A report about the relationship between Coca-Cola and King Mswati III of Swaziland has been published in the media across the world during the past 24 hours. It is based on a statement from the Swaziland Democracy Campaign calling for the drinks firm to sever its ties with the last absolute monarch in sub-Saharan Africa.
I wrote about Coca-Coal and Swaziland on this blog on 21 January 201. That posting contains more detail about what Coca-Cola gets up in to than the SDC report - so for those interested I have reproduced it here.
SWAZILAND: SPONSORED BY COCA-COLA
Coca-Cola is to work to promote Swaziland, a kingdom with one of the world’s worst human rights records.
Coca-Cola presently contributes about 40 percent of the kingdom’s gross domestic product (GDP) through the concentration plant it has in the kingdom, ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch.
This helps to prop up a regime that consistently uses torture against dissidents and alleged criminals. In September 2010, Barnabas Dlamini, Swaziland’s illegally-appointed Prime Minister, said he wanted people (especially foreigners) who criticised him and his government to be tortured using foot whipping.
Swaziland Investment Promotion Authority (SIPA) has said that it will work with Coca-Cola to market the kingdom internationally.
Phiwayinkhosi Ginindza, SIPA Chief Executive, said a country market study done with Coca-Cola was almost complete.
Swaziland supplies the Coca-Cola concentrate (the sugary syrup the drink is made from) to most of Africa, big parts of Asia and all of Australia and New Zealand from its industrial plant in Matsapha.
Swaziland has been mortgaged to Coca-Cola, ever since it allowed the company to use it in its fight against workers’ interests in other countries. In 2009, Coca-Cola closed its concentrate supply plant in Nigeria, citing an ‘unfriendly manufacturing environment’ in that country.
It had made ‘little profits because of the high manufacturing costs’.
Coca-Cola is said to be so large in Swaziland that it accounts for 40 percent of the kingdom’s GDP, but it is said to be exempt from paying full taxes.
Coca-Cola also has an impact on the international standing of Swaziland’s economy. The money generated by Coca-Cola is what largely accounts for the kingdom being classified as a ‘lower-middle income developing country’ (and therefore not eligible for certain types of international aid), even though seven in ten of Swaziland’s one-million population live in abject poverty, earning less than one US dollar a day.
This dominance of the Swaziland economy by Coca-Cola represents a breathtaking piece of economic mismanagement by King Mswati and the governments he appoints. It in effect allows Coca-Cola to determine the economic (and other policies) of the kingdom. Coca-Cola can blackmail Swaziland at any moment it likes. If it doesn’t get its way it simply has to threaten to take its business elsewhere and Swaziland’s already depressed economy sinks into the mire.
Of course, it could use this power for positive effects. It could demand political reforms in the kingdom that has one of the worst human rights records in the world. It could insist that political parties be unbanned and that the Swaziland Constitution be honoured.
Alas, Coca-Cola won’t do any of that: it likes things the way they are. Coca-Cola is in Swaziland in such a big way precisely because it is a dictatorship. This allows wages to be kept low, unemployment high and workers rights to be oppressed.
It also means that Coca-Cola can work directly with King Mswati and the King can ensure that the company gets all it wants. It is no secret that the King keeps a slice of the income from Coca-Cola ‘in trust for the nation’, which we all know means, ‘for himself’.
King Mswati is said to be so close personally to Coca-Cola that he visits the company’s global headquarters in Atlanta, Georgia, US, each year.
Ginindza, of SIPA, told the Observer, ‘We decided to use Coca-Cola as they have shown so much love for the continent [Africa] and they care for it. Over the past 20 years Africa has developed a relationship with them.’
But does Coca-Cola really ‘love’ Africa? In October 2010, Bloomberg Business Week reported that Coca-Cola’s sales in the US and other countries had stagnated and it will rely on some of the poorest nations (including in Africa) to generate the 7 to 9 percent earnings growth it has promised investors.
Consumption of Coke is also low in India and China, relative to the US, Europe, and Latin America, but those countries present less of an opportunity for the company than Africa, where Coke is the dominant brand and a middle class is just emerging.
Tara Lohan at foodchange.org reports that Coca-Cola has been in Africa since 1929, but has not reached total domination yet.
Lohan says, ‘The reason for this is that while there are many countries in Africa with growing middle classes, it’s also a continent with extreme poverty, scarce or unclean water sources, hunger, political instability, and war. Coke intends to spend $12 billion in the next ten years there and what do Africans get in return? A product that will use vast amounts of water, create more waste, and offer people no nutritional value.
Lohan adds, ‘Having recently been briefed on Coke’s sordid history in Michael Blanding’s new book The Coke Machine: The Dirty Truth Behind the World’s Favorite Soft Drink, I have to say I’m extremely wary of the company’s advances. Blanding's book details Coke's history of anti-union activity in Central and South America, allegations of its fraternization with paramilitaries who murdered bottling plant workers, the effects of marketing to kids in schools, and the wake of environmental catastrophes the company left behind in places like India where Coke has drained and polluted drinking water.
Lohan says, ‘If that's what Coke has in store for Africa, then it looks like the continent is getting the raw end of the deal.’
So there you have it. King Mswati allows Swaziland to be taken for a ride, for his own personal gain.