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Botswana, Mauritius Touted As Successful Exceptions
The Washington Diplomat / October 2008

By Larry Luxner

Other than their location in sub-Saharan Africa, Botswana and Mauritius have seemingly little in common.

With only 1.3 million inhabitants populating its 233,000 square miles of territory, Texas-sized Botswana is one of the emptiest nations on Earth. The landlocked nation is blessed with diamonds, copper, nickel and gold but cursed with one of the world's highest AIDS infection rates.

Mauritius, on the other hand, has no natural resources to speak of. Its 1.2 million people are jammed into an island slightly larger than Frederick County, Md., making it the 10th most densely populated country in the world. Botswana's population is highly homogenous, with the Tswana people comprising the clear majority unlike Mauritius, whose people are descended from French and Dutch settlers, Indian indentured servants, African slaves and Chinese traders.

What links these two disparate African nations together is their uncommon success on a continent "scarred by political repression and economic underdevelopment," according to the Washington-based Cato Institute.

"In 2007, Freedom House certified both countries as free, and the Fraser Institute's Economic Freedom of the World report found that Botswana and Mauritius had the two freest economies in Afica," says a Cato Institute report. "According to the World Bank, the two also have along with Seychelles Africa's highest per-capita incomes. What explains that success? Why did the institutions of freedom take root in Botswana and Mauritus, while failing to do so in most other African countries?"

To answer these questions, the Cato Institute's Marian Tupy recently moderated an event entitled "Botswana and Mauritius: African Success Stories" and featuring the country's ambassadors to the United States.

Lapologang Caesar Lekoa, who's represented Botswana here in Washington since 2002, says his nation's journey to prosperity started over 40 years ago.

"Botswana was resource-poor, underdeveloped, with no physical infrastructure, a per-capita income of only $70 and a donor-funded budget. Three years after independence, our first president, the late Sir Seretse Khama, described Botswana as a country faced with a problem of under-development of classic proportions," he said.

"Today, Botswana's per-capita income exceeds $5,000, the country provides free quality education and health care for all its people, and together with Mauritius, it is the only other country to graduate from a lower level of development to a higher one in the UN classification index."

According to Lekoa, Botswana "has consistently received the highest possible sovereign credit ratings from international rating agencies. According to Transparency International, Botswana is the least corrupt country in Africa, and is graded higher than all the G-8 countries in the area of political stability by the World Bank."

The situation in Botswana sharply contrasts with that of its perennially troubled neighbor, Zimbabwe, where Robert Mugabe continues to maintain his iron grip on power after winning an uncontested presidential run-off election in late June that much of the world dismissed as a sham.

Despite the unprecedented international condemnation, many African leaders have been reluctant to come down on Mugabe, in part for fear that the spotlight will be cast one their own lackluster democratic credentials except for Botswana.

Botswana's government has taken a hard-line stance against Mugabe's 28-year-rule by calling for his country to be suspended from the African Union and the Southern African Development Community, joining other world leaders in denouncing Mugabe's victory illegitimate.

Perhaps it's no surprise that Botswana has been one of the few African countries to rebuke Zimbabwe given Botswana's history of political freedom. The ambassador attributes this "rare African success story" to political tolerance, pragmatism, the idea of leaders as servants of the people, consensus, and a sense of inclusiveness.

"We believe that all of our citizens can make a contribution to national development, irrespecive of political affiliation or station in life," said Lekoa. "The former president of Botswana, Sir Quett Masire, observed that in deciding on important matters such as national symbols, the whole nation was consulted. Thus, our national anthem was created by the founder of an opposition party. The colors and design of the flag were proposed by a former colonial officer. This would have been unthinkable in many countries then, and even now."

He added: "Many people believe that our pragmatism was an instinctive reaction of our earlier suffering, uncertainty and hardship in a poor and drought-stricken country," he said. "National choices were therefore made on the basis of what worked, not what ideological label was attached to it. This saw Botswana choose market capitalism at independence, when many African countries opted for central planning in order to assert national control over resources in the post-independence era."

Unlike many of its neighbors, said Lekoa, Botswana was never attracted to the idea of a one-party state.

"For people already espousing ethics such as political tolerance, inclusiveness and consensus, political pluralism it would seem was a more natural option than anything else," he told his audience. "So the 'necessity' of a one-party system, justified by many countries in the 1960s on the basis of national unity or nation-building, did not appear so imperative in the case of Botswana."

