BOTSWANA: SURVIVING UNDER ADVERSITY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85S00317R000100120001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: December 22, 2016
• Document Release Date: May 3, 2010
• Sequence Number: 1
• Publication Date: June 1, 1984
• Content Type: REPORT

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Directorate of
Intelligence
Botswana:
Surviving Under Adversity
ALA 84-10056
June 1984
Copy 2 7 1
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Directorate of Secret
Intelligence
Botswana:
Surviving Under Adversity
This a er was prepared by 25X1
ffice of African and Latin American 25X1
Analysis, with a contribution from 25X1
Office of Central Reference. It was 25X1
coordinated with the Directorate of OperationsF ~ 25X1
Comments and queries are welcome and may be
directed to the Chief, Africa Division, ALA, 25X1
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Secret
ALA 84-10056
June 1984
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aecrec
Botswana:
Surviving Under Adversity
Key Judgments Botswana generally has been supportive of US efforts to promote peaceful
Information available solutions to the problems of southern Africa. Since it gained independence
as of 18 May 1984 in 1966, Botswana has been a model of political stability, enjoying the
was used in this report.
benefits of a strong democratic tradition and economic growth. Although
Botswana faces several political and economic challenges in the next few
years, we believe the chances are good that it can maintain its stability and
pro-Western policies
Parliamentary elections set for this fall will be the first electoral test for
Quett Masire since he assumed the presidency in 1980. We concur with the
judgment of local observers that neither Masire nor his ruling Botswana
Democratic Party is likely to face a serious challenge. Masire has dealt
deftly with tribal frictions within the party, and he undoubtedly benefited
politically from his visit to the United States in early 1984. Moreover, the
opposition parties lack the popular support and resources to challenge
successfully the Botswana Democratic Party, which has dominated all four
of Botswana's general elections and currently holds 29 of the 32 seats in
parliament.
Since independence, the economy generally has maintained a vigorous
growth rate, spurred by the development of diamond mining and expansion
of the cattle industry. More importantly, Botswana, unlike many develop-
ing countries, has achieved its economic success largely through reliance on
private enterprise, a free market, and open trade and investment policies.
Adherence to these policies has enabled Botswana to weather a series of
economic setbacks in recent years-cattle disease, drought, and volatile
diamond prices-and to be well positioned for continued growth in the near
to medium term, albeit at a modest rate.
Despite sound economic management, Botswana's economy is vulnerable to
events beyond its control and faces serious long-term obstacles to diversifi-
cation and growth. Moreover, Botswana's inability to provide adequate job
opportunities for its rapidly growing and increasingly educated labor force
may in the long term create fertile ground for recruitment by radical
opposition parties and a potential threat to stability
Botswana's immediate foreign policy concerns stem from its troubled
relations with its two more powerful neighbors-South Africa and Zimba-
bwe. The use of Botswana territory as a staging area by Zimbabwean
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ALA 84-10056
June 1984
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dissidents has bedeviled relations between Gaborone and Harare for over
two years. Repeated small-scale cross-border operations by the Zimba-
bwean Army have occurred in late 1983 and early 1984, and more are like-
ly as long as the dissident problem in Zimbabwe is unresolved.
South Africa is pressing Gaborone to sign a nonaggression pact that would
allow Pretoria the right of "hot pursuit" against anti-South African groups
operating from Botswana territory. Pretoria has warned that it will
encourage domestic opposition to the Masire government if it does not
accept a South African draft agreement. It has also reminded Botswana of
its vulnerability.to South African economic pressure. Botswana has
steadfastly refused to sign, citing its longstanding policy of not permitting
these groups to operate from Botswana. Nonetheless, increased use of
Botswana territory by guerrillas-whose traditional infiltration routes into
South Africa from Mozambique are being denied-would overtax Botswa-
na's limited defense and police capabilities. This would invite South
African military retaliation and could compel Gaborone to acquiesce to
Pretoria's demand for a formal security cooperation agreement.
Although officially nonaligned, Botswana has traditionally been pro-West
in orientation. In particular, Gaborone has been generally supportive of US
initiatives seeking peaceful solutions to southern African disputes. Gabo-
rone has had few dealings with Moscow since the Soviets' unsuccessful
attempt in 1980 to expand their involvement in Botswana by concluding a
roughly $7 million arms deal. Moscow, however, maintains a large
diplomatic mission in Gaborone and has long had close ties to the
opposition Marxist Botswana National Front.
Secret iv
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Key Judgments
The Coming Elections
A Potential Leadership Challenge
3
Growth and Vulnerability
5
Foreign Relations
10
Zimbabwe
12
East and West
12
Outlook
15
Economic Strengths and Weaknesses
17
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 Figure 1
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Botswana, a former British protectorate, became
independent on 20 September 1966. It is a
parliamentary democracy with a President acting as both
chief of state and head of government. There are
currently six political parties in Botswana with the ruling
Botswana Democratic Party holding 29 of 32 seats in
the National Assembly.
Botswana's population is an estimated 940,000 persons,
most of whom live along the country's relatively fertile
eastern border. Over 80 percent of the people belong to
the Tswana ethnic group, which is divided into eight
tribes or subgroups. The non-Tswana population
consists main nga, Sarwa, and European
elements
Botswana's principal exports are diamonds, meat
products, nickel, and copper. Botswana also has large
proven but undeveloped coal reserves and soda ash
deposits. Its principal trading partners are the UK, South
Africa, Zambia the European Community, and
Zimbabw
The Botswana Defense Force, numbering 3,200 men,
was formed in 1977. The BDF has received most of its
military equipment from the UK and China, but in 1981
purchased $4-7 million worth of arms from the
Soviet UnionO
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Boundary representation is
not necessarily authoritative.
Indian
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Underlined countries indicate
Frontline States
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Botswana:
Surviving Under Adversity
Sharing borders with Namibia, Zimbabwe, and South
Africa, Botswana increasingly finds itself caught in
the political and military cross-currents of the region.
It also faces serious long-term obstacles to economic
diversification and growth and is heavily dependent
on close economic ties to South Africa. As a result,
Botswana and its President, Quett Masire, are likely
to face several important challenges in the next few
years.
