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September 26, 2006

Good governance and development: Botswana is forty on the 30th September 2006

Are there features of the last forty years that make Botswana is some sense special?

Botswana achieved independence on the 30th September 1966, under the leadership of Sir Seretse Khama. Khama, with the cooperation of the ‘new men’ of the Bechuanaland Protectorate founded the Botswana Democratic Party in October 1962. In the face of opposition from more radically groups, Khama seized a march on radical and traditionalists alike and swept the board in the self-government elections. The strength of his victory meant that the constitutional development from self-government to independence was rapid.

The outside world was skeptical. Apartheid South Africa attempted to treat the country like a Bantustan. UDI Rhodesia was also to cause problems for the credibility of the newly independent Botswana. Neither of these regimes exists today. Botswana achieved independence surrounded by minority regimes hostile to its existence. The country was poor. Seretse Khama once said that the ‘national dress was rags!’ and he, and his close colleague, and long-serving second President of Botswana, Ketumile Masire, were determined to use the prospects of mineral development to improve the lot of the people of Botswana. Botswana’s multi-party democracy is robust, even if dominated by the Botswana Democratic Party. The party that Khama founded is still in power today, some nine elections later, elections that now also carry the seal of approval of outside observers. Botswana claims, not without justification, to be the oldest democracy in the African continent whilst the old racist enemies have vanished. The ‘hand of friendship’ offered by Kenneth Kaunda helped in the early days but the country soon had a reputation of its own. Over time, Khama and then Masire became better known and the country’s record of economic development understood.

Botswana achieved rapid development not around copper-nickel deposits as was first hoped but through the discovery of diamonds and by means of a carefully worked out (and recently re-worked) agreement with De Beers. Planning was the basis for government developmental activity. Early it its life Botswana was called an ‘administrative state’, as the influence of development-led administrative action and support were seen as its principal means of resource mobilization. Latterly it has been defined as a ‘developmental state’, a type of state (first identified in East Asia) in which the market and the state apparatus operate together to enhance economic development.

Botswana’s ‘administrative state’ pre-dates the notion of the developmental state but in essence there are great similarities. What counted was the attempt by Khama and Masire to institutionalize the new state and to approach policy through an economically prudent and ends-oriented vision. There was no spending spree, in the style of Nigeria, of mineral wealth. There is no ‘kleptocracy’ as corruption has been kept within bounds. Botswana was and is still recongized as a good place to do honest business. The continuity of approach through a combination of development effort and socio-democratic principles goes from Khama through Masire to Mogae. Ian Khama, Seretse’s eldest son, and currently the Vice-president is expected to be the next President when Mogae stands down in a couple of years’ time.

The democracy is not without some blemishes. Some see that that ‘dominant party’ has never had to relinquish power (though it has had to renew itself from time to time). The treatment of the San people and their expulsion from the Central Kalahari Game Reserve is one area of political life that is under international scrutiny. The result of a High Court case concerning the San peoples’ rights is awaited towards the end of this year. The rule of law is highly respected in Botswana and it will be interesting to see the Court’s judgment. The constitution has been reviewed in order to eliminate ethnic bias and to put representation in the House of Chiefs (an advisory chamber) on a regional and district basis rather than on an ethnic basis. Questions are being asked about the death penalty and about the presidential power of declaring outsiders to be prohibited immigrants. Unemployment is still high and the distribution of income unequal. Blemishes are there but so are the democratic voices calling for change. Civil society is weak in Botswana but developing rapidly.

The past forty years have seen many dramatic changes in southern-Africa. Botswana has remained relatively calm (even when refugees were pouring over three of its borders) and relatively prosperous. It is tackling its biggest problem, that of HIV/AIDS with courage, dignity and with health resources and innovative projects. Defeating the virus is a national priority. The country is several times better of in economic terms that it was at independence. Enhancing development and raising living standards in rural areas is also a priority. The country is, according to the President, Festus Mogae, on target to meet its development objectives by 2016.

September 15, 2006

Doha: still breathing?

There seems to be efforts to revive the Doha Round. This is good news but how good?

Since I last wrote about Doha I have been asked why Doha? The idea of ‘rounds of trade negotiations’ is an outcome of the way in which the General Agreement on Tariffs and Trade (GATT) worked. The rounds were named after places where the meetings that initiated the talks were held. The World Trade Organization (WTO) has continued this. The Doha Round is named after the capital of Qatar (a Gulf emirate).

