...Botswana: A Diamond in the Rough Botswana, a country in the south of the African continent, has a surprising success story. This is because this country is located in a continent which has a history of colonization, poverty, and diseases. Botswana created an increase in its' GDP from 25% of the world's gem-quality diamonds, which was operated by a joint venture between the Bostwanan government and De Beers, the South African mining giant, which essentially controlled the world diamond market. If an individual would examine the case of Botswana's story, he/she will agree that this is a success story. Botswana's economic growth has outplaced even the “Asian Tigers”. This group consists of Hong Kong, Singapore, South Korea and Taiwan, which are the best in economic growth in such a short period of time. This is something big. By one estimate, it has the fourth highest GDP in Africa, giving it a standard of living which countries such as Mexico or Turkey has right now. One of the biggest reasons that Botswana has experienced a success story was that they were not in the eyes of the big european colonization in the beginning of the 19th century. Many African countries were being colonized at that time, losing their resources and cultures. Botswana was not united back then, there were members of related African tribes which migrated to the area in the middle of the 18th century. Another reason for this success story is that Botswana did not get affected by the Dutch...
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...Organizations The De Beers Diamond Corporation Dr. Beth Kane Business 475: Business and Society January 28, 2014 The De Beers Diamond Corporation is a multinational diamond mining, hops, trading, and manufacturing business. In this paper the nature, structure, and types of product this corporation is involved well be analyzed. As with every large corporation stakeholders salient stakeholders are involved with the shaping of the companies direction, three key stakeholders relationships and roles will be evaluated. There are five key points for primary stakeholders wielding influence inside the corporations mainframe and the evidence of this behavior at De Beers. During the building and development of most businesses there are social issues that arise to challenge the structure and integrity of the corporation, De Beers faced this as well. This paper will detail the issue in which De Beers faced as well as the corporate and social changes that were wrought from the situation. This paper will also cover a hypothetical situation were a first person narrative of the roles of forming a stakeholder coalition. During this hypothetical situation the leader role will explore three (3) potential holdups for the the forming of a stakeholder coalition. The De Beers Diamond Corporation is a privately owned multinational conglomerate established in 1888 by Cecil Rhodes. Rhodes invested money made from renting water pumps to diamond miners into buying mining...
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... De Beers Introduction For generations, diamonds have been marketed as tokens of power and love. For some however, diamonds have a more utilitarian appeal. Easily concealed, immensely valuable and largely untraceable, stones from rebel-held mines have raised billions of dollars on world markets to finance revolution in Angola, Sierra Leone and the Democratic Republic of Congo (DRC). For years these "conflict diamonds" have encourage rebel leaders to arm and equip their armies in violation of UN weapons and financial sanctions. Diamond monopoly De Beers is notable for its monopolistic practices throughout the 20th century, whereby it used its dominant position to control the international diamond market. The company used several techniques to exercise this manipulation over the market: Firstly, it persuade independent producers to join its single channel monopoly, it flooded the market with diamonds similar to those of producers who refused to join the cartel, and lastly, it purchased and stockpiled diamonds produced by other manufacturers in order to price control through supply. In 2000, the De Beers forced to change the model, due to certain unavoidable factors such as the decision by producers in Russia, Canada and Australia, to distribute diamonds outside of the De Beers channel, thus effectively ending the monopoly. The De Beers family of companies started operating under a set of guiding rules known as the Diamond Trading Company Best Practice Principles (BBP)...
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...De Beers Diamond Company Social Performance of Organizations Business 475 August 4, 2014 De Beers Diamond Company De Beers is a multinational privately owned diamond mining company established in 1888 by Cecil Rhodes. The company specializes in trading and manufacturing diamonds. Rhodes invested capital made from renting water pumps to miners and started buying mining claims. Rhodes knew the acquirement was on an untapped market. He purchased diamond fields owned by two brothers named “De Beer.” He even began purchasing from his rival Barney Barnato. The Rothchild family, Ernest Oppenheimer and JP Morgan were some of the companies first financial partners, their investments helped expand the business. By 1902 De Beers controlled 90% of the world’s diamond production. Ernest Oppenheimer, a rival diamond producer, owned the production company (Anglo American Corporation). Oppenheimer essentially bought his way onto the De Beers board of directors. In 1927, he became the chairman. Under his leadership, De Beers began making exclusive deals with its suppliers and buyers; this strategy made it impossible to have transactions with other companies and quickly became monopolized. De Beers is known for maintaining a strong hold on the industry and for absorbing its competitors by using it’s dominate position in the diamond industry. De Beers has been implicated in multiple scandals that involve price fixing and antitrust behaviors. There have been revolts against...
