Up to 100 000 public sector workers in Botswana recently went on strike over a wage dispute. The strike, the first legal one by public sector employees[1], started on 18 April 2011 and came to an end nearly 9 weeks later on 12 June 2011. Public sector workers were demanding a wage increase of 16%, with the government initially offering 0%[2]. Not surprisingly, public sector workers rejected this in the context of an inflation rate which has been sitting at 7% and higher for many years, with  a high point of 12,6% in 2009[3]. On top of this, public sector workers have not received a wage increase for the past three years[4]. In a statement issued after wage talks deadlocked the public sector unions argued that “our members’ patience has been stretched to the limit”[5]. The government’s final offer was a mere 3%.

While Botswana has for many decades been regarded as a strong economy, with a large public sector, government has relied to a large extent on the export of diamonds for its revenue.  The recent global financial crisis resulted in a decline in the demand for diamonds which led to a decline in government revenue.   In this year’s wage talks, the government argued that a 16% increase could not be accommodated given Botswana’s ‘fragile economic recovery’[6]. The unions, however, argued that the budget can accommodate their wage demands, if spending in the budget is reprioritized.

The government’s position needs to be seen in the context of the advice it is getting from the IMF and World Bank, both of whom are urging the government to reduce the size of government in the economy. This will require both reducing the wage bill and reducing the number of public sector workers. In a statement released on 31 May 2011 after they had undertaken a mission to Botswana, the IMF argued that “the government would need to reduce the size of the wage bill as a share of GDP as this remains rather high relative to comparator countries and is not sustainable”[7]. They go on to argue that “reducing the wage bill would also require efforts to make the public service leaner and more efficient”. This position is entirely in keeping with the IMF’s neo-liberal policies, and shows a marked dislocation from the political climate in the country where public sector workers, denied a wage increase for three years, actively took steps to demonstrate their need for a decent wage increase.

During the strike, government dismissed workers that they said were essential workers[8]. Post the strike they have refused to re-instate these workers, and have instead embarked on a process of re-employment. There are fears that the government will use the opportunity created by dismissing workers during the strike to outsource various government services[9]. This would be in line with the advice given to the government by the IMF.