Growth without Development?
Although Botswana safely weathered the global “conflict diamond” tempest, gradually mounting domestic criticism concerning economic inequity within the country was proving harder to overcome. Accusations and admissions of corruption associated with Botswana’s diamond industry had also begun to plague a government that was otherwise lauded as a model on the continent. Responding to allegations of acute domestic inequality, the government has repeatedly pointed to a range of accomplishments, including the prodigious “rainy-day” reserves it has strategically amassed; the widespread provision of basic services it has overseen, such as greatly improved access to health care, electricity, education, and clean drinking water; and the country’s impressive social accomplishments, including literacy rates of 80 percent for adults and 94 percent for youths. However, with poverty levels still uncomfortably elevated, the second highest HIV/AIDS prevalence rate in the world (only Swaziland’s is higher), and gross inequality between the country’s elites and much of its citizenry, accusations of corruption are particularly damning and have been much harder to dismiss. Clearly, much work remains.
Although Botswana is arguably the world’s best example of how diamonds can assist in the rapid, peaceful development of a nation, its deposits can’t help it surmount every challenge, nor has the government done enough to address some of the more important ones. While Botswana’s diamond revenues have helped reduce poverty levels and have significantly upgraded the standard of living over the past forty years (in 2005, GDP per capita was a respectable $12,387, compared to just $216 in Sierra Leone), calls persist for the government to spend even more of the mineral profits. Simply put, some Botswanans have benefited from the country’s economic success to a much greater degree than others. For example, despite the country’s small population, which is only slightly larger than New Mexico’s, and the over $3 billion a year it enjoys in diamond revenues, more than half of the population lives on less than $2 per day. At the same time, the wealthiest 10 percent of Botswanan society controls half of the country’s overall income—one of the highest levels of income inequality in the world. These deep social inequities remain at the heart of the growing domestic discontent.
To be fair to Botswana’s post-independence administrations, these divides existed long before the discovery of diamonds. For centuries, the status of residents was largely dictated by the number of cattle owned, with a small number of chiefs and their relatives dominating the ranks of large-scale cattle holders. These differences remained entrenched following the end of the colonial period, as many of these elites moved into government, thereby forging powerful connections between large cattle holders and the political administration, which, in turn, replicated and perpetuated historical inequalities. In the early years of independence, for example, two-thirds of Botswana’s National Assembly was made up of owners of large or medium-sized cattle herds.
In fact, these socioeconomic discrepancies are not just persisting, but deepening, which is squarely at odds with the prevailing public perception that Botswana pursues a broad-based approach to development. In practice, the indifference that the government has often displayed in the face of these social challenges may well be a manifestation of its political overconfidence and complacency: since independence, the Botswana Democratic Party (BDP) has enjoyed exclusive control of the reins of state. The BDP’s successes at the ballot box have given it scant reason to revise its governing policies. Yet, until the government addresses a range of serious domestic problems and, in particular, unemployment, accusations regarding its self-serving approach to power will persist.
Even though Botswana’s diamond industry serves as the major driving force in the country’s economy, this capital-intensive sector employs only roughly 8,000 citizens—about 4 percent of the total labor force. Furthermore, the industry generates few jobs outside of mining, with the exception of public sector positions in the state bureaucracy. As such, diamond mining operates as a type of enclave, both physically and economically. The government of Botswana has been working with De Beers to establish diamond-cutting and -polishing operations in the country, but these initiatives have not generated, and really aren’t designed to generate, large numbers of jobs. Additional employment opportunities outside the mining sector are sorely needed.
Botswana’s BDP government also troubled the nation by admitting that certain public officials have had unethical links to De Beers as far back as the 1980–88 presidency of Ketumile Masire. In the spring of 2011, for example, an investigation revealed that “De Beers bailed out former President Masire when he was in debt; Masire even acknowledged this. What is now needed is . . . to investigate how such transactions affected the business deals Botswana had been making with De Beers, a company that is profit driven.”[127]While Masire did acknowledge that the diamond giant had provided “modest support” to help his farming business in the mid-1980s, he maintained that this financial assistance “did not materially compromise his government’s bilateral dealings with the company.”[128]These initial revelations naturally came as somewhat of a shock to a country that had prided itself on, and has been lauded by the international community for, governmental transparency and a lack of corruption. Now that the country’s halo has been tarnished, foreign investment in Botswana could be adversely affected. It is worth noting, though, that corruption exists everywhere in the world and that this example hardly seems egregious. In fact, in most African diamond-producing nations, a disclosure of this nature would be barely newsworthy, let alone “scandalous.” In many respects, the sensationalism surrounding Masire’s admission is a testament to the otherwise largely prudent ways that successive Botswanan governments have managed the country’s diamond resources.