The talks were recently suspended. Since then a number of different countries and institutions have called for the re-start of talks. Chancellor Gordon Brown (UK and Chair of the IMF’s policy steering group) has expressed a high level of optimism about the re-start and likely progress of the talks. The Australian Treasurer (Peter Costello) also called recently for the re-start of the Doha Round, stressing to other members of the Asian-Pacific Economic Cooperation (APEC) that the talks ought not to be allowed to fail. United States Trade Secretary Henry Paulson has also stated very clearly that the re-launch of the Doha Round is an important priority area for his activities. The United States is accepting that in part of the global adjustment to imbalances (including that of the United States); letting markets work may be a significant part of the process. The aim seems to be to re-address the question of agricultural subsidies in Europe and the United States and so work further towards the liberalization of trade in agricultural produce. What the developing countries want is for the EU, for example, to raises its average tariff cuts to match the expectations of the developing world and of other exporters. This means an offer in excess of the present offer of 39% average tariff reductions. The United States has offered cuts in subsidies but the overall package of subsides provided by the United States is currently contentious. Large developing countries object to the United States stance as does the EU. The G20 group (with India and Brazil as prominent members) has undertaken a review of the state of play and has called for the developed countries to reconsider their position. Some member of the European Parliament (albeit British members) are calling for a New Zealand type adjustment leading to the removal of all subsidies to European farmers, irrespective of Doha.

There is a lot on the agenda if the talks re-start (perhaps sometime after the US mid-term elections). New Zealand removed agricultural subsidies in the mid-1980s. This led to adjustments within the sector and the adoption of a ‘business’ approach by New Zealand farmers leading to significant growth in the agricultural sector. It is interesting that New Zealand’s approach was recently discussed at an Economic Policy Program meeting in Washington D.C. This may not amount to much but the re-start of Doha raises questions about the type of adjustments that are likely to be needed to satisfy all participants. World trade is always about domestic trade in the end and the adjustment of domestic markets and conditions in its light.

Good news then but how good? This depends on how far the talks go with respect to the issue of agricultural markets and domestic subsidies in Europe and the United States. The US wants access to European markets. It is faced with demands from India and Brazil to adjust its domestic subsidies. It is a question of how far all parties will be prepared to go. Even if successful, the actual gains world-wide are not expected to be massive in relation to the present volume of global trade. Nonetheless they are expected to be positive and available to the world’s poorest countries.

In an earlier report I asked ‘who cares’ about the collapse of the Doha Round. The answer seems, fortunately, to be rather a lot of people, institutions and countries.

September 12, 2006

Cameron Goes Global: Britain and the United States

On the anniversary of September 11th David Cameron gave the JP Morgan Lecture at the British American Project in London. What issues were keys to his thinking? What does he mean by a ‘liberal conservative’ policy? How does he interpret Britain’s junior partnership with the United States in matters of foreign policy?

Being Leader of the Opposition in British political life has never been easy. Whilst Cameron was busy delivering his speech, Tony Blair had already informed the British Trade Union movement that being in Government, however difficult, was so much better than wasting your time in Opposition. The Leader of the Opposition is always in the business of spectatorship, however informed, however active, however much in the political ascendancy, the post lacks power and the support and information and direct engagement with policy formation and direction that is the hallmark of power. The agenda for British foreign policy has already been set by Blair, even if it seems to be in disarray in so far as the British public is concerned. Cameron is in a difficult bind. Not only has he no direct engagement with policy, key elements of that policy, as set by the United States, have been developed by ‘neocon’ thinkers. Cameron finds himself having to distance himself from Blair and from ‘neocon’ ideas. For a conservative this is a hard project. Cameron, in a thoughtful speech, has tried to demonstrate new credentials whilst accepting that events unfold too quickly to develop specific policy. In doing so, he draws upon a Conservative tradition.

Cameron argues that ‘terrorism cannot be appeased – it has to be defeated’. However this needs something more than force. It requires also ‘separating terrorists from their recruiting base’ and ‘winning the trust of Muslim … communities’. Cameron knows that action in the Middle-East has fanned ‘the flames of anti-Americanism’ in Britain and around the world. In describing the present relationship with the United States he calls upon the images of Churchill, and Roosevelt; Thatcher and Reagan; Major and George Bush. He sees these relationships as balanced though Britain played the junior part. In his eyes Blair has supported uncritically. Uncritical support is in the context of complex problems, unhelpful and shortsighted. For the development of beneficial outcomes the junior partner needs to have a clearer and independently worked stance.

The two ‘crucial qualities’ that he finds lacking in the evolution of policy since 9/11 are ‘humility and patience’. His ‘liberal conservative approach’ would be based on understanding: the threat; that democracy cannot be quickly imposed from outside; that the strategy needs to go beyond military intervention; that there is still a significant role for a new multilateralism to tackle all aspects of global challenges; that moral authority is of huge importance. Cameron argues that ‘there are more tools to statecraft than military power’ and cites numerous areas in which British development policy can be brought into play. He does not detail where the ‘humility and patience’ comes in but it is implicit in what he has to say about the growth of democracy in societies where customs and manners dictates against democratic processes. Understanding such societies calls for both virtues. Multilateralism, based on institutions and on alliances, also calls for the two virtues to be exercised and agreement to be built. Even a superpower will feel constraints on what is possible without strategic and moral support.

