Gov’t must resist hasty cuts to the civil service
LETLHOGONOLO LAMONG | Monday March 17, 2025 11:23
These passionate champions of leaner bureaucracies, often peddle inflexible prescriptions that ignore the nuanced socio-economic realities of nations like Botswana. They argue that a bloated public service undermines fiscal stability and hinders sustainable growth. However, the indiscriminate application of these contentious and rigid principles in the distinctive socio-economic profile of countries such as ours, warrants a more contextually aware approach. While fiscal stability is a noble pursuit, Botswana's journey towards economic self-reliance and diversification shines a klieg light on the dangers of adopting arbitrary cookie-cutter solutions to unique onion-layered developmental challenges.
This exposes the inherent risks soldered to ingesting one-size-fits-all remedies that could plunge our economy into an undesirable morass of socio-political chaos. The IMF and the World Bank are perceived through sharply divergent lenses. Their reputations are largely shaped by a nation’s economic status. To some, these entities are the celestial star guiding nations to financial order; crucial players in managing financial stability, fostering investment, and promoting growth, even when their policies demand painful austerity measures. To many more, they are overrated wolves in sheep’s skin; harbingers of reforms that widen inequality and trample national sovereignty. This dichotomy underscores not just an ideological clash, but an uncomfortable power imbalance, where the financial rules are written by the few in the Global North, and the many in the Global South are left to navigate the painful consequences. For the Global North, the IMF and the World Bank are symbols of enduring hope, whereas for the Global South, they are nothing but a vivid representation of undue hardship. What the West view as necessary financial discipline often represents an uncomfortable and contentious legacy of economic colonialism. And what the Global North perceive as crucial strides towards global economic order is deemed by many developing countries as a biased and punitive system that perpetuates cycles of debt, dependency, and stagnation. In fact, the policies driven by these entities are seen as instruments of neocolonial economic control, imposing stringent reforms that deepen poverty, increase inequality, and undermine national and economic sovereignty in emerging and developing economies. Steeped in the apathetic demand of agonising economic sacrifices, even their purported ‘structural adjustment’ policies often serve as economic straightjackets that ultimately suffocate valid aspirations of the world’s most vulnerable economies. In his book, Kicking Away the Ladder: Development Strategy in Historical Perspective, South Korean economist Ha-Joon Chang, insightfully highlighted the inherent double standards of developed economies, “Rich countries have ‘kicked away the ladder’...Already established countries do not want more competitive competitors emerging through the nationalistic policies they themselves successfully used in the past.”
The undeniable truth is, emerging and developing economies like Botswana are barred from climbing to prosperity using the very strategies that propelled the developed world. The new administration must tread carefully, embracing only what aligns with our country’s unique developmental path, intentionally discarding toxic generic prescriptions and regressive one-dimensional strategies that could worsen our vulnerabilities, and make us perpetually dependent on donor aid and its insidious entanglements, which breed long-term harm. The IMF and the World Bank, in their critiques of government-heavy economies, frequently cite the inefficiency of large public sectors, high wage bills, and the crowding out of private sector investment. This perspective is underpinned by the belief that a leaner civil service enables governments to allocate resources more effectively towards infrastructure and other growth-enabling investments. In principle, this logic seems foolproof. Yet, when applied to Botswana's context, it overlooks critical realities, including the ever-present scourge of high unemployment, and over-reliance on public sector jobs. Indiscriminately wielding the sharp axe of mass retrenchments would ignore a vital reality; Botswana’s civil servants are lifelines, supporting extended families in a nation grappling with over 20% unemployment. A reckless slash-and-burn approach disguised as fiscal discipline would be tantamount to cutting off one’s nose to spite one’s face, triggering unprecedented economic turbulence and social despair. Botswana's economic trajectory provides a compelling case in favour of moderation and gradualism, not foolhardy abandonment. Unlike many developing nations, Botswana has built a solid foundation of prudent governance and resource management. The country has leveraged its diamond wealth to create a stable macroeconomic environment.
