Budget focuses on humanitarian issues

Humanitarian issues occupied a large portion of Finance Minister Majozi Sithole's 2004 budget, which was presented to the parliament of Swaziland on Wednesday. "Issues of social inequities and good governance have to be addressed," Sithole told MPs as he described the requirements for attracting the investment that could bring much needed employment and poverty relief. "High unemployment in the formal economy and AIDS have pushed a majority of the population to live on less than a [US] dollar a day. Two-thirds of our people live in poverty," Sithole said. AIDS was only going to get worse, and would bring 20,000 deaths annually to Swaziland by 2009, he noted. In a country heavily dependant on agriculture for export products - and creating livelihoods for the 80 percent of the population living as peasant farmers on communal Swazi Nation land - AIDS and drought would make 297,000 people, out of Swaziland's population of 970,000, dependant on food assistance by June. "2003-04 will be the worst year of drought since the drought began [three years ago]," Sithole said. Despite widespread poverty, a concentration of wealth in a minority of hands has given Swaziland one of the world's highest divides between rich and poor. The government would like to reduce the gap between the wealthy haves and the majority of have-nots to 40 percent through poverty reduction efforts. These include expanded foreign trade, and the introduction of a Value Added Tax (VAT) to be borne by the nation's consumers. Peasant farmers would be encouraged to grow sugar cane and other crops, launch community tourism initiatives and begin small enterprises, said Sithole, while cautioning that the success of these projects would depend on the drought situation. Sithole noted that "since 1999, 28 garment factories have opened because of AGOA", the United States African Growth and Opportunities Act, which drops import duties and quotas for Swazi-made goods entering the American market. More factories were expected to open this year, bringing 8,000 jobs, while existing factories planned to expand. "We have one of the most trade-dependant economies in the world. We must work harder to expand markets," the minister urged. Swaziland, as part of the South African Customs Union (SACU), has entered into trade negotiations with some non-traditional partners like Brazil, Argentina and Uruguay in South America, as well as India and mainland China. When contacted by IRIN, the Swaziland embassy of the Republic of China (Taiwan) declined to comment on possible ties between the kingdom and mainland China. Swaziland is one of the few countries with diplomatic ties with Taiwan. In return, Taiwanese garment factories have spearheaded the expansion of the kingdom's manufacturing sector. "There has been no significant economic disinvestment from the country this past year," Sithole told MPs. Because of increased manufacturing activity, GDP growth had reversed a precipitous 15-year decline that reached a historic low of just 1.7 percent in 2002 - half that of the previous year. 2003 saw a slight improvement to 2 percent, and a slight increase to 2.5 percent was predicted for 2004. Listing Swaziland's advantages to foreign businesses, the minister declared: "Investors will find here that security, electricity, good water, road infrastructure, are second only to South Africa." Swaziland is heavily dependent on South Africa's economy, which absorbs 70 percent of the country's exports, and provides 90 percent of goods and services imported into the kingdom, including all petroleum. "Government's poverty reduction strategy is aimed at empowering people to generate their own incomes. A Poverty Reduction Monitoring Unit has been put in place by government to assess the effectiveness of government poverty programmes," Sithole told parliament. A programme to ensure that all children could attend school was at an advanced stage. "Over the years, government has provided substantial monies to education. We are committed to free primary education for all children. The HIV/AIDS epidemic has led to a new disadvantaged group of children in our society, which also has to be addressed," he said. The education ministry was prioritising school payments for orphans, impoverished and vulnerable children. "Government expenditures will continue to be much higher than revenues. This cannot continue," Sithole warned, but offered no cuts in government programmes or services. Rather, he mentioned new programme spending for the security forces and other government departments. Among large infrastructure projects, government would finance a new dam in the Lubombo region to bring clean water to 250,000 people - about a quarter of the population. The finance minister praised "a new spirit of cooperation between employer and employees - a reduced number of strikes is evidence of this". Swaziland's labour organisations have been at the forefront of the country's pro-democracy movement, but recent efforts to mobilise workers for mass strikes to protest against monarchical rule were not as successful as in the 1990s. Despite complaints by Swazi workers of low wages and exploitation at the hands of Asian-owned garment factory managers, only one factory was affected by an extended strike last year. Emphasising the challenge of the AIDS epidemic, Sithole concluded his speech with health sector developments, such as new funding for programmes to encourage behaviour change by individuals to reduce HIV infection. Funding to the agriculture ministry would expand to ensure food assistance to orphaned and vulnerable children. "Food, shelter, health and protection from neglect are essential for all these children," Sithole said. "We must take into account government's financial constraints, but I would urge all stakeholders to think of ways to better provide health services for our people."