This paper examines internal political issues related to
the parliamentary elections set for later this year and
Botswana's troubled relations with South Africa and
Zimbabwe. It also describes 'the key features and
recent performance of the Botswana economy and
assesses economic and political prospects for the near
and long term. An appendix contains a detailed
assessment of the the Botswana econom
Political Background
When Botswana gained independence in 1966, after
81 years as the British Protectorate of Bechuanaland,
its prospects seemed among the least promising of
any African country. Somewhat larger than France,
landlocked and arid, Botswana embarked on self-rule
surrounded by hostile neighbors. Its people, now
numbering just over 1 million, were desperately poor,
and its cattle-based economy prone to drought. De-
spite these obstacles, the Batswana have prospered
and in so doing have demonstrated the compatibility
offree enterprise and democratic principles with the
goals of a developing country.
One of the reasons for Botswana's unusual success
was the leadership of its first president, Seretse
Khama. From the time of independence until Kha-
ma's death in 1980, moderation was the keynote as
domestic politics centered on the need to bring pro-
gressive economic and political development to a
conservative society without destroying its traditional
The Coming Elections
Quett Masire, Vice President for over 14 years under
President $eretse Khania, has firmly established his
control since assuming the presidency following Kha-
ma's death in 1980 and has continued his predeces-
sor's moderate, pragmatic policies. Parliamentary
elections set for this fall will be the first electoral test
of Masire's presidency. We concur with the judgment
of the US Embassy and other local observers that
neither Masire nor his ruling Botswana Democratic
Party (BDP) is likely to face a serious challenge. The
BDP has dominated all four of Botswana's general
elections since 1966 and currently holds 29 of the 32
seats in parliament.
Nonetheless, tribal' and personal frictions appear to
be on the rise within the BDP. According to the US
Embassy, some leaders of the Bamangwato, Seretse
' The Tswana people are divided into eight principal tribal group-
ings: Bamangwato, Bangwaketse, Bakwena, Batawana, Bakgatla,
foundations.
Throughout his presidency, Khama was faced with
the reality of the economic stranglehold South Africa
had on his country. He never wavered in his opposi-
tion to apartheid, however, and played a leadin -if
moderating-role within the Frontline group. 25X1
Khama's tribe and long the dominant force in the
party, believe that their position in the government
has eroded under Masire-who is a member of the
minority Bangwaketse tribe. Masire has responded in
part by continuing to appoint Bamangwato to govern-
ment posts. On the whole, however, Masire has held
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President Masire-A Profile
President Masire, 58, was Seretse Khama's hand-
picked successor and served as Vice President for 14
years before assuming the presidency in 1980. A
founding member of the Botswana Democratic Party,
Masire shared most ofKhama's political views.'
While he was Vice President, Masire also headed the
Ministry of Finance and Development Planning and is
responsible for many of Botswana's successful eco-
nomic policies
Masire has performed well in his first four years as
President and will be a candidate for his first five-
year term as President in the planned fall elections.
He has taken a particular interest in foreign policy,
where he has adopted a stronger public stance against
South Africa than did Khama.
Masire has a reputation for political astuteness and a
genial manner, although Embassy reporting states he
has a surprising distaste for day-to-day politics. A
successful rancher before he entered politics in the
1950s, he is independently wealthy and does not have
to rely on politics for a living. Masire's first love is
ranching, and he escapes to his ranch at every
opportunity. A member of the minority Bangwaketse
tribe, Masire apparently is in Qood healthi
to Seretse Khama's line of keeping tribal politics out pro-Soviet rhetoric has made it unattractive to most
of the party and has thereby prevented the internal would-be defectors from the BDP, according to the
rifts in the BDP from becoming serious. The selection US Embassy. The BNF garnered about 13 percent of
of Peter Mmusi-an,able technocrat but a non- the vote in the last general election and holds only two
Bamangwato-as Vice President in 1983 is an exam- seats in parliament. According to Embassy reporting,
ple of Masire's policy of rewarding competence and the party may gain one seat at best in the coming
merit that has met with general approval. election.'
All but one of the five opposition parties have ex-
tremely narrow constituencies and ill-defined pro-
grams and, in our view, present no real challenge to
the BDP. Only the Botswana National Front (BNF)
appears to have a well-defined base of support-
primarily among urban Batswana '--but its Marxist,
Masire also seems to be coping effectively with occa-
sional public criticism of the government's handling of
Zimbabwean refugees, most of whom are Ndebele
' One of the constituencies the BNF has a good chance of winning,
according to Embassy reporting, is the Gaborone seat held by Vice
President Mmusi. Despite Mmusi's popularity, the BNF is strong in
urban areas, and a victory there could be politically embarrassing
2 Citizens of Botswana refer to themselves as Batswana rather than
Botswanans. The adjectival form of the country's name is Botswa-
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Opposition Parties at a Glance
Botswana Independence Party
(BIP)
1960
Motsamai
Mpho
Botswana Peoples Party (BPP)
1964
Knight
Maripe
Botswana National Front
(BNF)
1966
Kenneth
Koma
Botswana Progressive Union
(BPU)
1982
Daniel Kwele
Botswana Liberal Party (BLP)
1983
Martin
Chakalisa
Among the Bayei and Bata- Lost its only seat in the 1979
wana in northwest Botswana. elections.
Represents non-Tswana people Holds one seat in the National
in the northeast with some sup- Assembly.
port around Francistown.
Among workers and leftist ideo- Holds two seats in the National
logues, as well as rural Bangwa- Assembly. Only party capable of
ketse loyal to ex-chief Gaseit- challenging the BDP.
siwe.
One-man show, with no nation- Nil.
al organization and little follow-
ing.
Among the non-Tswana people
of northeastern Botswana. Nil.
and related to the Kalanga of northern Botswana. The
Kalanga resent even the limited efforts that Botswana
security forces have mounted against their Zimba-
bwean tribal kin-some of whom probably are dissi-
dents-in response to pressure from Harare. Opposi-
tion parties have been unable to exploit this
resentment, however, and Masire has been careful to
limit his cooperation with Harare even at the risk of
antagonizing Zimbabwean officials.