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...DeBeers “A Diamond is Forever” Prepared April 16, 2012 For decades, De Beers has been the preeminent name in diamonds. Thanks to a stockpile of the world's rough diamond supply, indelible marketing schemes and even negotiations with foreign governments for their diamonds, De Beers has been the most important name in one of the world's most lucrative businesses for almost a century. This paper will review the billion dollar rise and fall of a monopoly that has crushed competitors and cash-strapped governments since the 1800s. Diamonds became a symbol of love thanks to De Beers, which is fitting, since De Beers became what it is today because of a love story: the love of money. In the beginning, the diamond trade took place mostly in India and Brazil. With the discovery of diamonds in South Africa, the trade simultaneously took off and became much less profitable. Up until the mid-1800s, diamonds were a rarity and could be seen only on the hand of a monarch. But the diamond rush that began in South Africa in the second half of the 19th century flooded the market with diamonds, killing demand. It would take some ingenious plotting and advertising to keep the diamond's reputation as intrinsically valuable and desirable, which is where De Beers comes in (Goldschein, 2011). Company History and Overview De Beers got its start when English-born businessman Cecil Rhodes, broke into the diamond business in South Africa by renting water pumps to miners before buying diamond fields...
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...Explication: Diamonds, Development, and Democracy Nicky Oppenheimer is the chairman of the De Beers Group in Gabrone, Botswana. She has written an article on the successes of her company and the path it can give for the remaining countries in Africa. In her article “Diamonds, Development, and Democracy”, Oppenheimer strongly believes that, “..my argument on the role natural resources can and must play in Africa’s future development.”(212). The continent of Africa has been known for it’s corruption and lack of government structure for the majority of their 54 countries. But today Botswana is one of the most successful economies in Africa which once was ranked the poorest country in the World. The De Beers Company is an $83 Million facility that has precise technology to correctly maintaing Botswana’s most prized resource, being Gem Diamonds. These Gem diamonds are not only for the well known polished stones but can also be used for; eating food, building shelter, or running your car. De Beers Company is not only about the production of income they receive but they make sure that they give back to the people of their country. Oppenheimer states, “In the past 40 years, the government’s diamond revenues have been used, through prudent and wise stewardship, to create the country’s physical and financial infrastructure, to build its transport system, to educate its citizens, and to create a proper healthcare system, which includes free access to anti-retroviral drugs to counter...
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...LEASING CASE EXPLORING LEASING MARKET OPPORTUNITIES IN BOTSWANA by TOOCHUKWU AGWUNCHA ( copyright Fortvivit Resources Limited 2008) This case has been inspired and motivated by further developments in the Leasing industry in Botswana, but does not describe the actual situations in the country. Botswana, lies directly above South Africa and has one of the highest Gross Domestic Product per Capita in Africa (at USD 6140 - 2006). Its proximity to Africa’s economic powerhouse gives it the investment confidence of corporate organisations in South Africa. Its 2006 population is 1.75 million (growing at just over 1.5% p.a.) with a Gross Domestic Product (GDP) of about USD10.75 billion, a booming solid mineral industry (especially Diamond mining) and a focused government whose liberal policies have encouraged Foreign Direct Investments (FDI’s) mostly sourced from and generated through the influence of the strong and resilient South African economy. Three years ago, Botswana started operating a leasing law in the country. The regulator in the industry is the Leasing Commission of Botswana (LECOBOT), which is empowered to supervise the Leasing operations in the country. Some of its terms of reference and charge of responsibility include but are not limited to the following: 1. Promote the business of equipment leasing through its regulation of the market and according to the provisions of the leasing law. 2. Enable and encourage leasing companies to practice the business...
