SUMMARY REPORT BOTSWANA-5KILLS FOR COMPETITIVENESS AND ECONOMIC GROWTH 44i, THE WOL BAN The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development, its affiliated organizations, or those of the Executive Directors of the World Bank or the governments that they represent. SUMMARY REPORT BOTSWANA-SKILLS FOR COMPETITIVENESS AND ECONOMIC GROWTH THE WORLD BANK Outputs of the"Skills for Economic Growth and Diversification in Botswana" analytical work: Policy Note 1: "Raising Botswanais Human Resource Profile to Facilitate Economic Diversification and Economic Growth" Policy Note 2: "Labor Market Signals on the Demand for Skills" Policy Note 3: "Skills Needs of the Private Sector" Policy Note 4: "Skills Implications of Botswana's Diamond Beneficiation Strategy" Summary Report Acknowledgments This note, prepared by Tazeen Fasih (Task Team Leader), Zeng. Ruth Kagia, Constantine Chikosi, Peter Materu, and summarizes the findings of four policy notes that ad- Ritva Reinikka, provided overall guidance for the project. dress skills for economic diversification in Botswana. Initial versions of the background papers were presented Background papers and/or empirical analysis for the set to key education stakeholders in Botswana at a workshop of notes were prepared by Sonali Ballal, Kevin Macdonald, in December 2010. The workshop was co-organized by the Letsema Mbaya, Professor Christopher Mupimpila, Profes- Ministry of Education and Skills Development (MoESD); sor Nathan Okurut, Peter Orazem, and Professor Happy critical input provided during the workshop helped shape Siphambe. the current version of this note. Valuable comments on an initial draft of these notes The World Bank is grateful for the support provided by were received from Sajitha Bashir, Peter Darvas, Keiko MoESD, particularly by PS Mrs. Grace Muzila and DPS Dr. Inoue, Nathalie Lahire, Maureen Lewis, Peter Materu, Theo Mooko, at various phases of the preparation of this and Shwetlena Sabarwal. The peer reviewers were Wendy report. In addition, the author would like to thank officials Cunningham, Amit Dar, Raja Bentaouet Kattan, Zeinab of the MoESD and the Botswana Training Authority (BOTA) Partow, Harry Patrinos, Jan Rutkowski, and Douglas Zinhua for sharing valuable data and information. Abbreviations and Acronyms AfDB African Development Bank BOTA Botswana Training Authority BUIST Botswana International University of Science and Technology CPS Country Partnership Strategy EDB Economic Development Board, Singapore ESSB Employer and Employee Survey Botswana ESW Economic Sector Work FDI Foreign Direct Investment GDP Gross Domestic Product GLS Grant-Loan Sponsorship Program ICT Information And Communication Technology ITE Institute of Technical Education LSE Lower Secondary Education MOE Ministry of Education, Singapore MoESD Ministry of Education and Skills Development, Botswana MoFDP Ministry of Finance and Development Planning, Botswana MTI Ministry of Trade and Industry, Singapore NMC National Manpower Council, Singapore R&D Research And Development SACMEQ Southern and Eastern Africa Consortium for Monitoring Educational Quality SBM School-Based Management SSDS Singapore Skills Development System STEM Science, Technology, Engineering, and Mathematics TVET Technical and Vocational Education Training USE Upper Secondary Education VTC Vocational Training Center WEF World Economic Forum All dollar amounts in U.S. dollars unless otherwise indicated. Context of the Study Human development is one of the pillars of Botswana's Coun- strengths and weaknesses of Botswanas education system try Partnership Strategy with the World Bank (2009-13). The (i.e., basic, technical and vocational, and higher education) Country Partnership Strategy is in line with Botswana's "Vi- and recommends policy interventions to strengthen sion 2016," which envisions the transformation of Botswana students' acquisition of relevant knowledge and skills. to "an educated and informed nation' and to "a prosperous, 2. Labor Market Signals on the Demand for Skills. Examines productive and innovative nation' In line with these objectives, both current labor and skills demand (based on available the World Bank with support from the Ministry of Education labor market data) and expected skills demand (based on and Skills Development (MoESD) embarked on analytical the government's economic strategies). On the basis of this study entitled "Skills for Economic Growth and Diversifica- tini otwn. Tewr s nomd yBtwIasne analysis, it offers recommendations on skills development tion in Botswana. The work is informed by Botswansgovernment programs. to diversify its economy to facilitate stronger, more sustainable economic and employment growth and, concurrently, equip its 3. Skills Needs of the Private Sector. Uses the findings of an workforce with a variety of skill sets that meet employer needs. employer-employee survey conducted in Botswana in 2010 The objective of the exercise has been to provide the to identify skills needs and gaps from the viewpoint of the government of Botswana concrete suggestions for policy private sector. interventions that strengthen the skills base of the workforce 4. Skills Implications of Botswana Diamond Beneficiation and thus facilitate economic growth, diversification, and Strategy Examines the skills implications of the govern- employment. The recommendations are based on analyses ment's diamond beneficiation (processing) strategy and of available data and international best practices. Four policy suggests actions that can be undertaken to ensure that the notes were developed, each of which touches on crucial aspects nation's skills base supports, rather than hampers, imple- of strengthening the country's skills base: mentation of the strategy. 