A Potential Leadership Challenge
A nagging concern for Masire is the political future of
Botswana Defense Force Deputy Commander Ian
Khama, son of the late President. Khama's political
plans are the subject of intense speculation within
Botswana and a source of considerable consternation
to Masire,
Khama, in addition to carrying the family name, also
is Paramount Chief of the Bamangwato. Since 1981,
Khama has made no secret of his desire to enter
politics, and most observers are convinced that his
ultimate goal is the presidency
A major impediment to Khama's political aspirations,
however, is a constitutional amendment-sponsored,
ironically, by his father-that makes a tribal chief
ineligible for political office until five years after
relinquishing his tribal position
he constitutional issue was raised
by Masire in January 1983 when Khania discussed
with the President his possible resignation from the
military and his desire to become a BDP candidate for
In addition to the constitutional hurdle, Khama has
personal liabilities that we believe could potentially
inhibit his support among traditional elements of
Botswana society: he is of mixed race-Lady Ruth is
a white Englishwoman-and he does not speak Sets-
wana; the traditional language of most Batswana.
*sire's
concerns about Khama have been heightened by
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Brig. Gen. Ian Khama, 31, is the eldest son of the late
President of Botswana, Seretse Khama. After attend-
ing school in England and Rhodesia, Ian Khama
graduated from Britain's Royal Military College at
Sandhurst. At the age of 23, he became Deputy
Commander of the Botswana Defense Force and was
promoted to the rank of brigadier general. Khama
holds the most important tribal position in Botswana;
in 1979 he was installed as chief of the Bamangwato,
the.largest Tswana tribal group.
Khama gained considerable international exposure. as
hisfather's aide-de-camp during state visits and talks
with leaders of the Frontline States. A vocal opponent
of apartheid, he has nevertheless conceded that the
current US policy of negotiation with South Africa
may be more fruitful than a confrontational stance.
Moscow has also sought to establish a special rela-
tionship with him, and Khama has stressed Botswa-
na's nonaligned status in recent years, declaring that
the country would accept arms from both the West
and East
Khama has expressed support for the democratic
principles espoused by his father. He is apparently
impressionable, however, and is under considerable
pressure to play a more active role in Botswana
politics. Elders of the Bamangwato, intent on having
one of their own as national leader, want him to seek
the presidency.
Khama is a strict disciplinarian. He has assumed
responsibility for training the Botswana Defense
Force, personally leading his men on grueling field
exercises.
Foreign visitors have found Khama to be polite and
unassuming, almost to the point of shyness. He has a
pilot's license and does recreational flying, but he has
little time for other sports or hobbies. Khama is a
mulatto. His mother, an Englishwoman, apparently
still has substantial influence over him. Khama nei-
ther smokes nor drinks.
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Khama's meetings
with opposition politicians who urged him to resign
from the military and run as a BDP candidate in
order to effect "change from within."
Nonetheless, Masire, with the cooperation of the
commander of the Botswana Defense Force, Maj.
Gen. Mompati Merafhe. has taken steps to limit
Khama's influence.
A senior officer-an
ally of Merafhe-was promoted recently to Khama's
rank of brigadier and given the operations command
that had previously been Khama's. To further under-
mine support for Khama,
the military has adopted a policy favoring
supporters of Merafhe for promotion.
For the time being, Khama appears to be weighing his
options: whether to renounce his chieftainship, work
within the BDP, join an opposition group, or even
form his own opposition party. Another factor influ-
encing Khama's strategy could be the retirement
plans of General Merafhe.? If Merafhe were to retire
prior to Khama's political debut, or be appointed
Minister of Defense
Khama would probably delay his entry into
military commander
Merafhe, however, is well aware of Khama's desire to
replace him and may decide to delay retirement as
long as possible, More-
over, we believe Masire would only reluctantly allow
Khama to assume command of the military. Should
Khama be passed over for the top military position,
' Although the 49-year-old Merafhe-a 24-year veteran of the
police and Defense Force-was eligible for retirement four years
we doubt that his embarrassment and frustration 25X1
would translate into a destabilizing political struggle,
especially if elections had just taken place. In our
view, Khama would more likely begin in earnest to . 25X1
develop political support for a challenge in a future 25X1
Botswana has had one of the most impressive econom-
ic development records in the Third World. At inde- 25X1
pendence Botswana was heavily dependent on the
United Kingdom and other foreign donors. The coun-
try had a national income of $75 per capita and was
one of the poorest in Africa. Today Botswana finances
all of its operating budget and much of its develop-
ment spending from its own resources. Per capita
national income now tops $900, although distribution
is highly unequal, and prospects are good that the 25X1
economy will continue to grow, albeit at a modest
rate, for the rest of the decade. I - 25X1
Growth and Vulnerability
The 1970s were years of rapid, export-led economic
growth and of surpluses in the budget and balance of
payments. The mining of diamonds and of nickel and
copper, begun in the early 1970s, along with improve-
ments in the commercial cattle industry and the start
of beef exports to the European Community, boosted
real national income by an average of nearly 15
percent annually during the decade, according to
International Monetary Fund data. Increased cus-
toms receipts and diamond royalties led a 33-percent
average annual rise in government revenues during
the.decade, while Gaborone maintained its tradition-
ally conservative fiscal management and consistently
enjoyed budget surpluses that.were subsequently ap-
plied to development spending. Mining investments
spurred growth in the construction industry and ac-
counted for the bulk of large inflows of private capital
that, together with export growth of about 30 percent
annually, generated balance-of-payments surpluses.
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Angola
Zimbabwe
S tak /~ M~~kgadrl~gadr ~^-f t ~-"
Nf 1 - Is~7 ens) f' /~ ulawayo
Namibia
~ ~~~~~ySua DukweRefupee
/ s i
'TIN Wl
W/i
xOrapa'
Botswana
~k~a _~ RaiJroa
Boundary representation is
not necessarily authoritative.
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Economic Activity
it/ Diamond mine 94 Tourism
u460 Copper-nickel
mine and mill
Beef processing
Coal mine
Cattle corn,
Coal resources sorghum
Soda ash deposit Cattle
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zoecrei
Figure 3
Botswana: Economic Indicators
Real GDP Growth, 1978-84a
Percent
Balance of Payments, 1978-83
Million US S
Inflation Rate, 1979-83
Percent
Production of Principal Food Crops, 1980-84 it
Thousand tons
-100 1978 79 80 81 82 83
GDP by Sector, 1982/83 b
Percent
transportation
Manufacturing
Agriculture
Commerce,
finance, services
a Year ending 30 June. Based on producer price deflator. In comparison,
the use of a consumer price deflator to reflect the real purchasing power of
Botswana's export-oriented output results in a decline in real GDP for both
1981 and 1982, when the Botswana pula experienced substantial
devaluation.
b Estimated.
