Building Prosperity Through Trade and Investment

July 6, 2005
Mountain Inn, Mbabane

      Welcome to what I hope will be a continuing dialogue between the public and private sectors, the government of the Kingdom of Swaziland and the United States government, on creating an improved investment climate in Swaziland.  I am pleased to see such a large group gathered here today and I am particularly happy to welcome our visitors from USAID’s Regional Center for Southern Africa and the Hub - most of who are responsible for the studies you have read, such as the Investor Roadmap and the Transportation Study.  I also want to thank SIPA—Bhekie Dlamini and his staff--for all of their hard work in assisting our visitors and arranging this conference.  SIPA is central to any new strategy that Swaziland will adopt to diversify its economic base and improve its investment climate - so I am pleased to work with them.

      Before I go any further, I want to remind you of the upcoming seminar in Dakar, Senegal, entitled the “AGOA Forum 2005” which runs from July 18-21.  If you are interested in learning more, we have information at the back of the room. 

      As you know, this same cast of characters, SIPA, RCSA, the Hub, and the Embassy met in early March with many of you in the room today.  The purpose of that meeting was to talk about how Swaziland can best use the opportunities presented by AGOA as catalysts for economic diversification. 

      The central theme of today’s conference is to advance to the next stage in the evolution and implementation of a national strategy on economic diversification.   Swaziland must take an active leadership role in this process.

AGOA

     Swaziland, like many other countries in Africa, faces a serious challenge: how to extend the benefits of AGOA beyond the textile sector into other profitable sectors.  A careful plan regarding Swaziland’s potential to expand its AGOA export base is urgently required and must be the priority of the proposed national diversification task force - meeting at this conference for the first time. This assessment needs to take stock of short-term opportunities, as well as longer term ones, to include linkages with productive sectors in South Africa and other countries in the region.

      In the short term, Swaziland must focus its diversification efforts on value-added products.  For example, Swaziland has a high degree of national expertise and competitiveness in two products that have AGOA tariff preferences: glassware and dried fruit.  The point is to identify more of these products (of the 6,000 eligible under AGOA) where Swaziland has a comparative advantage and move forward. 

Investor Roadmap and the Transportation Study

      While studying the effects of the end of the multi-fiber agreement, Amanda Hilligas of the Trade Hub came to Swaziland where she learned what many of you already know:  Swaziland’s transportation costs are higher than most other areas in the region and often times transportation of goods is unreliable.  She recommended a detailed review on the industry and today I am pleased to say that we not only have copies of that report available for those of you who have yet to read it, but that we also have several of the drafters here to speak to you.  

      The transportation report notes that because Swaziland is landlocked, transport costs play a critical role in overall national competitiveness. There is an urgent need to consider immediate strategies for improving the transport and logistics system detailed in the transportation study.

      In working closely with SIPA and discussing some of the difficulties foreign investors face when first doing business in Swaziland, we decided to capitalize on some of the “best practices” already working in other countries.  Sutherland Miller came to Swaziland and met with many of you.  He drafted an Investor Roadmap (again available in the back if you haven’t received a copy) that highlights numerous issues commanding urgent attention by both public and private sectors.

      Areas highlighted by the report include: 1) the need to improve procedural transparency regarding investment related procedures, 2) the need to improve policy coordination among government departments and agencies, and 3) a review of the investment incentives systems.

      A key recommendation of the study is the urgent need for the establishment of a national consultative forum that will facilitate exchange of information between all stakeholders and ensure that national priorities are developed with the full participation of all parties including the private sector.  That recommendation is being met with the formation of the diversification task force.

     A final note is for me to make a comment about corruption and application of the rule of law:  progress on creating better conditions for trade and investment are directly undercut by corruption in all its many dimensions and manifestations.

    All the hard work that goes into helping Swaziland identify and implement improved trade practices through expensive studies and seminars and so forth can all be undone by the actions of corrupt officials or through non-application of the rule of law.  Corrupt practices lead as well to further damage to Swaziland’s international image – another important aspect of attracting foreign investment.  We are pleased to have been assisting the Kingdom of Swaziland assess its anti-corruption laws and practices and we urge the strong pursuit of reform in this area and a determined effort by the GKOS to root out and destroy the cancer of official corruption.

    Ladies and gentlemen, the U.S. Embassy in Swaziland, along with our colleagues from USAID, are very pleased to be a serious partner with Swaziland as you seek to make this country a better place to invest and do business and in so doing create enhanced and improved economic opportunities for Swazis – who deserve and expect nothing less.

    Again, I am pleased to be with you today and tomorrow and extremely pleased to be a part of this program.  Thank you.