Botswana Unified Revenue Service: Fill & Download for Free

Going from a poor country to a middle income country is not easy. The majority of countries that were poor fifty years ago are still poor today. And once a poor country makes it to "middle income" levels, breaking out of the "middle income trap" has proven to be even harder.In the post-WW2 era, you can count on two hands the number of economies that have been able to do this. These include small island countries that rely on tourism, trading entrepôts (e.g. Hong Kong and Singapore) that leveraged their advantageous geographic position, and resource-rich countries (e.g. Qatar) whose economic development paths are virtually impossible to emulate for larger, more diversified economies like India. When you exclude these, you are really just left with two examples: South Korea and Taiwan and potentially (but not yet) China.Today, India is still a low-income country that needs to take the first step of getting to "middle income" levels before worrying about breaking out of the "middle income trap". I am hopeful that India is able to accomplish both one day. The stakes are high with India representing one-sixth of humanity. Lifting one billion Indians into the global middle class can only be a net positive for the world.But the realist in me knows that there will be significant challenges ahead. Specifically, I believe developing its manufacturing sector is both absolutely necessary and key to India elevating itself into the "middle income" tier over the next two decades and then hopefully one day breaking out as well.Looking to the past to see the future ...To put things in proper perspective, I re-constructed the Economist chart that Balaji refers to in his answer and updated the data for 2014 (see Note 1 below for my data sources and methodology). First, I looked at the data from 1960 which is similar to the original Economist chart:As you can see, South Korea and Taiwan stand out in the upper-left quadrant as countries that were able to go from poor to rich in a little over 50 years (the other blue dot in that quadrant is Qatar, now one of the wealthiest countries in the world on the back of its massive natural gas reserves).I've also highlighted some other relevant countries. In the "Low to Middle Income" quadrant, we see China and Malaysia as well as Africa's biggest success story, Botswana. In the "Broke out of the Middle Income Trap" quadrant, we see trading entrepôts Singapore and Hong Kong as well as Japan and Ireland.Then moving to the lower-left quadrant we have "Low Income Trap" countries. This is where India sits, although I would note the importance of staying to the left of the diagonal orange line [2]. Poor and middle income countries that sit to the right of that line are not doing well -- you can see his with the troubled economies of the Philippines, South Africa and (especially) Venezuela. The good news is that India is sitting well to the left of this orange line, which means that there has been some progress.Then I re-calculated this chart to compare things in 1980 to 2014 to see how the chart changed if we looked at a shorter time horizon -- one that is also more relevant for China and India which started their economic reforms a bit later than everyone else:Once again, you can see how South Korea and Taiwan are the only ones to have broken out of the "Middle Income Trap" [3]. In the "Economic basketcases" quadrant, you will note how Iraq has joined Venezuela following a disastrous three decades during the Saddam Hussein era.Turning our eyes to India, we can see that it is still stuck in the "Low Income Trap" quadrant. This is not to say that it has not made significant strides since 1980 or 1991 but the data is what it is. In 1991, at the beginning of India's reforms, its per capita GDP was 1.3% of the United States. In 2014, it had risen to 2.9%. This represents progress but there is still a long way to go.Harnessing entrepreneurial energy the right way ...I have thought and written a lot about this subject.I was very curious about why South Korea and Taiwan were so unique in their ability to raise themselves up from being "dirt poor" to "high income" in less than three generations and penned my thoughts in another Quora answer (How did Taiwan and South Korea become so rich?).I have also thought about China and the challenges it faces as it tries to break out of the "middle income trap" (Has China reached the "Middle Income Trap"?).And I spent a lot of time thinking and writing about why certain Southeast Asian countries were able to go from "dirt poor" to "middle income" but appear to have since gotten stuck in that dreaded "Middle Income Trap" (Why is China wealthier today than Thailand, Indonesia and Philippines?).My overall conclusion is that it has less to do with political orientation, specific economic approaches, how well-endowed you are with natural resources, or how homogeneous your population is. And while specific things like land reform and industrialization policies seem to have mattered a lot, a more complete "grand unifying principle" was this:Every country has enough entrepreneurial energy. The difference between success (getting rich) and failure (staying poor) lies in their ability to harness this energy in a manner that was not only profitable for the entrepreneur but beneficial to society at large.India cannot get there on Services alone ...The IT/BPO services exports industry is the one sector in India that is a great example of this "grand unifying principle". Entrepreneurs who entered this sector have made fabulous amounts of money but even more importantly, their companies have generated very valuable and high-paying jobs for millions of workers, pushed this workforce to improve its skills and talents and created positive spillover benefits for the rest of the economy. Many (if not most) Indian Quorans have been direct beneficiaries of this over the past two decades so I am sure you guys have firsthand experience of what I am talking about.But one sector alone will not be able to make India rich, or get it to "middle income" levels even. The three million Indians that work directly in the IT/BPO sector simply cannot pull a nation of one and a quarter billion into "middle income" status on their own. There needs to be more.In another answer, Sunny Mewati articulates well why India's services-centric economy may be less the result of a vibrant services sector than an under-performing manufacturing sector, citing Debraj Ray:... the enormous services sector in developing countries is symptomatic of the development of the unorganized or informal sector... This sector is the home of last resort -- the shelter for the millions of migrants who have made their way to the cities from the rural sector. People who shine shoes, petty retailers, and middlemen: they all get lumped under the broad rubric of services because there is no other appropriate category.Outside of the IT/BPO export sector, the rest of the Indian services sector consists largely of low-paying informal jobs that simply cannot support a middle class lifestyle. While the IT/BPO sector's three million workers punch way above their weight, these industries still contributes less than 10% of India's GDP. To lift the other billion or so Indians who are not directly or indirectly tied to the IT/BPO sector into the middle class, you need to figure out other areas where they can find ways to link them to the global economy.There are productivity limits to services jobs. Wages for Indian IT/BPO workers shot up in during the 2000s and very quickly converged with developed country standards. But the laws of economics dictate that future wage gains will be limited to developed country growth standards, where 2% real growth per year is the "new normal" if not upper bound. In addition, we are seeing how BPOs in countries like the Philippines are today quite competitive with India.Industrial and manufacturing businesses are not subject to the same productivity constraints that typical service sector jobs are. This is because over time you can gradually introduce more capital and technology to improve productivity year by year in small chunks over a long, long period of time. These small year-over-year productivity improvements ultimately lead to remarkable leaps in productivity over long stretches of time. In his most recent annual letter, Warren Buffett talks about the remarkable productivity improvements he's seen in his beloved rail sector:In 1947, shortly after the end of World War II, the American workforce totaled 44 million. About 1.35 million workers were employed in the railroad industry. The revenue ton-miles of freight moved by Class I railroads that year totaled 655 billion.By 2014, Class I railroads carried 1.85 trillion ton-miles, an increase of 182%, while employing only 187,000 workers, a reduction of 86% since 1947. (Some of this change involved passenger-related employees, but most of the workforce reduction came on the freight side.) As a result of this staggering improvement in productivity, the inflation-adjusted price for moving a ton-mile of freight has fallen by 55% since 1947, a drop saving shippers about $90 billion annually in current dollars.Another startling statistic: If it took as many people now to move freight as it did in 1947, we would need well over three million railroad workers to handle present volumes. (Of course, that level of employment would raise freight charges by a lot; consequently, nothing close to today’s volume would actually move.)Our own BNSF was formed in 1995 by a merger between Burlington Northern and Santa Fe. In 1996, the merged company’s first full year of operation, 411 million ton-miles of freight were transported by 45,000 employees. Last year the comparable figures were 702 million ton-miles (plus 71%) and 47,000 employees (plus only 4%). That dramatic gain in productivity benefits both owners and shippers. Safety at BNSF has improved as well:In contrast, if you look at output and productivity of labor-intensive service jobs like shoe-shine boys, domestic workers or retail shop workers, there