Less than 100 days into his second term as President of the United States, Donald Trump has managed to over-turn decades of long established international relationships, appearing to side with Russian President Putin in his war against Ukraine, to alienate France, Germany and other European Union members by overt support for far-right populist leaders and groups, and to antagonize Panama, Greenland and Canada through imperialist claims akin to “land grabs”. In the case of Canada, Trump continues to suggest that the country would be better off if it joined the U.S. as its “51st state”. He has also suggested that he would take over Canada through economic means and has initiated an aggressive trade war. In particular, he seems intent on forcing Canada-based automotive manufacturing to relocate to the United States. In response, Canadian politicians and the population at large have responded with “their elbows up” — a term that anyone who has tried to keep their place in a queue will understand!
As a Canadian, currently residing in Canada, but who lived and worked in Botswana for many years, it seems to me that there are important lessons Canadians can learn from Batswana who have long faced significant challenges living next to physically, economically, and militarily more powerful neighbours, ie apartheid and post-apartheid South Africa, as well as Ian Smith’s Rhodesia. And Canada has a few lessons from this recent experience to offer Botswana.
Like Botswana’s difficulties with its neighbours, Canada’s problems with the United States are various and long-standing. In 1969, Prime Minister Pierre Trudeau travelled to Washington to meet with President Richard Nixon and famously stated: “Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt”.
The challenges originate in part due to the natural environment. Physically, Canada is a lot like Botswana, though the latter is significantly smaller. Both countries’ populations cluster along arable corridors — in Canada this means roughly 90% of the population lives within 160 km of the southern border shared with the United States; in Botswana this means roughly 80% of the population lives within 100 km of the eastern border (Lobatse to Francistown) shared with South Africa and Zimbabwe. The vast majority of both countries (the Kgalagadi Desert in Botswana’s West; Canada’s “frozen North”) is lightly populated, inhabited mainly by Indigenous Peoples living primarily off the land and enduring harsh environments. Both countries are endowed with vast natural resources above and below the Earth’s surface: diamonds, coal, and copper; forests, water and wildlife. Whereas initial settlements, expansion and subsequent population growth were determined by where crops could be grown, livestock raised, and markets accessed, today both countries are predominantly urban. According to the World Bank, in 2023, 73% percent of Botswana’s 2.5 million people reside in urban areas (up from 18% in 1981 and just 3% in 1960). Of Canada’s 40.1 million people, 82% live in urban areas (up from 76% in 1981 and 69% in 1960). Rapid and extensive urbanization creates both challenges and opportunities for economic and social development.
Modern economic development in both countries relied heavily on natural resource extraction and trade — minerals, metals, flora and fauna: dig it up, cut it down, catch it and trade it with your neighbours for the finished goods they produced. Living next to larger, more industrialized neighbours made it difficult for Canada or Botswana to do anything else. These unequal terms of trade (cheap, easily substitutable, raw materials for expensive, necessary finished goods) leave the weaker trading partner highly vulnerable to activities both in the richer partner and in the broader market system. This vulnerability continues to plague most post-colonial countries to this day. Yet, there are those within the raw material producing country who benefit considerably from the persistence of these relations — those who control the trade, governments who extract revenues from participants in this economic activity, and others who benefit from the subsequent economic activity of these dominant actors (those directly employed say in the state or state-run enterprises as well as those indirectly employed through secondary economic activity — from spaza shops, combi drivers and panel beaters to dentists, carpenters and plumbers). Botswana presents an extreme case where the country remains heavily dependent upon revenues from diamond sales — constituting about 85% of all foreign exchange earnings and 25% of GDP — and from the state spending that both drives the economy and derives from diamond revenues. Governments past and present have long championed economic diversification as a central aim of national development planning. Yet, the heavy reliance on one mineral places the country in a highly vulnerable position. Put simply: no diamonds, no forex; no forex, no ability to buy oil; no oil, no economy — everything would grind to a halt. This is why President Duma Boko’s government has made consolidating and deepening the diamond industry a key priority, achieving a series of agreements with De Beers as well as negotiating Botswana’s position as an export certification point for rough diamonds with G7 country collaboration. The former ensures a steady stream of state revenue through diamond sales, while the latter ensures market access for non-Russian mined diamonds. As of early 2024, Russian origin diamonds and Russian diamonds processed in third countries were banned from G7 country jurisdictions. Similar to the Kimberley Process which sought to ensure that “blood diamonds” were banned from world markets, Botswana continues to market its gemstones as products of “ethical production”.
Canada benefited from its proximity to the United States both as a market for its goods as well as a ready source for foreign direct (e.g. establishing a mill or a mine or a factory) and indirect (e.g. investing capital in Canadian-owned and operated businesses, such as mills or mines or factories) investment. Coinciding with the decolonization of Asia and Africa, the first wave of international development occurred between about 1945 and 1975. The approach was characterized by ‘import substitution industrialization’ and encouraged new states to prohibit imports of finished goods from other countries (often the prior colonial master) while creating the conditions for their own production. The logic turned on getting out from ‘underdevelopment’ — a phenomenon characterized by uneven terms of trade described above, and on the continual outflow of economic wealth (resources and financial capital) to more powerful states. Canada placed heavy tariffs on U.S. producers wishing to sell to Canadians in order to entice them to establish factories and mines and so on in Canada. The primary destination market for these goods remained the United States (where today approximately 92% of Canada’s exports land up). Given the rapid growth of the U.S. consumer market in the post-World War II period, Canada’s wealth of resources and raw materials were attractive inputs for American manufacturers. Branch plants were set up across the U.S. border in Canada and massive amounts of U.S.-based multinational corporate capital also flowed into agriculture, forestry, fisheries and mining. Canadian policy makers have tried on numerous occasions to limit foreign domination of the economy, attempting to impose a ‘Canada first’ approach when considering any new investment. By the early 1980s, however, the world largely abandoned protectionist approaches to national economic development in favour of what came to be known as neoliberalism and neoliberal globalization. Since then Canada has largely been ‘open for business’, taking a regional approach to wealth creation by, first, creating NAFTA — the North American Free Trade Agreement — with its continental neighbours, Mexico and the U.S.A. This agreement was renegotiated under the first Trump administration and is now called USMECA, an agreement, by the way, that Donald Trump today calls unjust though at the time he claimed it was the greatest deal he’d ever made.
