Saturday, September 13, 2008

Remarks by H.H. The Vice President, Lt. General Mompati S. Merafhe, MP, at a dinner for Botswana National Council hosted by FNB, Francistown

source: Republic of Botswana (13/9/08): TAUTONA TIMES no 27 of 2008
The Weekly Electronic Press Circular of the Office of the President "Democracy, Development, Dignity and Discipline"


[Salutations]...Ladies and Gentlemen

1. I am naturally very delighted to be part of this gathering that brings together such a large number of people from both the Government and private Sector. Your presence here this evening, and indeed throughout the three day conference, is indicative of a serious government and private sector commitment to forge a more closer collaboration in the development of this country.

2. Let me welcome Professor Joseph Stiglitz who is in our midst tonight. Prof. Stiglitz is no stranger to us, neither is Botswana new to him. He is a friend of developing countries who has, with utmost erudition, dedicated his research to finding solutions to development challenges facing developing countries in this era of globalization. Those who have read his works will agree with me that he has not only challenged the established economic orthodoxy, but brought new thinking in development economics that has given us - developing countries - some hope for a better future. I am sure in the next few days you will not only benefit from his experience, but equally, he will learn first hand about the special development challenges that we face in this country.

3. Distinguished Ladies and Gentlemen, the forum that has brought us all to Francistown is a very special and important gathering nurtured over 10 years to promote public - private sector dialogue. It provides a platform for us to collectively reflect on our past achievements, interrogate our present challenges and come up with workable policy options to enhance prospects for sustainable economic growth and development of our nation. In this respect, allow me to take you on a brief walk down the memory lane, if only to make sure that we all know where we come from.

4. Forty two years ago on 30 September 1966, to be more precise, we attained independence and formed a Government to run the affairs of this country. By then this country was among the 25 poorest in the world and it was thought to have no natural resources to inspire any hope for any brighter future. The GDP per capita was a paltry $100. There was no private sector to talk of. As a matter of fact, our agitation for independence was perceived with a lot of scepticism and cynicism.

5. In his book, Sir Ketumile Masire, one of the founding fathers, eloquently recalls that some pundits thought we were either "Very Brave or Very Foolish".

6. I also recall, a Botswana student who was studying in one of the neighbouring countries just after the declaration of independence was confronted by a fellow student who cynically quizzed him: "my friend you say your country is independent?! What are you going to eat? - sand?!"

7. But as I often like to say, "Fortune favours the brave". A combination of bravery, visionary leadership, fortitude as well as prudent husbandry of mineral revenues and foreign aid, underpinned by unflinching commitment to social justice and equity, ensured that we are where we are today - an upper middle income country with a private sector that we can proudly call a partner in development.

8. Yes, Prof. Stiglitz, who is with us here this evening, acknowledges in one of his books entitled Globalization and its Discontents that our success is partly because we did things our own way. That is indeed true. We never allowed ourselves to be sidetracked and confused by empty sentiment and ideology that could not put bread on the table of our people. Our people's interests, needs and aspirations provided, and indeed continue to provide, a realistic and everlasting template for our development agenda. While the journey has so far been long and arduous, the challenges ahead must even be more daunting.

9. It is therefore critical for the Government and the private sector to recognize our separate roles and exploit our synergies in order to realize our national development goals. This Dialogue and many other collaborative mechanisms that exist between Government and private sector will surely continue to facilitate an exchange and sharing of ideas as we all work towards the development of this country. I am therefore very much encouraged by this Dialogue and have every reason to be confident that your deliberations will result with implementable recommendations.

10. Director of Ceremonies, the Government recognizes that it has a role to play in creating a conducive environment for business to operate and above all, for ensuring that any form of economic growth is beneficial to our people. While we have high regard for the efficiency of the market, in the same vein, we have a duty to make sure that business has a human face, that is to say it responds to the needs of our people in a benevolent way.

11. Within this context, this year's theme "Setting the Agenda for Sustainable Economic Growth" is not only pertinent, but very much in line with the road map announced by His Excellency President Lt. Gen. Seretse Khama Ian Khama during his inauguration on April 1, 2008. In his inaugural address His Excellency the President underlined the important role of the private sector by confirming that as Government: "...we have to create an enabling environment for the private sector, and to actively encourage it to become the driving force of and the main investor in our economy."

