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INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 06 MBABANE 000048 
 
SENSITIVE 
 
SIPDIS 
 
DEPT PASS TO USTR (WJACKSON FOR AMBASSADOR MARANTIS); 
AF/S (MHARRIS) 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON ETRD OVIP MARANTIS DEMETRIOS WZ
SUBJECT:  SCENESETTER FOR VISIT OF AMBASSADOR DEMETRIOS MARANTIS TO 
SWAZILAND 
 
Summary 
------------ 
 
¶1.  (SBU) Swaziland is a politically stable country with significant 
democracy and governance shortfalls, and a divided civic community 
challenging the government's lack of response to these deficits.  It 
has a deeply traditional society with large economic disparities 
between the developed urban areas connected by well-paved roads on 
one hand, and rural areas suffering from severe water shortages and 
deep poverty on the other.  The nation suffers from the highest 
HIV/AIDS prevalence in the world.  Relations between the Government 
of the Kingdom of Swaziland (GKOS) and the United States are 
amicable.  The Swazis welcome increased U.S. participation in 
several areas, including national security; development of 
government institutional capacities; democratization programs; 
foreign investments, AGOA, and guidance on membership in the 
Millennium Challenge Corporation.  The greatest U.S. impact on 
Swaziland is through its HIV/AIDS programs, enabled by partners 
operating throughout the country.  DOD/PEPFAR (DHAPP) is a 
significant contributor to the Umbutfo Swaziland Defense Force 
(USDF) HIV/AIDS response.  At present, the most serious problem 
facing Swaziland is how to make up the 40 percent drop in Southern 
African Customs Union (SACU) revenues, its single largest source of 
income to finance its budget.  End Summary. 
 
Economic Hard Times 
---------------------------- 
 
¶2.  (SBU) You will be arriving in Swaziland at a time when a 
dramatic drop in SACU receipts, Swaziland's principal source of 
income, has forced the government to cut ministries' budgets and 
consider alternative ways to raise money to finance the 2010 budget. 
 Formerly, SACU receipts accounted for approximately 60 percent of 
the GKOS's budget, but for FY2010, Swaziland's share was slashed 
from 6 billon emalangeni (800 million USD) to 1.9 billion emalangeni 
(253 million USD) due to losses in customs revenue and the cost for 
Swaziland to repay overpayments from SACU in previous years.  At 
this writing, the Swazi government is seeking a loan from the 
African Development Bank to cover its budget deficit. 
 
¶3.  (SBU) While government interlocutors may ask for your help in 
getting the country out of its economic predicament through 
increased American investment in Swaziland, the Prime Minister 
almost certainly will request, at least obliquely, that President 
Obama receive King Mswati III.  The king has been on the throne for 
23 years and never has been received by the U.S. Chief Executive for 
an official working or state visit to Washington.  It is unlikely 
the Administration will consider such a request seriously in the 
absence of government progress toward granting greater liberties to 
the Swazi people. 
 
Relations with the United States 
---------------------------------------- 
 
¶4.  (U) The Government of the Kingdom of Swaziland (GKOS) values its 
relationship with the United States, both for the prestige of having 
a major country with a resident diplomatic mission here, and also 
for the humanitarian assistance the U.S. provides, particularly on 
HIV/AIDS.  The Prime Minister and other Cabinet officials are 
generally available to meet with the Ambassador or DCM. 
 
¶5.  (U) GKOS response to U.S. suggestions, demarches, and documents 
is frequently slow or non-existent.  It took steady effort for 
nearly two years to obtain an Article 98 agreement and the exchange 
of notes which brought it into effect.  Swaziland-specific studies 
conducted by the USAID Trade Hub in Gaborone -- AGOA 
diversification, an Investor Roadmap, a study on transportation, and 
a Combating Corruption in Swaziland Report -- were praised, then 
shelved.  Approximately 20 percent of the Investor Roadmap's 
recommendations have been implemented.  Insisting on a policy of 
non-interference in the internal affairs of other countries, and 
solidarity with other African Union nations, the GKOS has not voted 
with the United States on any of its "important issues" in the UN 
General Assembly in at least four years, although occasionally it 
has abstained when other African votes were in opposition. 
 
