The free market in…Botswana?

This short article was submitted to me by Will Carson, a member of YAL at St. Cloud State.  As he explained in his email to me, “After re-reading Ron Paul’s first book I wrote an article for class responding to Dr. Paul’s mentioning of Botswana as one of the freest economies in the world.”  This is that article:

When one thinks of individual freedom and unrestricted economic opportunities, a country in Africa might not be top the list.

However, Botswana has emerged as one of the most successful countries to come out of colonial rule in all of Africa. Regarded as a leader in economic freedom and boasting a healthy, competitive business environment, this southern African country has not only a rapidly developing free market economy, but also the lowest tax rates in the region. In fact, according to World Bank statistics, Botswana has outpaced “Asian Tiger” countries in economic growth, with an impressive average of 9% annually since 1966.

This growth can be attributed to several factors, such as the abolishment of government exchange controls, minimal government intervention in the economy, and a judiciary system separate from the government which advocates very strong personal and property rights.

Botswana’s government has a comparatively conservative fiscal policy as well, spending roughly 33% of GDP each year, according the the IMF.  These policies have led Botswana to have the highest credit rating in Africa, also due in part to the fact that domestic credit is allocated in market terms rather than artificially determined as in other countries and stockpiled foreign reserves.

These liberty-minded policies in the economy have spilled over to the military as well. When Botswana became independent from Britain in 1966, the country had no army.  In the late 70s an army was created in self defense against attacks from South Africa, as well as what was then called Rhodesia. However, the domestic army of 12,000 soldiers now has a different agenda:  training for natural disasters and, most importantly, defending wildlife against poaching.

Although this country might not be well known in the world, its limited government policies have resulted in one of the fastest growth rates in per capita income in the world.  Botswana may not have the power on the world stage that the U.S. has, but it does seem like we could learn a thing or two from this emerging African country.

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