Gaborone’s Heavy-Handedness in “The Last Eden”
Whereas allegations of corruption are relatively new in Botswana, administrations since the 1980s have come under fire for their treatment of the ethnic Basarwa/San populations. This controversy stems from the fact that some of these communities are “inconveniently” located on or near prospective diamond deposits in the country’s Central Kalahari Game Reserve (CKGR). The most persistent criticism has been leveled by Survival International (SI), a London-based NGO focused on indigenous rights. SI classifies efforts by De Beers and Botswana’s government to remove and, from 2002, to deny water and other basic services to these communities (who may well have resided in the CKGR area for tens of thousands of years), as genocide. The UN Committee on the Elimination of Racial Discrimination has also condemned Botswana for its “ongoing dispossession of Basarwa/San people from their land.”[129]Moreover, outcries from international celebrities, including fashion models Iman, Lily Cole, and Erin O’Conner, all of whom had previously advertised for De Beers, helped prompt candlelight vigils outside Botswanan diplomatic offices overseas. Given these allegations, it’s somewhat difficult to reconcile Botswana’s “Diamonds for Development” campaign with the government’s more severe measures in the CKGR. This incongruence naturally raises the question: Just how “clean” are Botswana’s diamonds?
Rather than yield in the face of this unwanted attention, Gaborone continued to insist that these indigenous peoples could no longer maintain their lifestyles solely via hunting and gathering, and therefore they jeopardized the country’s wildlife resources, that is, valuable tourist assets. Interested in developing tourism, as well as further assisting the diamond industry, in 2002 the government began cutting off water supplies to these CKGR communities. It also, however, allegedly fined, taxed, beat, and tortured members of these populations located in what it promotes as “the last Eden.” Although the CKGR had originally been established in 1961 on the ancestral lands of ethnic San groups, the government subsequently relocated members of these communities to “resettlement camps.” In their new locations, residents received subsidies, while hunting and gathering was allegedly more feasible—or, at least less intrusive. In 2006, Botswana’s High Court finally reach
ed a verdict that ensured the right of return to the CKGR for these relocated populations, highlighting both the country’s independent judiciary and its functioning democracy. Smarting from this loss in court and still bitter about the negative international campaign, although Botswana’s government complied, it endeavored to make life extremely difficult for those individuals who desired to return to the CKGR.
Upon review, it appears that Botswana’s desire to develop its tourist industry, rather than to assist the mining sector, had served as the primary impetus for its initial aggression. Even as it sided with the indigenous communities, the country’s High Court had included in its ruling an explicit exoneration of the role of diamonds in the initial relocations. In that sense, it was united with the country’s executive in its stance against the accusations that Botswana’s stones were tainted or should somehow be characterized as “blood diamonds.” As further confirmation, De Beers eventually discontinued prospecting in the contested region due to the absence of any commercially viable deposits, though it was also mindful of the potential global backlash against “corporate bullying.”
Unfortunately for Botswana’s government and its diamond industry, the release of the film Blood Diamond shortly after the High Court’s verdict seemed to revive the issue, especially in light of the administration’s heavy-handed actions following the court decision. Audiences worldwide were flocking to the film, thereby reigniting the “blood diamond” flame. As part of this resuscitation of the issue, activists launched a new campaign intended to cast Botswana’s stones as “conflict diamonds” and, concomitantly, scuttle the country’s blossoming tourist industry. However, these campaigners’ fanciful attempts to analogize the governmental indiscretion in Botswana to the mayhem in Angola and Sierra Leone only trivialized the “blood diamond” conflicts. For example, during the boycott of the first De Beers store in the United States in the mid-2000s, the US American activist Gloria Steinem, who had recently returned from the Kalahari, declared: “The fact is . . . De Beers is supporting the genocide of this culture. . . . And I certainly feel completely clear in calling for a boycott of every diamond.”[130]
In response, the government of Botswana hired a prominent public relations firm, while its senior officials, including President Festus Mogae, defended the country’s human rights record and its “clean” diamonds in front of a series of high-profile audiences around the world. These efforts were bolstered by no less a person than Leonardo DiCaprio himself, the star of Blood Diamond, who publicly lauded Botswana for utilizing its diamond revenues for socially productive ends. After all of the bad publicity that Blood Diamond had indirectly generated, the film was finally poised to make a positive contribution to the country’s economic development.Ultimately, Botswana’s impressive administrative track record enabled it to counter and quickly dispel what were largely a series of hyperbolic attacks and accusations; consequently, Survival International’s calls were largely ignored both within Botswana, and far beyond its borders.
Despite the problems outlined above, the majority of the population and the international community continue to perceive Botswana as a largely benevolent state. Massive investments in education, transport, social welfare, and health, including the free distribution of antiretrovirals to HIV-positive individuals, are largely responsible for these widely favorable views. In light of these socially beneficial measures and the history of responsible resource management, the campaign against Botswana’s stones seems ultimately to have been, at best, misguided, and, at worst, uninformed and wasteful.
