After tense period, new govt seeks better ties with Beijing

Botswana, a small inland country in southern Africa, is ramping up efforts to strengthen economic and trade ties with China, as the new administration in Gaborone bets on China and other emerging markets to play a vital role to propel the country’s economic transformation. 

The intensifying efforts from President Mokgweetsi Masisi to attract Chinese companies to invest in the diamond-rich nation marks a dramatic shift from the previous administration’s hostile approach toward China and defies smearing campaign by western media bad mouthing China’s cooperation with African countries. 

Ask anyone in Botswana what their country is famous for and many will be quick to say the magic word: diamonds – one of the most sought-after and romanticized gemstones. Indeed, the southern African nation, which is the size of France but only has a population of about 2.3 million, is one of the world’s largest diamond producers. The precious stone has propelled the country from being one of the poorest in the continent five decades ago to one of the richest and most vibrant.

However, people in Botswana don’t shy away from admitting the acute problems for the country’s economy, which has grown excessively reliant on diamond mining and trade. 

“It is not good,” a tour bus driver in the capital named MG told the Global Times on a sunny afternoon, referring to the country’s diamond export-led economy. Asked why, the driver smiled and said, in less fluent English: “Diamonds are good but not for long.”

What MG said so plainly points to the profound constraints for sustained economic expansion faced by the country and the need for swift transformation, in which officials in Gaborone have determined China could play a vital part.

Economic transformation

Since taking office in April 2018, President Mokgweetsi Masisi has led the country in what many call an unprecedented drive to transform Botswana’s economy from being overly reliant on diamonds and other natural resources to being powered by innovation and entrepreneurship, under an initiative highly regarded in the country – National Vision 2036.

“Through our vision, we aspire to transform Botswana from a resource-based to a knowledge-based economy through digitization and embracing the Fourth Industrial Revolution,” Masisi told local and global business leaders gathered in Gaborone for the Global Expo Botswana (GEB) on Tuesday. “We are committed to a modern Botswana that is not only open to but is also able to compete with the rest of the world.”

The GEB is an initiative undertaken by Botswana’s Ministry of Investment, Trade and Industry aimed at raising the country’s global profile and attracting regional and global businesses. This year, the GEB attracted more than 250 companies from Botswana, Africa and beyond, according to the organizer – the Botswana Investment and Trade Centre (BITC).

In his speech at the opening ceremony, Masisi echoed the theme of the expo – “Harnessing the Power of Emerging Markets for Economic Growth” – and called on Botswana business to engage with emerging markets such as China, South Africa, India, Russia and Brazil – the so-called BRICS – to boost vitality in its economy.

“We need to nurture the spirit of entrepreneurship in this country, with a view to stimulating economic growth through value addition and beneficiation of our natural resources,” Masisi said. “We can only achieve this through strategic partnerships with the emerging economies that are advanced through digitalization and the application of artificial intelligence.”

China focus  

With this mandate in mind, Masisi has shifted focus on reviving ties with the leader in the emerging markets – China, seeking to repair rocky diplomatic relations and strengthening economic and trade ties with the world’s second-largest economy.

Soon after taking over the leadership from long-term president Ian Khama, Masisi became the first Botswana president to have paid a state visit to China in more than a decade. 

He also attended the Forum on China-Africa Cooperation (FOCAC) summit in Beijing, where he vowed to strengthen cooperation under both the China-African cooperation mechanism and the Belt and Road Initiative – a completely opposite approach from his predecessor.

During this tenure, Khama, the son of the country’s founding president Seretse Khama and Ruth Williams of England – who are still hailed as pioneers in mixed marriages in the country – adopted a hostile approach to Chinese investments in the country and even touched on China’s core interests. In 2017, against China’s repeated opposition and warnings, he indicated he would let the Dalai Lama, a separatist, pay an official visit to Botswana and claimed “we are not a colony of China.”

Though the trip was eventually canceled, the episode resulted in serious deterioration for bilateral ties. His “colony” comment also played right into rhetoric from Western officials and media outlets that have been mounting a smear campaign against Chinese investment in Africa, which they describe as “debt trap diplomacy” and “neo-colonialism” by China in the continent that was once colonized by Western powers.

Under Masisi, things have shifted dramatically and bilateral exchanges have been increasing, though further cooperation is needed as many Botswana officials pointed out in interviews with the Global Times and as shown in the lack of Chinese participation at the GEB.

There was only one Chinese company – telecom giant Huawei Technologies – at the expo, where many companies from India and South Africa were present. Asked about situation, Keletsositse Olebile, chief executive at the BITC, sought to downplay the number and highlight China’s rising interest in investing in Botswana.

“I can assure you that the Chinese interest is very high, since our president visited China for the FOCAC,” Olebile told the Global Times during an interview on Wednesday on the sidelines of the GEB. “I’m fielding a Chinese inquiry almost every week and companies are setting up in sectors like construction, manufacturing and even tourists.”

Olebile noted that he had expected about 200 Chinese companies, but “we don’t know what happened.”

A source in the Chinese Embassy in Gaborone told the Global Times that Chinese companies had shown interest in attending the expo but they did not have sufficient time to prepare. The expo, which is usually held in October, was moved up this year because the country will hold a general election in October, where addressing unemployment and corruption issues are at the front and center and Masisi is widely expected to win.

Apart from the tight schedule, the source also pointed out that though there is great interest, Chinese business activity, particularly investment, in Botswana has been limited over the past few years, due to tense diplomatic relations.

In 2018, bilateral trade stood at $296 million, according to data from the Chinese Ministry of Commerce. Investment by Chinese companies in Botswana was $23.24 million, the data showed. Both are relatively low numbers compared with China’s massive trade and investment in Africa.

Abundant opportunities

But with “a China-friendly” president, there is huge potential for cooperation between China and Botswana in a wide range of areas from infrastructure to technology to tourism to healthcare, Chinese business leaders in Botswana said.

“I feel things have turned more optimistic,” Ye Xiaoyang, a Chinese citizen who has been doing business in Botswana for more than two decades told the Global Times on Wednesday. Ye noted that though the Botswana market is small, there are “always business opportunities if you have the eyes of an explorer and spend time understanding the market.”

After spending years of doing commodity trade and mining, Ye has turned to the healthcare sector, which he said is an area where there is huge potential. Along with other investors, Ye is building one of the largest private hospitals in Botswana named Sidilega, which is set to open in September.

In the interview on Wednesday, Olebile also said that there are many areas where Chinese companies could play a vital role but he singled out one sector in which Botswana is seeking Chinese participation – manufacturing.

“Specifically, we are attracting [companies] in the manufacturing space,” he said, noting that though the Botswana market is small because of its small population, it is well-positioned to reach southern African nations and could enjoy considerable policy support. 

Chinese companies can enjoy a 15 percent corporate tax rate when they set up factories in Botswana, instead of the standard 22 percent, Olebile said. There will also be no issues with labor because “we have cordial relations,” he said.

In addition to attracting more Chinese investment, Botswana is seeking to expand exports to China, including beef and other agricultural goods as part of its economic diversification push.

Botswana’s intensifying efforts to strengthen ties with China also come at a time when the West, particularly the US, has ramped up efforts to disrupt China-Africa cooperation. Asked about the Western accusations, Olebile said though there could be some projects where issues appear, “China is a very good partner, in my view… we know China is capable.”

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