Consumer price index.
d Year ending 30 June.
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Figure 4
Botswana: Economic Comparisons
Zimbabwe
Zambia
Malawi
Botswanaa
0 200 400 600
Us $
Zimbabwe
Zambia
Malawi
Botswana
0
Percent
-5 0
Percent
Urban Population, 1981
Zimbabwe
Zambia
Malawi
Botswana
Zimbabwe
Zambia
Malawi
Botswana
0 10
Percent
Since 1979, however, Botswana's narrowly based, nickel and copper mine. Moreover, in 1982 Botswana
export-led economy has been hit by a succession of experienced the onset of a severe drought-as yet
troubles that are largely beyond its control and dem- unabated-that has withered subsistence crops, dev-
onstrate the economy's fundamental vulnerability. astated grazing lands, and caused substantial reduc-
These difficulties have included a serious bout of tions in the national cattle herd
hoof-and-mouth disease that curtailed beef exports, .
sharp speculative swings in the volatile international Recent Performance
diamond market that whipsawed Botswana's exports Despite recent difficulties, the Botswana economy has
and balance-of-payments position, and a prolonged demonstrated resilience in the short term, such as its
slump in the world minerals market that has threat-
ened the solvency of Botswana's major employer, a
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Unemployment: A Growing Concern
We and most academic observers believe that Bot-
swana's most intractable economic need-and an
issue that could eventually become a source of politi-
cal unrest-is the creation of new, nonagricultural
jobs for its rapidly growing labor force. Although
jobs in the modern sector, including commercial
agriculture and ranching, grew by 10 percent annual-
ly during the 1970s, according to press reports, the
mineral-based and export-led nature of development
thus far has resulted in a narrow, capital-intensive
economy a and a highly unequal income distribution.
Consequently, the absolute number of new employ-
ment opportunities has been inadequate, and unem-
ployment has grown. Out of an annual-increase in the
labor force of 12,000 to 13,000, from 7,000 to 8,000
become unemnloved. according to press reports.
The unemployment rate probably exceeded 12 per-
cent last year, in our estimation, hitting young people
hardest and creating potentially fertile ground for
recruitment by the political opposition. In addition,
the presence of several thousand refugees seekingjobs
has been a source of tension that has prompted the
government to require work permits for employment
of expatriates. Nonetheless, refugees with special
skills have been allowed to obtain work away from
the refugee camp at Dukwe, according to the US
Embassy.
a No more than 30 percent of total employment in Botswana is in
the modern sector. The rest is in subsistence agriculture and
traditional herding. According to IMF data for 1982-83, manufac-
turing-mostly meat processing-provided only about 9 percent of
GDP and some 10 percent of formal employment, while mining
provided about 27 percent of GDP but only about 8 percent of
modern fobs. Central government, commerce, and construction
together accounted for over half offormal employment. F
The number of Batswana officially employed in
South Africa has steadily declined since the late
1970s, reflecting Pretoria's policy of reducing depend-
ence on expatriate labor in its mines. Only a portion
of the dismissed workers were absorbed by the expan-
sion of employment in Botswana when new diamond
mines opened there in 1979 and 1982. Moreover, only
about 1,000 new jobs will be created when, by 1987,
Botswana assumes ownership of its main rail line,
which currently is owned and run by Zimbabwe.
The drought has aggravated Botswana's rapid rate of
urban growth, estimated at an annual rate of over 12
percent by the World Bank, as well as its growing
unemployment problem. Worsening agricultural pros-
pects have driven many rural Batswana to seek 25X1
employment or government relief in towns. We esti-
mate that the level of urbanization now exceeds 25
percent, up from about 10 percent at independence.
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The government is currently emphasizing the expan-
sion of primary education, but rapid population
growth has outpaced the government's ability to
provide facilities. In addition, there is insufficient
higher education and technical training to satisfy
fully the economy's requirements for skilled labor.
Only about 60 percent of managerial, professional, 25X1
and technical jobs are filled by Batswana, according
to the World Bank. The result, ironically, is heavy
dependence on expatriates and inadequate staffing of
many posts in both the public and private sectors
despite.high unemployment amon the inadequately
educated and trained Batswana. 25X1
25X1
strong performance last year, that masks its underly-
ing economic vulnerabilities. Diamond sales were up
sharply early last year, spurred largely by higher
production but also by some improvement in the world
market. Diamonds earned a record $416 million in
foreign exchange, double the level in 1982, and
accounted for two-thirds of total exports, according to
press reports. Total production reached a record 10.7
million carats, according to the US Embassy. Beef
sales to the EC, which absorbs half of Botswana's beef
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exports, also were strong; at about 16,000 tons, these
sales nearly filled the 18,900-ton quota Botswana is
allowed under the Lome Convention.'
As a result of these developments, foreign exchange
reserves have risen dramatically-they now cover
more than six months of imports-and the balance of
payments has achieved a record surplus, according to
press reports. Moreover, Botswana's external debt is
low, with debt servicing absorbing less than 6 percent
of export earnings.
The domestic economy has also stabilized somewhat
during the last year, despite intensifying drought, and
the inflation rate has eased to less than 11 percent
from its peak of nearly 16 percent in 1981. The
government has maintained strict control over the
budget and, despite a pay increase for civil servants
and reductions in personal income taxes, projects a
return to surplus for the current fiscal year (1 April to
31 March), according to press reports
Foreign Relations
Botswana's major foreign policy concerns stem largely
from its extremely vulnerable position in the region.
Caught between its two more powerful neighbors,
South Africa and Zimbabwe, Botswana has recently
come under growing pressure to make politically
unpalatable concessions to both.
South Africa
President Masire has continued Seretse Khama's
pragmatic approach to bilateral relations with South
Africa. In the wake of South Africa's recent nonag-
gression pact with Mozambique and disengagement-
of-forces agreement with Angola, however, Botswa-
na-South African relations have entered a new and
potentially dangerous phase. Botswana is especially
fearful that the African National Congress (ANC),
South Africa's principal black insurgency, will make
'Under the Lome Convention, exports from the former colonies of
EC members are accorded duty-free access to the European
market. The United Kingdom's entry to the EC gave Botswana
such access, but subject to other nontariff barriers that include a
negotiable quota on volume and price restrictions designed to
greater use of Botswana territory to stage attacks into
South Africa now that Mozambique's treaty obliga-
tions require it to expel ANC military cadre. We
share the assessment of Botswana officials that such
use of its territory by the ANC certainly would invite
South African military retaliation.
