BOTSWANA Less development revenue as diamonds lose their shine

http://www.irinnews.org/report.aspx?ReportID=83784

JOHANNESBURG, 3 April 2009 (IRIN) - Diamond-rich Botswana has so far managed to avoid Africa's "resource curse" - a term for conflicts sparked or maintained by commodities - but is unlikely to escape the global recession unscathed.

The country relies heavily on diamonds for its development, but in tough economic times, deriving most of your revenue from a single resource can sour reputations. In March credit agencies downgraded Botswana's rating.

...

From cattle post to shining economy

Botswana, a landlocked and largely arid southern African country, discovered diamonds soon after independence from Britain in 1966, and despite its proximity to regional wars and apartheid South Africa, managed to chart a course of development.

Between 1966 and 1997 Botswana recorded an average annual growth rate of 9.2 percent, the highest in the world, but at the price of being the world's most diamond-dependent economy.

The ripple effects of the global recession have already begun lapping against its economy. Debswana, a joint venture between international diamond company De Beers and the government, has suspended production at two mines and reduced operations at a third.