San Francisco Chronicle - Monday, June 4, 2001
Kathy Chenault, Chronicle Foreign Service

That's one stone, from one pile of uncut diamonds sitting in mounds on tables at the Botswana Diamond Valuing Co.

In Botswana, this scene symbolizes the hope of a mineral-rich country in Africa struggling to help poor people overcome hunger and disease. But such precious stones also are emblems of brutality against civilians in Sierra Leone, Angola and Congo, where profits from illicit diamond sales fuel bloody rebellions.

Industry officials estimate that these diamonds make up only 4 percent of the diamond trade worldwide, but human rights groups say the number could be as high as 15 percent. According to Alex Yearsley, spokesman for Global Witness, which is leading a campaign to curb sales of diamonds from war zones - - known as "blood diamonds" -- rebels received as much as $290 million from diamonds last year in three countries: up to $200 million in Angola, up to $60 million in Sierra Leone and $30 million in Congo.

With the international campaign gaining momentum, officials and business leaders in Botswana worry that buyers will spurn their gems, too, and deprive the southern African country of resources desperately needed to fight AIDS. Botswana, which sells 30 percent of the world's diamonds, is more dependent on the cherished rocks than any other country. Last year, diamond sales made up 33 percent of gross domestic product, 50 percent of government revenue and 75 percent of foreign exchange earnings.

But even in diamond-rich, debt-free Botswana, hopes for continued peaceful development and prosperity are fragile. One reason is the country's adult HIV- infection rate of 38.5 percent -- the world's highest. And though Botswana has used mineral wealth to pave roads, build schools and offer small-business grants, officials fear that the country will suffer if its diamond trade is associated with images of land-mine victims in Angola or children maimed by rebels in Sierra Leone.

Yearsley said the campaign against "blood diamonds" is one way to strike out against carnage, like the brutality in Sierra Leone. There, rebels have hacked off civilians' limbs in a campaign of terror and "tattooed" civilians with their insurgency's initials by cutting 1- to 2-inch letters into victims' chests.

Such gruesome reports worry Botswana's diamond producers.

"If you are an American housewife shown little girls with their arms amputated and you are told that this is because of diamonds, the natural reaction is to have a revulsion against diamonds," said Louis Nchindo, managing director of Debswana, the national diamond company. "If something happens to diamond sales, especially with the HIV problem we face, Botswana will be set back 50 years."

Hoping to offset the imagery from war-torn Africa, Botswana hired American public relations giant Hill & Knowlton to stress the role diamonds played in building up the country of 1.5 million people.

When Botswana gained independence from Britain in 1966, the landlocked country roughly the size of France was one of the poorest in the world, with a per-capita income of about $80. All that changed after the discovery of diamonds in 1967.

"It was and still is mineral revenues, and especially diamond revenues, that have enabled us to provide free education from primary school to university, and to offer virtually free health service," President Festus Mogae said at a recent news conference.

Some people in Botswana grumble privately that many students can't get into Botswana University for free education and that nurses in remote clinics often have only aspirin to give patients, even those near death from AIDS. But economic figures support the president's claim that Botswana has used diamonds to transform itself into a rare success story on a beleaguered continent. Since fiscal year 1983-84, Botswana has had only one budget deficit. That came after a drop in diamond sales linked to the Asian recession of 1998. The country holds $6.3 billion in foreign reserves and ended last year with a budget surplus of $294.4 million.

The World Bank estimates that the per capita gross national product is about $3,600 -- seven times higher than the average for sub-Saharan Africa. Prompted by Global Witness, the diamond industry is taking steps to police itself. Thirty-six diamond-producing and -importing countries, including Botswana, are trying to hammer out a certification process that would track diamonds from mine to market.

However, Botswana is already taking steps of its own.

Diamond-mining is state-controlled and done under tight security. At Debswana, which reported $1.8 billion in revenue last year, Nchindo called it a "bulletproof" system, saying there is no way diamonds from conflict areas could be smuggled into the country and sold with shipments from Botswana.

Diamonds even come with bar codes attached to show which of the country's three mines produced each diamond. The gems can only be shipped out of the country with an export permit from the mining commissioner, and customs officials and police cannot open diamond packages, a Global Witness report said.

At Botswana's Jwaneng mine, 100 miles west of the capital of Gaborone, security is stringent. Huge dump trucks -- able to carry 117 tons each -- ferry boulders up winding roads of a man-made canyon that produced 11.5 million carats last year. The boulders are crushed and filtered, then diamonds are extracted. A high fence surrounds the pit and company buildings, with guards controlling access to the mine.

In Gaborone, at the Diamond Valuing Co., security is just as tight. All pockets on employees' shirts, suit jackets and pants are sewn up. And every diamond must be accounted for at the end of each day.

Global Witness said it has not threatened a boycott but wants buyers to refuse to take stones that could finance wars in Africa. Yearsley disputes Botswana's claim that his group's work could hurt innocent producers.

"I think they are exaggerating," Yearsley said. He adds: "If the industry had taken action sooner, it wouldn't be in this situation now."

But the Rev. Marek Marciniak, a Catholic missionary who has been in Botswana for 12 years, worries that anything done to discourage diamond sales abroad would be disastrous to a country where, despite diamond wealth, 47 percent of the country still lives in poverty.

"People need to think about the consequences of their actions. People in wealthy countries sometimes make decisions that can devastate development in countries like Botswana," he said.

Soaring HIV rate threatens Botswana's future On a continent engaged in an increasingly desperate struggle with AIDS, Botswana presents one of the toughest challenges.

Its adult HIV-infection rate -- an astonishing 38.5 percent -- imperils its increasing prosperity. Unlike some other African countries, Botswana has used its diamond wealth neither to wage wars nor to enrich corrupt officials but to promote development.

But if HIV rates cannot be brought down, President Festus Mogae warned earlier this year, the nation's very future is threatened.

"The implications are too horrendous to contemplate," Mogae said. "It means that we will face extinction."

Sensing that his country is at a critical juncture, Mogae announced plans in March to begin providing anti-retroviral drugs to all who need them by the end of this year. However, there are widespread doubts that Botswana's health care system is capable of carrying out a stepped-up fight against AIDS.

He has also encouraged Botswanans to publicly disclose their HIV status in order to break the taboos that have fed the rampant spread of AIDS.

There is no time to lose.

Botswana's Institute for Development Policy Analysis has forecast that the cost of treating AIDS, coupled with the loss of productivity because of AIDS deaths and illnesses, will cut Botswana's gross domestic product by 30 percent during the next 10 years.

The epidemic already has slashed life expectancy from 69 to 44 years, according to a U.N. report, and 1 in 8 infants is infected at birth.

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