Botswana has recently come under South African
pressure to contain South-West Africa People's Orga-
nization (SWAPO) infiltration into Namibia via Bot-
swana, according to Embassy reporting. New pressure
on Gaborone and the Botswana security forces
emerged in early March after the apparent infiltra-
tion-for the first time through western Botswana-
of 12 SWAPO guerrillas into Namibia. Pretoria made
a public demarche to Gaborone demanding an imme-
diate investigation of the incident
Although details concerning the incident still are
unclear, Botswana security officials apparently be-
lieve SWAPO guerrillas did indeed enter Namibia
through Botswana territorvF-
difficulty in patrolling the huge and desolate border
region. Indeed, the Botswana military has no troops in
the area, and the police are nearly as scarce, accord-
ing to Embassy reporting.
Pretoria used the March incident to press Gaborone
to enter into a security pact granting South African
forces the right of "hot pursuit" against guerrillas in
Botswana territory,
Although Botswana is resisting South African pres-
sure to sign a formal pact, Botswana will, in our
judgment, continue to crack down on ANC and
SWAPO activity as best it can. Because of Botswa-
na's small defense force and long borders, however, it
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Economic Ties With South Africa
Botswana's economy is linked extensively to, that of
South Africa. Most of its trade is transported 'on
South African roads and railways. We estimate that
some 40,000 Batswana work in South Africa as
migrant laborers, nearly haIf of them legally in South
Africa's mines and most of the others unofficially in
agriculture and other fobs, helping relieve Botswana's
high unemployment and sending home valuable for-
eign exchange and income. Nonetheless, such employ-
ment is down sharply since the mid-1970s, when
40,000 Batswana worked in the mines alone.
Botswana also is dependent on South African corpo-
rate investment and other forms of economic coopera-
tion for continued growth. One promising protect
requiring Pretoria's cooperation as a market and
possibly as a partner in costly transport systems is
development of large soda ash deposits for export to
South Africa. British Petroleum has begun the initial
phases of an investment of over $300 million, but
Pretoria, according to US Embassy sources, has
attempted to link its cooperation in the venture to
Botswana's willingness to sign a formal security
accord. Gaborone's strong desire to proceed with the
protect, and Pretoria's interest in obtaining a low-cost
source of soda ash for its glass, aluminum, and paper
industries, probably will open the way for compro-
mise.
Botswana's membership, along with Lesotho and
Swaziland, in the South African-sponsored Southern
African Customs Union (SACU) has provided Pre-
toria with another important source of leverage that
it appears to be willing to use. South Africa collects
duties on the imports of these landlocked countries
and distributes shares based roughly on the mem-
bers' share of total SACU imports. Pretoria also
provides a hidden form offoreign aid by allowing the
other members to overstate their imports, a practice
probably initiated originally as a reward for formal
cooperation in the union with South Africa. Accord-
ing to the US Embassy in Pretoria, however, South
African officials have recently hinted that members'
shares will be reduced in September unless they
accept South Africa's four so-called independent
tribal homelands as new and equal members of
SACU. Although we believe Botswana would strongly
resist such a demand, SACU receipts provide over 30 25X1
percent of its government revenues, and Gaborone
would feel the pinch if Pretoria did decide to reduce
them.
Like other states in the region, Botswana has sought,
unsuccessfully, to loosen these economic ties. Bot-
swana is a founding member of the Southern African
Development Coordination Conference (SADCCJ, a
nine-nation regional group formed in 1980 partly to
promote regional development but also to alleviate
economic dependence on South Africa. The SADCC
secretariat is located in Gaborone. (Other SADCC
members are Angola, Lesotho, Malawi, Mozam-
bique, Swaziland, Tanzania, Zambia, and Zimba-
bwe.) Despite large commitments of support from
Western donors, however, SADCC has made little
progress toward its goals. Its members, battered by 25X1
recession and drought, have so far met with little
success in their efforts to escape from Pretoria's
economic stranglehold, in part because South Afri-
can-backed insurgents in Angola and Mozambique
have disrupted transport routes and precluded addi-
tional transport development that is vital to the other,
mostly landlocked members.
Secret
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Commander: Maj. Gen. Mompati Merafhe
Deputy Commander: Brig. Gen. Ian Khama
Budget: $28.7 million (1982)
Strength: 3,300 men
Major Units: Five Infantry Company Groups
Equipment: Shorland APCs, V-150 APCs,
BTR-60s, 75-mm recoilless rifles, 20-mm antiair-
craft guns, SA-7 antiaircraft missiles. (s NF)
The small Botswana Defense Force (BDF), a well-
organized, disciplined, and professional force, was
formed in 1977 as an outgrowth of the Rhodesian
civil war. Botswana found itself by the late 1970s
increasingly drawn into the war in neighboring Rho-
desia, deluged by the thousands of refugees fleeing
the war and fast becoming an area of antiguerrilla
operations by Rhodesian security forces. The BDF
was created when the government found that police
and its paramilitary wing were unable to preserve
internal security and maintain the integrity of Bot-
swana's borders.
Control over the Botswana military is exercised by
civilian officials. President Masire serves as the
commander in chief of the BDF, determines manpow-
er levels, and is responsible for appointing the com-
mander of the BDF as well as approving all senior-
level appointments. Masire, along with BDF
Commander Merafhe, determines the composition of
the f ve-member Defense Council. The Council, which
is chaired by Minister of Public Service and Informa-
tion Daniel Kwelagobe, is responsible for overseeing
BDF affairs.
is unlikely the government could control either of
these groups should they make a determined effort to
use Botswana's territory. As a result, infiltration by
the ANC or SWAPO is likely not only to continue,
but to increase, prompting further pressure from
Pretoria for Gaborone to allow South African forces a
cross-border role in controlling it.
Zimbabwe
The use of Botswana territory as a staging area by
Zimbabwean dissidents has bedeviled relations be-
tween Harare and Gaborone for over two years.
Despite repeated public denials, the Zimbabwean
Army has frequently conducted small cross-border
operations against suspected dissidents operating from
Botswana, according to US defense attache reporting.
