In the era of globalization, low production costs and various tax breaks are commonly used as incentives to attract foreign investors, but for Swaziland — the smallest country in the southern hemisphere — another factor, albeit one that is hard to quantify, has been proposed — peace.
“Never, since World War II, have we experienced any kind of war or threat,” Swazi Minister of Economic Planning and Development Hlangusemphi Dlamini said in an interview with Taiwanese reporters visiting the country late last month.
“It is something that makes us proud as a country, something that we can say to the world, maybe if they come and invest and make Swaziland as a destination for Africa, a lot can be achieved,” Dlamimi said.
Still, a drop in foreign direct investment (FDI) flowing into Swaziland in recent years has made some officials wonder if peace is not so much a strength as it is a weakness.
“There are opportunities for investors to invest in Swaziland and southern Africa ... but the main thing is people don't know about Africa and Swaziland,” Swazi Minister of Foreign Affairs and International Co-operation Lutfo Ephraim Dlamini said.
Swaziland is a very peaceful country, said Lutfo Ephraim Dlamini, formerly the minister of commerce, industry and trade, “but the problem is, the headlines are about war and fighting, so the peace that we have, the tranquility, has become our disadvantage.”
According to AfricanEconomic-Outlook.org, which combines experts from the African Development Band and other agencies providing data and analysis of 50 African economies, says Swaziland has been adversely affected by the global economic slowdown, as its economy is closely linked to South Africa.
Investment in Swaziland went down in real terms from 20.1 percent of GDP in 2002 to 11.4 percent in 2008 and 10.6 percent last year, the research body said.
Hlangusemphi Dlamini attributed the decline to the sharp appreciation of the South African rand — which the Swazi currency, the lilangeni, is pegged to — since 2002.
“These are things that no one can control,” Hlangusemphi Dlamini said.
With a gradual recovery in the global economy, the Swazi government is trying to highlight its relatively favorable investment climate compared with other countries in Sub-Saharan Africa, with whom Swaziland shares development challenges.
Pointing to South Africa-based Taiwanese textile and apparel manufacturers that will be looking at possible investments in Swaziland this month amid concerns over crime in South Africa, Ambassador to Swaziland Peter Tsai (蔡明耀) said that peace was a characteristic that had strong appeal with foreign investors.
Swaziland’s characterization as a “safe and secure” location for business, families and property is a clear advantage over other African countries, he said.
Another distinguishing feature of Swaziland in terms of investment promotion policy is that it allows full repatriation of profits and dividends of enterprises operating in the country, Tsai said.
“Not many African countries adopt the measure, mostly because of limited foreign exchange reserves. However, this is not a case in Swaziland,” Tsai said, adding that Swaziland has sufficient foreign exchange reserves to sustain a liberalized foreign exchange mechanism.
Lutfo Ephraim Dlamini said the policy was guided by the view in Swaziland that “we believe in this country. You invest your money. You make profits and you are able to take the profits away.”
RSS