¶6.  (U) The Embassy's top Mission Strategic Plan priorities are 
democracy and good governance; economic development; and fighting 
the scourge of HIV/AIDS.  Some sectors of the GKOS are extremely 
dedicated to fighting HIV/AIDS, but they have insufficient backing 
from top-level leadership.  The new government, formed in late 2008, 
signed a bilateral "Framework" agreement that describes the mutual 
commitments the USG and Swazi governments have made in regard to the 
30 million USD PEPFAR funding that is expected to flow into this 
country annually for the next few years.  The fall in SACU revenues 
poses a threat to nascent progress in the country's ownership of its 
HIV response, as well as to the implementation of free primary 
 
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education.  The Embassy presses for greater governmental 
transparency, anti-corruption implementation, and a multiparty 
political arena, but because changing the traditional structure is 
anathema to the King and his advisors, these efforts have met with 
mixed success.  On economic development, the centerpiece of Embassy 
effort is a USAID-administered trust fund supporting the Swaziland 
Enterprise and Entrepreneurship Program (SWEEP), a five-year program 
which promotes small business formation and expansion. Its 
expiration in 2011 will be a significant loss to U.S. government 
visibility and impact in Swaziland. 
 
Political Overview 
----------------------- 
 
¶7.  (SBU) The Monarchy:  Swaziland has a ruling monarchy, composed 
of heads of state King Mswati III and the Queen Mother.  They are 
revered in this deeply traditional society.  The King holds Swazi 
land in trust for the nation, and parcels it out through the 366 
chiefs whom he appoints and who represent him at the local level. 
Despite the King holding absolute authority, he is not in total 
control of the GKOS decision-making process.  The King has a 
tightly-knit group of advisors (Swazi National Council) who filter 
information passed from Government Ministers to the King, and all 
responses from the King to the Ministers.  Members of the National 
Council are staunch traditionalists, and many are Christian 
Pentecostal ministers, traditional chiefs or healers, and former 
conservative government officials.  Few have experience with 
international travel, some are illiterate, and most are 
anti-democratic in our definition of the word. 
 
¶8.  (U) Parliament:  The King appoints two-thirds of the Senate and 
10 of the 65 members of the House of Assembly, and must assent to 
any legislation passed by the Parliament before it can become law. 
He appoints the Prime Minister (PM) and the other members of the 
Cabinet (on the PM's recommendation), and can dissolve Parliament at 
any time.  The Parliament has not taken action on many laws which 
must be amended to bring them into conformity with the 2006 
Constitution, causing conflicts in application. 
 
¶9.  (SBU) Parliamentary Elections: The most recent election was held 
in September 2008. Those elections were viewed as non-compliant with 
international standards.  Elections are held regularly (every five 
years), but since most power is concentrated in the King and 
political parties are not allowed to contest for any elected office, 
elections are more of an exercise in giving the people a pretense of 
participation than a contest for power. 
 
¶10.  (U) Umbutfo Swaziland Defense Force (USDF):  The USDF is 
responsible for external security but also has limited domestic 
security responsibilities, mainly patrolling the porous borders 
between South Africa and Mozambique.  Since a September 2008 car 
bomb detonated less than three kilometers from the King's 
administrative capital, the USDF has been charged with patrolling 
bridges along the highway running between the capital city of 
Mbabane and the industrial center of Manzini.  The USDF reports to 
the Minister of Defense, the King.  The principal secretary of 
defense and the army commander are responsible for day-to-day USDF 
operations. The USDF is generally professional, despite inadequate 
resources and bureaucratic inefficiency, but is susceptible to 
political pressure, corruption, and occasional human rights abuses. 
 
¶11.  (U) Constitution, human rights:  The constitution took effect 
on February 8, 2006, and is Swaziland's first constitution in over 
30 years.  The constitutional drafting process took ten years, did 
not include civic education about the purpose of a constitution, and 
excluded group submissions.  The Constitution confirms most of the 
King's powers; exempts the King, Queen Mother, and the senior prince 
from the law; and makes insufficient provision for separation of 
powers.  However, it does provide for a fairly comprehensive list of 
fundamental rights and freedoms, most of which were not previously 
protected by any law.  It also promotes women to the status of legal 
adults, and states that a woman cannot be forced to comply with a 
tradition to which she in conscience objects. 
 
¶12.  (U) In mid-2008, Parliament passed the Suppression of Terrorism 
Act (STA).  Most analysts view the act as excessively repressive. 
In October 2008, following the bomb detonation noted above, Prime 
Minister Barnabas Dlamini banned four political organizations under 
this act, then, in November, the leader of one of the banned 
organizations was arrested. He was released after almost one year, 
when the prosecution failed to present sufficient evidence to 
continue a trial. 
 
