South Africa's Swaziland Bailout: A Political Anti-climax?
South Africa's granting of a 5 year loan worth R2.4 billion to Swaziland has been met with a backlash of critique since the loan conditions are perceived to be counter productive in instrumentalizing significant democratic reforms.
Dimpho Motsamai, Researcher, African Conflict Prevention Programme, ISS Pretoria Office
South Africa’s granting of a R2.4 billion loan to help address Swaziland’s liquidity crisis - without explicit political stipulations - has divided public opinion. The Swaziland financial bailout has lent itself to Chinese etymology that equates crisis with opportunity. In the context of Swaziland’s rather rebellious relationship with democracy, South Africa’s rescue package could be seen to either be addressing a crisis or as an opportunity. In other words, a well-managed crisis by both the intervening country and the recipient becomes an opportunity toward constructive and meaningful change; while a mishandled opportunity could lead to yet another crisis.
The call for loan requirements on the Swazi bailout, known in aid technical jargon as conditionalities, has been a subject of intense debate in South Africa. The Congress of South African Trade Unions (COSATU) and the African National Congress Youth League (ANCYL) have already denounced the current modality seen as devoid of serious stipulations that lay a firm foundation for political change in the absolute monarchy.
However, there are some implicit political conditions, hidden in the professed ‘confidence-building measures’ as the South African government calls it. According to South Africa’s finance minister Pravin Gordhan, the loan and other support measures to Swaziland are to be ‘guided by the Joint Bilateral Commissions for Cooperation (JBCC) agreement, which promotes democracy and the respect of universal human rights’. The exact detail of these confidence building measures and subsequent mechanisms for ensuring compliance is yet to be clarified in addition to how much is required to buffer the country against the risk of permanent recession and social unrest in the longer term.
In the face of relative domestic pressure in Swaziland from a coalition of public sector unions and banned political parties under the banner of the Swaziland Mass Democracy Movement to enact political governance reforms, the perception has been that the economic crisis is a blessing in disguise. The strong support to the pro-democracy movement from their long-standing solidarity partner, COSATU as well as the ANC and its Youth League, raised expectations that the ANC government would not pussyfoot around the political equation in Swaziland, rather it would put emphasis on enacting democratic reforms in addition to the usual fiscal ones. SA’s loan facility does not; however, seem to support calls for unconcealed pressure on the Swazi regime. Even the cogency of the mooted establishment of a Ministerial taskforce comprising officials from the Department of International Relations and Cooperation (DIRCO,) the National Treasury and the Department of Trade and Industry (DTI), responsible for mapping the framework for dialogue on financial assistance-linked political reforms with Swaziland remains unclear.
On the fiscal side, however, there are several explicit reforms as articulated by Minister Gordhan. These include calls for the tabling of the Public Finance Management Bill in parliament by October 2011, implementation of the Fiscal Adjustments Roadmap by February 2012, protecting the peg between the lilangeni and the rand, among others. These are mostly well known to Swazis having been well articulated in the Swazi government’s budget speech of 2010/11 and in the widely debated Fiscal Adjustments Roadmap (FAR).
The Swazi government’s self-declared ‘business unusual’ policy in addressing the budget deficit starting with a 14% cut on base budgets; emphasis on reducing its high wage bill through controversial salary cuts and entrenchment in the civil service sector are largely some of the sources of dissent fuelling protest action from the civil sector unions in recent months. In fact, according to the budget speech document, the Swazi government was ‘able to solicit the support of the nation in the pursuit of the difficult policies and interventions that will promote fiscal stability and growth’. The same document articulates ‘no policy can be credible unless it has the political buy in and from the civil society’. Yet it emerges that there is no buy-in from the labour unions deadlocked in negotiations about the implementation of the FAR since its development last year, nor from political formations declared as terrorist organisations under the 2008 Suppression of Terrorism Act.
The pro-democracy group that has latched on trade union dissent remains unequivocal that the financial meltdown is not simply due to the current lack of financial resources but largely ‘a direct result of the total breakdown in good governance, rule of law, public accountability and responsible leadership spanning many years, coupled with the absence of effective participation of the people in the affairs of their country.’ What has also been underlined is the lack of alternative austerity proposals (other than FAR) from government, including reductions in the royal household budget and using revenues from the two government owned development funds, Tibiyo Taka Ngwane and the Tisuka TakaNgwane.
While lending the absolute monarchy money could save the country from implosion in the wake of the budget crisis in the offing since 2009, the imperative for certain conditionality not only relating to fiscal reforms but also political governance ones is unavoidable. Indeed, the country, whose Transparency International Corruption Perception Index ranks it at number 79 out of 160 countries; which lacks effective national systems for planning, budgeting and reporting on aid and has experienced declining donor assistance - in particular direct budget support since 2006 - may actually meet the economic conditions as stipulated by the South African government. But, as the February 2011 launch of the Paris Declaration Aid Effectiveness Survey in Swaziland alludes, pervasive poverty; significant inequalities of wealth; skewed income remain challenges that have made aid effectiveness and the impact of development resources insignificant. The downside of an economic centered approach is that it may sustain the political survival strategy of the current regime, thereby making it more difficult to influence incremental reform to democratise the political system; give the regime intransigence such that it confidently renegades to its innovation that the country ‘does not need democracy’; allow government to atomize the democracy movement and erode possibility of developing a broad-based consensus on requisite political reforms; and grind down any vehicle for stronger rural political participation and inputs into the democratisation discourse.
Indeed the Swazi fiscal crisis is a matter of the country’s national sovereignty as the South African government has maintained. However, the policy of ‘good neighborliness’ as affirmed by International Relations and Cooperation Minister Maite Nkoana-Mashabane during DIRCO’s weekly media briefing on 6 July 2011, depending on the objective of the aid, should also ideally find strong resonance in South Africa’s foreign policy goals - the promotion of democracy and human rights. In that context, the objective to help instrumentalise significant political change should not border on low-key to ambiguity. Promoting democracy from the outside is certainly a challenging task, and whether the JBCC platform is indeed going to facilitate some re-apportioning of political power or force popular accountability, is debatable. The perceived link between the lack of democracy in Swaziland and gross mismanagement of resources may imply that the economic governance status quo is maintained, which then makes economic reform as challenging as outright political reform.