1. Raising Botswana ( Human Resource Profile to Facilitate The key findings and recommendations of these four notes Economic Diversification and Growth. Assesses the are summarized here. Botswana-Skills for Competitiveness and Economic Growth av1 1. Overview capacity. A significant part of the country is covered by the Kalahari Desert, which makes water both scarce and expensive. Botswana is a story of the successful management of min- Comparative surveys have rated Botswands infrastructure to eral resources. It has pursued prudent macroeconomic pol- be of lower quality than that of other countries in Sub-Saharan icies to manage the revenue streams from diamond exports. Africa. Forexample, only888kiometresarecoveredbyraillines It is now an upper-middle-income country that outperforms and barely 33 percent of roads in the country are paved. Until other countries in Sub-Saharan Africa on key indicators of recently, Botswana also had a telecommunications monopoly; socioeconomic performance including education, health other utilities are not always accessible at competitive terms. and social services. Education is a particular area of success. Looking at the lessons offered by successful economies that Botswana has long achieved near universal primary educa- have grown rapidly in a short period of time, such as those in tion and adult literacy has doubled in recent decades. Serious East Asia, it is clear that export-led industrialization policies gender gaps in literacy rates are nonexistent (the rate is 80.4 contributed to their growth. These policies involve the state percent for males and 81.8 percent for females). taking the lead in crafting and managing market institutions, Botswana's evident success, however, masks multiple building physical infrastructure to support industrialization, vulnerabilities, the most striking of which is an economy and minimizing coordination failure within the various dominated by mining and government services. Diamond segments of the economy. A well-educated and trained mining currently accounts for more than 70 percent of population with a wide spectrum of skills also played a vital Botswana's gross domestic product (GDP), between 70 supporting role in this growth in East Asia. This population and 80 percent of its export earnings, and about half of had a sufficient skills base to absorb and assimilate technology the government's revenues. At the same time the country's (via foreign direct investment), operate equipment and economic dependence on diamonds exposes it to the price and infrastructure, and create effective organizations. output fluctuations of international markets. The Africa Competitiveness Report 2011 (WEF, World The revenues derived from diamond mining dwarf those of Bank, and AfDB 2011) still classifies Botswana as a transition other sectors, whether manufacturing or agriculture. However, economy, one in the process of moving from factor-driven to mining activities employ only 5 percent of the total labor force. efficiency-driven growth. In other words, the country faces Since mining has a limited potential for job creation and labor- significant challenges in transforming its human resources into intensive manufacturing has failed to take off, Botswana is a force that can drive total factor productivity improvements currently faced with the problem of educated unemployment. and, consequently, economic growth. Officially, unemployment was 17.5 percent in 2012 (CSO 2012b).' Unlike in most of Sub-Saharan Africa, the problem 2. Human Capital Profile of Botswana in Botswana is not one of illiteracy, but of inadequate skills. Despite high levels of primary and secondary educational Economic literature postulates that the quality of human attainment, the country has a shortage of skilled labor. capital is determined by two factors: (i) various levels of The economic structure in Botswana has undergone education and (ii) the quality of education provided. There changes in recent years, but these changes have not yet are strong interlinkages between capital and investment, on ended the country's reliance on diamond exports. In fact, the the one hand, and the quality of human capital available in contribution of agriculture to GDP fell from 6 to 2 percent an economic system, on the other. Similarly, research and between 1988 and 2008. In comparison, the mining industry development (R&D) can develop a nations capacity to absorb registered only a small decline. Importantly, the manufacturing existing technology, thus increasing total factor productivity.3 sector's contribution to GDP has remained relatively In general, tertiary education is expected to create the high- insignificant, even falling since 1988. The most noticeable end skills needed for innovation. Critical mid-level skills change has been in the services sector, which expanded required for the absorption and/or adaptation of technology from 28.5 percent of GDP in 1988 to 45 percent in 2008.2 can be gained from either tertiary or technical and vocational But since government services are an important part of this education. sector, it is also vulnerable to fluctuations in diamond revenues. Students who complete basic education are expected to have Economic diversification has been at the heart of Botswands achieved a certain level of skills that allow them to successfully national development plans for the last two decades. perform in postbasic education. Recent research shows However, the policies supporting this goal are hampered by that rapidly advancing knowledge economies need certain low internal demand, structural barriers, poor geography, additional key competencies that create the basis for worker and infrastructure. Internal demand is inhibited by a small adaptability and continuous learning. In addition to cognitive, population. Botswanais physical geography, especially its lack academic, and technical skills, these competencies include of access to the sea and the country's agroclimatic conditions, problem solving, creativity, interpersonal skills, a work ethic, raises barriers to trade and production. and management skills. The primary and basic education Transport costs, already very high in the country, are sector is responsible for inculcating such skills in those going compounded by limited administrative and construction through the education system (World Bank 2010). _________________________3 Factors such as the quality of education, cognitive skills, technical and 1 All government documents cited in this report are identified by the min- specialized skills, innovation, and technology absorption determine the ef- istry or agency of the Republic of Botswana that produced them; they are ficiency with which capital and labor are used and thus influence economic listed in the Reference list under "Botswana, Republic of." growth. These factors, which help an economy increase its productive output, 2 Botswana -Country Profile 2008, Economist Intelligence Unit, London. combine to produce total factor productivity growth. 