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Thursday, 25 June 2015

LACK OF DEMOCRACY BAD FOR ECONOMY

The lack of democracy in Swaziland is a substantial risk to the kingdom’s growth, according to a World Bank report. 

And, Tibiyo Taka Ngwane, the conglomerate owned by the royal family, deters private companies from operating and thereby boosting the kingdom’s economy.

Swaziland is ruled by King Mswati as an absolute monarch. Political parties are banned from taking part in elections and the King chooses the government and top judges. Groups advocating for democracy in Swaziland are banned under the Suppression of Terrorism Act and dissenters are jailed.
 
The King also controls large parts of the Swazi economy through Tibiyo and holds most of the land in Swaziland ‘in trust for the Swazi nation’.

The World Bank report, called the Country Partnership Strategy for the kingdom of Swaziland 2015 – 2018, said, ‘Perceptions about lack of voice and accountability and weak rule of law hamper growth and development. The limitations on the rights to participate and form political parties deprives the citizenry of political competition and electoral feedback to prioritize policy choices.

‘The regular arrest of pro-democracy activists contributes to pushing Swaziland low on the political freedoms scale and high in the rankings for perceptions of corruption. Transparency International ranks Swaziland 82 among 177 countries on its Corruption Perception Index.’

The World Bank added, ‘The political and governance risks are expected to be substantial’ during the coming years.

It said, ‘The governance system in Swaziland leaves room for political interference, policy reversals, vested interests, nepotism and corruption which can adversely affect the selection and prioritization of sectoral investments, as well as the effective implementation of programs.’

It added that programs that the World Bank would support, including those to alleviate poverty and stimulate economic growth, ‘can be particularly vulnerable to such risks, if the project beneficiaries become direct competitors to established vested interest’.

The World Bank consulted various groups within Swaziland, including ‘the donor community, civil society and the private sector’ in compiling its report.

The World Bank concluded, ‘All parties consulted agree on limitations in state capacity which undermines implementation of policies and service delivery. Some stakeholders identified the lack of political will to review the current system of Governance and the separation of powers. Cases of imprisonment of media representatives and unionists demonstrate that the Swazi public has no mechanism through which to voice their concerns.

The World Bank report also criticised King Mswati’s conglomerate, popularly known as Tibiyo.

It said, ‘Direct intervention by the state in economic sectors also seems to be a deterrent. The state is invested in key economic sectors through state-owned enterprises (SOEs) and the company owned by the royal family – Tibiyo Taka Ngwane. These institutions operate in multiple economic sectors including agriculture, transport, finance, tourism and housing, which put them in direct competition with private players, creating conflicts of interest in several sectors. 

‘Furthermore, some SOEs function as regulators in their sectors, and are responsible for charging levies on imports by private enterprises of products that they themselves are selling.

‘This creates another set of conflicts of interest and potential opportunities for corruption. The overall result is further uncertainty among investors.’

See also

KINGDOM’S WEALTH STAYS WITH THE KING
IMF TELLS SWAZILAND HOME TRUTHS
GOVT ‘SNEERS AT WORLD BANK REPORT’

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