¶13.  (U) Judiciary: In 2002, Prime Minister Barnabas Dlamini (in a 
previous appointment) precipitated a judicial crisis when he 
announced that the GKOS would not obey a number of Court of Appeals 
decisions against the government.  The Court resigned en masse, and 
 
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no appeals were heard for two years.  The walkout forced the King's 
hand and he removed Dlamini.  The 2006 Constitution renamed the 
Court of Appeals the Supreme Court, states that the judiciary shall 
be independent, and that the courts shall interpret the 
Constitution.  After a five year hiatus, in 2008 the King 
reappointed Dlamini as PM.  The selection has been interpreted by 
many as a move to consolidate the powers of the traditional 
authorities and take back previous advancements in the rule of law. 
 
 
¶14.  (U) The country has two parallel legal systems: Swazi Law and 
Custom, and Roman Dutch Law, resembling that of South Africa.  Swazi 
National Courts apply Swazi law and custom on minor offenses, 
inheritance and land disputes.  The King appoints the judiciary on 
the recommendation of the Judicial Services Commission.  The GKOS 
has not obviously interfered in the judiciary's independence 
recently, but the judiciary usually delays delivery of decisions on 
controversial political cases calling for interpretation of the 
constitution.  The court system chronically suffers from 
insufficient funding, but last  year saw the number of Supreme Court 
judges climb from three to nine. 
 
¶15.  (SBU) Corruption:  GKOS officials agree that corruption is a 
severe problem in Swaziland. In 2008, the Minister of Finance opined 
that corruption cost the country approximately 5 million USD (40 
million emalangeni) a month.  The Anti-Corruption Commission was 
re-established in April 2008 after being disbanded in 2005.  Staff 
members were only recently appointed, and there have been no 
prosecutions.  Swazis with close connections to the royal family are 
generally considered untouchable. 
 
¶16.  (U) Political parties:  When the present King's father, King 
Sobhuza II, annulled Swaziland's initial constitution and instituted 
rule by decree in 1973, he specifically banned political parties. 
The presence of a political party was assumed to imply unhappiness 
with the rule of the king, and there must be no opposition to the 
king.  Since that time, the ruling class has argued that political 
parties are un-Swazi and divisive; in Swazi culture, disagreements 
are to be settled by discussion and consensus, not votes or clashes 
of ideology.  The 1973 Decree lapsed when the Constitution took 
effect in 2006.  The Constitution is silent on the question of 
political parties, but states that anyone standing for election to 
any position must compete on his individual merit.  Different GKOS 
officials have given differing views on whether political parties 
are now legal, and at least one group has gone to court to demand to 
be registered as a political party.  One case has stalled, 
apparently due to the group's inability to pay their lawyer, while 
another has been argued in the Supreme Court and is waiting for a 
decision. 
 
¶17.  (SBU) Civil society:  Non-governmental organizations operate 
freely in Swaziland, publicizing and advocating their views. 
However, politically active groups are weak, poorly organized, and 
have little impact on the government.  Most Swazis respect the 
monarchy and Swazi tradition, and though dissatisfaction may be 
growing, it tends to manifest itself in fatalism.  Although 
widespread political turmoil is unlikely, the use of the Suppression 
of Terrorism Act to ban the four most active opposition groups 
indicates that the GKOS feels it is under some degree of threat. 
One GKOS official confidentially termed the situation as 
"simmering." 
 
Economic Overview 
------------------------ 
 
¶18.  (U) GDP makes it a "lower middle income country," but income 
distribution is extremely skewed, with one of the highest Gini 
coefficients (60.9) in the world. The World Bank estimates twenty 
percent of the population controls eighty percent of the nation's 
wealth.  The GKOS states that 69 percent of Swazis live on less than 
seven emalangeni (under one dollar) per day.  GKOS estimates the 
official unemployment rate at 28 percent, while non-governmental 
organizations say it is closer to 70 percent.   The IMF estimates 
Swaziland's 2008 real growth rate as 2.6 percent.  Swaziland has an 
educated workforce and fairly good infrastructure, but suffers water 
shortages and depends on external generation for most of its 
electricity.  South Africa, which surrounds Swaziland on three 
sides, accounts for over 80 percent of Swaziland's imports and 74 
percent of Swaziland's exports.  Swaziland generally defers to South 
Africa in trade negotiations between the Southern African 
Development Community and other nations. 
 
