries have taken place mainly as a response to what proponents have identified as the major problem ____ low productivity. In this regard, civil servants are viewed as the main cause for poor service delivery and this is used as the primary reason for restructuring public service today. The public sector employees have been blamed for inefficiency that has according to neoliberal reformers led to waste and fiscal deficits. Therefore it is argued that there is a need to contain it through various ways, the most obvious and direct of which is simply to reduce the public sector. rs is the reduction of the public sector. Consider what one the leading management ‘guru’ and advocate of neoliberal policy, has to say on this matter:
The lowest productivity is in government employment. And yet governments everywhere are the largest employers of service workers. In the United States, for instance, one-fifth of the entire workforce is employed by federal state and local governments, predominantly in routine clerical work. In Britain the proportion is 30%. In developing countries government employees account for similar share of total workforce...To improve the productivity of making and moving things required drastic changes in the organisation of the work... Service work in many cases will be contracted out of the organisation to whom service is being rendered. This particularly applies to support work, such as maintenance, and to a good deal of clerical work...One driving force behind outsourcing is the need to make service workers productive (Drucker, 1999:76-84).
The above sentiments are in tune with the views expressed by leading international institutions, such as the World Bank and the IMF, which have championed changes in the public service of both the developed and developing countries. Thus in two World Bank-led meetings, on Anglophone one in South Africa (1995) and Franchophone meeting held in 1996 in Cote d`Ivoire the main issue to be discussed was “Civil Service Reform”. At the Anglophone seminar, the South African Minister of Public Service gave this introduction:
The real challenge in this area of reform is to redefine the role of government in meeting the development needs of the country and to raise the efficiency and effectiveness of the public sector. More importantly, African governments need to put in place effective controls over public sector employment as a pre-condition for matching more closely public sector employment and the needs of the country. The changes are also essential for creating an institutional framework which will provide the incentives crucial for changing attitudes and behaviour of those more in line with the needs of a results –oriented public sector (Quoted in Langseth,1995:xii).
In Botswana the present reforms are also partly justified on the premise of poor performance by public sector workers. To bolster their position, senior government officials who are responsible for the reform programmes, often appeal to some international authority. For example, the World Economic Forum (WEF) annual publication called Africa Competitive Report is often used in an attempt to change workers attitudes and perceptions about the quality of their work. Speaking at the 2002 productivity week in Francistown, whose theme was “efficiency and effectiveness: the smart choice to customer satisfaction” the commissioner of police said:
The lessons and challenges that this theme poses to the nation are many and it should be worth our efforts not only to find what these challenges are but also examine the extent to which individually and collectively we are living up to them. Such an examination should also be examined against the background of what other people are saying about us. In trying to ascertain whether we are living the theme, I wish to share with you how other people have rated our efficiency and effectiveness. “ The Africa Competitiveness Report 1998” rated Botswana 13 out of 20 countries on the efficiency of the public services. In the same report it was noted that while the best countries in Africa would install a telephone within a week, Botswana took on average from two weeks to one month to do that. This was despite the fact that Botswana was second best connected country after Mauritius. The work ethic of Botswana has also been poorly rated in the report. (Moleboge, 2002)
But is there really a productivity crisis in the public sector? And if that is the case what is the underlying cause? There seems to be a paradox here because while proponents of public sector reforms give a negative picture when addressing workers, on the other hand, advocates of foreign investment like the Botswana Export Authority (BEDIA) argue the exact opposite. For instance, BEDIA, writes in one of its publication meant for the foreign investors, ‘the 1998 Davos Conference has clearly recognised the competitive environment in the country, when a study conducted by Harvard Institute on African Countries ranked Botswana as one of the most competitive countries in the African continent.’ There is no doubt that labour is a central factor in competitiveness, however it may be assessed. Hence, the public service constituting a major component of the labour market has in some way helped to contribute to this productivity. The problem with groups like BEDIA is that they use information selectively depending on the target. For example, if their audience is the trade movement they are more likely to raise the problem of productivity.
Bach (1999) challenges the unquestioned prism through which public service productivity is being assessed based on a unilateralist model which views the private sector as the best practice. They almost never, however, consider whether or not the model is plausible. Furthermore, productivity advocates often dismiss alternative models. As Petras and Veltmeyer (2001) have argued, western policy makers have always sought to dismantle alternative approaches that tend to limit access to multinationals. Stiglitz (2002), for example criticises the Washington Consensus for plunging the Asian economies into an economic crisis because western planners imposed a wrong solution on them:
Consensus policies emphasised rapid financial and capital market liberalisation, the East Asian countries liberalised only gradually - some of the most successful, like China, still have a long way to go. While the Washington Consensus policies emphasized privatisation, government at the national and local levels helped create efficient enterprises that played a key role in the success of several of the countries. In Washington Consensus view, industrial policies, in which governments try to shape the future direction of the economy, are a mistake (Stiglitz, 2002:92).
The above casts doubt about a simplistic view that tends to generalise that governments or the public sector are inherently inefficient. Botswana’s state-owned enterprises disprove this thinking because over the years they have done well in terms of financial viability. The Ministry of Finance and Development Planning (MFDP) annual economic report of show that, ‘performance of 12 major state-owned public enterprises which are operating on commercial lines. The returns recorded by the majority of these enterprises for 2001/2002 are satisfactory’. But as the manual workers have argued their case against privatisation, profitability is not necessarily a measure of social consumer delivery (goodness). The private sector may make enormous profits but this might due to the highest prices charged to the consumer, poor quality products/service, or low wages (Manual Workers Union 2001). The public sector is about more than just making profits. They provide many people with employment. More importantly, they provide essential services and these will be inaccessible to the majority of people if they were to be left to the market. However, this is not to say the public sector is always efficient. The fact is if we were to use the private sector as a benchmark for the public sector efficiency, then it would have to exploit workers and charge the public higher prices to make profits. Therefore looking at the objectives of public services as welfare providers there is no reason why there may be less productive than the private sector.
