24 June 2011
Analysis: A failed, impoverished fiefdom
By Lucky Lukhele
Should South Africa help Swaziland out of its self-inflicted economic doldrums without setting conditions for democratic reforms, it will be an insult to the oppressed Swazi people and the ANC-MK cadres who sacrificed their lives in Swaziland.
The adage that if you are too close you can’t see the real picture applies to President Jacob Zuma and South Africa’s Nobel Peace Prize laureates for not reacting when they see commercials on TV screens alluding that Swaziland is the destination paradise of half-naked virgins coerced and choreographed to dance for the attention of suitors.
No one realises that construing Swaziland as Africa’s cultural museum, means Swazi citizens and posterity remain predestined by the world to be an exhibition of how Africans survive under absolute monarchies.
Hence the unfortunate and lame argument by pro-monarchy economists that it is the SA Customs Union (Sacu) revenue that has brought Swaziland’s economy to its knees.
Whereas South Africa, also subjected to Sacu solely by virtue of being a democratic state, whose economic growth estimate has been upgraded to 4% this year by the IMF, Swaziland’s is headed for economic disaster with a budget deficit of 14.3% of GDP.
Before the banning of political parties, the Swaziland economy was vibrant and always maintained a budget surplus. The economic woes have always been associated with the recycled present Prime Minister Sibusiso “The Landlord” Dlamini when he was finance minister in the 1980s.
History will testify that since 1983-84, the Peoples United Democratic Movement (Pudemo) withstood various forms of persecution while peacefully arguing that the growing dependence on Sacu by the Tinkhundla system of government and its inherent lack of transparency, accountability and checks and balances would destroy the economy.
In fact, the signals were very clear – 25 years later in 2008-9 the time had come when Sacu’s actual revenue, forecast at R31.3bn, declined to R22.8bn.
As echoed by Pudemo, few nations have such a high level of dependence on one source of revenue that comes essentially as a flow from abroad, save for economies that have been rendered inefficient by the mammoth cultural task of sustaining a monarchy, as is the case in Lesotho and Swaziland.
Grynberg and Motswapong (2009) argue “the revenue-sharing formula that was negotiated in the apartheid era renegotiations of the Sacu agreement in 1969, created a politically, if not economically, unsustainable formula”.
“This revenue dependence has continued and worsened, and has fostered a significant measure of mutual resentment in Pretoria and other Sacu capitals in the post-apartheid era.”
We can go on and on blaming the Sacu formula and so forth, the bottom line is that the economy is not stupid. Mswati cannot lie about the GDP because it reflects on the miserable living conditions of the masses in Swaziland which contrast with his life style.
The high dependence by Swaziland on Sacu revenue is a result of skewed and mind boggling economic strategies premised on pyramid schemes, begging, aid from regional and international agencies, and praying for rain and miracles from ancestors.
As the unlimited financial aid from Muammar Gaddafi and the Kuwait royal family is no longer forthcoming, the IMF and South Africa are the lenders of last resort.
Why is Swaziland turning out to be the most affected? Why are global giants like Sappi, which owns one of the world’s largest man-made forests in Swaziland, packing and leaving Swaziland?
The answer is simple and straight forward: it is a fiefdom that is run by an absolute monarchy and the risk is very high for investors.
“When the rest of sub-Saharan Africa was growing over the last decade, the economy of the kingdom of Swaziland stagnated,” wrote the IMF in 2008.
“For example, in 2001 about 75% of residents lived in poverty and 20% of the population claimed two-thirds of the income. A major contributor to the stagnating Swazi economy has been its monetary policy, which has taken, steps backward in the past decade,”
Monetary policy in Swaziland is only focused on ensuring that Mswati’s Forbes ranking improves at the expense of the overall growth of the economy without addressing poverty, income equality and financial accountability. Mswati’s underhand dealings in the economic meltdown are a result of his affinity for luxury and vanity.
It is worth reminding all and sundry that the writing was on the wall during his coronation when he disregarded traditional regalia, instead dressing as Michael Jackson.
The Sacu card is one being repeated over and over by detractors of the quest to democratise Swaziland. While Mswati has amassed a fortune estimated at $200m (R1.37bn) “the government has been surviving by running up $180m in domestic arrears and eating into the central bank foreign reserves, which now stand at $570m, or just 2.6 months of import cover”. (Croply, 2011)
Lucky Lukhele is the spokesperson for the Swaziland Solidarity Network.