SWAZILAND@NEWSLETTER 33
PUBLISHED BY SOUTHERN AFRICA CONTACT (DENMARK)

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See also new photo archive on the land, life and struggle of the Swazi
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1. Swaziland's May Day is a test for the democracy movement. Terry Bell,
Business Report, April 21, 2006

2. New initiatives after blockade of border posts. Moyiga Nduru (IPS), 14
April 2006.

3. Swazi king lashes out at South African trade union federation, Cosatu.
News24.com (SA), 15 April 2006.

4. Producing ethanol from sugar may rescue cane growers. 11 April 2006
(IRIN).

5. Associated British Foods (ABF) steps up move on South African sugar
firm. Amanda Andrews, The Times (UK), 14 April 2006.

6. Swaziland@Newsletter Documentation:

(i) AFRICAN DEVELOPMENT BANK SWAZILAND COUNTRY STRATEGY PAPER 2005-2009.
Operations Department ONCB 2005.

(ii) INTERNATIONAL MONETARY FUND. THE KINGDOM OF SWAZILAND. Staff Report
for the 2005 Article IV Consultation
Prepared by the Staff Representatives for the 2005 Consultation with
Swaziland. Approved by David Andrews and Juha Kähkönen, January 23, 2006

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1. Swaziland's May Day is a litmus test for the democracy movement. Terry
Bell, Business Report, April 21, 2006

This May Day could be a decisive moment for Swaziland's embattled
pro-democracy movement. The fairgrounds in the industrial centre of
Manzini, south of Mbabane, is where May Day rallies are traditionally
held.

This year will be no different, but for the fact that the rally should
reveal whether the largely trade union-led democracy movement has managed
to heal recent rifts or if new lines have been drawn in the battle against
Africa's last absolute monarchy.

The announcement this week by King Mswati 3 that a new constitution is now
in place has not changed matters.

"It merely entrenches the king's power, allowing him to approve or veto
all laws," notes Mario Masuku, the president of the still officially
illegal Peoples' United Democratic Movement (Pudemo).

He has been invited to speak at the May Day rally by the country's largest
union, the Swaziland National Association of Civil Servants, which last
week distanced itself from the Swaziland Federation of Trade Unions
(SFTU). It is usually the SFTU that invites speakers to and organises the
rally in Manzini.

This is one of the indications of the serious rifts that have appeared in
the movement to introduce multi-party democracy to Swaziland. And the
rifts have been gleefully exploited by the monarchists, who have portrayed
democracy as a crocodile-infested island remote from the security of the
kingdom.

But the fact that the new constitution will allow more voices of advice
(which the king can choose to ignore) has seen some non-governmental
organisations argue that engagement from within would be better than
opposition from without.

Opposition from outside the officially designated system was epitomised
last week by the protest blockades of Swaziland's borders with South
Africa.

These were co-ordinated on the South African side by Cosatu in solidarity
with pro-democracy campaigners in Swaziland.

But the SFTU did not join the protests. Instead, on the eve of the
blockades, SFTU general secretary Jan Sithole issued a joint statement
with Musa Dlamini, the acting president of the Swaziland National
Association of Teachers (SNAT), warning SNAT and SFTU members not to join
the protests.

Confusingly, SNAT is not affiliated to the SFTU. It is regarded as highly
conservative and pro-monarchist.

The confusion caused by the call by Sithole and Dlamini had hardly begun
to register when news came through of seven South African trade unionists
being shot and injured and 25 arrested by the South African police while
attempting to blockade the Matsamo border post.

The use of rubber bullets and the arrest of leading trade unionists have
caused anger throughout the labour movement.

It also appears to have resulted in considerable embarrassment in
Swaziland's pro-democracy movement and to have contributed to renewed
calls for unity.

"South Africans suffered in solidarity with us while some of our leaders
were playing politics," an SFTU official notes bitterly.

In the wake of the police action, the SFTU stated: "Our non-participation
at this particular event should not be interpreted as either
disassociating ourselves with the struggle or the issues."

Sithole claimed he had been misrepresented. He remained committed to the
struggle for democracy; his opposition to the blockades had arisen because
he and the SFTU were not adequately consulted.