is very little improvement in productivity from people doing the same things a hundred years ago.This is why in nearly all wealthy, developed economies, their huge services sectors are underpinned and enabled by a strong industrial and manufacturing base, and not the other way around.So for India, the only way to lift itself to "middle income" status and beyond has to be manufacturing. Industrial businesses are the only way to create the hundreds of millions of relatively productive jobs that India needs to absorb the approximately 15-20 million young people entering the workforce every year.What makes this endeavor even more critical is the risk of angry youth. If you cannot provide decent wage-paying jobs for hundreds of millions of young people, India's demographic dividend could become a curse. Watching how things unfolded during the "Arab Spring" a few years ago, we should all have a sense of what happens when you have lots of idle, under-employed young people, especially if they tend to skew male.Manufacturing is the key to India getting to "middle income" levels and it will also continue to play a role if India has any shot of breaking out of the dreaded "Middle Income Trap" once it gets there. It's not going to be easy but I do believe the challenge is once again per my "grand unifying theory" of development, figuring out how to harness latent Indian entrepreneurial energy to make "Make in India" a massive success. I discuss the specific challenges and potential solutions here in an in-depth look at how to become a world class manufacturer: Glenn Luk's answer to Why are manufacturing costs higher in India, compared to China?Notes:[1] Data points are based on GDP per capita (nominal) in U.S. Dollar terms (source: World Bank). I calculated each country's per capita GDP relative to the per capita GDP of the United States and converted it to a log scale. This was similar but not exactly the same as the Economist's approach. The classifications for "low income", "middle income" and "high income" levels correspond roughly with the World Bank's classifications.I'll note that the boundaries of these income classifications differ from the Economist chart. I don't agree with a chart that places China at a "middle income" bracket in 1960 -- it was definitely poor then.[2] Where you are relative to the orange line in the upper-right "Staying Rich" quadrant is less meaningful.[3] The other blue dot in that quadrant is Portugal, which was already a "Middle Income" country in 1960 and is dangerously close to falling back to "Middle Income" levels.

Create a favorable environment first and implement reforms based on “indigenous” institutions.Africa Unchained: The Blueprint for Africa's Future: Ayittey, G.: 9781403973863: Amazon.com: BooksIndigenous African Institutions: Ayittey, George: 9781571053374: Amazon.com: BooksAPPLIED ECONOMICS FOR AFRICA George B.N. Ayittey, PhDhttps://www.atlasnetwork.org/assets/uploads/misc/Applied_Economics_for_Africa_2018.pdf“He who does not know where he came from, does not know where he is going,” says an African proverb. We are lost in Africa because we do not know where we came from, which is why we copy everything foreign by heart. It is either because we have no faith in our own or we lack knowledge of our own. Africa is lost and wandering because many of its leaders do not know where they came from. They have been copying alien systems and institutions, instead of building upon their own. For example, they have been building Confucius Institutes across Africa, not Ubuntu Institutes.We need to continue championing “African solutions to African problems” and arguing that the salvation of Africa does not lie inside the corridors of the World Bank, the IMF, or the US Congress. Neither does it lie in the inner sanctum of the Chinese Politburo or the Russian presidium. It lies in Africa’s own backyard—in her own indigenous institutions.There is absolutely nothing wrong with Africa’s indigenous economic system. But the indigenous system was roundly castigated by the ruling elites as “backward and primitive.” They then proceeded to copy all sorts of alien and unworkable models from abroad to impose on the African people. The continent became littered with the putrid carcasses of failed imported systemsTraditional Africa, the home of the real people of Africa, works—albeit at a low level of efficiency—and has sustained its people for centuries. The natives may lack formal education, but they are hard-working and enterprising. Using their raw native intelligence, ingenuity, and skills, they have been able to produce some of the world’s most beautiful cloths (kente, for example) and great works of art. The sculptures of Yoruba, Ibo bronzes, the beads of the Maasai, Fang masks, Zulu headrests, and Sotho snuff containers are recognized as masterpieces.There were free village markets, free trade, and free enterprise before the advent of colonialism in Africa. Timbuktu, for example was one great market town. Free-trade routes crisscrossed the continent with the trans-Saharan being the