In late 1983 the Zimbabwean military was regularly
crossing into Botswana in search of dissidents. The
Zimbabwean Government views Botswana's reluc-
tance to allow hot pursuit across the border as
evidence of tacit approval of, if not outright assistance
to, the dissidents, according to Embassy reporting.
25X1
Following border clashes in December and February
between units of the Zimbabwean National Army and
the Botswana Defense Force, officials from both
countries met to try to arrest a serious deterioration in
bilateral relations. A tacit agreement was apparently
reached that Botswana would attempt to repatriate
Zimbabwean refugees suspected of being dissidents
and monitor the Dukwe refugee camp more closely,
while Zimbabwe would refrain from further cross-
border operations. Even though there have been no
further border incidents since February, Harare will,
in our judgment, continue to use Gaborone as a
scapegoat for its dissident problem, and more Zim-
babwean Army cross-border operations-and strained
relations-are likely.
East and West
Although officially nonaligned, Botswana has tradi-
tionally been pro-West in orientation. In particular,
Gaborone has been generally supportive of US initia-
tives seeking peaceful solutions to southern African
disputes. Botswana probably hopes that the agree-
ment between South Africa and Angola for a disen-
gagement of forces can serve as the basis for a
broader regional settlement. Along with other Front-
line States, however, Botswana is skeptical about
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Zimbabweans began fleeing into Botswana in sizable
numbers in early 1982 when political and ethnic
rivalries between the ruling Zimbabwe African Na-
tional Union (ZANU)-the party mainly supported
by the Shona-speaking majority-and the minority-
based Zimbabwe African Peoples Union (ZAPU) trig-
gered dissident violence in Matabeleland. Repeatedly
brutal antidissident campaigns have caused thou-
sands of Zimbabweans, both armed dissidents and
civilians, tofee into Botswana.
Botswana considers itself a country of first asylum
for those refugees who cannot gain entry elsewhere.
Gaborone's policy is to register refugees and send
them to Dukwe Resettlement Camp, located north-
west of Francistown, about 80 kilometers from the
Zimbabwean border. About 3,800 persons now live at
Dukwe, mostly Zimbabweans but also South Afri-
cans, Angolans, and Namibians. Another 1,000 or so
refugees are scattered'throughout the country, princi-
pally in urban areas, according to the US Embassy.
The Zimbabweans are especially concerned about
Dukwe and believe that a large group of mostly
military-age males located just across the border
pose a serious threat, according to the US Embassy.
Harare believes that ZAPU dissidents are using the
South Africa's sincerity in the Namibian negotiations
and probably believes that pressure from the United
States is necessary if Pretoria is to abide by its public
commitment to implement the plan for Namibian
independence embodied in UN Security Council Res-
olution 435, according to Embassy reporting. More-
over, in our judgment, Botswana will continue to look
to the United States to support its position in relations
with Zimbabwe and South Africa, and especially to
intercede on Gaborone's behalf against pressure from
Pretoria.
Botswana has long been a recipient of small amounts
of economic development assistance from the United
States, for which government leaders have frequently
camp as a base to organize a political and military
opposition force, and that Botswana's laissez-faire
attitude permits such activities to continue, according
to press The Zimbabweans also
have claimed publicly to have received reports from
captured dissidents that the South African Govern-
ment has set up dissident training camps in Botswana
and even recruits directly from Dukwe.
Botswana has, with one exception, stoutly resisted
Zimbabwean pressure to forcibly repatriate these
refugees. Gaborone has a long tradition of offering
asylum to refugees and political exiles, and it takes
very seriously its obligations under the United Na-
last December, Gaborone expelled from Dukwe 39
Zimbabweans it claimed had been involved in a riot
at the camp. According to the US Embassy, Gabo-
rone insists that only those individuals involved in
criminal acts will be repatriated, but has agreed to
give the UN High Commissioner on Refugees a three-
month notice before carrying out any further
expulsions
voiced appreciation. During the past 13 years, for
example, US economic aid amounted to $160 million.
Gaborone will probably continue to look to the United
States for such aid as well as for emergency food
relief, provided primarily through the World Food
Program, and for other drought assistance. Botswana
also has welcomed US military assistance, which is on
the order of $9 million this year and has included such
items as armored vehicles, spare parts, and training.
In requesting such aid, Botswana's military leaders
have shown a realistic awareness of the military's
limited capacity to absorb sophisticated equipment
and of constraints on their financial resources.
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Figure 5
Angola
Zama
Namibia
xau`-' Orapa' 'Letlhakane
Ghanzi Botswana Bay
7"ra,,-Ka/ahari Railr
Gobabis:.% ...~-...v e~
Sarwa des
Bakwena
a t a P
nf/a
Okavango
.Swamp ata
Kalanga
(delta)
Cake -h1~~k adik ac/4 .r
Ngami B rer Z.. _ (sIans) P. f t
Bat/o,
Jwaneng Gaborone j
Bangwaketse '~
--- Bama/ete;
__-_Lobatle
Barolong
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Sua Refugee
a
Ethnic Groups
and Border Incursions
Bakwena Selected tribe
All tribal divisions in Botswana, except
the Kalanga and Sarwa, are divisions
of the Tswana ethnic group.
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Gaborone has had few dealings with Moscow since
the Soviets' unsuccessful attempt in 1980 to expand
their involvement in Botswana by concluding a rough-
ly $7 million arms deal. The equipment, consisting
primarily of 32 armored personnel carriers and 64
SA-7 antiaircraft missiles, and a few Soviet advisers
arrived in August 1981. According to US Embassy
reporting, maintenance and performance problems
with the Soviet equipment soon soured relations, and
Gaborone declined to renew the initial one-year con-
tract for the Soviet advisers.
In our judgment, the subsequent provision of US
military assistance-which is budgeted at $9 million
this year-together with Western and, in particular,
South African criticism of the Soviet military aid,
also contributed to Gaborone's decision in 1982 to
back away from Moscow. Botswana subsequently
rejected Soviet offers of medical and educational
assistance and also allowed a proposed cultural agree-
Moscow, which
maintains a large diplomatic mission in Gaborone 6
has long had close ties to the leadership of the Marxist
Botswana National Front, provided limited funding
for the party, and made travel and training available
Despite the misgivings that we believe Masire may
have about- Soviet activities and intentions in Botswa-
na, he may nonetheless be planning a trip to the
USSR and perhaps one East European country to
discuss educational, cultural, and scientific ex-
changes, Such a trip
could be envisione by Masire as balancing his recent
visit to the United States.
