Diamond-rich Botswana might feel the brunt of the United States’ plans to cut back on asset purchases in a bid to stimulate economic growth.
Ben Bernanke, the charismatic Fed Governor has announced the possibility of implementing the program before the year ends. This will among others result with the world’s biggest economy slashing its monthly $85 billion on bonds purchases. This week two local observers concurred that Botswana could be affected either directly or indirectly especially since the country sells most of its diamonds to the world economy through De Beers. “When they implement it (reduction on asset purchases), it means the US will no longer put more money into the economy which has effects on production and consumer confidence,” said Karabo Tladi of the fund management outfit, IRPO Botswana. “In other words there won’t be more money to stimulate growth.” De Beers, through its Forevermark brand, sells diamonds to the US market and other global markets.