The ratings reflect Botswana's strong public sector balance sheet, even though this recently deteriorated. They also reflect its well-managed minerals-based economy, and long record of political stability. These factors are somewhat offset by the country's narrow economic base that relies heavily on the diamond sector, and is vulnerable to shocks despite efforts to diversify; fiscal challenges; and still-significant development needs. Botswana's stable politics, track record of prudent macroeconomic policies, and high level of transparency are strong by emerging market standards. However, key structural credit constraints are the country's narrow economy, together with income levels that are amongst the lowest in the 'A' category, high unemployment, and the impact of the HIV/AIDS pandemic. Botswana is the world's top producer of diamonds