However, Swazi trade unionists point out that Sithole has been directly
involved in discussions about the blockades. Last year he announced: "It's
either the king listens to us, his subjects, or he faces an escalation of
mass protests. We will not hesitate to blockade the borders as part of
these protests."

His disagreement with Cosatu, they feel, may have more to do with the fact
that the South African federation has completed a report on the management
of the SFTU, which is understood to be critical of Sithole. The
investigation was at the request of the International Confederation of
Free Trade Unions following complaints from unions in Swaziland about a
lack of transparency and accountability in the SFTU.

These criticisms surfaced obliquely but publicly at the May Day rally in
Manzini last year. Masuku, speaking on behalf of Pudemo, warned that the
affairs of all sections of the democracy movement had to be transparent in
their actions and accountable to their members.

Yesterday Masuku would not be drawn on the issue, remarking only that
Sithole's earlier comments about the blockades had been "unfortunate and
ill-timed".

It was a comment typical of the diplomatic remarks that publicly abound as
a major fence-mending exercise gets under way. May Day should reveal how
successful this exercise has been or whether any new fissures exist in the
political landscape of Swaziland.

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2. New initiatives after blocade of border posts. Moyiga Nduru (IPS), 14
April 2006.

Activists lobbying for democratic reform in Swaziland have vowed to push
ahead with their campaign, even though several of them were temporarily
detained this week for blocking the five border posts between South Africa
and Swaziland.

"We'll meet with our counterparts in Swaziland to chart a way forward. We
are right now consulting with each other and we will agree on a date for
mass action as soon as we can," Bongani Masuku, secretary general of the
Johannesburg-based Swaziland Solidarity Network, a non-governmental
organisation, told IPS.

Twenty-five pro-democracy campaigners were arrested on the South African
side of the border at various crossings Wednesday, and charged with public
violence and disturbance. Police said they had been forced fire rubber
bullets to disperse the marchers, after they refused to heed warnings to
end their protest.

Those detained included Joe Nkosi, deputy president of the
Johannesburg-based Congress of South African Trade Unions (COSATU), and
Cedric Cgina, deputy president of the National Union of Metal Workers of
South Africa -- also headquartered in the South African commercial hub.

Confirming their eventual release, COSATU spokesman Patrick Craven told
IPS that the campaigners had been granted bail of between eight and 82
dollars.

"We will fight these cases. We will demand that the cases be dropped
altogether," he said. "We also want the conduct of the police investigated
so that similar incidents can be avoided in the future."

Craven further emphasised that, while South African unions were involved
in lobbying for democracy in Swaziland, the latest initiative was being
spearheaded by Swazis.

"This campaign is entirely a Swazi campaign. We are guided by what they
decide. It will be quite wrong for South African trade unions and civil
societies to decide for the Swazis," he noted.

"But what's clear is that the struggle will continue."

Despite the arrests, Masuku described the blockade as successful. "It drew
the necessary international attention to what's happening in Swaziland. It
also put the Mswati regime in the spotlight," he said.

The protest was planned to coincide with the date on which King Sobhuza,
father of the current Swazi monarch, Mswati, declared a state of emergency
in the country 33 years ago. Under the state of the emergency, Sobhuza
banned all political parties, introduced 60-day detention without trial,
outlawed marches and demonstrations - and scrapped the constitution.

While a new constitution has since been introduced, it is viewed by some
as tightening the monarchy's grip on the country; and, opposition parties
remain outlawed. The lack of far-reaching reform has prompted the
Swaziland Solidarity Network and the banned People's United Democratic
Movement (PUDEMO) to declare April the 'Month of Focus on Swaziland'.

Despite intimidation and harassment, PUDEMO is holding rallies around
Swaziland, and lobbying for international sanctions against the monarchy.

"We are also demanding that treason charges against 15 of our comrades,
who were arrested last year, be dropped," PUDEMO President Mario Masuku
told IPS in a telephone interview from Swaziland.

In addition, "We are demanding that our comrades in exile, 30 of them, be
allowed to return home,'' he said. Most of these persons are living in
South Africa, Britain and Australia, according to Masuku.

