Gaborone: Botswana needs a modern heavy gauge railway to transport 70 - 90 million tonnes of coal to the sea and on to India and China.Whether the route it takes goes to Mozambique or Namibia is less important than having the independent national rail capacity because Cecil Rhodes' narrow gauge from Cape to Bulawayo is no longer fit for the purpose and cannot provide competition to South Africa's planned railroad to Swaziland and Mozambique, writes Roman Grynberg.
On Tuesday, President Barack Obama delivered his State of the Union address and said those who think that America is in decline don't know what they are talking about. It's an election year and anything, even that which cannot be supported by evidence, can be said as long as it gets votes! And afterall, which Republican was going to say Obama was wrong and the US is indeed in decline?
In 1946, when the Second World war was over, the US produced almost half the world's GDP. Having nuked Japan, flattened Germany, while the Soviet Union had been literally decimated and Britain bankrupted, America had no rivals at all - it was at the zenith of its global power. By 2010, however, the US accounted for only 23 percent of world GDP, and some time in the next decade, the Chinese will push them out of first place.
The involuntary expansion of the definition of the world's 'leading powers' from the largely North Atlantic G7 to the G20 was a result of realization that almost nothing of any global importance can now be solved by the old Atlantic powers alone without the agreement of the rising BRICS. This is evidence enough of the relative decline in American power.
In Thomas Friedman's recent book, 'That used to be Us,' which is based on a quotation from the same President Obama who does not believe that the US is in decline, Obama said: "It makes no sense for China to have better rail systems than us, and Singapore having better airports than us. And we just learned that China now has the fastest supercomputer on Earth - that used to be us'.
US infrastructure has fallen behind because it has not invested in it and in solving its most basic problems. While the US remains the world's most powerful nation by virtue of its military power, and there is still much that is admirable in that country, it is simply not what it used to be and no amount of pre-election fiction from President Obama will change the facts.
The US now has a political system that does not allow the state to function in the ways of modern states elsewhere, by helping the private sector or by providing modern and effective infrastructure. In large part, this was because of decisions over taxation, wealth and the role of government in the Regan-Bush era. Politically, the US moved in 1980 to an entirely new consensus that has lasted for 30 years which states that its government could do no economic good, and that the best thing to do was allow the wealthy to become even wealthier by lowering taxes on them and allowing them to invest.
This helped make the rich very rich in the US. In 2007, the top one percent of earners in the US took in 23.5 % of National Income. This was up from a low of nine percent in 1975. This redistribution in favour of the rich left less tax revenue and political space for government to act.
South of the Limpopo Basin, we have a very similar situation with South Africa, the great regional power that is also in relative decline and similarly in denial. Its absolute dominance of southern Africa is now ebbing as its neighbours start to recover from decades of liberation struggle and apartheid induced civil wars. At its peak in 1994, South Africa was responsible for 47 percent of sub-Saharan Africa's GDP. By 2008, South Africa was responsible for only 28 % of su-Saharan Africa's GDP.
Politically, South Africa, like the US, took a position and tried to redistribute wealth to the victims of apartheid rather than telling them what everyone knew - that the 1994 democratic dispensation was only the first step in a much longer and bitter struggle to end the economic injustice of the past.
The redistribution of income and government spending was never going to be enough to redress the profound scars of apartheid and that the nation had a collective responsibility to develop a world class national infrastructure, to develop real black business - not tenderpreneurs - and to invest massively in quality education and that this would take at least one generation of national sacrifice.
The US has been remarkably successful in making the rich much richer, but South Africa's efforts at redistribution have been less so. Measures of income distribution in SA remain stubbornly close to that which existed during apartheid, despite the government's best efforts.
And yet the results of a failure to invest in SA are there for all to see. Rather than invest to expand electricity production, President Thabo Mbeki waved his hands after the Electricity White Paper in 1998 and said the private sector would supply Eskom without ever providing a policy structure where they could.
The post 2007/8 power blackouts were predicted a decade earlier. Rather than deal with the rail bottlenecks in South Africa, the government did almost nothing and as a result coal exports stagnated and therefore SA lost the massive dividend of the Chinese coal boom of the last decade to Australia and Indonesia. Australia avoided the 2008 recession, the only country in the OECD to do so, largely because it was in a position to meet Chinese coal demand.
Last week, the Transnet boss made it quite clear that South Africa intended to develop its railroad to Swaziland and Mozambique as a way of relieving the Richards Bay Coal line for more coal from the Waterberg coal field in Limpopo and ultimately from the huge Botswana coal fields just the other side of the border. To many in Botswana, this looks like a power play to undercut rail initiatives being developed to build railway networks to either Namibia or Mozambique. However, unless the Richards Bay Coal Terminal is also expanded beyond its current 91 million tonne capacity, it could not alone accommodate Botswana's planned coal exports of 70-90 million tonnes.
Dominating the rail links in southern African has been one of the pillars of South African relative economic power. Until just a decade ago, almost everything coming into Africa south of the Congo River came in through Durban or Cape Town. Botswana's dependence on SA rail networks has endured for over a century, but the narrow Cape gauge railroad built by Cecil Rhodes in 1897 from Mafeking to Bulawayo that transits Botswana and links it to the coast is no longer fit for the purpose.
Botswana now needs a modern heavy gauge railway to transport 70-90 million tonnes of coal to the sea and on to India, and whether the route it takes is to Mozambique or to Namibia is less important than having the independent national rail capacity.
What the new railroad must do is provide competition to the Port of Durban and the South African railroad system and not be part of it. If transport economics teaches us anything, it is that more railways also lower the cost of road transport and there is probably no greater commercial barrier to Botswana's economic diversification than the high cost of transport from the coast.
Next month, all going well, Botswana will commission the first part of the Moropule B Power Station which, by the end of the year, will generate 600MW of electricity and put an end to two decades of almost total dependence on the now crumbling power infrastructure of South Africa which barely has the capacity to supply its own citizens. The temptation to remain dependent on the declining rail infrastructure of our neighbour should be avoided. The competition will also do us both good.
- Professor Roman Greynberg is a senior research fellow at the Botswana Institute of Development Policy Analysis. He writes in his personal capacity.
