Botswana: Is the Economic Miracle Over?

Botswana was the world's fastest growing economy from 1966 to 1989. Rapid growth was to be expected because of the discovery of large diamond deposits. What is unusual is that the economy has not suffered from the Dutch Disease, as is common in mineral boom economies. Although rapid mineral-led growth tends to result n greater income inequality and urban bias, Botswana's record (though flawed) has some points that can be made in its favour. Most importantly, formal sector employment grew very fast over a long period, reaching most rural as well as urban households, and beginning to reduce the backlog of those unable to get formal sector jobs in the past. The government's control of its own spending slipped badly in the late 1980s, at high cost: inflation of construction costs and weaker control of the quality of projects. All control was not lost, however; and it is argued that the factors which underlay past good management are still present.