Impact of new social investment in Bolivia

ESS-33 37 Figure 13. Botswana: Long-term GDP and GDP per capita growth rates, 1960-2010 Source: World Bank, 2010. The economy of Botswana is a resource-driven economy, one whose most distinctive features is its strong reliance on diamond exports, its main product since Independence. Not surprisingly, therefore, mining is the countrys main economic activity, accounting for 45 per cent of GDP in 2008. The participation of the public administration sector, the second largest in Botswana, represents roughly one-third of the contribution of the mining sector figure 14. Figure 14. Botswana: Structure of the economy by sector Source: AfDB et all, 2010. 38 ESS-33 Historically, diamonds have accounted for more than 90 per cent of total exports, though after 2003 their participation decreased to 65 per cent in 2008 figure 15. This declining participation of diamonds in total exports was the result of two factors. First, the demand for diamonds on the international market fell sharply during the financial crisis of 2008. 9 Second, other exports from Botswana grew at very dynamic rates that were well above the performance of diamonds. While diamond exports increased by an average of 5.5 per cent annually between 2001 and 2008, exports of copper-nickel matte and textiles grew by 43 per cent and 49 per cent respectively. Figure 15. Botswana: Diamond exports as a percentage of total exports, 2001-2008 Source: AfDB et all, 2010. Two additional features characterize the economy of Botswana. The first is that the unemployment rate was estimated at 7.5 per cent in 2007, with some sources citing even a two-digit rate. For the years for which data are available, the average unemployment rate between 1990 and 2006 was 21.4 per cent. The second characteristic is the low inflation rates that have prevailed since 1997. With the exception of 2006 11.6 per cent and 2008 12.7 per cent, the consumer price index increased at an average of 8.4 per cent between 1997 and 2009. With regard to fiscal matters, from Independence to 1995 the economy experienced a great accumulation of international reserves and a sustained fiscal surplus. Despite fast-growing fiscal revenue mostly derived from diamond export taxes and accelerated economic growth, the Government maintained a cautious policy and no fiscal deficits were ever observed. By 2008 fiscal revenue accounted for 29.7 per cent of GDP, with an average of 35.7 per cent of GDP between 1995 and 2008 figure 16. The participation of the Government in the economy is also high for a developing country. In 2008 public spending accounted for 38 per cent of GDP, while between 1995 and 2008 the average participation of the public sector was 36.4 per cent. The 2008 figure suggests 9 See, for instance, http:www.nytimes.com20090220businessworldbusiness20iht- diamond.4.20339704.html.