When the term Globalization is used, it is often in a negative context. The environmental and social impact of globalization have produced troubling situations for developing nations.
However, there are many good news stories around the world providing examples of what can happen when nations are able to become self-efficient. Such good stories are prevalent in the Southern African nation of Botswana. Let's explore Botswana's strengths and opportunities it may present for Canadian organizations trying to improve revenues.
Botswana is located just north of South Africa and shares its border with South Africa, Namibia, Zambia and Zimbabwe. Based on statistics from the United Nations Department of Economic Affairs, Botswana has a population of approximately 1.8 million people. The nation is a Presidential Representative Republic Democratic Republic with a multi-party parliament. The current President of Botswana is Ian Khama, member of the Botswana Democratic Party. Botswana has free and fair elections every 5 years.
We mention this model for democracy as one of the criticisms of Africa is the lack of democracy. According to monitoring agency Transparency International, Botswana ranked 38th out of 171 nations in its annual Corruption Perceptions Index. This makes Botswana the least corrupt nation in Africa and ranks it ahead of huge markets such as India and Brazil. The political and legal climate in Botswana is stable, allowing it to be open for business.
From an economic point of view, Botswana is a solid performer in terms of GDP. According to the World Bank Report "African Development Factors 2007", Botswana experience GDP Growth of 6.7 per cent 1996-2005. Diamonds make up 88 per cent of the nation's exports as of 2005; however the country has taken steps to diversify its economy.
That being said, according to ResourceStocks Australia's World Risk Survey for Mining (2005), Botswana ranked number one in terms of posing the least risk for investors. The results of this survey are more impressive considering that Botswana beat Canada and the United States in this area. According to the same World Bank Report, Botswana boasts of a literacy rate of 94 percent for the 15-24 age groups.
Additionally, Botswana established the Botswana International Financial Services Centre in 2003. This was created to grow the financial services sector and develop more banking, insurance and fund management skills in Botswana. This illustrates an effective use of natural resources revenues to assist in economic diversification.
There is also a human side to Botswana, where Canadian organizations can improve quality of life for the people of Botswana. Before HIV/AIDS, Botswana's economy was growing at 9 percent per year. The Government has had to invest hundreds of millions of dollars to fight HIV/AIDS.
Because of HIV/AIDS, life expectancy in Botswana is 35 years. The good news, this is improving due to strong government focus. According to the IMF, this number is expected to continue to improve.
So where are the opportunities for Canadian firms in relation to Botswana? Manufacturing skills in Ontario in the areas of producing equipment used for mining of natural resources is the most obvious fit. According to Industry Canada, the major avenue for our trade with Botswana is in motor vehicles. However, there is a now a sharp increase in international trade in medical equipment. This does make sense in the face of HIV/AIDS. However, Canada can do much better.
As Botswana looks to transform its government by integrating more electronic means to serve its public—Canadian firms could look to provide IT Consulting and Infrastructure that would enable this transformation to take place.
Additionally, the move to diversify its economy into financial services should be of great interest in Canadian firms. The solid foundation of Canada's financial services sector could be exported to Botswana, especially since the country is located in a strategic area of Africa. One of the Millennium Development Goals for Botswana is environmental sustainability. The Green Technologies being developed in Canada could be exported to Botswana to help the nation accelerate its targets in this area. There are also trade opportunities in the area of agriculture.
Botswana has proved to the world that African-run states can produce solid economics and address the social issues necessary to ensure a fair society. This nation, like all others, has its challenges; however these challenges present great opportunity for the people of both Botswana and Canada.
As Botswana aims to create more Botswana-owned companies—the struggling Ontario Economy would be wise to look at Botswana as a high-growth trading partner as Ontario also deals with the U.S. economy.
With its stable government, history of executing sound economic policy and its determination to address the HIV/AIDS issue straight on—Botswana is a hidden gem that Canadians can no longer afford to ignore.
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