most famous. Politically, decision-making was by consensus at village meetingsBut much of this knowledge, as Mr. Soyinka rightly complains, has been hidden. Myths about Africa came to replace these truths, and the problem was compounded by the failure on all sides to distinguish between form and substance. The institutions of democracy, free markets, money, marriage, and justice, can take many forms. Just because there were no ballot boxes or supermarkets or white-wigged judges in pre-colonial African villages doesn’t mean Africans had no conception of those institutions. African tribal cultures aren’t in conflict with the West; only the forms of institutions are different.There is still much mythology about Africa’s indigenous economic system. The myth of “hunters and gatherers” persists, giving the impression that Africa had no economic institutions or culture before contact with the Europeans. Inexorably tied to their ancestral land, Africans supposedly eked out a living from primitive agriculture. Trade and exchange were supposedly un- known, since self-sufficiency and subsistence farming were the operative goals. Books on pre-colonial Africa dwell excessively on the “backwardness” of African technology. But Africa did indeed have economic institutionsAfricans engaged in a variety of industrial activities in the pre-colonial era. In Benin, “the glass industry made extraordinary strides” (Diop 1987, 136). In Nigeria, “the cloth industry was an ancient craft. Kano attained historical prominence in the fourteenth century with its fine indigo dyed cloth, which was traded for goods from North Africa. Even before the discovery of cotton, other materials had been used for cloth. The Igbo, for example, made cloth from the fibrous bark of trees. The Asante also were famous for their cotton and bark cloth (kente and adwumfo).No effort was made to build on Africa’s own indigenous institutions; only Botswana did this. The indigenous systems were castigated as backward and primitive that could not be relied upon to achieve the rapid transformation the leaders desired. Foreign systems and paraphernalia were blindly aped and transplanted into Africa.As such, no organic development took place but rather “development by imitation.”——————-The Chinese Economic Miracle: Lessons to Be LearntSuccess has many parents, failure is an orphan.So explanations are never lacking for the Chinese success.One set of explanations runs in terms of favourable initial conditions for China around 1978, relative to the transition economies in USSR and east Europe around 1990. The oft-mentioned favourable initial conditions are the following:Predominantly agricultural economy: Reforming agriculture by replacing collec- tive farming with private incentives to farmers (through the household responsibility system) released the pent-up productive potential in agriculture. This caused a big and immediate rise in agricultural productivity which in turn brought significant benefits to a vast number of people, creating an enormous support base for further reforms. The growth of agricultural incomes also caused a rise in demand for other goods. On the supply side, rising rural incomes created additional savings for investment while labour released from collective farms became available for non- agricultural employment.Less comprehensive and more decentralised planning: China, from Mao's time, practised a more decentralised planning system. This, together with Maoist insis- tence on regional self-sufficiency (Mao was haunted by the spectre of war) contributed to the growth of a larger number of locally owned smaller firms within an industry which promoted greater compe- tition. This tradition and the existing local infrastructure provided the spring board for the phenomenal growth of TVEs after the reforms. Decentralisation of adminis-trative and fiscal powers provided a greater scope for local experimentation, which was one of the hallmarks of Chinese reform strategy. Less comprehensive central planning and less stringent central control had allowed the development of quasi- market transactions between the TVEs and the state-owned enterprises (SOEs) even before the reforms started in 1978.Preponderance of small-scale SOEs: Compared with the USSR, China had a larger proportion of small-scale SOEs. It was a byproduct of the Maoist policy of decentralisation and local self-sufficiency. This made the subsequent restructuring of the SOE sector easier in China compared with USSR, where a much larger fraction of SOEs were large-scale enterprises with a long and complex chain of command.No foreign exchange crisis: in 1978, China did not have any foreign debt to service nor did it suffer from any foreign exchange crisis, unlike USSR and eastern Europe in the early 1990s. For this reason, China could evolve its own reforms strategy fairly independent of foreign advisors.Role of overseas Chinese: China from the very beginning of reforms, could get sub- stantial help from overseas Chinese, espe- cially from Hong Kong and Taiwan. The capital technology, entrepreneurial