SOUTH AFRICA ‘READY TO GIVE LOAN’

South Africa is ready to give Swaziland a R1.2 billion loan, but insists King Mswati III’s absolute monarchy must end.

Southern Africa Report

7 July 2011

SOURCE

Swaziland: Inching Towards Finalising the R1,2-Billion Loan

The process of getting South Africa's bailout loan to Swaziland edges towards completion. Despite conflicting media reports, Pretoria and Manzini have agreed to a R1,2-billion loan, payable in tranches, details of which are as yet unclear. Further developments are expected later this week.

What is already clear is that Pretoria is aligning the conditions for the first tranche (probably about R400-million) with those set by the International Monetary Fund for provision of guarantees that would have allowed Swaziland to raise funds from the African Development Bank (AfDB). These include establishment of policies and mechanisms to maintain fiscal and public budgetary discipline.

At the time Swaziland's profligate King Mswati III refused to submit to the conditions, but now has little choice.

South Africa has agreed to give the loan reluctantly, because it does not what to repeat the regional aftershock of Zimbabwe's 2007-2008 economic collapse, which put massive pressure on South Africa itself and on most other countries in the SADC region. With Lesotho already battling under the cuts in South African Customs Union revenues, it is keen to keep Swaziland out of the crisis zone.

It has set a R1,2-billion ceiling on its own contribution, calculating that it this will be sufficient to stabilise Swaziland sufficiently to enable it to access AfDB funds.

But it is using its R1,2-billion to do more than achieve short-term budgetary stability. The second tranche (still part of the R1,2-billion) will come with additional strings, several of them explicitly political.

These include insistence on the start of a process towards replacing Mswati's absolute monarchy with some form of democratic dispensation. It is not yet clear if subsequent tranches will include more detailed conditions on the modalities of the transformation or its final form.

But the apparent inevitability of Swaziland's move away from absolute monarchy has sparked interest in the process - and its ultimate destination - from elsewhere.

Conservative US think-tank and advocacy Freedom House last month (24 June 2011) convened a workshop in Johannesburg of what it termed the "Swaziland Mass Democratic Movement" in what appears to have been a surprisingly clumsy attempt to direct both the composition and direction of Swaziland's pro-democracy movement.

The invitation included even near-moribund formations, but noticeably excluded the recently-formed Communist Party of Swaziland (CPS), despite its relatively close working relationship with Swaziland trade union movement and with the dominant but outlawed People's United Democratic Movement (Pudemo). Predictably the CPS responded by describing the invitation as part of "a scramble by reactionary forces to try to take the initiative and set the agenda for Swaziland's future".

Significantly, a post-workshop media release, referring by name to participating organisations (but excluding reference to Freedom House as the convener), excluded from the list of opposition demands any reference to economic demands, among them calls for redeployment of the country's wealth to tackle the immediate problems of mass poverty and the rocketing HIV-Aids pandemic. Ironically, it included the demand, first formulated by the CPS, for a transitional government.

Pudemo, the Swaziland Coalition of Concerned Civic Organisations and several other prominent participants have repudiated the statement.

Whatever its purpose, the Freedom House initiative appears to have backfired: trade unionists and political activists have interpreted the initiative as an attempt to direct the pending Swaziland process towards a "Lesotho outcome" - the creation of a South Africa-dependent constitutional monarchy, with an entirely (if miniature) free-market economy.