Diamonds, forever or for good?: the economic impact of diamonds in South Africa
The paper provides some history of the industry in these three Southern African countries. It looks at the development of the trade in Botswana and the the economic benefits accruing to government there. Although these are significant, they do not seem to be significantly filtering down and reducing poverty. The author also points out that Botswana is not diversifying its income generation sufficiently away from diamonds, which are a finite resource. Similar analyses of the history and economics of the industry in Namibia and South Africa are presented.
The author concludes that, with the exception of Botswana, diamonds contribute little to total government revenue in the region, and their contribution to employment in all three countries is small and declining. This means that diamonds cannot be identified very directly either with good development or its absence.
However, the report defines some reasons for success and future priorities for improving benefits from the diamond industry:
- through good governance, management and control of supply, Botswana has managed to retain significant income from diamonds while retaining its political stability
- benefits to local economies must be improved
- these three countries have benefited from the Kimberley process, developing new regulations, although evidence of conflict diamond trade in South Africa has to be better addressed
- ultimately the responsibility for ending conflict diamond trade lies with the industry and with genuine corporate responsibility