ability, marketing skills and international trading experience of the overseas Chinese made a formidable combination with the advan- tages of cheap land and abundant supply of low-priced disciplined labour in the mainland. The export boom of China was facilitated by the relocation of labour- intensive stages of production from Hong Kong and Taiwan to the adjacent special economic zones (SEZs) in the Chinese coastal provinces. There was no political risk involved in this relocation of factories from Hong Kong to the mainland as Hong Kong would in any case become part of China. No other country had enjoyed such an advantage.Labour market conditions in China: China possessed the advantage of an abundant supply of cheap disciplined labour. Labour unions, though officially allowed in China, mostly played a cooperative role with the management, instead of the collective bargaining role practised in non-commu nist countries. Managers were given the right to hire and fire workers in the export- oriented factories in the SEZs.Macroeconomic stability: China did not have to face any inflationary pressure, open or repressed, in the initial years of the reforms. So, China did not have to institute any stabilisation programme before liberalisation started and hence could avoid the social costs (and unpopularity) asso- ciated with stabilisation programe before liberalisation started and hence could avoid the social costs (and unpopularity) associated with stabilisation programmes.High saving rate: Even at the beginning of reforms, the national savings rate in China was quite high (35 per cent of GDP in 1979, according to Lardy (1998:9)) by the standards of comparable countries. Household savings rate was merely 1 per cent before reforms and most of the sav- ings came from the profits of SOEs.However, favourable initial conditions may, at best, provide only a partial expla- nation.Even if initial conditions, on balance, were favourable to China compared with many other developing and transition economies, most observers agree that the main credit for the Chinese miracle should go to the Chinese reform strategy - its contents, timing, sequencing and imple- mentation - which was unconventional in many respects.Chinese reforms followed a gradual evolutionary path ("crossing the river by touching stones", to use Deng's celebrated phrase) based on localised experiments in selected sectors and its extension to other areas only when the local experiments turned out successful.Rather than being a 'big bang' as in the USSR and east Europe in the 1990s, the Chinese reforms have been picturesquely described as "a series of small controlled explosions" [Yusuf 1994]. In some cases, the reform initiatives were bottom-up.0l The total experimentation under decentralised government had several advantages. It made possible experiments suited to local conditions and limited the social and political costs of failure.If unsuccessful the central government would not be discredited, but if successful then the central government could adopt and extend it to other areas. Instead of having a comprehensive re-form package, China followed a sequential approach, especially in the first stage of reforms (1978-93). Reforms were first introduced in agriculture, foreign trade and investment sectors (that too in limited coastal regions) and later extended to industry. As already indicated, these initial reforms in agriculture brought prosperity to a vast number of poor people, created conditions for the subsequent phenomenal growth in rural industries and built up a big political support base for more reforms.In the first stage, China did not try to reform the SOE sector by privatising existing units, unlike USSR and east Europe.The Chinese relied more on intro- ducing competition. The rapid growth of new enterprises (mostly TVEs and some private firms) created competitive pres- sure on the SOEs. The monopoly of the central state trading corporation was re- placed by a large number of regional trad- ing corporations competing with one another.Another ingredient of gradual reforms in China was to follow dual pricing. In the transition from plan to market, farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs through the planning mechanism at gov- ernment-controlled prices. The remaining part could be bought and sold at market prices.….Qian (1999), in a perceptive analysis of Chinese reforms, attributes the success of China primarily to institutional innovations.According to him, there are three basic requirements for growth and efficiency: incentives, hard budget constraints and competition. In the first stage of reforms (1978-93), three institutional innocations contributed to the basic growth requisites.These were:(1) Regional decentralisation of government, which promoted inter-regional competition, provided incentives to improve fiscal performance and imposed harder budget constraints on regional and local governments.