Paper short abstract:

This paper explores the persistence of commodity dependence by examining processes of upgrading along the diamond value chain in Botswana. It highlights how the evolution of ownership structures reflects complex power dynamics regarding the creation and addition of value of natural resources.

Paper long abstract:

Resource-rich countries face the challenge of transforming resource wealth into long-term growth. Upgrading along value chains by adding value to raw materials through processing generally commands higher prices in the global market which can lead to increased revenue and economic development. This study explores the persistence of commodity dependency in Botswana by examining the various historical and economic factors which influence processes of upgrading along the diamond value chain. This research draws on literature focusing on global value chain development and political economy of commodity dependence to investigate how the evolution of ownership structures in Botswana’s diamond industry reflects colonial roots of commodity dependence. Emerging questions include, what is the role of the state in creating and shaping upgrading processes in the diamond value chain? How do ownership structures reflect redistribution of power in Botswana diamond value chain? Using document reviews, secondary literature and semi-structured interviews, the paper maps out the evolving ownership structure of Botswana’s diamond value chain from 1960s to date. The paper argues that the redistribution of ownership structures along Botswana’s diamond industry reflects the complexity of power dynamics between resource-rich countries and multinationals corporations regarding the creation and addition of value to natural resources. The paper contributes to literature exploring the relationship between colonial roots of commodity dependence and global value chain development in African resource-rich countries.