However, this stability has not yet translated into a dynamic private sector capable of absorbing large volumes of labour. Unlike industrialised nations with booming private sectors, Botswana’s private enterprise ecosystem is still finding its feet. This is attributable to deep structural challenges that the country has grappled with for decades. These include a small domestic market, geographical constraints posed by its landlocked nature, and a limited entrepreneurial ecosystem. Add to that, the over-dependence on diamonds that has perpetuated a vicious cycle where the government, its enterprises and suppliers remain the primary employer and economic driver, throttling the very innovation needed for long-term sustainability. A vibrant private sector, the kind that economic thinkers like Joseph Schumpeter, an Austrian political economist, envision as engines of innovation and growth, does not emerge overnight. Post-war Europe and East Asia triumphed by cultivating their private sectors through judicious government interventions. The governments actively fostered industrialisation, invested in education, and created an enabling environment for generating, developing and sustaining private enterprise. For developing economies, economic transformation has never been, and will never be, an impulsive ‘Usainic’ sprint; it mirrors a purposeful but navigation-straining Spartathlon over unforgiving socio-economic routes, treacherous deprivation-strewn terrains and marshy inequality-fuelled grounds. Government’s role in this gruelling evolutionary odyssey is indispensable. A scorched-earth policy of civil service cuts would only deepen poverty and widen inequality. The path taken by well-developed economies to reach this milestone underscores the importance of nurturing foundational stages. Overzealously skipping these foundational stages in favour of rapid retrenchment or wholesale privatisation would be akin to 'slaughtering the goose that lays the golden eggs.'
Instead, Botswana must adopt a phased approach; gradually scaling back the state’s entrepreneurial footprint while systematically invigorating the private sector. The first critical phase involves investing in human capital. Botswana’s educational strides are commendable, but misalignment between skills and market demands persists. The new administration must prioritise reforms that bridge this gap. History has revealed that a skilled workforce is a prerequisite for economic diversification. A well-educated and skilled workforce is the foundation of private sector development, as exemplified by the Nordic countries, where government investments in education acted as a powerful catalyst for private sector growth. Second, Botswana must focus on creating a conducive business environment. This involves reducing the cost of doing business by streamlining regulatory frameworks, tackling infrastructural deficits, and fostering a culture of entrepreneurship that can spur innovation. Consider the astounding transformation of Singapore, which achieved remarkable private sector dynamism through the implementation of business-friendly policies and strategic investments in growth stimulating hubs. This is not just a textbook case of success but an undeniable proof of what can be achieved when governments strategically invest in high-potential industries and embrace progressive research and development. Likewise, Rwanda, a country with few resources, embraced technology and created a pro-business regulatory environment, emerging as an innovation hub in East Africa. Botswana must look to these examples and adapt these lessons to its own unique context. Third, Botswana must address its over-reliance on diamonds. Economic diversification is not a silent wish upon the stars, it is a matter of survival. While efforts to promote sectors like tourism, agriculture, and manufacturing are laudable, the pace has been sluggish and the approach somewhat scattershot.
The government must adopt targeted, laser-focused interventions and ramp up investment in research and development through organs such as BITRI, BDIH, UB and BIUST. Mauritius, a small island nation with limited resources, offers an inspiring blueprint, having successfully diversified its economy by focusing on textiles, financial services, and technology. These sectors that seemed out of reach, were strategically prioritised. Botswana can emulate this trajectory by zeroing in on high-potential industries. In essence, economic diversification must transcend lip service; it is an existential imperative. A prime example of successful diversification is Malaysia, which strategically cultivated a solid private sector that has extended its influence beyond national borders. The nation’s automotive industry, spearheaded by Proton, illustrates the untapped potential of government-supported ventures in fostering industrial growth. Initially dependent on domestic support, Proton now commands a significant international presence. Botswana’s Special Economic Zones Authority (SEZA) could play a pivotal role in driving similar outcomes. By creating targeted economic clusters and offering incentives for high-potential industries, SEZA could position Botswana as a competitive player in regional and global markets by unlocking private sector growth at a pace that propels Botswana into the next chapter of economic prosperity.