2 r nBotswana-Skills for Competitiveness and Economic Growth Figure 1. Impact of Schooling on Economic Growth Panel A. Impact of Years of Schooling Panel B. Impact of Test Scores Conditional Growth Conditional Growth 2 4 GP5P 3 TWN CYP 1 MAR UA ZAF TUN TWN BRA 2 HKG KOR HKG IONTHA PRT THA KOR NOR 1 CYP PRT CHN IRL PER TUN IRL MYS THE N HE P BEL FA 0 ....-- MEX GRC 0 MAR NR EGYNL IRN EGY SWE ISGBRTUR AT TUR MYS BEL GR AUT JPNEX ZL FRA FIN NLD ROM -1 15R URY CNN NZL PHL O IRN IND RY COL ZAF ARG ROM ZWC JO -1 GHA -2 PHA ZWE PHL -3 JOR -2 -4 -4 -3 -2 -1 0 1 2 3 4 -1.5 -1.0 -0.5 0 0.5 1.0 1.5 Conditional years of schooling Conditional test score coef= 0.264058, se= .07839797, t = .34 coef = 1.9804387, se= .21707105, t= 9.12 Source: Hanushek and W68mann (2007). Note: These are added-variable plots of a regression of the annual rate of growth (in percent) of real GDP per capita in 1960-2000 on the initial level of real GDP per capita in 1960, average test scores on international student achievement tests, and average years of schooling in 1960. ARG = Argentina, AUS = Australia, AUT = Austria, BEL = Belgium, BRA = Brazil, CAN = Canada, CHE = Switzerland, CHL = Chile, CHN = China, COL = Colombia, CYP = Cyprus, DNK = Denmark, EGY = Arab Rep. of Egypt, ESP = Spain, FIN = Finland, FRA = France, GBR = United Kingdom, GHA = Ghana, GRC = Greece, HKG = Hong Kong (China), IDN = Indonesia, IND = India, IRL = Ireland, IRN = Islamic Republic of Iran, ISL = Iceland, ISR = Israel, ITA = Italy, JOR = Jordan, JPN = Japan, KOR = Republic of Korea, MAR = Morocco, MEX = Mexico, MYS = Malaysia, NLD = Netherlands, NOR = Norway, NZL = New Zealand, PER = Peru, PHL = Philippines, PRT = Portugal, ROM = Romania, SGP = Singapore, SWE = Sweden, THA = Thailand, TUN = Tunisia, TUR = Turkey, TWN = Taiwan, URY = Uruguay, USA = United States, ZAF = South Africa, and ZWE = Zimbabwe. Source: Reproduced from Hanushek and Wo13mann (2007), figure 4a and b, pp7. Recent economic research has shown that it is not simply 61.3 percent (CSO 2011). In addition to general education the average years of educational attainment of a country's programs, students also enroll in postprimary technical and population that serves as the catalyst for economic growth, but vocational institutes and teacher training institutes. Total also the quality of education that determines growth (figure 1). enrollment at the postbasic level in all these institutions was estimated at 80 percent in 2007-08 (WDI and GDF). Basic education Quality. Despite success in increasing enrollment, a number At the primarylevel, Botswana achieved the high net enrollment of challenges remain in the education sector, the most important rate of 90 percent in 2002, which it has since maintained. of which is the low quality of education. In the international However, in the last 10 years, the remaining 10 percent of arena, Botswana lags behind its peers in math and science children not in schools have still not been successfully integrated education. The proportion of Batswana students able to attain into the education system (CSO 2012a). The transition rate the "low" international benchmark in mathematics on the from primary to secondary education has been quite high- Trends in Mathematics and Science Study (TIMSS) in 2007 between 96 and 100 percent-over the last five years. In other was quite low. Students able to attain this benchmark "have words, almost all students who complete primary school enroll some knowledge of whole numbers and decimals, operations, in lower secondary school, irrespective of their performance and basic graphs" (IEA 2008, 113). Only 32 percent of students on the Primary School-Leaving Examination. This is a result attained this benchmark in 2007 (figure 2); leaving 68 percent of of the government's drive to achieve universal basic education. students below that level of knowledge. These results identify the Across junior and senior secondary school (Forms 1 through next major challenge for education policy makers in Botswana: Form 54) the gross enrollment rate stands at approximately improving learning achievement. 4 In Botswanvas education system, secondary education consists of Forms 1-5, equivalent to Grades 8-12 in other education systems. Botswana-Skills for Competitiveness and Economic Growth a 3 Figure 2. Comparison of Grade 8 Students Scores in Disparities in learning achievement are also apparent by Mathematics on TIMMS 2007, Various Countries both region and rural-urban location. Using the TIMSS 2007 results, the differences in student learning achievement (proportion of total students) between rural and urban areas was decomposed/disaggregated into a portion attributable to socioeconomic background and 1.0 a portion attributable to the quality of the education system 0.8 >5 40-5 <40 (in other words, the difference in achievement if students came 0.6 from the same socioeconomic background). Results of the 0.0 - E (which are among the better performers on TIMSS) are -0.2 much smaller than in Botswana. In fact, most of these -0.4 differences between the two high-income countries are eexplained by socioeconomic background of students. -0.6 BOn the other hand, most of the differences in Botswana are ( 0 ); mexplained by school characteristics. In other words, the E.0 Tdifferences between high- and low-achieving students in SBotswana would diminish if all students were put in schools stdetsreeasimilar to those attended by urban children. lowesA review of the basic education system in Botswana (see Policy Note 1) makes it clear that a better allocation of thueAp feducational resources across regions and urban-rural areas Note: Benchmarks for TIMMS mathematics scores are as follows: "low" scos. Cee etaiensucessuale apreoces have bent aote (less than 400); "mediun (400-625); and "high" (greater than 625). around the world to improve the equity and efficiency of resource allocation in the education sector. For instance, some Equity. There is wide disparity in the achievement of children countries (among them Bulgaria and Romania) have recently from different socioeconomic backgrounds in Botswana. The successfully implemented per capita financing to fund the Southern and Eastern Africa Consortium for Monitoring education system. In this approach, funds are allocated to Educational Quality (SACMEQ) assessments for sixth-grade decentralized levels of the system (such as district or provincial students reveal that almost half of the children from the education authorities) based on a formula that takes into lowest income quartile in the country have only basic reading account the number of students enrolled in local schools. The capacity