Arguably one of the most important works that shaped and continues to influence Botswana’s economic policy is the World Bank study of April 1993. It is entitled ‘Botswana Opportunities for Industrial Development in Botswana: An Economy in Transition’. This study suggested that for the new industrial policy to be competitive, it should shift from a protectionist towards a free market environment. The World Bank suggested amongst other things, the removal of subsidies that were offered to local manufacturers as an incentive to diversify the economy which didn’t work anyway. In addition they proposed the reduction of corporate tax as an incentive for foreign investment. Moreover, the World Bank called for the abolishment of minimum wages to raise productivity. But it was on the latter that the Bank seemed to have been more preoccupied with. On a number of instances the study emphasised the urgency of lowering wages if Botswana was to meet international competitiveness. For example, one option suggested was a clear tolerance of poverty:
(the option is) for Government to either eliminate the minimum wage or to move aggressively to reduce its real level. Botswana’s high wages rates and low levels of productivity are disincentive to investment. In the absence of a minimum wage, it is likely that wage rates would move more closer to a market clearing level—as they have done for rural workers and domestics where minimum wages do not apply. Such action could result in wages that are below poverty datum level. If this did occur, the Government could chose to provide direct income support for individuals fortunate enough to have a job (World Bank, April 28, 1993:107).
The concerns raised by the World Bank report were taken seriously by government because in 1998, for example, the new Industrial Development Policy (IDP) showed government was worried about the state of the labour market and was now willing to change its policy with respect to productivity and wages:
Realigning wages and productivity is of vital importance. The 1993 World Bank Report entitled Opportunities for Industrial Development in Botswana noted that the highly productive mining industry had supported a wage level in mining, and in the public sector that was high by developing country standards. This wage structure, when extended to the manufacturing and service sectors, was above the level the productivity of these industries could support. Thus, the existing policy directed at making manufacturing industries labour-intensive becomes more difficult to achieve without incurring high costs. At the same time, permanent wage subsidies for such industries become both a great burden on the government budget, as well as susceptible to sanctions by trading partners. The only option is to meet the competition on its own ground with a highly competitive and efficient industrial base. Industrial policy must therefore support and encourage the establishment of a substantial core of high productivity, highly competitive export industry (Industrial Development Policy for Botswana, 1998:3).
Whilst these policies are all based on the assumption that wages are high and productivity is low, there seem to fail address the crucial question that explains this relationship. Because as Fleetwood (2006) has argued labour markets do not work in mechanical way, such that a fall in wages caused by abolition of minimum wage would cause an increase in employment. Overall the level of productivity in Botswana should be positive given the increasing GDP. Indeed, Mandlebe (1997) found that labour productivity in Botswana has been increasing. For instance, between 1974 and 1994, it rose by an average 1.4 percent annually. Most of the productivity gains is ascribed to mining which is highly a capital-intensive industry (Bhalla et al., 2000). But as Kotz (2003) has noted the way labour productivity is measured is problematic because the GDP does not include the non-financial output. This is an important observation for Botswana where the productivity of people working in households and farms is not accounted for.
The government controlled National Employment, Manpower and Incomes Council (NEMIC) is one mechanism that is used to influence a lower wages policy. The strategy of containing wages is important to meet the imperatives of the World Bank and IMF’s global capitalism. As UN study on globalisation and liberalisation on Botswana suggests:
Increasing labour productivity and reducing unit labour costs are some of the key issues for competitiveness in the global economy. Theoretically countries that have improved labour productivity and reduced real wages are more likely to reap the best of the benefits of new opportunities from globalisation, mainly through competitive prices for their commodities and through foreign investment attracted by high productivity and low wages for labour (Bhalla, 2000:45).
But reducing unit labour costs is one way to show a quantitative increase in labour productivity, but is this really the solution sought by the government? Surely what they should seek is an increase in productivity via better productive techniques and new better technology.
This paper has attempted to demonstrate that the ongoing reforms in public service are linked to overall developments in political economy. I argued that like other former colonies, Botswana’s economic fundamentals were shaped by imperialism. Mining capitalism, which was the key source of accumulation for colonialists in Southern Africa, is now the lifeblood of Botswana economy and the major source of revenue to the government, which is the biggest employer in the country.
The failure to diversify the economy to other sectors and create the much needed jobs has seen government adopting the neoliberal reforms as a desperate measurer to develop local businesses and also attract foreign investors. In the public service this reforms gradually cropped in through the notion of productivity. However, in recent years public service restructuring has accelerated with more reforms geared at improving performance. Notably, these were market orientated and radically shaped the nature of the civil service in a way that service delivery meant satisfying private sector interests. This is seen from the main government reform, performance management system (PMS) and its attendant policies; privatisation, outsourcing, commercialisation and corporatization etc. But as government proceeds with its reform programme with the hope of creating employment. At the same time, the transformation they are embarking upon has negative consequences for public service workers. Considering the countries mass unemployment and widespread poverty, it is argued that the reforms will exacerbate these problems. The most affected will be the lower class whose jobs have been targeted for contracting out to the private sector. Ironically, while government talks of employment creation, it is on the other hand planning to dismiss public service workers as part of its attempt to “rightsize” its workforce. The idea of sucking government workers is not peculiar to Botswana but forms part of a global strategy taken from the private sector management to enhance performance. For example, reducing expenditure is justified under value for money or ‘best value’. But what is really meant by best? To some best value means the worst outcome.
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