Furthermore, the government’s investment arm, the Botswana Development Corporation (BDC), is well-positioned to drive transformational change. By thinking creatively and focusing on high-value, high-impact initiatives, the BDC could spearhead ventures in renewable energy, technology, and value-added manufacturing. Strategic partnerships, venture capital funding for startups at sustainable rates, and investments in export-oriented industries, could significantly bolster economic diversification and create the much-needed jobs. Unlike the narrative advanced by proponents of immediate austerity, a phased approach, where the state actively supports private sector development, while gradually reducing its direct commercial involvement, is not only more sustainable, but also extremely important. Retrenchment without a safety net or viable alternatives would exacerbate poverty and inequality. In Botswana's familial context, where a single government salary often supports multiple households, the ripple effects of an ill-conceived and inadequately planned civil service downsizing would be catastrophic. Fittingly, Ha-Joon Chang, believes “Economic development is not a natural process; it requires deliberate policies and state intervention. The idea that markets alone can deliver development is ahistorical and misleading.” Another critical factor to consider is Botswana's demographic and economic structure. Unlike larger economies with diversified markets, Botswana’s small population limits the scale of economic activity. This structural reality also affects the informal sector, which often acts as a buffer during economic transitions. Addressing these constraints requires innovative policies such as regional integration to expand market access, and leveraging technology to transcend geographical barriers. The urgency of reform is undeniable, but it must be inclusive and equitable, designedly rooted in pragmatism and foresight.
The new administration must prioritise the creation of an effective policy framework that balances fiscal discipline with social protection. Public-private partnerships, targeted subsidies for emerging industries, and strategic investments in infrastructure, can catalyse private sector growth without sacrificing social stability. Calculated refusal to bow to the IMF’s and World Bank’s insistence on downsizing a bloated public service has, in some cases, proven to be an act of economic foresight rather than fiscal recklessness. Malaysia, during the Asian financial crisis, refused to slash public-sector jobs, choosing instead to invest in infrastructure and education. This strategy provided a safety net for its citizens while laying the groundwork for private-sector growth. This approach preserved social stability, fostered private-sector growth, and allowed the public workforce to shrink gradually through natural attrition as the non-governmental business landscape expanded. In his book, ‘Globalization and Its Discontents’, Joseph Stiglitz, a Nobel Prize-winning economist, praises Malaysia for rejecting the IMF's austerity recommendations. Similarly, Mauritius rejected sweeping layoffs, focusing on policies that encouraged entrepreneurship and innovation. Tax incentives, streamlined regulations, and targeted investments transformed the island nation into a hub for financial services and tourism, enabling the burgeoning private sector to absorb workers sustainably, without the disruption caused by abrupt public-sector cuts.
These examples underscore the wisdom of resisting external pressures to shrink the public service prematurely. The hypocrisy of Western nations on this issue is glaring. The United States retained a large public workforce during the Great Depression and post-war years, using programmes like the New Deal to create jobs and spur economic recovery. Similarly, the United Kingdom maintained a robust public service after World War II, relying on nationalised industries and welfare programmes until its private sector matured. Despite historically benefiting from strong public employment to stabilise their economies, these nations, through powerful institutions under their control, urge developing countries to dismantle public institutions prematurely, ignoring the destabilising consequences of such double standards. For our country, the solution to a bloated public service lies not in dismantling the very structures that have sustained the economy thus far. Through the deliberate pursuit of the broader socio-moral imperative of sustainable development customised to our needs, our citizens must be empowered through job creation, equitable growth, and opportunities for innovation.
The decisions made today will determine whether the nation realises its wisdom-laden vision of a diversified, prosperous economy, or succumbs to economic imperialism linked to the misguided implementation of hasty, shortsighted and ill-manoeuvred reforms. Trembling, cowering, and grovelling before the deftly crafted declarative and imperially suggestive blanket demands of the IMF and the World Bank would be a betrayal of the people. We cannot consider everything from these institutions as apodictically infallible. The choices of the new administration will determine whether the ruling coalition gradually soars to unequivocal success, or posthaste stumbles to crushing doom. It is fitting to conclude by quoting Amartya Sen, an Indian economist and Nobel laureate, who, in a different context, observed, 'All men have hearts, and each heart has its own leanings. Their right is our wrong, and our right is their wrong.”