12. Without a vibrant private sector that is committed to the national agenda for sustainable economic growth and development, our efforts to diversify the economy, create employment and fight poverty would be seriously undermined.

13. Needless to say that in this increasingly interdependent world, our ability to compete globally will depend on the vibrancy of our private sector in different areas such as manufacturing, financial services, tourism and many others that have the potential to give Botswana a competitive edge. In this respect, the Government will continue to undertake reforms to deal with impediments to doing business in this country through the provision of, among other things, quality infrastructure; good legal framework that ensures respect for property rights; education to guarantee skilled labour for investors and most importantly, we will, as we have always done, aim to sustain the economic, political and social stability that is so essential for investment to flourish.

14. As I speak, efforts are ongoing to simplify procedures for applying and granting of work and residents permits to enable companies that require skills that are not available locally to source them outside without undue red-tape.

15. In recent years a certain Simeon Djankov with other colleagues at the World Bank, instituted an initiative to reduce obstacles to doing business in poor developing countries. Can you guess his findings? Yes, your guess is as good as mine. In his research he found that countries that require more red tape to start business have higher corruption and large informal sectors operating outside the law.

16. Business is shackled in developing countries by cumbersome procedures to collect debt, enforce contracts, register property and collect from business partners, he further found.

17. Not only that, he further found that it takes 153 days to start a business in a certain country in Southern Africa that will remain nameless, but just two days in Toronto. It takes 21 procedures to register commercial property in one big West African country that too will remain nameless, but just three procedures in Helsinki. This Ladies and Gentlemen are some of the challenges that we face as developing countries.

18. I am pleased, however, to assure you that as Government of Botswana we have embarked in an extensive exercise of process re-engineering to get rid of some of the cumbersome and anachronistic bureaucratic procedures that undermine expeditious service provision and the process of development in general. We have in that regard realized that a simple and fast business licensing process as well as a simplified tax system is necessary if we are to position Botswana as a preferred investment destination.

19. We will certainly continue to strive for transparency, and indeed accountability, in the Government tendering and procurement process. These reforms, together with many other incentives and empowerment schemes, should engender a strong partnership between government and private sector that will contribute meaningfully to the realization of the national agenda for sustainable economic growth and development. So much for Government commitments and responsibilities.

20. Ladies and Gentlemen, in order for us - that is both the private sector and government - to succeed in setting and realizing an agenda for sustainable economic growth, our partnership has to be based on good business practices, mutual trust and respect for the laws, including labour and immigration laws, of the country. While we encourage outsourcing of scarce skills, we are regrettably witnessing a disturbing trend among the business community, where this dispensation is being abused much to the detriment of our people.

21. We still find people who have come here purportedly to provide scarce skills engaged in some businesses that are otherwise reserved for locals. Worse still, there are some foreign investors who come to our shores, enjoy the incentives and then abscond as soon as they exhaust their incentives, leaving their workers stranded and without salaries. As I said last week at the commemoration of the 20th Anniversary of Woolworths Botswana, this calls for constant vigilance and safeguards on the part of both the Government and the private sector to ensure that good business practices are upheld and our partnership is inspired by common interests and responsibilities.

22. Director of Ceremonies, I have talked at length about what the Government is doing or ought to be doing. But you will certainly agree with me that in any successful partnership each partner has a critical role to play. Actually this reminds me of a joke I gleaned from a book by Professor William Easterly entitled The Whiteman's Burden : Why the West's Efforts to Aid the Rest Have Done so Much Ill and So Little Good: "....heaven is where the chefs are French, the police are British, the lovers are Italians, and the car mechanics are German - and it is all organized by the Swiss. Hell is where the chefs are British, the police are German, the lovers are Swiss, and the car mechanics are French - and it is all organized by the Italians."

23. I cannot attest to the veracity of the statement, but I can only say that in order for us to achieve a goal of sustainable economic growth and eradicate poverty, the private sector and Government must play their separate roles competently and ensure a partnership that works. Perhaps only then can we escape condemnation to hell where there seems to be a mismatch of roles! I know, much as you do, Ladies and Gentlemen, that for any business the primary and overriding objective for investment is profit.