Namibia: Two Decades of Diamond-Fueled Progress
Although Namibia and Botswana have managed their diamond deposits in similar ways in recent decades, their historical trajectories are very different. Most notably, diamonds have profoundly affected Namibians since the initial discoveries in this former German colony of South West Africa, all the way back in 1908, almost sixty years before the Orapa finds in Botswana. Following these finds, African laborers in South West Africa who had been working on railroad projects were quickly transferred to the diamond-rich beaches. Once there, they were made to crawl on their hands and knees, sifting through the burning sands for valuable stones with tin cans around their necks into which they placed any finds, and often gagged so as to prevent them from concealing diamonds in their mouths. The end of the German occupation at the conclusion of World War I came not a moment too soon for these and other Namibians. Yet the seventy-one years of hostile South African overrule that ensued were barely preferable; the plight of most indigenous Namibians closely resembled the challenging experiences of black South Africans under white minority rule in that country.
In contrast to the peaceful decolonization process in Botswana, Namibians, like their South African neighbors, were forced to fight for independence, led in this endeavor by SWAPO, the South West Africa People’s Organization. In fact, the violence associated with SWAPO’s nationalist struggle was, for a time, closely linked to the conflict in neighboring Angola, one of the epicenters of blood diamonds. Only following independence in 1990 were Namibians finally able to assume control over the country’s rich diamond deposits and allocate the revenues for the overall betterment of the population.
Since independence, Namibia has traveled a largely pacific path, with SWAPO transitioning from a liberation movement to the country’s ruling political party. Determined to overcome the nation’s heavy heritage, a series of SWAPO administrations have committed to using Namibia’s mineral wealth for national development in a transparent, peaceful manner. It is during this post-independence period that the parallels with Botswana begin to materialize. Like Botswana, Namibia also features a small population—at just over two million people—and diamond deposits that are difficult to access and, thus, reasonably easy to safeguard. These demographic and geological features have played key roles in the country’s avoidance of domestic, diamond-related turmoil.
The Seeds of Post-Independence Diamond Success
Unlike Botswana, Namibia inherited a well-established, highly profitable diamond industry at independence. Following the Second World War, the mandate experienced a mining boom which, going forward, accounted for between one-half and three-quarters of its total exports. At the time, Namibia’s diamond industry was controlled by the monopolistic Consolidated Diamond Mines (CDM), a subsidiary of Anglo American. The alluvial stones that the enterprise was mining were primarily washed down to the sea near Oranjemund by the Orange River and lay buried in coastal sands or embedded in the gravels of marine terraces on the floor of the Atlantic Ocean, stretching out from the mainland. The nature of these formations rendered over 90 percent of Namibia’s diamonds gem quality. Consequently, in the early 1970s, CDM was the world’s largest producer of gem diamonds and, given the high value of these stones, was generating almost half of Anglo American’s total (net) profits.
As SWAPO launched its struggle for independence from South Africa, the movement’s leaders naturally eyed these valuable deposits, but any attempt to access them would have been suicidal. The open terrain of the coast and adjacent restricted entry zone that stretches back into the interior failed to offer sufficient cover for the guerrilla outfit, which was most active and successful in the tropical areas of northern Namibia. As one former SWAPO fighter, who later became the country’s director of mines, declared: “We could not have operated there. The South Africans would have simply bombed us.”[131]In many respects, post-independence Namibian governments have benefited from the absence of fighting in these diamondiferous coastal regions. With little trouble, CDM engineers could have breached the retaining walls that the company had constructed and simply watched as the ocean rushed back in and re-covered the exposed deposits. In this sense, SWAPO’s most important military operation was, arguably, one that it never conducted.
In addition to the coastal mines that SWAPO coveted, Namibia also features more deeply submerged underwater deposits, which workers first began accessing in the 1950s. In fact, the hi
story of seabed mining owes more to a pioneering Texan named Sam Collins than to De Beers or any other multinational mining company. Motivated by tales of individuals retrieving diamonds from the sea floor using pumps, and also by occasional diamond finds in the shallows off of the coasts of Namibia, Angola, and South Africa, Collins’s Marine Diamond Corporation began mining in 1961. Success was instantaneous: in the first five days of mining, 1,018 high-quality carats were “sucked up” and over 550,000 would follow. However, the maverick Texan’s operation soon succumbed to the unpredictability, high risks, and even higher costs associated with this type of mining. Faced with mounting expenses, Collins gave way to De Beers in 1965. The behemoth moved in aggressively, buying control and picking up where Collins had left off.
Namibia’s Diamonds for Namibia—Finally!
Soon after Namibia’s independence, its SWAPO-led administration and De Beers validated an agreement regarding the country’s diamond deposits. Inspired by the Botswanan scenario, this accord also produced a joint mining enterprise (with a similarly generated title): the Namdeb Diamond Corporation. Equally owned by the state and De Beers, Namdeb was responsible for production for the next twenty-five years. For the diamond giant, this arrangement was preferable to a potential nationalization of the industry and, quite simply, De Beers needed to secure this vital output in order to continue to manipulate global carat prices. The agreement also helped the recently formed Namibian state establish an economic foundation: diamonds quickly constituted roughly 40 percent of its annual foreign exchange earnings, while Namdeb remains the country’s largest employer. However, unlike in Botswana, the Namibian government denied De Beers mining exclusivity and, even today, a number of smaller operators continue to mine in the country, especially offshore—reminiscent of the plucky Texan, Collins.
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