¶19.  (U) Government revenue:  The GKOS collects tariffs, fees, and 
various business and individual income taxes, but normally depends 
on receipts from the Southern African Customs Union (SACU) for 60 
percent of its budget.  Declining SACU revenues are contributing to 
a substantial 2010 budget deficit.  South Africa's plans to adjust 
 
MBABANE 00000048  004 OF 006 
 
 
the current revenue sharing agreement will also negatively affect 
GKOS SACU revenue receipts over the next few years.  The Ministry of 
Finance has worked for several years to substitute a value-added tax 
for existing levies, without much progress, aside from the recent 
consolidation of several agencies into a unified Revenue Authority. 
The Ministry currently collects only twenty percent of taxes owed. 
IMF and World Bank officials have repeatedly counseled the GKOS to 
reduce the size of the civil service, which absorbs some 60 percent 
of the recurrent budget, and improve expenditure allocation.  The 
GKOS has not followed this advice, as the civil service is a 
controllable resource for providing jobs for the extended royal 
family and those close to them.  Swaziland's close association with 
South Africa in the Common Monetary Area (CMA) limits its autonomy 
in monetary policy.  The national currency, the lilangeni, is fixed 
at par with the South African rand, which is also legal tender in 
Swaziland. 
 
¶20.  (U) Agriculture:  Swaziland's economy is based on agriculture 
and agro-industry.  Almost 60 percent of farming is subsistence and 
accounts for most maize production and cattle raising.  However, 
drought has devastated maize and other crops in the lowveld for 
years, and 25 percent of the population requires food assistance. 
World Food Program has been providing food to about 20 percent of 
the population.  In 2007, the Embassy issued a disaster declaration 
because of drought conditions and extensive wildfires.  Last year, 
harvests were somewhat improved, but the rains were sporadic and too 
heavy at the wrong times in many locations.  The same is occurring 
this season.  Additionally, some analysts now believe that a 
dependency on food handouts has developed.  Part of the problem is 
that there is normal migration to the cities of ambitious young 
people.  Also, the high rate of HIV/AIDS infections and deaths in 
what should be the most productive age groups leaves only old people 
and children to farm.  Water for irrigation, and even for household 
use, is limited.  Large tracts of land along rivers are usually 
agricultural concessions (e.g. citrus and sugar cane plantations) 
from royalty to large companies they hold a major share in. 
Swaziland exports sugar, canned fruit, wood pulp, and soft drink 
concentrate (including to Coca Cola).  Cotton was once a major cash 
crop, but for the past four years the country has produced too 
little cotton to make it worthwhile to operate the ginnery.  The 
European Union will have reduced the price it paid for African sugar 
under preferential price agreement by 37 percent in 2010.   The 
United States allocates Swaziland a sugar quota that the latter 
rarely uses. 
 
¶21.  (U) Business:  Swaziland is eligible for benefits under the 
Africa Growth and Opportunity Act (AGOA).  Exports from Swaziland to 
the U.S. under AGOA and GSP provisions in 2007 were valued at $145.3 
million.  Swaziland provided factory shells and tax breaks to 
attract investors, mostly Taiwanese, who created garment assembly 
plants.  At their peak, the plants provided up to 30,000 jobs. 
However, following the lapse of the Multifiber Agreement in January 
2005, some plants closed and the number of jobs they provide fell to 
about 18,000.  High transportation costs and the strength of the 
rand against the dollar (as mentioned above, the Swazi lilangeni is 
linked to the rand at par) reduced the competitiveness of products 
produced in Swaziland.  There has been no substantial foreign direct 
investment in Swaziland during the past four years.  GKOS efforts to 
promote small and medium enterprises (SMEs) have had limited 
success, primarily due to government bureaucracy and the 
conservative lending policies of banks, most of which are branches 
of South African banks.  Swaziland places great hopes in tourism as 
an engine of development. 
 
¶22.  (U) Labor:  Several labor federations are active in Swaziland. 
Suspected of being incipient political parties, they are not popular 
with the GKOS.  They were especially active in the 2008 election 
year, calling for multiparty democracy and joining with the Congress 
of South African Trade Unions (COSATU) to protest King Mswati's 
policies.  They participated in a protest march at the SADC Heads of 
State meeting on August 16, 2008 and a September 2008 border 
boycott, and collaborated with COSATU to protest the King's 
appearance at the May 10 swearing-in ceremony for then South African 
President-elect Jacob Zuma.  Since the 2008 appointment of the 
current Prime Minister, unions have faced increasing police 
interference. 
 
¶23.  (U) In 2002, the AFL-CIO filed a petition to deny General 
System of Preferences (GSP) eligibility to Swaziland due to the 
country's non-conformity with internationally recognized labor 
rights.  The GKOS gradually implemented legislation and regulations 
to conform to these labor standards, and the petition was dropped in 
¶2006. 
 
