Swaziland's steady progress to national maturity is a two-edged sword. Its sustained strong economic growth, political stability, uncompromising attitude to, and success against corruption and crime gives it 'middle-income' status (due to its per capita GDP of just under $1,000 a year) and that precludes it from much concessional funding from abroad, significantly the World Bank. Accordingly, the country must be powerfully proactive and its case must be strong if it is to attract the foreign direct investment it needs to maintain its steady growth. Apart from its obvious attributes, Swaziland has peace and quiet to offer the investor.
Swaziland's tranquillity stems largely from the fact that it is a nation at peace with itself and, in contrast with most other African countries, it is virtually a single-tribe nation. It is one of Africa's last remaining monarchies, and is under the reign of King Mswati III, now 32-years-old. As a dual monarchy, the king rules in conjunction with the queen mother - who may be the king's mother or, on her demise, a senior wife. Her role is to uphold the nation's cultural and traditional elements.
Executive power is vested in the king who rules in consultation with the cabinet (headed by the Prime Minister), the bicameral parliament and the Swazi National Council, the Libandla - the traditional aspect.
Swaziland regularly earns a frown from both African and first world leaders for taking its time in transforming its politics into a western-style democracy, and although King Mswati has called for studies into ways Swaziland can become a Westminster-style democracy, it's not happening quickly enough to foreign likings. The majority of Swazis are happy with their current political lot and can't see a reason to change. The world beyond Swaziland's borders are not convinced of this fact, and would like to see it tested at the ballot box.
Whether that will happen anytime soon is anyone's guess.
As an investment destination, Swaziland has some persuasive arguments. In the first place, its higher income status testifies to the fact that it knows what it's doing economically. Secondly, it's a country that has steadily and uninterruptedly grown since its independence from Britain nearly 40 years ago. In the third place, the country has access to lucrative foreign trade concessions in America and Europe that are available to investors under certain conditions.
Manufacture drives economy
To strengthen its investment drive, the government has affected a number of reforms, including a new FDI code, and hastening the privatisation of state assets.
Swaziland's economic performance is dependent on regional economies, especially South Africa's because of the close economic integration between the two countries, hut Swaziland rides out economic storms far better than its bigger neighbour.
It has an open, market-oriented economy with the manufacturing sector as the driving force. With limited domestic markets available, export-oriented commodities and industries play a significant role in determining the country's economic development and growth. Its foreign earnings are dominated by sugar sales from its vast plantations in the south of the country.
This pocket-sized dynamo tucked into a south-eastern corner of the continent and wedged between South Africa and Mozambique has avoided the poverty afflicting most other emerging nations and largely self-supporting. How Swaziland conducts its affairs should be required reading for other emerging economies.
NO PROGRESS WITHOUT PASSION - PRIME, MINISTER DLAMINI
Barnabas Sibusiso Dlamini has variously been described as a martinet and a father figure, hard-headed and accommodating, a man who forgives but never forgets. But most of all, the Swaziland Prime Minister is known to be mercilessly ambitious in the interests of his country and passionate about its progress. His critics say this driving ambition leads him into biting off more than he can chew, and that's something he readily admits while expressing disappointment that some tasks he set himself and his Cabinet are unfinished. That's not to say they will stay that way. Like the former US President, Theodore Roosevelt, Dlamini speaks softly and carries a big stick. He has a way of getting things done. Uncharacteristically for a politician, Dlamini has a way of getting directly to the point, finds no capital in avoiding the negative and carries discussion with an easy grace.
Now in his second term in office, Dlamini has held the leadership reins for the past eight years and his economics and finance background accounts for his close attention to detail.
African Business's Tom Nevin spent some time with this charismatic, and at times unpredictable, political chief of the Swazi nation.
African Business: How is Swaziland performing in the current global economic slowdown and how are its effects?
Sibusiso Dlamini: Swaziland is already feeling the effects of the global slowdown. We have seen a number of business closures in recent months and these have reflected a recessionary trend firstly in the region and then in the industrialised nations of the world. Our economic revival relies upon growth in our export markets and we are unfortunately seeing the reverse. The performance of the United States economy affects the entire world and, before the tragic events of September 11, it was already on the edge of a significant recession, with industrial production, investment and profits falling markedly.
In the current year alone, our currency, the lilangeni (tied as it is to the South African rand) has depreciated by 17% against the US dollar. The cost of imports such as fuel has therefore increased substantially, though there is a degree of volatility in the oil market itself at the present moment, and this has a recessionary effect on the economy. As a measure to stimulate demand, the Central Bank of Swaziland has, this week, reduced its discount rate by half a percent.
AB: Swaziland is under pressure from some organisations, and some countries, to reform its political system. Is this being considered?
SD: We are currently reforming our political system to meet the wishes of our people gathered during the recent constitutional review exercise conducted nationwide over the past five years. Swaziland does, from time to time, receive pressure from organisations and countries to make changes of a political nature.
We have demonstrated a willingness to engage in dialogue and a receptiveness to constructive criticism both from within and outside our country. Furthermore, events over the past year have, I believe, shown our preparedness to make changes where we have concluded that these are for the benefit of the Swazi people.
Politically, Swaziland has demonstrated that there can be equitable and viable alternatives to the standard democracy model. That is not always fully appreciated by those who have to adhere to, and promote, the political criteria of their own respective countries.
The underlying theme to our own political system is that we seek to run our country in the way that the majority of our people want, based on widespread consultation, increased devolution to the grassroots, and a readiness to consider change. I believe that our continuing good relations with our many international friends lends credibility to our system.
There are, of course, organisations that seek substantial change to suit their own political ambitions within the Kingdom. As the recent constitutional review exercise has demonstrated, that is not an approach favoured by a majority of Swazis. Furthermore, political objectives are frequently hidden behind other legitimate issues such as labour rights and industrial relations. Such techniques harm no one more than the workers themselves.
AB: Is Swaziland taking full advantage of the United States Africa Growth and Opportunity Act (AGOA)? If so, in what areas?
SD: We responded quickly and positively to AGOA and have made the necessary legislative changes and undertaken the appropriate personnel training to take full advantage of the Act. The strength of new foreign investor interest is a measure of how rapidly we have acted in taking up the benefits of this new legislation.
Although AGOA enables over 6,500 different products to enter the USA quota free and duty free, at the heart of scheme are special provisions for apparel. It is in the clothing sector that there is by far the largest share of investor interest. This is a very satisfactory situation as far as we are concerned since the textile industry, as it exists or is planned for Swaziland, is highly labour intensive. This enables us to move steadily towards meeting one of our primary economic and social objectives - creating sustainable livelihoods for our people and reducing the...