24. Be that as it may, I am convinced that the imperatives of our times are such that concomitant to increasing the profits must as of necessity be the corresponding expansion of economic opportunity for members of society. If that is not the essence of Corporate Social Responsibility then it is just an important part of it.

25. In "setting the agenda for sustainable economic growth", you will do well to recall that beyond the profit lies the responsibility to create jobs; provide skills and technology transfer; protect the environment; augment government efforts in the provision of services and infrastructure; and perhaps most fundamentally, help uplift the living standards of those at the bottom of economic pyramid. There is no doubt that the successful implementation of our economic diversification policies and all this implies, will require focused and a single-minded pursuit of our goals and objectives. I am confident that with the right leadership at all levels and the appropriate mindset, we can, together, secure that success.

26. From our perspective as Government, it is critical for private sector players to show us that they can rise to the challenge of being effective partners in development. Public Private Partnership is not a Zero Sum Game; it is a win-win engagement where we both benefit equally in our own ways. It is our ardent desire to see increased private sector participation in major Government initiated projects. I urge you to explore creative and winning partnerships to take advantage of these available opportunities.

27. Distinguished Ladies and Gentlemen, as we in Government continue to look at ourselves and refine our policies and working methods to satisfy your requirements, we also expect the private sector to equally engage in critical self-introspection by committing to proper governance systems, and most importantly, to uphold principles of corporate social responsibility.

28. Corporate social responsibility may mean different things to different people depending, perhaps on the context. While it may generally mean net positive impact of business on society, it may also mean that business should not engage in any activities that are injurious to the society in which it operates.

29. One such nefarious activity is corruption. Experience has shown that corruption is a product of collusion between private sector people and public officers. What this means is that without the co-operation of the private sector it will be very, very difficult for us as Government to combat the vice of corruption.

30. It goes without saying that corporate social responsibility dictates that you should uphold high ethical standards and refrain from any activities that would undermine the governance fabric of societies in which you do business. Corruption, by all means, and in many instances, is a function of an unholy alliance between businessmen and public officers. As such, it is only through a strong partnership between Government and private sector that we can hope to prevail in our fight against the problem of corruption.

31. Ladies and Gentlemen, it would be remiss of me if I don't conclude by paying tribute to the First National Bank for hosting this Dinner tonight. I am informed that to date, First National Bank of Botswana has continued to increase it's footprints with 16 branches country wide, 71 ATM's and 65 mini ATM's. These delivery channels are all aimed at extending the much needed banking services to the people of Botswana. I am convinced that the decision by FNBB to establish a presence in these areas of Botswana was as a result of the realization that the market has great economic potential and diverse business opportunities.

32. You are aware that financial services in Botswana have in recent years assumed greater business significance and have been altered by various new product offerings and innovations. If you look further over the last 3 to 5 years the changes have been profound. Financial Services are serving customers, managing wealth, financing business, individuals and their families and conducting transactions in more ways than ever before and at ever - increasing speed.

33. A significant part of this market is made up of an emergent small business sector which is crucial and pivotal to the continued growth and development of the economy of Botswana.

34. Master of Ceremonies, Distinguished Ladies and Gentlemen, in your deliberations, you should in the next few days, address yourselves to lot of questions regarding our agenda for sustainable economic growth. Allow me to think aloud about some vexing questions and to give you a food for thought:

* What should we do, as both the Government and the private sector, to ensure the success of our economic diversification strategies?

* As a small developing country located at the centre of Southern Africa, landlocked and very far from the sea, what strategies do we need to put in place to overcome the challenges that go with this geographic location?

* What role can you play as private sector in the implementation of Vision 2016?

* For many years we traversed the world to promote Botswana as an investment destination, yet the FDI flows are not commensurate with the efforts. What is the missing link?

35. This is a policy dialogue, so you should feel free to explore all the policy options that you deem appropriate and realistic to the "setting of an agenda for sustainable economic growth".

36. I would like to believe that I have said enough to generate a good interaction between you and myself and among yourselves this evening, as we embark on stimulating ideas that are critical to the development of our country. I am sure we have a clear vision of what we want Botswana's future to be, it only behoves us to live that Vision by word and deed.

37. I thank you for the courtesy of your kind attention and look forward to interacting with you more. PULA!

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