The report believes that it is as vital to address this imbalance between the rich and the poor in the kingdom as it is to get the national finances sorted.
The report, Restoring Sustainability in a Changing Global Environment: Options for Swaziland, written by three experts independent of the IMF, which is due to be published later this month (December 2012), studies the financial crisis that has hit the kingdom, ruled by King Mswati, sub-Saharan Africa’s last absolute monarch.
The report says the kingdom not only has to address what it calls ‘a pure fiscal crisis’ but also ‘poverty and inequalities’.
It says ‘[T]here is scope to reduce sovereign and security spending in order to create the fiscal space for higher social expenditure.’ This means less spending on the King, Royal Family, police and army and more on such as schools, hospitals and food security programmes.
To make this change, the report states, ‘Swaziland would need to secure a broad political and social consensus on reforms and make continued progress on strengthening the quality of its institutions.’
It goes on, ‘Swaziland is often perceived, domestically, as having a “social” fracture, where resources are not allocated according to a clear objective of alleviating poverty. Reducing the social fracture is not just about reforms, but also their dissemination and eventually endorsement by the whole population.’
It says that ‘improving transparency and accountability would be as essential as implementing all the required [financial] reforms’.
The report concludes, ‘In addition, all the sacrifices that may be needed by Swaziland to restore fiscal and external sustainability would need to be shared in a fair manner. From that perspective, the share of social spending would have to increase, to protect the most vulnerable people.’
The IMF has in the past drawn attention to the need for wealthier people in Swaziland to take their share of the hardships that are necessary to restore the strength of the kingdom’s economy.
Last month, the IMF said budget cuts, ‘[W]ill require sacrifices by all segments of Swazi society, but the basic needs of the most vulnerable should be protected as far as possible.’
In November 2011, Joannes Mongardini, leader of the IMF mission to Swaziland, suggested to the BBC that even King Mswati and the Royal Family should play their parts in reducing their budgets.
The IMF has already said that Swaziland’s economy is in such a poor state there need to be immediate cuts in public spending if the government is to meet its own budget forecasts. Next year even more cuts will be needed, the IMF said, because the Swazi Government has failed to make important changes to the economy that would increase revenue for the government and reduce unnecessary spending on ‘investment projects that are not effective in fighting poverty’.
Although the IMF does not name it, the building of Sikhuphe Airport, often referred to in the international community as King Mswati’s vanity project, would be one project that should not be funded.
IMF REPORTS GOVT ECONOMIC FAILURES
IMF CALLS FOR SACRIFICE FROM KING