or less. In contrast, almost 90 percent of children from funding formula can also take into account the remoteness or the highest income quintile can at least read for meaning, if not other specific conditions of a particular area in order to ensure better, on the reading assessments (figure 3). equitable distribution of resources. Another approach that has proved successful in certain country contexts is school-based management (SBM). The Figure 3. SACMEQ 2007: Grade 6 Reading Scores argument for SBM is that agents closer to the school level of Batswana Studen better understand the needs and requirements of schools and should therefore be given decision-making power over school resources. This authority enables them to respond better to the needs of individual schools and encourages more equitable resource distribution. The review of the basic education system also suggests that Lowest (25%) 10.9i MoESD needs to design an effective monitoring and evaluation system with a clear link to educational research (pedagogic and Highest (25%) economic), preferably by means of a semi-autonomous arm. Specifically, such an institute should be tasked with conducting %&ofStudlentperformingbleowvleve14 research in order to identify areas of strength and weakness in different subject areas so as to respond to the skills needs Basicreadingorworse E Readingforemenaing Interpativexreading of a competitive global economy. Other major activities of E Inferental reading 0 Analytical reading C ritical reading the institute would include conducting periodic reviews of curricula and developing new textbooks in order to align Source: SACMEQ 20 10. Note: SES - socioeconomic status. "Highest" and "lowest" here indicate 5 Math scores were decomposed using the axaca-Blinder model adapted income quartile. from labor market studies (see Policy Note 1 of this series). 6 Economic research postulates that family background has an impact on student achievement. s Botswana-Skills for Competitiveness and Economic Growth basic education with the requirements of meeting international education, for instance, to improve their skills by entering student achievement benchmarks; comparing student into a diploma-level training program or the academic performance in schools run by various regions, authorities, and educational stream. Unfortunately, this lack of opportunity is areas; and influencing teacher training programs. A successful characteristic of many education and training systems around example of a monitoring and evaluation system in Jordan is the world, leading TVET to be perceived as a "dead-end" discussed in Policy Note 1 of this analytical work. stream. However, successful education systems and growing knowledge economies have managed to develop flexible Technical and vocational education in Botswana education systems that support learners to advance through A detailed review of the technical and vocational education these systems according to their ability. systm i Boswaa reeald tat otsana as ontnue to Establishing articulation in the education system in Botswana system in Botswana revealed that Botswana has continued to wolprvd vetcladhiznlptwys cos modify its skills training system to adapt to the changing needs acadm id techical edcation rograms A css of the economy, yet its trained workforce faces high unemploy- ment. Clearly, there is a skills mismatch in the labor market. example is the type of system found in Singapore, as discussed The country boasts good-quality infrastructure in its technical inpoliy Not 1TeV sys incBotswana n s tob and vocational education and training (TVET) colleges, but espos t itsmn taeholders,rinldnsds and has a severe lack of expert trainers. Another major concern is that mechanical and electrical engineering graduates, as well expert trainers and the type of training courses needed to as information and communication technology (ICT) grad- attract students and enable technical colleges and institutes to uates of technical institutes, also have a high unemployment operate at capacity. Because expert trainers are in short supply, rate In general, employers regard the training provided by Vo- they need to be either hired internationally or trained locally cational Training Centers (VTCs) to be insufficient or dated, without delay. given rapid changes in technology, particularly ICT. Botswana operates a vocational skills development program Tertiary education parallel to the VTCs-the Brigades. These are private, small If Botswana is to achieve its vision of becoming a knowl- or medium-sized, rural, community-based organizations that edge-based economy, it needs to align its tertiary education combine training with production. Brigades have historically system with the needs of such an economy. Student enroll- offered the most widely accessible skills training in the country, ment in tertiary institutions has increased as a result of in- with the largest enrollment. The quality of training has been creased completion and transition rates in basic and sec- uneven among the Brigades, however, as some have had better ondary education. In addition to one major university, the funding and staffing than others. University of Botswana, the country has a number of affiliate These factors prompted the government to recently assume colleges and institutions that offer more specialized diploma control of the Brigades. This change gives the government an or degree programs in such areas as nursing and agriculture. opportunity to consider a major revision of the training system, A new university, Botswana International University of based on the findings of various tracer surveys and recent Science and Technology (BIUST), is currently being set up and studies of the TVET sector in Botswana. Most important, will soon open its doors. The University of Botswana also has vocational training courses need to be rationalized based on state-of-the-art infrastructure in its school of medicine and labor market demand for various vocations. It is recommended other faculties. Given the small size of Botswana s population that the revision of technical education follow the model and internal market, this university must become a niche center of Singapore's Institute of Technical Education, which is of excellence in order to be both economically viable and attract responsible for providing full-time pre-employment technical international students, as envisioned by the education hub.' If it training and education, as