Oct. 15 (Bloomberg) -- Botswana, the world’s biggest diamond producer, is facing its worst economic crisis after global jewelry sales slumped. That’s unlikely to end the 43-year rule of the Botswana Democratic Party when people go to the polls tomorrow.

The ruling party will benefit from a fractious opposition and their failure to capitalize on the recession, said analysts including Mike Davies at Eurasia Group in London.

“It’s probably a sense of not trying an untested opposition given the severity of the crisis,” Davies said. “It’s a case of going with what you know. The economy has been reasonably well managed.”

The BDP has overseen the transformation of Botswana from a poor, cattle-herding society into the success story of Africa with a per capita gross domestic product close to that of Mexico and Argentina. It has also presided over this year’s slump, when the closure of the diamond mines because of tumbling global demand will knock about 10.3 percent off GDP, according to the International Monetary Fund.

A win for the BDP would automatically lead to the retention of Ian Khama, 56, as the southern African nation’s president. Khama, who attended the British officer-training school Sandhurst and headed Botswana’s defense force until 1998, took over the post from Festus Mogae in 2008.

Polling stations in the nation of 1.8 million people open at 6 a.m. tomorrow and close at 7 p.m. local time. Final results are scheduled to be announced the following day.

Opposition

The biggest opposition party is the Botswana National Front, which won 12 of the 57 seats in parliament at the last election in 2004 and advocates more help for the poor. The only other party represented in parliament is the Botswana Congress Party, which has one seat.

The face of Khama and other ruling party members stare down from billboards across the capital, Gaborone, while opposition posters are confined to such places as lampposts.

Khama’s BDP has the support of 44.4 percent of the electorate, compared with 27.4 percent for the Botswana Congress Party and 20.7 percent for the Botswana National Front, the Botswana Gazette reported yesterday, citing a survey conducted by Probe Market Intelligence. It didn’t give a margin or error.

‘Foregone Conclusion’

“The outcome is a foregone conclusion,” said Gus Selassie, Africa analyst at IHS Global Insight in London. “On the one hand you could say that it confirms the country’s stability and smooth transition of power, but the opposite of that is that the BDP has been in power since independence, which raises questions about whether it’s good for democracy.”

There are no concerns that tomorrow’s vote will not be free and fair, said Zibani Maundeni, senior political scientist at the University of Botswana in Gaborone.

“Every election in Botswana since independence in 1966 has been free and fair and the Independent Electoral Commission has put processes in place to ensure that this election is no different,” Maundeni said in an interview today from the city.

The government helped lift Botswana’s per capita GDP to $13,900 last year from $13,400 two years earlier, according to the U.S. Central Intelligence Agency’s Web site. The international watchdog Transparency International ranks Botswana as the least corrupt nation in Africa, ahead of countries such as Italy and South Korea.

‘Massive Shock’

The economy will contract this year after Debswana Diamond Co., the joint venture between Johannesburg-based De Beers and Botswana’s government, suspended operations in February as the worst global recession since World War II hurt jewelry sales. The company resumed production at most of the operations in April.

“Botswana has never really had such a massive shock to its economy,” said Jan Duvenage, Africa analyst at Johannesburg- based Standard Bank Group Ltd., the continent’s biggest lender. “This has brought home the importance of diversifying the economy. It should be the main focus of the incoming administration.”

Mining generates about a third of economic output in Botswana and diamonds account for about 70 percent of exports. The government has previously announced measures to diversify the economy, including developing “high-end” tourism destinations, expanding the power-generation industry and establishing an international financial-services center in Gaborone.

“Most of the areas they’ve looked to diversify are difficult and face challenges,” Davies said. “And that will remain the case with the current global economic picture.”

Recovery

Diversification is needed to help find work for the almost one in four people who are unemployed, according to the International Monetary Fund.

Next year, Botswana’s economy is expected to expand 4.1 percent amid a recovery in demand for diamonds, though Standard Bank’s Duvenage said that given the tenuous nature of the current global economic recovery, particularly in the U.S., it isn’t clear whether Botswana’s recovery is sustainable.

“The biggest diamond jewelry market in the world is the U.S., which accounts for about 50 percent of demand,” he said. “American consumers are battling. They are saving and no longer spending. If there is a structural decline in U.S. consumers’ appetite for luxury goods, I don’t think the commodity recovery is out of the woods yet.”

To contact the reporters on this story: Paul Richardson in Johannesburg at pmrichardson@bloomberg.net; Jerry Bungu in Gaborone via Johannesburg at pmrichardson@bloomberg.net.

Last Updated: October 15, 2009 09:32 EDT