Cameron’s wife was in Manhattan the day of 9/11. He followed events with horror and with his own personal concerns. He is in no doubt of the need to tackle international terror. His ideas are thoughtful and even interesting and they are far from radical. His suggestion, derived from liberal credentials that go back to Gladstone, that ‘we must be wise as well as good’ is no doubt sincere but it is hard to see in the hurly-burley of international developments, particularly of terrorist attacks, how these two virtues, however desirable, can in fact be maintained. The approach is mature but he needs to be tested in office or pushed a bit harder before gaining office, before the British public can be certain that there is a new direction for British foreign policy and a better (more evaluative and hence ultimately more helpful to all concerned) basis for the relationship with the United States.

September 5, 2006

Blair: Going, going but not yet gone!

Is Tony Blair likely to choose his own exit strategy or will he be pushed from office?

The Labour Party in the United Kingdom is, when it comes to leadership struggles, historically less ruthless that its Conservative opponents. In British political life, long-lived governments eventually fall apart. The problems become too great, the concentration diminishes, the leaders get tired, the press gets restless and in the end, the electorate deserts the party in power, repelled by the perceived behavior rather than necessarily attracted by the alternative. Blair said he would go. Now the issue seems as if it can no longer be avoided. If any successor is to have time to establish a reputation as Prime Minister before a general election, that successor needs time. By all accounts the coming Party Conference, in Manchester, is being predicted as the last that Blair will address as leader.

What are the problems facing Blair? The war in Iraq and subsequent events in the Middle-East have drained away much support. Blair needs Bush to achieve foreign policy influence but Bush is to the British public at least somewhat un-giving. The relationship would seem on the face of it to have benefited Bush more than it has Blair. Blair cannot really go public about specific aspects of any ‘influence’ he may have. It is hard to see just what domestic constituency, either in his party or in the country, his current foreign policy appeals to. Domestic problems with (still) a small group of radicalized Muslim youth and the consequences for British security, have unsettled the public. The fiasco at the Home Office over criminal migrants released from prison rather than deported has also made the Government look incompetent. The Tories under David Cameron need not make too much of a fuss: the government and internal divisions in the ranks are helping their case nicely along with the electorate.

But this is a new Parliamentary term. Blair is still in charge and still capable of a revival. Any British Prime MInister wields enormous patronage. Gordon Brown (Chancellor and the heir apparent) lacks Blair’s drive for power and probably feels that cooperation rather that out-and-out confrontation is still the best strategy. Whatever happens, there will be an internal party election and Brown has potential rivals. Blair may wish a successor in his own image and this Gordon Brown is not. Unless there is an open revolt, and the recently reported ‘private’ letter from 17 Blairite MPs, does not in my mind constitute open revolt, Blair can chose his moment. This is still the ‘nice’ phase. The ruthless phase is still some time away. Blair, if he is wise (Prime Minsters do not tend to go willingly) will decide his own fate by developing a proper exit strategy rather than promoting a crisis, and Gordon will just have to wait. A question remains as to whether or not Blair's personality and drive makes a planned exit a viable option.

September 1, 2006

Gone for now, but please do not forget about Doha

Is there any hope of reviving Doha’s aim to liberalize trade in agricultural products?

Economic globalization has many enemies, yet the sorts of changes that we have seen in recent years are helping to pull people out of absolute poverty, especially in Asia, and not just in India and China, at a faster rate than at any time in recorded history. Globalization is still a partial phenomenon: there is no open market in international labor and there are still many restricted markets in agricultural products. Given the sheer significance of agriculture in the developing world, changes in the way in which international trade is conducted in agricultural products are capable of having a huge impact on rural living standards in such countries. Multilateral trade negotiations are the basis for trade expansion in the post-World War II world, assisted by the most-favored nation clause. Such negotiations are not easy. Agriculture in many countries is a highly protected sector. There are vested interests with respect to agricultural outputs and to farm inputs, not only in the European Union but in the United States and it would seem also India. If developed market economies (DMEs) and those that live in them are serious about raising the living standards of poor rural people in the developing countries, domestic change in DMEs is essential.

The suspension of the Doha talks at the end of July was described by the Economist newspaper as ‘senseless and shortsighted’. At the end of June the Vienna Summit Declaration looked as if it was sending a message to the Doha negotiators (see the weblog ‘Don’t forget about Doha’) reinforcing the significance of Doha and of freer trade in agricultural produce. By the end of July, the Economist was reporting the suspension of the talks. If the Vienna Summit did send a message, the negotiators (the ‘trade ministers’ mentioned in the Declaration) were not listening. The Economist fears that the break down is in fact a challenge to the whole idea of multilateralism in trade negotiations.

A significant opportunity to liberalize trade in agriculture and to shake up high-priced domestic producers in DMEs has been missed. The aim may well have been unrealistic but it was worth pursuing. There is no great popular constituency for agricultural change in DMEs. Doha’s suspension grabbed no headlines. Its possible outcomes in improving, through time, the lot of the rural people in the developing world are hard for the popular imagination to grasp. Those with a potential interest see the WTO as an organization without legitimacy. The Doha Round has been in trouble before. There does not appear to be a date set for the resumption of the talks. Who cares?