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Hbs Botswana Case

In: Business and Management

Submitted By adamindibi
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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 disease. This term means that the increase in exploitation of natural resources can reverse the industrialization of a country by decreasing the exchange rate. The Botswanan Central Bank knew that they had to manage their currency so that the competition in their domestic industry was maintained. Botswana managed to pull this off. This showed that they made smart moves economically, which...

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