6 According to US Embassy reporting, the Soviets have more than
40 personnel at their Embassy in Gaborone, including I i known
Botswana has small economic and technical assistance
agreements with other Communist states. China has
funded an agricultural development project, providec25X1
small arms and ammunition, and is now providing a 25X1
team of medical doctors.
Beijing offered to sell 25X1
Botswana troop transport aircraft, light planes, and
other military equipment on concessionary terms.
China also agreed recently to carry out a $14 million
refurbishment of Botswana's main rail line accordin 25X1
to press reports. F_ _1 25X1
uba sent three technicians
to Botswana in March to assist with water resource 25X1
ao.,oi ,.,...o...
Outlook 25X1
Despite differences between President Masire and
some elements within the Botswana Democratic Par-
ty, we believe Masire and the vast majority of BDP
members will easily win reelection in 1984. The
political opposition to the Masire government is disor-
ganized and fragmented. In our judgment, Ian
Khama will wait for a more favorable opportunity and
not attempt to run for political office in 1984, and the
military is likely to remain loyal to the current
government. Moreover, we believe that any coup
attempt by Ian Khania or, much less likely, by junior
officers would require much more support from within
the armed forces than has been evident so far. Minor
dissatisfaction within the military and growing fric-
tion between Merafhe and Khama has not translated 25X1
into organized opposition to the President.
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In the near term, the effects of the drought make it
certain that 1984 will be a difficult year for rural
Batswana engaged in subsistence farming and ranch-
ing. Because of dwindling herd size and declining
animal weight, commercial cattle production and
sales probably will decline this year. Diamond sales
are likely to be firm this year, but output from a
massive new mine in Australia scheduled to begin
production next year probably will have a prolonged,
depressing effect on the diamond market.
Over the longer term, in our view, the growing
problem of urban unemployment will play a larger
role in the political equation. Botswana's likely inabil-
ity to provide sufficient employment opportunities for
a growing but inadequately educated urban labor
force could cause disenchantment with conservative
economic policies and contribute to political unrest.
Although political opposition parties have so far not
been able to effectively exploit discontent arising from
economic conditions, their ability to do so will almost
certainly be enhanced by growing frustration among
the Batswana over increased unemployment and ris-
ing income inequality, periodically exacerbated by
drought that worsens rural conditions. Parties such as
the BNF are likely, in our view, to respond to such
conditions by calling for increasingly radical political
and economic reforms.
The possibility of a coup, which now seems unlikely,
can only increase as economic conditions deteriorate.
Such a struggle for power, in our judgment, would
most probably pit a Khama-led coalition of the
Bamangwato, the BNF, and dissatisfied BDF ele-
ments against the Masire regime. It would also open
up the possibility of intervention by outside powers-
although the Soviet Union would be tempted to curry
favor with the Khama faction, South Africa might
intervene directly against it.
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Appendix
Economic Strengths and Weaknesses
Although Botswana's economy probably will continue
to have more good years-and occasionally some
excellent years, such as in 1983-the economic slump
of 1982 has underscored its fragility. In particular, it
is vulnerable to changes in international markets,
drought, and recurring outbreaks of cattle disease.
These, together with fundamental weaknesses in other
sectors, ensure that periods of severe economic stress
will continue to challenge Gaborone's ability to main-
tain sound economic management.
The Mineral Sector
Diamond mining has been the springboard for Bot-
swana's economic growth but also one of its greatest
potential vulnerabilities. As a result of a new diamond
mine that came into production at Jwaneng in 1982,
more than doubling the country's total output, mining
has become Botswana's largest productive sector and
now accounts for about one-fourth of GDP. Botswana
now ranks with South Africa and the USSR as one of
the three largest diamond producers in the world.
Diamond sales constitute some two-thirds of all ex-
ports, but are subject to volatile world demand for
jewelry and speculative investment. During the specu-
lative diamond boom of 1979-80, for example, the.
value of diamond exports nearly tripled. In 1981,
however, slumping world demand for diamonds-
especially for the high-quality gemstones that account
for over one-third of the diamonds produced in Bot-
swana-caused sales to fall by over 40 percent,
resulting in the first balance-of-payments deficit in a
decade.
All of Botswana's mines-at Jwaneng, Orapa, and
Letlhakane-are operated by a subsidiary of De
Beers, the South African diamond giant, and are
marketed by a De Beers-controlled cartel-the Cen-
tral Selling Organization (CSO)-in London. Con-
tractual arrangements with De Beers guarantee that a
percentage quota of Botswana's annual output-
based on Botswana's share of the total volume sup-
plied to the CSO worldwide-will be purchased.
In our view, this arrangement and the opening of the
new mine at Jwaneng-more than Gaborone's imple-
mentation of austerity-measures aimed at restraining
domestic demand and cutting imports-made possible
the turnaround in Botswana's external accounts and
prevented the economy from contracting. Nonethe-
less, the marketing arrangement has its own down-
side. The collapse of the diamond market in 1981 and
Botswana's obligation to take a share of the output
from Jwaneng have compelled Gaborone to carry a
growing stockpile of unsold diamonds now valued at
more than $500 million, equivalent to about half of
Botswana's current national income, according to
press reports. Despite record export sales last year,
about one-third of output volume was stockpiled.
.Botswana's only other significant mineral production
is nickel-copper matte from a mine at Selebi-Pikwe
and a small amount of coal for domestic use. The
nickel mine is owned jointly by the government,
Anglo-American Corporation of South Africa, and a 25X1
US firm that is the only significant US investor in
Botswana. After opening in 1974, the mine and its
associated processing plant were plagued by technical
problems, but the complex is now considered by
experts to be one of the most technically efficient in
the world. Production now exceeds designed capacity
and is expected to rise further, but reserves are
sufficient to sustain production at current levels for at
least the rest of the century,
25X1
25X11
Although the US partner buys all of the mine's output 25X1
for refining in the United States and reexport to
Europe, low prices caused by weak world demand
have caused repeated losses and rising debt, according
to press reports. The mine's production costs are low
'by world standards, but without a -substantial im-
provement in world nickel prices-unlikely before
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Figure 6
Botswana: Production of Principal Products,
1978-83
Beef
Thousand tons
Copper/Nickel Matte
Thousand metric tons
Diamonds
Million carats
1985, in our judgment-the mine's profitability will
remain shaky. Its political importance as a source of
employment, however, has made the mine's continued
operation a government priority. Gaborone has suc-
cessfully pressured its private partners in the venture
to participate in a series of financial bailouts to keep
the mine open, according to a variety of press
Prospects for new mineral development are mixed.