Bongani Masuku believes the 54-nation Commonwealth, a body which groups
former British colonies -- including Swaziland -- could do far more to
encourage democracy in the kingdom.

PUDEMO has also complained that the 14-nation Southern African Development
Community (SADC), of which Swaziland is member, is turning a blind eye to
developments in the country.

"We have written three letters, the latest being early this year, to SADC
in the last three years, and we have not received any response. We are now
planning to travel to Botswana for a face-to-face meeting with SADC
secretariat officials," said Mario Masuku.

The Treatment Action Campaign (TAC), a non-governmental group based in
Cape Town that lobbies for wider availability of anti-retrovirals, has
added its voice to those criticizing the lack of democratic rights in
Swaziland -- saying this has affected the health of Swazis.

"Life expectancy (in Swaziland) is estimated to be approximately 33,
possibly the world's lowest. Its Human Development Index rating (from the
2005 United Nations Human Development Report) is falling, primarily due to
the AIDS epidemic: nearly 39 percent of adults aged 15-49 are estimated to
be HIV-positive," said the TAC, in a statement issued Thursday.

"The Kingdom suppresses dissent and political parties are outlawed. The
King demonstrates callous disregard for the rights of women. This is not a
political climate conducive to improving health-care."

Swaziland currently has the world's highest adult HIV prevalence rate.

Added the TAC, "Swaziland is a neighbour of South Africa, supplies this
country with labour and is a member of the African Union. There is a moral
obligation for South African civil society and government to assist the
people of Swaziland in their struggle for democracy and freedom."

According to Mario Masuku, the monarchy continues to downplay the growing
demands for democratic reform in Swaziland.

"Like all dictatorships, they continue to deny Swazis their rights," he
noted. But, "The people will win."

----------------------------------------

3. Swazi king lashes out at South African trade union federation, Cosatu.
News24.com (SA), 15 April 2006.

Africa's last absolute monarchy, King Mswati III, has accused Cosatu of
seeking to undermine Swaziland after it began a border blockade this week.

Speaking to the royalist Weekend Observer, King Mswati said it was
"unfortunate" that "certain groups or individuals" had embarked on an
exercise which he charged was aimed at undermining the landlocked
kingdom's economy, riding roughshod over its independence and sovereignty.
"No matter how small a country may seem, its sovereignty should be
respected. We are all equal and are bound by UN protocols.
"All governments must work in harmony to ensure that any threats to
international peace are nipped in the bud", he was quoted as saying.

His outburst came after union activists blocked border posts between South
Africa and Swaziland on Wednesday to put pressure on the king to embrace
democratic reforms and democratise the landlocked kingdom.
The king thanked local trade unions affiliated to the Swaziland Federation
of Trade Unions (SFTU) and the Swaziland National Teachers Association
(SNAT) for not taking part in the blockade.

"We are happy that the Swazi people resisted the elements which wanted to
make trouble. This shows a sense of maturity and a consideration for the
country and its people. Anything that seeks to undermine peace, the
economy and the country's security must be opposed by all", Mswati said.

-----------------------------------------

4. Producing ethanol from sugar may rescue cane growers. 11 April 2006
(IRIN).

Swaziland's troubled sugar industry is turning to ethanol production, a
petroleum substitute distilled from molasses, as a way to rescue
profitability and jobs.

"There is a bright future in this. Ethanol prices are going up in Europe,
just as sugar prices are declining," John du Plessis, managing director of
the Royal Swaziland Sugar Corporation (RSSC), explained.

Sugar was Swaziland's top export earner, thanks to a generous price
subsidy from the European Union, which purchases 30 percent of production.
However, the industry shuddered last year when Brussels renegotiated its
contract to pay 37 percent less - throwing thousands out of work.

"This has had a serious consequence for all components of the Swazi Sugar
Industry, from the large companies to the small growers. It also has
implications for government revenues, since tax obtained from the sugar
sector is shrinking as earnings and profitability decline," said Mike
Matsebula, chief executive officer of the Swaziland Sugar Association, at
an industry meeting last week.
Since 2000, the government had encouraged small-landholder farmers to form
cooperatives and grow sugar, in an effort to wean them from
drought-sensitive crops like the staple food, maize. Declining revenues
have seen some cooperatives unable to service bank loans, and fail.

