Swaziland’s Prime Minister Barnabas Dlamini is trying to
cover up the devastating impact on the kingdom of the withdrawal of a trade
agreement with the United States.
He said it would not affect trade, but an independent report
said it would destroy the textile industry.
On 1 January 2015 the United States withdrew
Swaziland’s trade benefits under the Africa Growth Opportunity Act (AGOA)
and the kingdom’s exports to the US will no longer be free of tariffs.
The withdrawal came after Swaziland failed to meet five
conditions of eligibility, regarding workers’ rights in the kingdom and King
Mswati III’s refusal to introduce democratic reforms.
Since the decision was announced in May 2014, the
Swazi Government, which is handpicked by King Mswati, who rules as sub-Saharan
Africa’s last absolute monarch, has been on a mission
to mislead Swazi people and the international community about the shattering
consequences of withdrawal of trade benefits.
The
Observer Sunday, a newspaper in effect owned by King Mswati, in an
article written by the Chief Editor Mbongeni Mbingo, quoted
Prime Minister Dlamini saying, ‘there is no need for Swazis to
behave like a major catastrophe has happened following the loss of Swaziland’s
eligibility status under the African Growth and Opportunity Act (AGOA).
Besides, AGOA did not benefit Swazis or the country’s economy much.’
However, an independent report on Swaziland and
AGOA concluded the opposite to be the case.
One report, The
Impact of AGOA on the Swaziland textile Industry, prepared in 2010
by the African Cotton and Textile Industries Federation, concluded, ‘Swaziland owes the very existence of its apparel and
textile industries to the MFA [Multi Fibre Agreement, a previous trade agreement that ended in
2005] and AGOA and exports to the US With one exception, all apparel
manufacturers in Swaziland were established post 2000
following the enactment of AGOA.’
It added, ‘Between 2000 and 2004,
the Swaziland apparel sector grew phenomenally mainly as a result of investment by Taiwanese companies to take advantage
of the duty free quota free access to the US market under AGOA. At its peak in 2004, the
clothing and textile sectors employed an estimated 30,000 employees in 27 establishments.’
Reporting in 2010 on the likely consequences to the Swazi economy
if AGOA benefits were removed in 2015, the report said it was ‘quite likely’
that employment in the textile industry would be halved. In 2005 when the MFA
ended, it reported, ‘nine foreign owned
manufacturers closed down virtually halving
employment in a single year, with employment declining from 30,000 employees in mid-2004 to 15,000 in mid-2005.’
In 2014 it was estimated there were at least 17,289
people employed by the textile companies in Swaziland.
The report added, ‘Current exports are
almost exclusively focused on the US market. The predominant business model of the Taiwanese-owned companies is for
the Swaziland subsidiaries to be purely production facilities with product development,
marketing and sales being conducted out of Taiwan. The product range appears to be very narrow
being principally long-run basic knits.
‘Should the U.S. market be threatened in
any manner or the risk factor raised to any extent, it is quite likely that a scenario similar to the one that
followed the demise of the MFA would unfold, namely at least half of the existing factories would
close down and approximately 9,000 jobs be lost as the business models would not allow for the
focus to shift to the EU and the South African market would not be large enough to absorb the
surplus capacity.
‘Even if it was possible for the South African market to be to a certain extent a
viable alternative to the US market for some Swaziland manufacturers, this would negatively impact
on South African producers and destabilize the SACU [Southern African
Customs Union] region as a whole.
‘The apparel and textile sectors are significant employers in
Swaziland and have a positive impact on other sectors such
as transport operators, freight forwarders, commuter transport providers and street vendors. Therefore any decline in the apparel and textile sector will be felt in the broader community.’
The report’s predictions are already coming true. Shortly after
the loss of AGOA benefits were confirmed, Tex Ray, a Tawianese-owned textile
company, announced the loss of 1,450 jobs. In a letter,
to the Swaziland Manufacturing and Allied Workers Union (SMAWU) and Labour
Commissioner Khabonina Dlamini, factory manager Lisa Chang said, ‘The company
exports 100 percent of its products to the United States of America market and
due to the country’s exclusion [from AGOA], we have been unable to secure any
further orders from our clients.’
In December 2014 media in Swaziland reported that Matsapha
Knitwear was retrenching 1,000 of its workers. Kwaluseni Member of Parliament Mkhosi
Dlamini reportedly told the Swazi House of Assembly, the ‘factory was
terminating the workers’ employment because of the loss of the Africa Growth
Opportunity Act (AGOA)’.
The Times of
Swaziland, the only independent daily newspaper in the kingdom, reported,
‘The MP said other smaller companies in Matsapha were also retrenching
employees under the pretext that it was due to the loss of AGOA.’
Textile factories in Swaziland are mostly owned by
Taiwanese companies which have a poor record on industrial relations and
exploitation of their workers.
In July 2014 a survey
of the Swaziland textile industry undertaken by the Trades Union
Congress of Swaziland (TUCOSWA) revealed workers in the textile sector were
subjected to harsh and sometimes abusive conditions, many of the kingdom’s
labour laws were routinely violated by employers, and union activists were
targeted by employers for punishment.
More than 90 percent of workers surveyed
reported being punished by management for making errors, not meeting quotas
or missing shifts. More than 70 percent of survey respondents reported
witnessing verbal and physical abuse in their workplace by supervisors.
See also
PM MISLEADS ON AGOA PROGRESS
SWAZI TEXTILE WORKERS EXPLOITED
EXPLOITATION BY TAIWAN TEXTILES
MINISTER RAIDS TEXTILE FACTORY
SWAZI TEXTILE PAY STRIKE ILLEGAL
SWAZI GOVT AIDS TAIWAN EXPLOITATION