well as continuing education and is able to attract a high-quality, research-oriented international training to workers so that they may upgrade their technical faculty, one or two selected faculties can indeed be able to play skills (box 1). such a role in the region. TVET in Botswana is funded through a turnover tax At present, all students enrolled in government-run higher imposed on employers. The construction and tourism industry education institutes are sponsored by the government through had already been using a levy for training purposes, and in the Grant-Loan Sponsorship (GLS) Program. Created in 1995, 2008 the Ministry of Labor and Home Affairs introduced GLS was designed to attract students to fields in high economic the levy system for all enterprises in the country based on a demand, such as science and engineering, through various turnover rate criteria. Yet despite the levy, few employers combinations of financial assistance. Despite its original intent, reclaim available grant monies for their training expenses. Of the 7,000 firms contributing to the Vocational Training Fund, GLe has ecme over lte loan only 1,000 have used a grant to date. As a result, approximately Appropriate financial incentives could have achieved a better 200 million pula remained unutilized in 2010 (BOTA 2010). alignment of tertiary education with market needs. A recent This levy could, however, be used to effectively fund tailor- made courses for specific industries within existing training det rhe the GLm o r oE (es 209 institutes. science skills by Category 1 programs (i.e., programs that teach TVET trainees in Botswana have the opportunity to enter the labor market or become self-employed. However, the 7 One of the governmenfs priority sectors for promoting economic current system offers them no opportunities for further growth, see Policy Note 2 of this analytical series. Botswana-Skills for Competitiveness and Economic Growth i 5 Box 1. Institute of Technical Education of Singapore The Institute of Technical Education (ITE) is a statutory board (i.e., parastatal agency) under the Ministry of Educa- tion of Singapore, with well-defined functions that include the provision of: (i) full-time pre-employment technical training and education; (ii) continuing education and training for the purposes of upgrading the technical skills of the workforce; (iii) regulation and promotion of industry-based training and education; (iv) regulation of certifications and standards for technical skills; (v) consultancy services and research in technical training and education. In terms of its relationship with the Ministry of Education, ITE receives annual operating and development budgets from the ministry, based on student headcount. In return it is accountable for meeting annual government targets and educational outcomes that specifically aim to produce market-relevant, entrepreneurial, adaptable graduates for the global economy, together with lifelong learners (to improve employability). The governance structure for ITE is shown in figure B1.1. Figure B1.1 ITE Governance Structure * Appoints ITE Board of Governors (BoG) Minst E cat* BoG must include representatives of Government, employers, c m trade unions (9-18 members) U * Organized into various Standing Committees :T * Contains various Academic Advisory Committees (AACs) * Includes a Technical Advisory and Certification Council (TACC) * Is member of BoG E D o & * Supported by key internal decision-making committees * Advised by AACs * Advised by TACC (" * Deputy CEOs for 4 functional areas (academic, development, -. a industry, corporate services * A Principal for each college Three ITE Colleges * Four schools in all three colleges * Niche areas in each college A distinguishing factor of ITE as a postsecondary training institution is that it operates as a business entity following a business model. The Director is also a CEO who makes strategic long-term plans with detailed implementation blueprints. In addition, Singapore's business excellence framework serves as a benchmark for organizational excellence for the Institute. The institute is responsive to stakeholders and relevant to the market. Students and employers are considered customers; the institute practices active listening by receiving feedback from multiple channels and on the basis of this feedback, develops new course offerings. ITE is both quality and brand conscious-it maintains skills standards, grants certifications, and adheres to a quality assurance framework. For example, it has undertaken continuous branding exercises to improve the public percep- tion of an ITE education. The institution is efficiency-conscious. Organized according to the slogan, "One ITE, Three Colleges,' the Institute formulates policy, develops curricula, admits students, and conducts quality assurance, among other tasks, at the central level in order to enhance efficiency. However, it operates three colleges, each of which has sufficient autonomy to compete with the others and grow in niche areas. ITE also uses state-of-the-art technology for service delivery (this technology facilitates e-students and e-tutors). ITE is results-conscious. It tracks the performance (e.g., employer and student satisfaction surveys) of its three colleges and reports this data through the Annual College Excellence Report. Through constant review and revision of its policies, Singapore's TVET system has evolved over the last decade to become a nimble, practice-oriented system that is responsive to the needs of industry. Source: Fredriksen and Tan (2008); Seng (2008). 6 | Botswana-Skills for Competitiveness and Economic Growth skills considered to be of highest priority, such as engineering) for upper secondary education (USE) graduates. The USE explains why these programs have not enrolled more students. worker supply appears to have increased substantially faster By the time students reach the tertiary level, it is hard to in recent years than the demand for their skills, resulting in a remedy weak or poor-quality learning in these subjects, thus 5-percentage-point increase in the unemployment rate over a enrollment remains low. Additionally, there is a lack of career decade, as well as these workers becoming a greater proportion education in basic and secondary school that would highlight of the unemployed (from 8 to 21 percent over a decade; table the potentials of these programs of study at the tertiary level. 