Rolls-Royce Riding Swazi King’s Pay Rises as Cuts Stoke Rage
King of Swaziland Mswati III
Stephane De Sakutin/AFP/Getty Images
King of Swaziland Mswati III.
King of Swaziland Mswati III. Photographer: Stephane De Sakutin/AFP/Getty Images
King Mswati III has a Rolls Royce, 13 palaces and 14 wives, and just received a pay increase, even as a cash crisis forced Swaziland to slash spending, feeding anger against his regime.
With the government freezing state wages and imposing higher taxes to fight the country’s worst-ever fiscal crisis, the nation’s five biggest labor groups held a “mass protest” today in the capital, Mbabane. About 12,000 people marched through the city’s streets, closely watched by police, according to Mduduzi Gina, secretary-general of the Swaziland Federation of Trade Unions, or SFTU, the country’s biggest labor group.
The unions want change in sub-Saharan Africa’s last absolute monarchy as a 20 percent drop in recurrent state spending threatens to drive up a 43 percent jobless rate and push thousands of people in Africa’s third-largest sugar producer to search for work in neighboring South Africa. The king was awarded a 24 percent rise in his budget allocation.
“The anger will help speed up the process of change,” Vincent Dlamini, deputy secretary-general of the SFTU, said in an interview in Mbabane. “We’ve seen the people of Tunisia and Egypt. They are essentially monarchies too. That can happen here as long as people consistently mobilize.”
The Congress of South African Trade Unions, the country’s biggest labor union federation with about two million members, backed the protests, calling for an end to “the intensified state of terror enforced by the royal regime and its security forces,” it said in a March 16 e-mailed statement. Swazi workers are employed in South African mines and other industries.
People Leaving
South Africa must cut trade and economic ties with Swaziland’s government and companies must disinvest until democracy is in place, Johannesburg’s National Union of Metalworkers of South Africa said in an e-mailed statement today.
Last year the nation of 1.2 million people lost over a third of its revenue as income from a regional customs union collapsed when the global economic crisis slashed trade, according to the government. South Africa, under white rule until 1994, subsidized some of its neighbors by sharing income from duties and tariffs in return for the right to steer regional policies. It’s now seeking to renegotiate the accord.
Efforts to raise money through bonds have faltered. In January, Swaziland sold a fifth of the 750 million emalangeni ($106 million) worth of seven-year bonds it offered. It didn’t accept any bids for a 182-day Treasury-bill sale on March 16.
Xenophobic Fighting
“It’s never happened in the history of Swaziland,” Zodwa Mabuza, chief executive officer of the Swaziland Federation of Employers and Chamber of Commerce, said in a Feb. 14 interview in Mbabane. “People are leaving, especially skilled people, and they don’t come back.”
The kingdom will miss out on a $100 million loan from the Tunis-based African Development Bank if it doesn’t curb the continent’s highest wage bill as a share of spending.
“They have to cut the wage bill significantly,” Donald Kaberuka, the lender’s president, said in an interview in Pretoria, South Africa on March 13. “However, they are having some challenges with the unions. This money can only kick in if that fiscal sustainability plan is satisfactory to us.”
Swaziland is a land-locked nation wedged between Mozambique and South Africa, the continent’s biggest economy, which is struggling to cut its 24-percent jobless rate. Some South Africans blame refugees for their inability to find work, sparking anti-immigrant riots three years ago that led to the death of about 60 people. As many as 1.5 million Zimbabweans fled an economic and political crisis in their country to South Africa, according to the Johannesburg-based African Centre for Migration & Society.
Quashed Protests
“There’s certainly the possibility that an influx of any kind of migrants will fuel tensions and could even spark future violence,” Kaajal Ramjathan-Keogh, head of the migrant rights program for the Johannesburg-based Lawyers for Human Rights, said in an interview. “The spirit of xenophobic violence hasn’t stopped.”
Mswati is the nation’s second ruler since independence from Britain in 1968 and the 42-year-old will celebrate a quarter of a century in power in April. The king appoints the prime minister and lawmakers aren’t allowed to belong to a political party. Security forces have quashed opposition protests during 32 years of emergency rule. In September, they “arbitrarily detained, assaulted and intimidated” human rights activists, Amnesty International said on its website.
The monarch clings to past rituals, including an annual reed dance in which bare-breasted virgins vie for his attention, and to possibly become his new wife.
Marula Wine
At an annual praise-giving at one of the sovereign’s palaces on Feb. 12, about 2,000 women dressed in colorful fabrics sang and danced with rattles strapped to their ankles. With three burgundy feathers sticking in his hair, wearing a traditional red toga-like garment and flanked by his mother, Mswati surveyed his subjects while accepting gifts of marula wine, a homebrew made from a small round fruit.
This, and the other festivities which eulogize Mswati, are an insult to Swazis, over two-thirds of whom live on less than $2 a day, according to labor leader Dlamini.
“If your father said he has no money to pay your school fees and then he throws a massive birthday party for himself with champagne for everyone, what would you think?” he said.
Highest HIV Rate
Mswati has a personal fortune of $200 million, New York’s Forbes Magazine said on its website. The nation’s gross domestic product was $3 billion in 2009, according to the International Monetary Fund. He holds stakes in most major businesses, including a venture with Illovo Sugar Ltd. (ILV), Africa’s biggest producer of the sweetener, and Swaziland’s only mobile phone services provider, the local unit of Johannesburg-based MTN Group Ltd. (MTN)
Mswati’s allocation of 210 million emalangeni in this year’s budget is nearly as much as the government spends on medicines, including anti-AIDS drugs, in a country where one in four adults has the HIV virus that causes the disease. That’s the highest infection rate in the world, according to the United Nations.
Bheki Dlamini, the chief executive officer of the king’s office, referred all questions to Finance Minister Majozi Sithole. He declined to comment on governance issues during a Feb. 14 interview.
The government must now choose between appeasing unions or meeting lender demands.
“The trigger for a proper crisis is when they run out of cash totally,” John Cairns, a strategist for Johannesburg-based FirstRand Ltd. (FSR)’s Rand Merchant Bank said.
To contact the reporters on this story: Franz Wild in Johannesburg at fwild@bloomberg.net; Vuyisile Hlathswayo in Mbabane at vshlathswayo@bloomberg.net
To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net
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