it is a matter of concern that the country continues to make only slow progress in areas such as “ innovation ” and “ business sophistication ”, both of which are expected to be key to meeting future developmental objectives. furthermore, it should be acknowledged that, even when the changes have been significant, they are not all negative. in particular, it is encouraging that there is significant progress in the “ goods market efficiency ” category, where the rank has improved markedly, from position 93 in 2008 to 68, although it is a deterioration from last year ’ s rank of 58. this can be seen as a reflection of the early gains from recent initiatives to improve the business climate. since bis central bankers ’ speeches these reforms remain work - in - progress, we should be able to maintain momentum so that further advances can be anticipated with some degree of confidence. the report further indicates that the decline in the overall ranking is concentrated in five areas. these are : infrastructure, macroeconomic environment, health and primary education, labour market efficiency, and technological readiness. i have decided to focus on only three of these pillars, in part because the lacklustre rankings are glaring for the three - year period to - date. first, “ infrastructure ” : the steep decline from 52 in 2008 / 09 to 92 is worrying, especially at a time when government spending in this particular area has been so extensive. hopefully, this investment will soon bear fruit when the beneficial externalities of upgraded roads and improved electricity supply unfold. nevertheless, this serves as a timely reminder of the importance of both investment and adequate provision for maintenance. this includes a contribution by both the public and private sectors, and is especially important if we are to overcome the constraints associated with land - locked economies. second, “ macroeconomic environment ” : the decline in the ranking is even more pronounced than that of “ infrastructure ”, from 22 in 2008 / 09 to 82. i would, however, suggest that this probably exaggerates any underlying deterioration. i have reason to believe that this assessment is driven largely, if not entirely, by recent trends in the fiscal budget which, as you very well know, has registered substantial deficits in recent years, and this is coupled with an accumulation of public debt. we can take comfort in the fact that the government has initiated a medium - term programme of fiscal consolidation which, all things equal, should help reverse the deficit. indeed the relatively small decline from last year ’ s ranking of 74 indicates that this may

as drawn from the information contained therein. as i highlight my impressions of the main issues, i know you will appreciate that my condensed remarks should not be taken as a substitute for a thorough review of the report. i, therefore, commend it to you. the report began to include an index in 2006, at which point it covered 122 countries, out of which botswana was ranked 57th. for my purposes this morning, i will use, as my base, the 2008 rankings, when botswana attained a modest improvement of 56 out of 134 countries. since then, the story has been one of overall decline, to the extent that, out of 142 countries covered in the 2011 / 12 report, botswana is ranked 80th. clearly this is not good news, and it is incumbent on all of us to arrest the situation before it degenerates. it is disappointing that we also show signs of slippage among a group of middle income economies that are classified by the world economic forum as making transition from resource dependency towards development that is based more on factors related to efficiency and productivity. due to their similarities, these economies are close competitors in the global export market and in attracting foreign direct investment. they face similar global challenges, and have a similar set of policy tools for addressing economic stabilisation and structural reforms on their path to the next level of development. in this group of 24 countries, botswana features in the top 10 in less than half of the major categories. i need not remind you that botswana is currently emerging from an economic downturn that has underscored the need to diversify the economy away from the dominant mining sector. the fact is that we cannot afford any more economic performance slippages. let me highlight some of the key features of the country ’ s performance. my first observation is that, despite the dramatic headline fall, it is remarkable that little has changed in the period under review. for half of the 12 pillars covered by the index, movement is less than five positions in either direction in the three - year period to 2011 / 12, which is of relatively little importance when considering a cumulative fall of 24 places ; this is the difference between the 2008 / 09 overall ranking of 56 and that of 2011 / 12 ( rank 80 ). we can, however, derive confidence in the strength of botswana ’ s “ public institutions ” and “ relative sophistication of the financial sector ”, both of which remain ranked in the top 50. at the same time,