June 8, 2006

No end in sight to job losses

Sugar production and textile manufacturing in Swaziland are on their way out, taking tens of thousands of jobs with them. Just how far Swaziland's employment figures have deteriorated is evidenced in research being carried out by the International Labour Organisation (ILO). "We are surveying all private businesses, and we estimate there are 20,000 formal-sector jobs in all of Swaziland. This is down from 65,000 jobs in 2002," said Happiness Dludlu, National Project Coordinator for the ILO in Swaziland. However, Vincent Ncongwane, Secretary-General of the Swaziland Federation of Labour, estimates that fewer jobs have been lost: "I would think the number of jobs would be higher - closer to 30,000 - but that is still less than half of what we had four years ago." According to Ncongwane, a drop in employment could be explained by ongoing retrenchments throughout the economy, and the closing of labour-intensive factories in the garment industry in particular.

Economists and union leaders, like Ncongwane, are also wondering whether the 2000-02 rise in jobs, when Asian garment manufacturers set up shop in Swaziland and created tens of thousands of employment opportunities, was a temporary blip. "The clothing-makers came to Swaziland from Taiwan to take advantage of Swaziland's preferable trade benefits with the US under the African Growth and Opportunity Act. Since then, Swaziland's status under the act has been uncertain and the Swazi currency has also doubled in strength against the dollar. This made Swazi garments expensive overseas, and put further pressure on Asian-owned businesses here," said Robert Maxwell of the Swaziland Exporters Association.

The ensuing rise of cheaply priced Chinese garment exports throughout the world saw the closure of several large Swaziland-based clothing manufacturers. Mduduzi Gina, Deputy Secretary-General of the Swaziland Federation of Trade Unions (SFTU), said the government had miscalculated in promoting growth in one industry - garments - by one national investor - Taiwan. "We need a variety of investors. We should never befriend investors solely for political reasons," said Gina. Swaziland is one of the few countries with diplomatic ties to Taiwan, but does not recognise the People's Republic of China. Taiwan returned the favour by encouraging its garment-makers to invest in Swaziland.

Swaziland's sugar cultivation and processing industry has also been shedding jobs. Sugar is the top export product, and until last year the top export revenue earner. Thousands of Swazi workers were laid off in 2005 and several cooperatives failed because of declining profits, after currency appreciation and cheaper Brazilian sugar made the local product uncompetitive internationally. According to Mike Matsebula, CEO of the Swaziland Sugar Association, the European Union (EU) purchases about one-third of Swaziland's sugar output, and will do so again this year. But the price the EU pays is expected to decline by 37 percent next year, putting further pressure on the industry and its jobs.

In 2002, 66 percent of Swaziland's 1.1 million population lived below the poverty line, and current unemployment is estimated at 45 percent. No recent data is available to show how many more families have plunged into poverty in the wake of the formal-sector job losses since 2002. Khabo Dlamini, Principal Labour Officer of the Ministry of Enterprise and Employment, commented, "There is not a lot of new job activity in the country - we haven't seen big companies opening with a large number of employees." (IRIN)


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