More importantly, he said, "non-pluralistic options were deemed incapable of delivering on the practical needs of the people. Socialism or state capitalism was not considered a viable tool in that regard."

Botswana has been lucky thanks to the presence of diamonds, which accounts for 75% of the country's foreign-exchange earnings. A joint venture signed in 1969 between the government and South Africa's De Beers mining conglomerate has generated billions of dollars over the last four decades and allowed Botswana to offer its citizens free education and health care.

"We are a mono-economy, dependent on the diamond trade, and that particular sector is capital-intensive. It generates less than 10% of the country's employment," he said. "We keep on telling our people that diamonds are not forever."

To that end, Lekoa says he'd like to see Botswana diversify its economy into glass manufacturing, textiles and financial services.

More than 2,000 miles east of Botswana is Mauritius, which won its independence from Great Britain in 1968 only two years after Botswana did so. The country's ambassador in Washington, Kailash Ruhee, says his country, 30 miles long by 24 miles wide, has been described as "a piece of rock floating in the Indian Ocean."

"We are a classic example of a country that has moved from being a cauldron of poverty and despair to a cradle of hope and prosperity. I think this sums up the socio-economic development of Mauritius," said Ruhee.

"It has been a constant battle against the tyranny of geography and history. At independence, we were a textbook example of an agricultural monocrop; 96% of our earnings came from the production and export of sugar. Our per-capita income was only $175. I was personally a beneficiary of food aid donated so generously by the people of the United States."

As was typical of Third World countries, he said, "we had low life expectancy, high illiteracy and a demographic explosion, with our annual birth rate exceeding 3%. We had quite a lot of ethnic tensions, and we were highly vulnerable to external shocks and the vagaries of Mother Nature."

Today, Mauritius enjoys per-capita income of nearly $7,000. The country has been helped tremendously by preferential market access to Europe and the United States for apparel and other products, through such programs as the African Growth and Opportunity Act (AGOA), passed by Congress in 2000.

"We're considered an upper-income developing country, with a Human Development Index approaching those of the developed world," said Ruhee. "We have gradually instilled in the population an entrepreneurial culture. We have slowly gotten rid of the culture of entitlement. We have made the population realize that there's no such thing as a nanny state that will take care of them from cradle to grave."

Described by Leslie Alexander, a former U.S. ambassador to Mauritius, as "a mouse on steroids," the island currently enjoys economic growth of 6% a year.

Among its most important industries are seafood and aquaculture, medical tourism, professional services and logistics.

"Mauritius is now heading towards an increasingly knowledge-based economy," said Ruhee. "We want to make Mauritius a world-class business destination, open up the economy to foreign expertise and ideas, and strengthen macroeconomic fundamentals."

To that end, the country has instituted a 15% uniform corporate and personal tax rate, giving Mauritius the distinction of being one of the most pro-business tax jurisdictions in the world. Unlike much of post-colonial Africa, which looked to socialist countries like Cuba for guidanace, Mauritius has used Singapore, New Zealand, Ireland and the Nordic countries as institutional models.

The advent of export processing zones (EPZs) has also been a major factor, he said.

"Investors came and gradually helped Mauritius develop the necessary marketing skills and technology so that today, the EPZ sector in Mauritius is mainly Mauritian-owned. This has spawned a lot of investment from the private sector," he said.

"It all boils down to the quality of political leadership. Both Botswana and Mauritius have been blessed in the sense that all the political leaders we've had have been visionary and forward-looking in their approach."

In addition, he said, the country is a "vibrant and robust multiparty democracy," with free and fair elections.

"We have a totally independent electoral commission, and freedom of speech and religion are deeply entrenched in our constitution," Ruhee said. "We have a religious adherence to the rule of law, and when Mauritius became a republic in 1992, we took the wise decision of maintaining the Privy Council of the U.K. as the ultimate court of appeals. Property rights and contracts are stringently repected, and for an investor considering Mauritius, this is an important factor when making investment decisions."

Ruhee said the experience of his country over the last 40 years proves that creating a business-friendly environment along with a "compassionate" private sector can be a powerful instrument in making a dent on poverty.

"Mauritius faces a lot of challenges, and the transition to global competitiveness is turning out to be quite difficult and painful," he said. "But we will never allow the positive indicators we get from international bodies to blind us to the fact that success poorly managed breeds complacency."

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