Botswana — then Bechuanaland — flanked by racist neighbours, and having very few resources with which to defend its sovereignty, was held in a kind of amber by its colonial master, Great Britain. At worst coveted by South Africa as a further extension of the apartheid state, and at best, disregarded as little more than a transit corridor between South Africa and Rhodesia, the primary resource upon which Batswana could depend was the diplomacy of the three chiefs. Here is a primary lesson for Canada — when in a hostile neighbourhood, keep a low public profile while quietly and persistently cultivating relations with a more powerful partner, in this case Great Britain. Having so few resources at independence, Seretse Khama’s new government was largely a policy taker, not a policy maker. In terms of a modern economy, a country of perhaps 515,000 people composed primarily of small holder farmers, cattle keepers and hunter-gatherers, had very little purchasing power. GDP per capita at independence was estimated to be USD 70 (today, by comparison, it is approximately USD 7341.00). Import substitution industrialization was never an option from the start, and South Africa continues to be the primary source of most finished goods. Approximately 63% of all imports today come from South Africa. Perhaps as a stroke of luck, diamonds were discovered at Orapa in 1967 — after Botswana became independent — and the first revenues were realized in 1971 following the 1969 creation of the De Beers Botswana Mining Company joint venture. Beginning in 1975, revenues were to be shared 50/50. Hence the emergence of the nation’s dependence on foreign investment (capital, technology, human resources) centred on a single commodity where revenues accrued to a government who directed development for decades to come. Today less than 60% of working age Batswana identify as ‘economically active’, of whom about 30% are unemployed. As people continue to migrate to the cities and towns, the government through its national development plans (now in its 12th iteration), and through entities such as the Botswana Development Corporation, again and again searches for the ways and means of economic diversification. Most recently there has been great emphasis on "entrepreneurship", facilitated in part by opening up the tertiary education landscape to private "universities" and "colleges" of every shape and kind. The message from government is clear -- help yourself, we've tried state-centred development and it can only get us so far given our place in the global capitalist ocean as a very small fish, if even that: plankton perhaps?
Clearly, manufacturing for export to South Africa is not an option. The most painful example of this policy’s failure came with the collapse of the short-lived Hyundai assembly plant. Here there are two further lessons for Canada that emerge from this sorry tale: despite the existence of regional cooperative agreements such as the SADC trade protocol and SACU, when a more powerful partner decides to play by its own rules, binding agreements fly out the window; and, given the integrated nature of neoliberal capitalist globalization, not putting all of your eggs in one basket, while an important approach to economic development, is much easier said than done.
Shortly after the Hyundai plant closed, I was teaching a post-graduate course at UB entitled ‘development policy in developing countries’. The students were almost exclusively civil servants in search of a higher degree through part-time study. Among other ideas, I asked them to consider how Botswana could join a global value chain by producing, for example, glass for automobiles (rather than just assembling a car whose parts are made elsewhere). This still seems to me to be a logical starting point for large-scale manufacture in a global economy. I also asked them to consider the cost differential of producing something as simple as toothpaste — while the price would never come down to that of imports from Zimbabwe or South Africa, it would still be a ‘Made in Botswana’ product. I was met with blank stares: why pay more for something that you could get cheaper no matter who made it? They held to this position despite my argument about job creation and the circulation of capital within Botswana (rather than sending that money out to another country) — and that was almost 25 years ago. Has anything changed? Here arises another less from Botswana for Canada: consumers are both rational and selfish in their decision-making. Nationalism generally has no place in questions of personal consumption.
At least not until, that is, your neighbour threatens to make you the ’51st State’ — and this seems to be a lesson for Botswana from Canada. While personal consumers think personally, not nationally, policy makers need to consider ‘the personal’ in the aggregate: what do all of these individual decisions add up to? A country more vulnerable to external shocks, be they political or economic? And as policy makers search for policies on behalf of the collective, they must do the hard work of educating the citizenry about how our individual decisions can make us weaker or they can make us stronger. That’s why we call it the political economy of development: where politics impacts economics and vice versa. In the age of Trump, the irrational political seems to be forcing Canadians to reconsider, both individually and collectively, what rational economic choice can and must look like, particularly if you do not want to be either America’s 51st state or South Africa’s tenth province.
So, to sum up: dangerous neighbourhoods require careful and thoughtful diplomacy; powerful actors will bend the rules in whatever way suits them best; the global structure of production makes it almost impossible for small players to affect the rules of the game; the tendency to ‘look after yourself’, cultivated over several decades of neoliberal thinking, must give way to thoughts of one’s place in the collective, and how decisions made by one will ultimately affect all. The only way to deal with the neighbourhood bully, is to pull together in common cause. If you do some research on trade between Canada and Botswana you will see that Canada exports diamonds to Botswana. This is simply intra-multinational trade: it’s all De Beers. We ordinary Canadians and Batswana have more in common than you might think. Isn’t it time we put our heads — rather than our eggs — together?