Once-promising prospects for an expansion of coal
output for export are now dimming in the face of a
world coal glut and consequent low prices that have
rendered the project uneconomic. Although plans
have called for exports to begin by the end of the
decade under an agreement with Royal Dutch Shell,
the government has been notified recently of Shell's
intention to postpone development, according to the
US Embassy. On the other hand, development of soda
ash deposits in northeastern Botswana is set to begin
soon; South Africa is slated to be the major market,
but political tensions between' Gaborone and Pretoria
could still derail the project.
A less practical project that the government has
nonetheless proposed is a rail line to transport coal
across the Kalahari Desert'to the South African port
at Walvis Bay in Namibia. Such a line would for the
first time open up western Botswana to commercial
development, and Gaborone has already contracted
for feasibility studies. In addition to its being predi-
cated on the now moribund plans to expand coal
output, however, we and most observers believe the
project is fraught with technical and financial diffi-
culties and political uncertainty associated with the
negotiations for the independence of Namibia.
Agriculture
Before the diamond-led recovery had begun in 1982,
the onset of a severe drought-now in its third year-
began to aggravate Botswana's already chronic food
deficiencies. Even under normal conditions. Botswana
cannot feed itself. We concur with the judgment of
the IMF that several factors have contributed to a
long-term decline in agricultural output that predates
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the current drought: normal levels of rainfall are low
and erratic; less than 30 percent of Botswana's land is
cultivable, with only one-fourth of it planted in a
typical year; and yields are low because the govern-
ment lacks the skilled manpower to implement fully
its rural development schemes, despite adequate fund-
ing. Over 80 percent of the population is concentrated
on the relatively fertile 10 percent of the land area
along the eastern border with South Africa.
Most cultivation of food crops-such as corn and
sorghum-is for subsistence consumption on farms of
less than 10 hectares, according to the IMF. Output
normally averages only about one-third of domestic
consumption but has fallen to about 10 percent in
each of the last two years because of the drought.
Imports of food-mostly from South Africa, which
treats Botswana as part of its domestic market for
commercial grain-have increased substantially, as
has dependence on international food relief. We esti-
mate that Botswana requires well over 100,000 tons of
foodgrain imports for 1984. Although the parastatal
agricultural marketing board has offered favorable
prices for foodgrains in recent years, the effects of
these incentives have been overwhelmed by the
drought. As many as half of the nearly 1 million
Batswana are now dependent to some degree on
government distribution of food, according to press
and Embassy reports.
The cattle industry, the country's second-largest for-
eign exchange earner, has also been afflicted by the
drought. The industry has long been a major factor in
economic growth and is still the main economic
activity of about 70 percent of all Batswana, although
not the sole source of income for most of them,
according to the IMF. With some 2.8 million head of
cattle, the country has the highest cattle-to-people
ratio in the world (about 2.8:1). Commercial ranching
has become increasingly concentrated in recent years,
however, with about 360 ranchers now owning some
500,000 head, according to the World Bank. Drought
and resultant overgrazing have exacerbated this
trend, making it increasingly difficult for much of the
rural population to make a living from agriculture
alone and increasing the inequality of income distri-
bution.
Beef processing is Botswana's main manufacturing
activity, and the country's two slaughtering plants-
at Lobatse and Maun-are the principal employers in
the manufacturing sector. Beef exports-primarily to
South Africa and to the United Kingdom and other
members of the EC-were just recqvering from two
economically devastating bouts of hoof-and-mouth
disease in 1979-80 when the drought hit. Although a
high slaughter rate has prevented some economic
losses, average animal weights are down, and the
combination of slaughter and drought may have
reduced the national herd by as much as 800,000
head since 1981. The UN Food and Agriculture
Organization estimates that an additional 800,000 or
more head will die from the drought before the next
rains in October.
Industry and Investment
About 60 percent of manufacturing firms in Botswa-
na are foreign owned, mainly by South Africans.
Gaborone's wide range of financial and other incen-
tives for domestic and foreign private investment,
however, and the inducement of duty-free access to
the South African market, have been largely ineffec-
tive in attracting new foreign investment to boost
employment in manufacturing, according to the IMF.
The government itself has apparently had some suc-
cess in encouraging local entrepreneurs to develop
new, small-scale industries, with the result that the
proportion of locally owned manufacturing enterprises
has doubled in the last three years to 15 percent of the
total. Most of these firms are in textiles, building
materials, and foodstuffs. About one-fourth of manu-
facturing enterprises are joint ventures between local
entrepreneurs and foreign partners.
Barriers to expansion of industry and employment are
unlikely to be overcome any time soon, in our judg-
ment. They include the small domestic market, severe
shortages of skilled manpower, limited raw materials
and other inputs (especially water, power, and trans-
port), and competition from well-established produc-
ers in South Africa and Zimbabwe. Moreover, poten-
tial investors in manufacturing probably became more
cautious in 1982 when Harare-unhappy over the
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number of Zimbabwean textile firms that had relo-
cated in Botswana to escape rising wages, higher
taxes, and government regulation-temporarily im-
posed a quota on imports from Botswana to signal its
displeasure. Textiles are Botswana's fourth-leading
export. Scarcity of water is likely to remain one of the
most serious obstacles to industrial development, ac-
cording to most observers. The drought has already
caused serious' reductions in urban water supplies, and
water shortages may even constrain future mining
investments.
Botswana's tourist potential is a relatively untapped
area for foreign investment and economic develop-
ment. Although the country possesses some of the last
great unspoiled areas in Africa, centered around the
Okavango Delta in the northwest, there has been little
development of tourist facilities or effective interna-
tional marketing. Botswana plans to send a trade and
investment mission to the United States in 1985 to
spur interest in this and other areas of potential
investment, according to the US Embassy
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Secret
Secret
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