"You can eat sugar cane, but not like maize," said Jabu Mkombe, a
disillusioned farmer from the eastern Lubombo Region.
Ethanol production will open a new market for sugar cane: the RSSC can
distil 14 million litres annually, with some sold to Europe as potable
ethanol, which is slightly more refined than ethanol and is used to power
motor vehicles.

A $21 million Ethanol Expansion Project will boost capacity to 32 million
litres a year. The South African firm, Logichem, has been working on a
$17.3 million distillation facility since September 2005.

Automobiles adapted to run on ethanol can be tuned to use an
ethanol-gasoline blend of 15 percent ethanol upward, or run on 100 percent
ethanol.
"The first vehicles in Swaziland to be run entirely on ethanol will be our
company cars," said du Plessis. The RSSC is importing two vehicles on a
trial basis from Brazil, whose large sugar crop has made it largely energy
independent as a result of ethanol.
"New legislation in Swaziland is required before we can sell ethanol to
government or the general public, but any vehicle can be adapted to
ethanol use," said du Plessis.

The distillery will absorb all excess molasses production. Export markets
in Southern Africa and elsewhere are being explored for Swazi ethanol.

-------------------------------------------------

5. Associated British Foods (ABF) steps up move on South African sugar
firm. Amanda Andrews, The Times (UK), 14 April 2006.

Associated British Foods has appointed NM Rothschild, the investment bank,
to advise on its approach for Illovo, South Africa’s biggest sugar
producer, The Times has learnt.

The appointment of the bank, which also advised ABF on its successful bid
for Littlewoods, came as it emerged that Illovo appears to have been
delayed in examining a rival approach from the French sugar producer
Tereos.

The bid process is thought to have been stalled by the complexity of
Tereos’s proposal, according to sources close to ABF.
It is understood that Illovo’s management travelled to Brazil two weeks
ago to scrutinise Tereos’s assets there.

While ABF has proposed offering cash for 51 per cent of Illovo shares,
although an indication of the price is not known, Tereos had a more
complicated plan in mind. Tereos suggested grouping together its sugar
assets in Brazil and Mozambique with Illovo in exchange for new Illovo
shares, then topping up its stake to at least 51 per cent with a partial
offer to shareholders.
Illovo is valued on the Johannesburg stock market at around £520 million.

ABF would not confirm what stage the sale process was at.
Illovo had been expected this week to issue a recommendation to
shareholders about which offer it preferred, but it is understood that the
board is not yet in a position to do so.
It is understood that the board is waiting until it has firm offers from
both groups.
A spokesman for Illovo said: “The situation really is that the ball is in
their court, to the extent that we need to receive from either or both of
them firm offers. So until such time as that occurs, we’re playing a
waiting game.”
ABF, the owner of Silver Spoon sugar, refused to comment on whether the
company had tabled a formal bid, but last night it insisted that it was
still keen to pursue the South African company.

Illovo has operations in South Africa, Malawi, Zambia, Swaziland,
Tanzania, Mozambique and the United States.
The approaches for Illovo have emerged ahead of key reforms of subsidies
for sugar producers in the European Union. The reforms have sparked a hunt
for new sources of raw sugar supply by European producers.

Some analysts have forecast that Europe’s 20 million tonnes of annual
sugar output will fall by around three to five million tonnes as many
farmers in the least productive countries, such as Greece, Portugal, Spain
and Italy, cease cultivation.
At the same time, the world’s poorest countries, such as Mozambique, will
get free trade access to the European Union in 2009 as part of the bloc’s
sugar reforms.

Tereos, a co-operative venture that is owned by 14,500 French farmers,
says that it wants to create a listed southern hemisphere sugar champion
by grouping together most of its cane sugar assets with those of Illovo.
A sugar analyst in Johannesburg, who declined to be named, said it was
surprising that no firm bids had yet been submitted. “Illovo must be a
highly attractive asset for European sugar companies,” he said.