2). These findings raise two immediate concerns. One, it is As discussed earlier, reforms are urgently needed to improve unclear whether general USE is providing the right skills and the quality of basic education. However, introducing pre-entry learning content useful for employment purposes. Two, it courses for universities right away could help rapidly improve is possible that the education system is becoming stagnant, the quality of inputs into the tertiary education system. Finally, producing large numbers of secondary graduates without the the GLS Program needs to be re-aligned in order to promote higher-order skills needed for the country to move towards a the best students to study priority, higher-order skills, knowledge-based economy. Labor market returns to education Table2. Broad Unemployment of Labor Force The increase in the supply of workers with secondary and ter- by Education Level tiary education may account for the decreasing returns to sec- (Percentage) ondary education and increasing returns to tertiary education in recent years. The general pattern found in Botswana is very similar to that identified by Keswell and Poswell (2004) in Never attended 28 36 South Africa, where the marginal rate of return is extremely Primary education 31 36 high for tertiary education and very small for lower levels of Lower secondary education 39 37 education. The last three decades in Botswana have seen significant Upper secondary education 28 public investments in education, but the ability of the Source: Labor Force Surveys of 1995/96 and 2005/06 (CSO 1998 and 2008). economy to absorb these skills has lagged, especially because Note: "Broad"unemployment includes discouraged workers who are not the mining sector-which drives the economy-is capital- counted among the unemployed. intensive. This mismatch has resulted in an escalation of educational qualifications, with highly educated people taking Unfortunately, due to data limitations, the returns to TVET jobs that previously employed workers with lower levels of education cannot be estimated. The relative demand for such education. Consistent with this interpretation is the fact that skills has, however, been estimated on the basis of tracer studies lower and upper secondary graduates are experiencing rising of TVET graduates and the Employer and Employee Survey unemployment rates (see Policy Note 2 of this series). At the Botswana conducted by the World Bank in collaboration with same time, the high rate of return to tertiary education points MoESD (see Policy Note 3 of this series). to an unmet need of the labor market. 3. Sectors of Employment Growth Table 1. Rates of Returns to Education in Botswana over Time, Using Household Survey Data The private sector in Botswana has increased its share (percentage) of employment over the last decade. In 1995/96, the major employer was government, which employed 33 percent of the a tn workforce, with the private sector ranking second, with 32 Primary 7 9percent. By 2005/06, the private sector had grown to become Lowerthe dominant sector of the economy, employing 42 percent of eoy the total labor force. Government employment, on the other Upper secondary 36 8 -hand, had declined to 21 percent, making it the third largest Tertiary 11 24 employer-after the private sector and subsistence agriculture Source: CSO (1995, 2004). (which employed 24 percent of the work force) (LFS 1995/96 Note: Household Income and Expenditure Survey and 2005/06). Although the demand for skilled labor has not kept up The substantial increase in the share of employment in the with the improved educational level of the work force and has formal private sector is a positive development in line with certainly been insufficient to lower the unemployment rate government goals. Similarly, the decrease in public sector of these groups, the availability of jobs for lower secondary workers conforms to governmental objectives. Whether education (LSE) graduates grew only somewhat slower than the decrease in the share of the informal sector is a positive the supply of these graduates (otherwise the increase in their trend depends on the other sectors that increased their share unemployment rate would have been higher). In other words, of workers as a result, in addition to labor productivity in relatively fewer students are finishing their educations at the those sectors. Since the main increase appears to have been in LSE level. subsistence (or traditional) farming, it appears to be a negative The situation seems more serious with respect to the demand development. Botswana- Skills for Competitiveness and Economic Growth Wages for the skilled and unskilled longer period of unemployment before starting their current Individuals who are able to find income-generating employ- job had relatively higher wages (World Bank 2010c). ment but refuse it tend to have high expectations of theirthe earnings capacity and a household or public safety net that Aow age occupation ne lraed on tebsisonte Employer allows them to remain without personal earnings for a longer a Em ployee Sure Botwan te ras tha ther period of time compared to other workers. This phenome- is no wage differential across sectors (except for the mining non partly explains the high number of foreign workers with sector, which may be an outlier due to the small number work permits who are employed in elementary occupations of observations in the data set). Wages differ significantly, in Botswana, despite a national unemployment rate of 14 however, across occupations, with managers and professionals percent among workers who never attended school and 26 earning seven and five times more, respectively, than workers percent among those with primary education. Another expla- in elementary occupations (table 3). The 2010 Botswana nation for this finding could be a lack of labor mobility in employer employees survey (World Bank 2010c) found that the country. However, data from the Employer and Employee the most common positions for which expatriates are recruited Survey lends credence to the idea that Batswana have a high are engineers, accountants, and managers, for which skilled reservation wage. For instance, employees who reported a Botswana would appear to be in short supply. Table 3. Predicted Wages by Industry and Occupational Category 2008 2009 2010 Aag waeocu anidxcregnte bagfte Epoe isn Puan oe wa e if rn al a cr s sn ect r (x ep fo thea mIn ing Industry' Agriculture, hunting, and forestry 48,528 1.11 48,853 