Botswana's economic performance over the past two decades has been impressive, allowing the country to move quickly from low to upper-middle income status. The authorities have pursued prudent economic policies and have been working to upgrade the electricity and water infrastructure. Notwithstanding such progress, reforms in the areas of tax administration, state-owned enterprises, and the labor market have been constrained by limited capacity and, at times, insufficient coordination or political support. Furthermore, economic diversification has been limited and unemployment has been persistently high. The authorities consider that resolving these challenges will require a fundamental shift from a diamond and government-driven growth model to one based on building human capital and fostering a competitive private sector.