Ambassador's Courtesy Call on Trade Minister

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STATE PLEASE PASS USTR (WJACKSON)

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TAGS: ETRD ECON EAID SCUL BC
SUBJECT: Ambassador's Courtesy Call on Trade Minister


1. Ambassador Nolan paid a courtesy call on Botswana's Minister of
Trade and Industry Neo Moroka November 28 at the Minister's Office.
Moroka thanked the U.S. for providing development assistance to
Botswana since independence, and noted that both he and many of his
staff had benefitted from scholarship programs which enabled them to
study in the United States. Minister Moroka praised the Africa
Growth and Opportunity Act (AGOA),calling it "the most significant
trade preference program around." He said that AGOA has helped
Botswana begin to diversify its economy, but acknowledged that the
country still needed to do more to promote private sector growth and
diversification, especially in the current economic climate in which
demand for diamonds is lower. The Minister also praised the
USAID-funded Southern Africa Global Competitiveness Hub and said
that the Hub has played a significant role in assisting Botswana's
private sector, especially through trade capacity building programs.
Moroka commented that free trade negotiations between the U.S. and
the Southern Africa Customs Union (SACU) were suspended in 2006
because "the USG wanted too much reciprocity and we needed to
protect certain industry." However, he also said that in July 2008
the USG and SACU signed an agreement to work instead on a Trade
Investment and Development Cooperation Agreement (TIDCA) as an
interim step toward freer trade between the U.S. and the region, and
Minister Moroka offered that he was "quite positive" about the
prospects" for the TIDCA.

Private Sector Focus
--------------

2. The Minister explained that President Khama is determined to
grow Botswana's private sector and make it the engine for the
country's economic growth. He acknowledged that currently
Botswana's economy is "government led," but noted that the
government's National Development Plan 10 which is now in draft form
explicitly calls for the encouragement of private sector led
economic growth. Minister Moroka said that Botswana is already
using its diamond industry as a driver for diversification. With
the opening of the Diamond Trading Center earlier this year,
aggregation, cutting, and polishing of stones is now taking place in
the country, and the government hopes that this will spill over into
related industries including jewelry design/production and even
glass manufacturing. The Minister also explained that though
Botswana has a large cattle industry and exports beef (primarily to
Europe),the country is not currently involved in leather
production. He said that if the cattle industry changes its
branding technique to avoid spoiling the hides, there is real
potential for establishing a leather industry in Botswana. The
government is also planning to encourage ostrich ranching and export
of high-end ostrich leather goods.

Power, Water Limit Industry
--------------

3. The Ambassador praised Botswana's investments in capital
projects and infrastructure. He asked about the expansion of the
Morupule power station and planned Mmamabula Energy Project, both of
which could transform Botswana into a net electricity exporter.
Minister Moroka explained that energy drives all development, and
until Botswana has a reliable source of power, it will be very
difficult to expand its economy or attract new foreign investment.
He noted that in addition to power, water scarcity limits growth.
The Minister asserted that once Botswana has steady power and a
national master plan for water usage, the government hopes to
attract agro-industry projects.


Potential for Service-Led Economy
--------------

4. Botswana hopes to take advantage of its strategic location "at
the epicenter of the SADC region" and become a center for tourism,
medicine, and regional transportation, according to Minister Moroka.
He noted that President Khama has challenged his Transportation
Minister to make Botswana a "transportation hub" within SADC.
Though Botswana is already known for international safari tourism,
the Minister advocates for the construction of a 5-star hotel in
Gaborone and airport upgrades (including more international routes)
to serve "the billionaires coming to trade at Gaborone's diamond
hub." He was excited about projects to upgrade Botswana's medical
facilities and training, and explained that the government wants
Botswana to become a center for specialist medical attention. The
GOB hopes that in a few years its citizens will no longer need to
travel to South Africa for specialized medical care and that
Botswana will actually attract medical tourists. The Ambassador
praised the partnership between the University of Pennsylvania and
University of Botswana medical schools as a great initiative that
will help the GOB improve Botswana's medical system. He noted that
over 100 UPenn medical students are now doing rotations in Botswana
each year as part of their training. The Minister was glad to hear
about this important private initiative, and said that as Botswana's
health system improves, more and more Batswana medical students who
go abroad for training return to Botswana to practice.

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Biographical Note
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5. Neo Moroka was elected as Member of Parliament for Kgalagadi
South constituency (Botswana Democratic Party) in 2004 and was then
appointed Minister of Trade and Industry by former President Festus
Mogae. He retained his portfolio when President Khama took power in
April 2008. During his meeting with the Ambassador, Minister Moroka
repeatedly described himself as "more of a businessman than a
politician" and he highlighted his background as the former head of
the Botswana Confederation of Commerce Industry and Manpower
(BOCCIM) and work as the Managing Director for British Petroleum
(BP) in both Botswana and Zambia, as well as his experience in
banking and with Debswana. Moroka told us he was educated in the
United States in the 1970s, where he attended Texas A&M and New
Mexico State universities. His academic training was in wildlife
biology. He is married with three adult sons and mentioned that he
owns several large cattle ranches.


DROUIN