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...is defined by Merriam-Webster (Merriam-Webster, 2013) as the development of an increasingly unified global economy marked by free trade, free flow of capital, and the tapping of cheaper labor markets. Several cultures have recently been impacted by the Western world and have become globalized. The countries of Botswana and Mauritius are examples of recent globalization of native non-western cultures. Both countries had marked changes socially and economically post globalization. Impact of Globalization Botswana and Mauritius are two countries that recently experienced independence from Great Britain followed by globalization. Botswana was a colony of Great Britain until 1966. Under Great Britain’s rule poverty was extreme and Botswana lacked infrastructure. The country was tribal and its main economic force consisted of trading and bartering cattle. Independence was achieved in 1966 and the following year the government partnered with the international diamond company DeBeers and created a business relationship that would leave Botswana with the fastest growing economy in the world (Kilgour, 2000). Even though the mining of diamonds is the mainstay in Botswana, tourism is an economic contributor. The Kalahari Desert draws a high amount of tourism interest due to the diversity of species in the Okavango Delta and has become a top safari destination. Botswana’s economic success has allowed for improvement in its infrastructure and educational opportunities not previously...
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...(Merriam-Webster, 2013) as the development of an increasingly unified global economy marked by free trade, free flow of capital, and the tapping of cheaper labor markets. Several cultures have recently been impacted by the Western world and have become globalized. The countries of Botswana and Mauritius are examples of recent globalization of native non-western cultures. Both countries had marked changes socially and economically post globalization. Impact of Globalization Botswana and Mauritius are two countries that recently experienced independence from Great Britain followed by globalization. Botswana was a colony of Great Britain until 1966. Under Great Britain’s rule poverty was extreme and Botswana lacked infrastructure. The country was tribal and its main economic force consisted of trading and bartering cattle. Independence was achieved in 1966 and the following year the government partnered with the international diamond company DeBeers and created a business relationship that would leave Botswana with the fastest growing economy in the world (Kilgour, 2000). Even though the mining of diamonds is the mainstay in Botswana, tourism is an economic contributor. The Kalahari Desert draws a high amount of tourism interest due to the diversity of species in the Okavango Delta and has become a top safari destination. Botswana’s economic success has allowed for improvement in its infrastructure and educational...
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...Botswana Botswana is one of Africa’s most exclusive safari destinations. The Okavango Delta and Chobe National parks are filled with wildlife and not the easy to get to, so you’re never dealing with crowds. Botswana is a well off (thanks to diamonds), politically stable and the people enjoy a relatively high standard of living. The main attractions of Botswana are stated in the following: ~The Okavango Delta River cuts through the center of the Kalahari Desert, creating a unique ecosystem that gives life to a huge variety of birds and mammals. The Okavango is a unique safari destination because you can view much of the wildlife from a traditional canoe, a mokoro. ~The Chobe National Park lies in Botswana’s Okavango Delta and covers four distinct ecosystems. The Savuti marsh in particular, offers some of the highest concentrations of wildlife in Africa year round. Chobe boasts around 120,000 elephants so if you visit you’re unlikely to miss them. ------------------------------------------------- ~The Kgalagadi Transfrontier Park is full of Salt pans, Kalahari sand dunes, and, plenty of wildlife during the rainy season makes this a wonderful park to visit, but it’s not easy to get to. Location: Botswana is in Southern Africa, just north of South Africa. It borders Namibia to the west and Zimbabwe to the northeast. Area: Botswana covers an area of 600,370 sq. km., making it slightly smaller than Texas and slightly larger than France. Capital:...
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...simply throwing aid money at the problem will ultimately come to no good. After all, even when African countries do possess sources of great wealth--diamonds in Sierra Leone and oil in Nigeria, for instance--those resources often end up being a curse on95% of the respective country's populace. On the other hand, a few nations have done better through internal improvements; Botswana is often cited as an example of this, but their 40% Aids rate--definitely attributable to rampant sexual activity--is impossible to overlook. Encapsulated in this spiel are what could be termed ‘the four great fallacies of the Africa Debate’. I’ll attend to each of these in turn. Fallacy 1 - Africa’s problems are by in large internal There’s no denying that some of Africa’s problems are internal but the claim that they are entirely (or even by in large internal) is demonstrably false: it ignores history and turns a blind eye to the interconnected world that we live in. For a start, many of Africa’s current problems stem from the colonial epoch; and colonialism was hardly an internal process. Instead, an external force (that’s us – the Europeans) plundered Africa’s natural and human resources and set in place tools of governance (involving an extractive local elite) that still haunt the continent today. The example that Chris uses above of Botswana...