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6. Swaziland@Newsletter Documentation:

(i) AFRICAN DEVELOPMENT BANK SWAZILAND COUNTRY STRATEGY PAPER 2005-2009.
Operations Department ONCB 2005.

Excerpt:
Governance: Swaziland operates a dual system of governance that is a
product of two influences: the traditional system and western models of
governance, with His majesty the King at the apex of both systems. In
pursuit of this unique governance system, Swaziland has endeavoured to
develop modern political and administrative structures complemented by the
traditional institutions. The country operates a decentralised system of
governance with three tiers: national/central government, local
government, and regional structures known as Tinkundla. This system has a
number of advantages including national cohesion, which is necessary for
peace and stability.

However, one of the unintended consequences of the system is that there
are de-facto two bureaucracies running parallel though interrelated. The
central government and local government systems follow the western model,
while Swazi customary law, which is largely unwritten, governs the
traditional structures. Other challenges to the governance system include
the limited revenue sources for the urban and regional areas, weak
administrative and financial management capacity at the local level, and
limited decentralisation of power.

In recent years, the threat to the rule of law and legal uncertainties,
especially with regard to the interference of the executive with the
judiciary and Parliament have emerged as major challenges. The government
has, however, recently taken significant steps to improve governance in
the Kingdom, including the constitution-making process and administration
of justice and law reform. Also, in order to prevent corruption, which is
considered to be a growing problem in Swaziland, Government has
established an Anti-Corruption Commission to carry out corruption
prevention measures and investigations on corruption complaints. However,
the Commission has been criticised for being slow in instigating actual
prosecutions. This is exacerbated by the fact that since its establishment
in 2000, there is still no enabling legislation to make it functional.

For full report:
www.afdb.org/pls/portal/url/ ITEM/080127119E0EACC8E040C00A0C3D37FC
--------------------------

(ii) INTERNATIONAL MONETARY FUND. THE KINGDOM OF SWAZILAND. Staff Report
for the 2005 Article IV Consultation
Prepared by the Staff Representatives for the 2005 Consultation with
Swaziland. Approved by David Andrews and Juha Kähkönen, January 23, 2006


I. INTRODUCTION

1. Swaziland is a small, open economy, with close trade and financial ties
with South Africa.
It is a member of the South African Customs Union (SACU) and the Common
Monetary Area (CMA). The Swazi lilangeni exchanges at parity with the
rand, which is also legal tender in the country. There are no exchange
controls between CMA countries. Trade among SACU countries is free of
tariffs and duties. About half of fiscal revenues come from Swaziland’s
share in the SACU joint customs and excise pool. South Africa absorbs
about 60 percent of Swazi exports, and provides 80 percent of the
country's imported goods and services, including most electricity and all
petroleum products. Remittances from migrant workers are an important
source of income for Swaziland, amounting to about 5 percent of GDP in
recent years.

2. Economic growth in Swaziland has weakened over the past decade.
Since South Africa democratized in 1994, Swaziland has lost part of its
attractiveness to foreign investors. As foreign direct investment inflows
declined, real GDP growth fell from 3.6 percent in the 1990s to just over
2 percent since 2000. Swaziland’s economy is based
mainly on agriculture and agro-processing. In recent years, the garment
sector, benefiting from preferences under the US African Growth and
Opportunity Act (AGOA), has emerged as one of the largest employers in the
country. At its peak, in early 2004, it provided about one quarter of
formal sector jobs.

3. Although Swaziland is a low middle-income country, poverty is
widespread,aggravated by food shortages in parts of the country and a
severe HIV/AIDS epidemic.

A highly skewed income distribution, persistent drought, and an
inefficient internal market for agricultural products have contributed to
shortfalls in food production. The World Food Program estimates that about
20 percent of the population are in need of food aid
during 2005/06. HIV prevalence is among the highest in the world. As a
consequence, overall mortality has doubled since the 1990s, and life
expectancy has dropped from 57 years around 1990 to 33 years.

Full report at
http://www.imf.org/external/pubs/ft/scr/2006/cr06106.pdf

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SWAZILAND@NEWSLETTER is published by Southern Africa Contact (SAC,
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