COCA-COLA ‘SUPPORTS SWAZI DICTATOR’

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 2010. 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.

Ginindza told the Swazi Observer, the newspaper in effect owned and edited by King Mswati, they had identified Taiwan, the Middle East, and Europe as some possible targets.

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.

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.

Ginindza told the Swazi Observer, the newspaper in effect owned and edited by King Mswati, they had identified Taiwan, the Middle East, and Europe as some possible targets.

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.

NOW, THE SWAZILAND OIL FANTASY

Do we never learn?

Just as we hear that a grand plan for a 5 billion US dollar power plant has bitten the dust, news breaks that the Swaziland King is ‘negotiating’ a deal to develop a ‘multi-million’ dollar oil refinery in the kingdom.

King Msawti III, sub-Saharan Africa’s last absolute monarch, on one of his regular trips to the Middle East, has asked ‘business captains’ in the oil state of Qatar to help Swaziland find up to E35 billion (4.8 billion US dollars) to develop a ‘world class’ facility that will store at least a three-month supply of fuel for Swaziland

The Swazi Observer, in effect the king’s own newspaper, reports that the construction should be completed in about six years. Regular readers of this blog will note that this six-year timescale is an improvement on the three years completion time that the king and the fantasists who surround him usually put on their (never completed) projects.

Phiwa Ginindza, chief executive of the Swaziland Investments Promotions Authority (SIPA), who is part of a delegation presently in the Gulf States with the king, has reportedly been touting the plan around Qatar.

Ginindza told the Observer that it was clear that Swaziland needs to work extra hard to see the project through. That’s an understatement. As I reported in April 2009, SIPA has a poor record in attracting investment into Swaziland.

It admitted in its performance report for 2006 to 2008 that it had only managed to attract five foreign investments into the country in three years, with a total of 720 jobs.

The businesses that were set up are very basic: one is involved in producing starch from cassava and another makes plastic bags. Two are involved in manufacturing mining drills and hand held tools and the fifth is yet another Taiwanese textile company.

Do we really expect someone with 4.8 billion bucks to spend to come running to SIPA?

SWAZILAND’S JOBS FANTASY

Does Swaziland suffer from a collective self-delusion? Or is it only King Mswati III who lives in a world of his own?

I ask following the announcement from the king that a multi-billion emalangeni Swazi City, financed by international money and comprising a 25 000 sq m shopping, entertainment and ‘wellness’ centre ‘to rival the world’; a Science and Technology Park; a hi-technology industrial Site and an expansion of Matsapha Industrial Site are to be built over the next three years, creating 15,000 new jobs.

According to the Swazi Observer, a newspaper in effect owned by King Mswati, the king told crowds during his birthday celebrations at the weekend, “I have been assured by the experts who are working on the projects that they will deliver them within the next three years.

‘I have told them that I have taken their word for it and that the nation expects that the three years will be adhered to.’

I especially like the bit about ‘I have taken their word for it’. What possible evidence is there that any international company would want to set up in Swaziland, where seven in ten people are so poor they earn less than one dollar a day and have no money to buy anything at the new shops or leisure centres. In Swaziland, people are generally under educated (think about the present row over free primary schooling) so they are unlikely to be able to work at any ‘hi tech’ plant.

The Swazi City is a delusion and we should say so now.

The sad truth is that foreign investors by and large don’t want to be in Swaziland. Only last week the Swaziland Investment Promotion Authority (SIPA), an organisation tasked with bringing investment into the kingdom, admitted in its performance report for 2006 to 2008 that it had only managed to attract five foreign investments into the country in three years, with a total of 720 jobs.

The businesses that were set up were not exactly ‘hi tech’. One was involved in producing starch from cassava and another makes plastic bags. Two are involved in manufacturing mining drills and hand held tools and the fifth is yet another Taiwanese textile company.

If that’s the best that Swaziland has been able to achieve in the past three years we shouldn’t expect a sudden flood of top flight international companies at the border any time soon.

This isn’t the first time we’ve had announcements about foreign investors bringing lots of jobs to Swaziland: who remembers all the stories about call centres clamouring to get into Swaziland bringing thousands of jobs with them? Nothing happened and nothing is going to happen.

Just about every time King Mswati goes off on a foreign trip there are reports in the media that he has secured this or that agreement and jobs are on the way. It is a sad fantasy.

This is what the king says Swazi City is going to contain: a shopping mall with more than 250 shops, ‘which offer a variety of fashions from around the world’; four floors of luxurious shopping experience; Royal Villas which will offer up to 6-Star accommodation facilities suitable for all type of guests; a 28-Floor Hotel which will have 350 guest suites, world-class restaurants, three swimming areas and in-door sporting facilities, a health spa and a casino.

Now tell me, can you believe it?

Still in the land of fantasy, the new Sikhuphe International airport will receive its first plane in 2010. This is according to Millennium Project Unit (MPU) manager Lloyd Dlamini, who told a team of ambassadors from the Gulf and Arab States who are in the kingdom to explore avenues of cooperation and development between their countries and Swaziland.

Again, according to the king’s newspaper, Dlamini wants them to help get international airlines to use Sikhuphe International Airport and also to fund some of the project.

For those who had forgotten, Sikhuphe is being built in one of Swaziland’s many wilderness areas in the Lubombo region. Building started at the behest of King Mswati and Sikhuphe was billed as an airport that would be a hub for travellers coming into the continent of Africa. The idea was they’d fly into Sikhuphe and then change planes and fly on to their intended destinations.

I have never seen any analysis that supports this objective. In 2003, the Swazi Government ignored advice from the International Monetary Fund (IMF) about participation in unviable projects, and went ahead anyway with building the airport.

Why would anyone want to fly to this new airport when hardly anyone uses Swaziland’s existing airport at Matspaha? Business is so bad at Matsapha that last year the Swazi Express airline went out of business because it couldn’t attract passengers.

But at least Matspha is close to Swaziland’s main urban centres and is relatively easy to get to; Sikhuphe by contrast doesn’t even have an access road.

And let’s not forget that major international airports at Johannesburg and Cape Town are both a short flying time away.

According to the Observer, Minister of Economic Planning and Development Prince Hlangusemphi, said ‘The team of ambassadors have airlines in their countries and these are the countries we are targeting because they have big airlines which also operate in Africa.’

That may be, but if they wanted to fly to Swaziland they could use the existing airport. The truth is they don’t want to and, well, why would they?