HIV/AIDS 
-------------------- 
¶24.  (U) The 2006-07 Demographic and Health Survey (the first 
 
MBABANE 00000048  005 OF 006 
 
 
national survey in Swaziland to include HIV testing) estimated that 
25.9 percent of the population age 15-49 is living with HIV/AIDS 
(31.1 percent of women and 19.7 percent of men).  This constitutes 
the highest prevalence rate in the world.  With an estimated 80 
percent TB/HIV co-infection rate, Swaziland also has the highest 
tuberculosis rate in the world.  An estimated 110,000 children are 
orphans, many of them because AIDS has claimed one or both parents. 
By the end of 2010, this number is projected to rise above 120,000. 
 
 
¶25.  (U) In 1999 King Mswati III declared HIV/AIDS a national 
emergency.  The GKOS established the National Emergency Response 
Council on HIV/AIDS (NERCHA) to coordinate multi-sectoral HIV 
programs, has a National HIV/AIDS policy, and updates its HIV 
strategy every three years.  The GKOS provides anti-retroviral drugs 
free to approximately 30,000 Swazis.  However, due to the stigma 
attached to HIV/AIDS, many Swazis refuse to be HIV tested for fear 
of rejection by family and friends, loss of employment, and possible 
eviction from property. 
 
¶26.  (U) Most of the effort and money expended to fight HIV/AIDS in 
Swaziland comes from external donors, particularly the United States 
Government and the Global Fund against HIV/AIDS, Tuberculosis, and 
Malaria (funded approximately 30 percent by the  USG). 
 
¶27.  (U) In the past six years, the amount of USG aid allocated to 
HIV/AIDS- related programs in Swaziland has increased from about 
250,000 to 30 million U.S. dollars.  PEPFAR funds support national 
prevention efforts such as prevention of mother-to-child 
transmission, behavior change communication programs, male 
circumcision, and others. The PEPFAR program also supports expanded 
access to HIV counseling and testing, improved availability of 
laboratory services, and strengthening of a national supply chain 
and drug management system, which are all essential for enhancing 
the quality and scale-up of a holistic and integrated HIV/AIDS and 
TB care and treatment service.  PEPFAR provides institutional and 
human capacity building to address the serious human resource crisis 
that exists in both the public and private sectors, and supports 
multiple strategic information interventions to better report and 
understand the full impact of the HIV/AIDS crisis. 
 
¶28.  (U) As part of the PEPFAR program, in addition to the above, 
the U.S. Department of Labor sponsored a considerable intervention 
on HIV/AIDS prevention in the workplace, and for orphan and 
vulnerable children, from 2004-2008.  The U.S. Department of 
Defense, through its military-to-military program, has supported the 
establishment of the Swaziland Uniformed Services HIV/AIDS Alliance 
(SUSAH).  It is providing HIV/AIDS and TB prevention, care and 
treatment, strategic information, and health systems strengthening 
not only to the USDF, but also correctional and security services. 
 
 
¶29.  (U) The Peace Corps returned to Swaziland in 2003, at the 
invitation of the GKOS, specifically to provide interventions and 
education on HIV/AIDS.  The Peace Corps Volunteers - currently 64 in 
Swaziland - educate school children, youth, and their communities 
about HIV and its prevention, encourage Swazis to get HIV tested, 
promote access to care and treatment and good nutrition for AIDS 
sufferers, conduct life skill workshops and youth camps specifically 
urging youth to delay the initiation of sexual activity, and train 
community leaders about HIV/AIDS prevention and mitigation.  Much of 
this activity is also funded by PEPFAR.  Peace Corps plans include 
increased movement into the education system, with additional 
volunteers. 
 
Other USG Assistance 
---------------------------- 
 
¶30.  (U) USAID Southern Africa Trade Hub (Gaborone) works with the 
Ministry of Finance; Ministry of Commerce, Industry and Trade; 
Ministry of Natural Resources and Energy; and the Ministry of 
Agriculture.  The Embassy has small program funds via USAID for the 
Ambassador's Girls Scholarship Program, the Ambassador's Special 
Self-Help Program, and democracy and human rights programs.  Defense 
assistance, in addition to DHAPP noted above, includes the 
International Military Education and Training (IMET) program that 
funds approximately eight military personnel in external training a 
year, as well as leadership training through shorter seminars and 
exchanges. Additional exchange programs and educational 
opportunities operate through the Mission's Public Affairs Section. 
 
Diplomatic Community 
---------------------------- 
 
¶31.  (U) In addition to the Embassy of the United States, Swaziland 
hosts the Embassy of Taiwan, the Office of the European Union, the 
High Commission of South Africa, and the High Commission of 
 
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Mozambique.  The UN Development Program in Swaziland oversees the 
offices of the World Food Program, UNICEF, the World Health 
Organization, and UNAIDS.  It is anticipated that both Kuwait and 
Qatar will open embassies in Swaziland in the near term.