Excerpt from "Blood, Sweat, and Soil: A Global History of the Diamond Trade"
The academic study of the rise and development of capitalism is vast, and much research has moved beyond Eurocentrism to consider perspectives outside Europe. Janet L. Abu-Lughod posits that before the formation of the European capitalist world system, there was a pre-modern world system across the Eurasian continent. Features of the European capitalist world system, such as production relations, property rights, and market economy, are strongly linked to this pre-modern system (Janet L. Abu-Lughod, Before European Hegemony: The World System A.D. 1250-1350, Oxford University Press, 1991). As global capitalism entered the era of monopoly capitalism, the characteristics of high concentration of production and sales, monopolistic control of global markets, brutal colonialism of resource-rich areas, and the establishment of global monopolistic organizations appeared to diverge from the pre-modern world system but are, in fact, deeply connected.
In his book, Thiel Vanest takes a grand perspective, using the diamond industry as a starting point to uncover a global development history spanning five continents within the scope of global history. Vanest argues that the globalization, colonization, monopoly, and brutal exploitation strategies seen in the global diamond industry can trace their roots back to pre-18th century diamond mining in India. These characteristics were solidified by the Portuguese in Brazil during the 18th century. As the "Diamond Empire" controller, De Beers brought these strategies and characteristics to their peak in the 19th and 20th centuries. Although the monopoly and brutal nature of the diamond industry seem to have weakened with changes in the global diamond industry structure, these traits remain deeply embedded in the industry's logic today. In other words, the core of the diamond industry has remained nearly unchanged for centuries, and the major diamond-producing countries can still be considered "diamond colonies."
However, Vanest's book has some shortcomings. He does not discuss how major diamond-producing countries, especially in Africa, cooperate with global diamond monopoly capital to leverage diamond industry revenues for national development. Although many African diamond-producing countries fall into the "resource curse"—high dependency on a rich natural resource leading to economic and political instability and low development due to violent land and power struggles—some countries have begun to invest diamond revenues in development after ending civil wars and nationalizing diamond mining. Botswana is a prime example.
In 1967 and 1968, shortly after Botswana's independence, the Orapa and Letlhakane mines were discovered. In 1969, the Botswana government and De Beers jointly established Debswana to develop Botswana's diamond mines. Initially, the Botswana government held only a 15% stake, but it gradually increased its share to 50% through continuous investments to strengthen its control over the diamond industry. The government also established the Revenue Stabilization Fund (RSF) and Public Debt Service Fund (PDSF) to repay foreign debts and support domestic economic development. Furthermore, Botswana set up an independent Directorate on Corruption and Economic Crime to combat corruption and used diamond trade surpluses to build infrastructure, and develop agriculture, industry, and tourism.
By 2018, Botswana was the world's second-largest diamond producer by both weight and financial value, after Russia. Botswana's diamonds accounted for 16.4% of global production by weight and 24.4% by value. Although Botswana's economy remains heavily reliant on the diamond industry, the proportion of diamond exports in its economy has been declining annually.
As of 2022, Botswana's GDP was close to $20 billion, with a per capita GDP exceeding $7,500, or $19,000 in purchasing power parity, comparable to Thailand. Botswana ranks first in the Human Development Index in Southern Africa, has the lowest corruption index globally, and holds the highest sovereign credit rating in Africa. Despite facing issues like a single industry structure, regional economic imbalances, and rapid spread of HIV/AIDS, Botswana has effectively used its diamond trade surpluses to become a middle-income country. This outcome stands as an alternative legacy of "diamond colonialism."
References
- Abu-Lughod, Janet L. Before European Hegemony: The World System A.D. 1250-1350. Oxford University Press, 1991.
- Frost & Sullivan. "Environmental Impact of Lab-Grown Diamonds vs. Natural Diamonds."