(2) Entry and expansion of non-state firms, specially the TVEs in the initial stages and private firms,joint venture firms and totally owned foreign enterprises in later stages. This provided more competition to the state sector and improved the efficiency of SOEs (though not necessarily their financial performance.(3) Maintaining macroeconomic stability (low inflation, exchange rate stability and avoiding financial crisis) through "financial dualism". This involved a combination of controls on international capi- tal flows, keeping the deposit interest rate low for state-owned banks (which kept the cost of borrowing low for the state) and increasing money supply at a fast rate (which basically implies government bor- rowing at a zero nominal interest rate) while encouraging people to use cash and anonymous bank accounts in transactions (so that the demand for money keeps pace with supply and inflation is kept in check). High and rising domestic savings were mostly kept in state-owned banks (people did not have much options), which were used by the government directly (through borrowing from banks at low interest) or indirectly by directing banks to continually lend money to (even loss-making) SOEs at cheap rates to finance the social responsibilities (like housing, schools, hospitals for employees and families) which in many other countries are financed from general government budget.In the second stage of reforms (1994 onwards), China has made significant progress towards building a rule-based market system and western style institutions and practices but again with distinct Chinese characteristics.In certain respects, China has reversed some of the initial policies.For instance, China has now clearly moved towards recentralising the monetary and credit allocation powers. Monetary policy has been made largely independent of local governments and pressures. This has considerably hardened the budget constraint for local goverments and enterprises.China has also downsized government bureaucracy, introduced tax reforms with internationally accepted practices (with delin- eation of taxation powers and distribution of tax revenues between different layers of government), made state-owned banks more commercially-oriented, introduced prudential regulations on the financial system, started privatisation and restructuring of SOEs resulting in big layoffs, unified the exchange rate and introduced current account convertibility, incorporated private property rights and the rule of law explicitly in the Chinese constitution (which is indicative of a big ideo- logical shift for the ruling Communist Party).Demystifying the Chinese Miracle: Wang, Yongqin: 9781138915275: Amazon.com: BooksThe last three decades has witnessed miraculous economic growth of China. What has accounted for its miracle? What is the nature and future of the Chinese model? Is it unique?This book presents an analytical framework to demystify China's economic growth miracle. The book suggests that interlinked and relational contracts between the agents (in particular, between the state and the business) can compensate for flawed markets to achieve high growth. This kind of relational capitalism is significant in the investment-based stage of development, when mobilization of resources to exploit the existing technologies is key for growth.The book presents a general theory of interlinked relational contract, the workhorse model of the book. The theory highlights that effective governance is a function of market extent and market completeness. The process of economic development and modernization can be looked at fruitfully from two perspectives: the markets and the institutions and their interactions. The book stresses the critical fit between the development stage and the governance for a country's economic transition and development and thus the idea of "appropriate institutionsThe China Miracle: Development Strategy and Economic Reform: Cai, Fang, Li, Zhou, Lin, Justin Yifu: 9789622019850: Amazon.com: BooksThe tremendous success of China's economic reform, in contrast with the vast difficulties encountered by the former Soviet Union and Eastern European countries in their transition, has attracted worldwide attention. Using a historical, comparative and analytic approach grounded in mainstream economics, the authors develop a consistent and rational framework of state-owned enterprises and individual agents to analyze the internal logic of the traditional Chinese planning system. They also explain why the Chinese economy grew slowly before the market-oriented reform in 1979 but became one of the fastest growing economies afterwards, and why the vigor/chaos cycle became part of China's reform process. The book also addresses the questions: Can China continue its trend of reform and development and become the largest economy in the world in the early twenty-first century? What are the general implications of China's experience of development and reform for other developing and transition economies? In this revised edition, the authors update the data and information in the book and include a new chapter on the impact of China's WTO accession on its reform.