1.11 49,020 1.12 Mining and quarrying 176,663 4.04 177,848 4.04 178,082 4.06 Manufacturing 48,510 1.11 48,835 1.11 49,020 1.12 Construction 61,302 1.40 61,713 1.40 61,697 1.40 Wholesale and retail trade 60,058 1.37 60,461 1.37 60,475 1.38 Hotels and restaurants 56,511 1.29 56,890 1.29 56,954 1.30 Transport, storage, and communications 55,980 1.28 56,355 1.28 56,387 1.28 Financial intermediation 73,782 1.69 74,277 1.69 74,607 1.70 Real estate, renting, and business activities 61,818 1.41 62,232 1.41 62,317 1.42 Public administration and defense 46,976 1.08 47,291 1.08 47,098 1.07 Education 43,691 1.00 43,984 1.00 43,914 1.00 Health and social assistance 58,635 1.34 59,028 1.34 59,278 1.35 Other 56,954 1.30 57,526 1.31 57,661 1.31 Occupationa Managers 121,714 7.38 122,529 7.36 123,007 7.39 Professionals 92,627 5.62 93,249 5.60 92,967 5.58 Technicians and associated professionals 61,710 3.74 62,124 3.73 62,317 3.74 Clerical support workers 39,662 2.41 39,928 2.40 39,735 2.39 Service and sales workers 38,487 2.34 38,745 2.33 38,561 2.32 Skilledagricultural, forestry,and fishery workers 35,107 2.13 35,342 2.12 35,596 2.14 Craft and related trades workers 38,547 2.34 38,806 2.33 38,561 2.32 Plant and machine operators and assemblers 39,211 2.38 39,474 2.37 39,735 2.39 Elementary occupations 16,481 1.00 16,647 1.00 16,647 1.00 Source: Author's econometric analysis of EESB data (see World Bank 2010c). Note: Pula is the national currency of Botswana. a. Index is occupational wage relative to the average for the education industry. b. Index is occupational wage relative to the average for elementary occupations. 8 i Botswana-Skills for Competitiveness and Economic Growth 4. Skills in Demand 5. Diamond Beneficiation as a Data from household and labor force surveys conducted in Niche Area of Growth Botswana show that higher education is in greater demand among employers than other levels of education. The ESSB pato thec igowhyadim forona m e provided insights into the demand for specific skills, finding beeficationspiicy iam oren ton-ws de that employers found it hardest to recruit craft workers and plant operators. This survey asked employers to list the most this policy to increase employment and develop skills for the important skills requirements for two groups of skilled staff: downstream diamond industry, facilitating the sustainability leaders (i.e., managers and professionals) and other skilled of the industry when diamond mining comes to an end over workers (including production, administrative, sales, and the next two decades. In the last five years Botswana has made technical staff, together with craftsmen). Skills were grouped considerable progress in establishing a local cutting and pol- into one of three skill categories, namely, personal character- ishing industry as part of the beneficiation strategy, but the istics, core skills, and job-specific skills.' success of this new sector depends on the creation of related ESSB data shows that for leaders, most of the skills identified skills. (See Policy Note 4 for a simulation model that estimates in the survey (80 percent) were considered "very important" the potential employment creation of the strategy.) or "crucial" by a majority of employers, with personal The cutting and polishing industry is a still in the characteristics and cores skills valued in particular. In fact, the five most important skills for leaders were honesty, commitment devemn pel and nes a ic p envin e and hard work, reliability and punctuality, communication, tre e l e t all te its pent. Plicies and team work (World Bank 2010c). ar secfclyn t o eatesindstry-specfic s is Job-related skills were generally valued to a lesser extent. Among job-specific skills, practical knowledge of the job between the diamond and innovation hubs, facilitate rough was considered most important, but ranked only 16 out of diamond trading, and expand BOTAs accreditation of cutting 30 identified skills. The skills that were not considered very and polishing programs in sector factories. important or crucial by a majority of employers were mostly This niche area remains very challenging. International job-specific knowledge related to educational credentials and experience has shown that many countries have been unable advanced vocational skills. The most substantial difference to successfully compete with existing leaders in the diamond between the skills that employers sought in professionals and cutting and polishing industry, which include Belgium, Israel leaders is that fewer skills very considered important for the and now, increasingly, China and India. Botswana has a former (10 for professionals, compared to 24 for leaders; Ibid.). window of opportunity for a couple of decades, during which Other findings were quite similar for professionals and it can use being a producer of diamonds to its advantage to leaders. Employers mainly valued personal characteristics establish itself as one of the bi names in the industry and core values in their professionals, with the same top five skills identified above considered most important. In addition, honesty, the desire to learn and adaptability, and customer 6. Conclusions and care skills were valued skills for professionals. Again similar to Recommendations the skills sought in leaders, job-specific skills were considered relatively less important for professionals compared to personal Economic diversification has been at the heart of Botswanas traits and core skills. For example, educational attainment, national development plans for over two decades. The coun- general and advanced vocational skills, and theoretical job- try has introduced a number of policies to address the chal- knowledge were among the least valued skills for this group of lenges of this goal, but impact has been limited for a number workers (Ibid.). of reasons. A successful diversification strategy has multiple When comparing exporting with non-exporting firms, the dimensions, ranging from trade policies to exchange rate most substantial differences revealed by ESSB data show that: Exporting firms tend to give higher value to the skills of leaders than do nonexporting firms. This was particularly the needed to attract foreign direct investment, encourage inno- case for personal characteristics and core skills. vation, and adopt and adapt new technology. Job-specific skills (especially practical knowledge of the A holistic approach to diversification is the key to success. job, the