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...1. SOUTH AFRICA: NATIONALISATION AND THE MINING SECTOR As of late, the political atmosphere has been clouded with varying judgements on the great issue of whether South African mines should be nationalised or not. The camp in favour of nationalisation, Former President of ANC Youth League, Julius Malema echoes the words of the Freedom Charter in that “The National Wealth of our country… the mineral wealth beneath the soil, the banks and the monopoly industry shall be transferred to the ownership of the people as a whole”. The camp not in favour sees this vision in a different light. Nonetheless, this essay investigates the feasibility of nationalising the country’s mining sector from both a theoretical and empirical stand point. 2. WHERE IT’S ALL STARTED Nationalisation of mines has been called for in order to give back to the country as the government will have direct control over the sector. This, they believe, will present more employment opportunities, better working conditions for miners, a more efficient distribution of income and overall improvement in service delivery. Julius Malema (the main instigator behind the call for nationalisation), proposes that the state take a controlling share of 60% in all private mines, all which will be managed by a state owned mining firm (LeadershipOnline, n.d). According to Malema, nationalisation will achieve the following: ➢ Increase the State’s budget for social development objectives; ➢ Be a basis from which the...
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...How Different Groups within Society Experience Poverty in Different Ways Botswana is a nation that has experience high rates of economic growth since 1966 when it gained independence. It’s a middle income country with a GDP $5,360, although over 45% of people who live there are below the absolute poverty line. This particular type of poverty is seen in rural areas and female headed households where there is significant differences income. Due to this, and many other reasons there are big differences in equality throughout Botswana, giving a large Gini coefficient of 0.54. Other reasons include developing wealth in Botswana, especially through the diamond trade. The country struggles to include the poor, remote communities into the mainstream economy. One example of this is that the poorest 20% of the population get 4% of the national income, whereas the richest get 60%. Botswana has the highest rate of HIV/AIDS prevalence in the world with 350,000 people affected and 39% of 15-49 year olds infected. HIV/AIDS rates are so extremely high due to the migration to South Africa for work and internal migration between rural and urban areas. Life expectancy rates have fallen from over 60 years in 1996 to just 35 in 2007. Many people are dying young and so the size of the work force is declining. It also means the number of widows and orphans is increasing. There are 69,000 AIDS orphans in Botswana. There are many government benefits and food rations to support orphans although...
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...as new sources of competition and suspicion about conflict diamonds, Gareth Penny had to rethink the basics A diamond may be forever, as De Beers' famous advertising slogan contends, but is the same true of a business model? That was the question facing Gareth Penny, managing director of De Beers, in the late 19'90s, when the famed diamond cartel found itself beset by a series of events that ultimately forced it to examine and then retool its business strategy. Since the company was founded in 1888, De Beers followed a strategy of supply control. In addition to mining its own diamonds, it bought diamonds from other producers and had what it called the "central selling organization," controlling some 90% of the world's diamonds. Its tight control over such a vast amount of supply enabled De Beers to keep prices high for a commodity that is neither particularly scarce nor useful. If a competitor offered diamonds on the market outside of De Beers' central selling organization, De Beers would simply flood the market with similar stones, thus eliminating any pricing power the competitor might offer. By the end of the 1990s, the business model of controlling supply and managing how much of its inventory went to market at any time was no longer effective: New sources of diamonds were discovered in sufficient quantity that they could be sold competitively outside of De Beers' central selling organization. Demand for diamonds was dropping at a time when demand for other luxury goods...
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...downfall. They assumed that the copper mines would provide an abundance of income; but when the system became corrupt ,copper pricing plunging and the lack of any foreign income or aid Zambia became poorer than when they were independent. Where as Botswana was a little more wiser. Botswana also had a mineral wealth, diamonds. But instead of putting all of the money back into production of the mineral the income was distributed to things such as infrastructure, education and health. Botswana also allowed for private businesses to grow and foreign investments were welcomed. This story can teach us two things. The first is don't place all of your income and production efforts into one resource; its always good to have a backup plan incase things go astray. The second is to accept business and investments. If we limit our market to X amount of people in a specific area, we are only hurting our income possibilities. When we allow for others to invest in a product and something goes wrong, there's still some money available to try and place things back on track. Foreign investment and business outside of a market area will only aid in the overall bottom line. Zambia placed too much emphasis and effort into one market opportunity; whereas Botswana did the smart thing and spread it out. Question 2.) According to Robert Guest, title deeds are important because it's what allows individuals to obtain loans. He also states that capital is “the lifeblood of capitalism.” In America we own our...
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