minimum required level of education, and previous Developing and sustaining the priority sectors supported experience in a relevant field) are considered more important by the hubs identified in the National Development Report for professionals in nonexporting than exporting firms. requires skills that are quantitatively and qualitatively 8 Personal characteristics were defined as innate traits, such as honesty, wororce. Ths ury eor la c onsd tfnds commitment, hard work, and punctuality. Core skills were defined as ap- titudes required for employment that could be learned over time, either at of four Policy Notes that identify skill gaps in Botswana that school or elsewhere. This category included such skills as basic literacy, no- constrain economic competitiveness and growth. The main meracy, communication, problem solving, and team work. The last category, job-specific skills, was defined as theoretical knowledge, educational attain- recommendations of these notes are summarized in table 4. ment, and specific job experience related to particular occupations. Botswana-Skills for Competitiveness and Economic Growth i 9 Table 4. Summary of Recommendations for Enhancing Skills for Competitiveness and Economic Growth in Botswana Current government policies Poliy doain Immediate implementation Modification in designReomndnwitrvtos Polcydominrequired recommendedReomndnwitrvtos Allocate school resources more Develop Botswana's Universities as Introduce pre-entry STEM courses in the equitably centers of excellence in medicine tertiary sector to improve the quality of and technology teaching through learning in higher education viable and sustainable financing, including research and consultancy revenues, donations, and private capital via public-private partner- ships Develop education policy on the Redesign Grants and Loan Span- Establish an educational research institute basis of research, using the deter- sorship Program in order to target under MoESD minants of educational quality as students for higher-level STEM skills a guide programs at the postgraduate level Education Complete and implement Na- Redefine the existing apprenticeship Establish vertical and horizontal articula- tional Qualifications Framework program ofto include specific mod- tion across the academic, technical, and for Botswana ules on entreprenuership, personal vocational education streams in Botswana, skills, and core literacy, numeracy, encouraging lifelong learning and skills and communication skills upgrading Introducejoint degrees in business and engineering studies at BIUSTto encourage export- oriented businesses Develop a critical mass of software devel- opers for the BCT industry by establishing a globally accepted certification for the field in collaboration with the private sector Phase out income support programs Rationalize TVET courses across the system in agriculture and replace them with to respond to market demand, working with the provision of agriculture and private employers to design curricula and livestock technology and expertise in appoint instructors order to increase productivity Modify the work permit policy for Introduce short-term skills training and low-skilled occupations to ease the skills upgrading programs for low-skilled inflow of the workers for a limited workers to help improve their wages time period and reduce unemployment due to high Labor markets reservation wages Partner with the private sector to introduce training programs for young, unemployed, and discouraged workers, using the Vocational Training Fund to share costs. Training courses should teach technical as well as behavioral skills Have BOTA work with private employers to ensure intensive on-the-job training is conducted by certified education providers Modify_the_work_permit_policy_for_Itrodusing funds from the training levy Coordinate activities of the diamond and Diamond education hubs to attract well-known beneficiation training institutes in diamond processing and jewelry making to open their doors in Botswan a 10 HBotswana-Skills for Competitiveness and Economic Growth ful economic diversification in Botswana will require coordi- In addition to implementing these recommendation, success- nation and collaboration among multiple state organizations, as the experience of Singapore suggests (box 2). Box 2. Skills Development System in Singapore The credit for Singapores economic growth is in large part due to the country's human capital. Singapore has consistently ranked among the top countries for the quality of its human resources. The Singapore Skills Development System (SSDS) is a major reason why it has a highly developed economy and skilled workforce. The SSDS is a joint collaboration between the government and the private sector; the reasons for its success are outlined below. Some of the key institutional players in SSDS are the Ministry of Trade and Industry (MTI), Economic Development Board (EDB), National Manpower Council (NMC), and Ministry of Education (MOE). MTI is in charge of economic development; EDB is responsible for foreign direct investment; NMC examines manpower development in the tertiary education system; and MOE oversees the education system overall. An important lesson learned by SSDS is that the organizations that seek to impact skills development and economic growth should actually be involved in upgrading workforce skills. The system also has clear and open lines of communications between the various organizations, which facilitates the achievement of national goals. SSDS has been successful in attracting foreign investment by providing investors with business incentives. In exchange for establishing training centers in collaboration with the government, for example, foreign companies are guaranteed the right to hire a proportion of the students trained by these centers. As the program grew, SSDS became involved in setting up training centers funded jointly by foreign governments. Japan, Germany, and France, for example, established training centers specializing in metal machinery, production technology, and electronic technology, respectively. Singapore's success in transforming itself into a knowledge economy can be attributed to committed, coordinated, sustained leadership and support of SSDS at all levels, governance that ensures effective implementation, and a holistic approach to skills development. Source: Yusuf and Nabeshima (2012). 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