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LETTERS TO THE EDITOR
By The Editor on July 16 - SWAZI TIMES -16-Jul-2009
Could you kindly allow me a short space in your widely read newspaper, the Times of Swaziland to air my views to our economists, financial and legal advisors, parliamentarians and all those who care to know about the financial crisis that has its ripple effects all over the world.
Ripple Effect What do I mean by a ‘ripple effect’, you may ask? The following are best examples of a ripple effect. When you throw a stone into a dam with still water, you’ll see a splash and hear the sound as the stone hits the water. You might notice concentric circles rippling out from the centre point of where the stone hit the water. It is a guarantee that the thrown stone will always have other effects. It might frighten a nearby duck that leaps out of the water, hit another rock and bounce off, or scare the hell out of a bunch of fish, or scare the hell out of a group of crocodiles conspiring on their next attack as it sinks to the bottom of the dam. What started as a stone’s throw into the dam has caused change through a single and simple act.
The link to the financial crisis The above example explains exactly how the financial crisis is affecting economies the world over. The US started this by giving mortgage to non-deserving people, the people did not pay their bonds, banks suffered, the banks’ executives continued milking the already dead cow by announcing huge profits in order to get huge bonuses. It is for this reason that headlines like ‘Company A makes over E300m profit’ get shivers down my spine. These figures get inflated for the bosses to get bonuses, and guess what these bonuses can pay their entire employee base for a month or two if re-invested in the organisations. The ripples started on the once stable dam (world economy), the ripple effect hit the UK bank Northern Rock. More banks filed for bankruptcy.
Turning a blind eye to reality When I read the local newspapers, our local economists started commenting about the financial crisis affecting only the powerhouses of this world. My question then was, when big economies come crushing down, then what about our small Swaziland? I think I was just being paranoid about the whole thing because this was not an issue to our parliamentarians, it was just my problem. When this started our government, instead of trying to understand the whole thing, they went ahead with their expenditures turning a blind eye to the reality of tumbling world economies. I cannot start counting the expenditures; it would be a waste of time and space. Today, in less than 12 months since the financial crisis started, the number of companies filing for bankruptcy are estimated to be 14 in Swaziland; the country which was not so long ago announced to be immune to the financial crisis by its economists. Try to imagine the dent that this puts on our reputation in terms of investment conditions. Who would ever want to invest in a country where in a space of eight months, 14 companies file for bankruptcy? This is bad. Think about the job losses. I guess the work for those whose responsibility is to lure investors into the country to provide employment has just been made worse. All your efforts have just been washed down the drain. It really is a sad situation.
Do we have a contingency plan? In this kind of a situation, the powerhouses of this world applied a contingency plan, that is governments of the affected nations bailed out the bankrupt companies to give them a lifeline. Here is my question to our government. Do we have the capacity to apply damage control? Please note that I am not talking about World Bank loans here. This is not the time to make more debts. I am also not talking about printing more money because we might end up having a E1m note which is worth nothing like our brothers and sisters in one of our neighboiring countries. Can our government intervene and bring back to life the closing companies and hence the many jobs for the Swazi nation? Lobengula MT Dlamini ePitoli
If the answer to my question is not positive then I will add another question: are we ready for an increased crime rate because of unemployment? Uprisings become a reality when people have nothing to eat.
Recommendation It would be very lame, undiplomatic and unprofessional for me not to at least give a recommendation at this point. My recommendation would be for our government to start investigating on the extent of the situation. Instead of our honorable parliamentarians being busy investigating fights by their female counterparts, among other unnecessary issues, they should focus on this issue. I believe it is of national concern. They should find a strategy to avoid more company closures, because I believe more are still to follow suit.
My other recommendation is directed to the executives of companies, please stop being greedy and for once stop inflating your profits for your fat bonuses. Start taking pay-cuts and stop the bonuses to sustain your businesses. I have heard of a company requesting its employees to volunteer to work for a month without pay or to take unpaid leave, talk about cost cutting measures. This might not be practical for the majority of Swazis who live from hand to mouth, however it is can be applicable to our executives, PSes and honorable parliamentarians (tip for our government to save money). Start working on strategies to sustain your companies in these tough economic times. This is not time to bury your heads in the sand and claim it won’t catch up with you. Be proactive and keep your businesses going.
Opinions and Ideas In closing I would like to say whatever is written in the articles is solely my own opinions and does not in any way reflects the opinions of any company or organization I am affiliated with. In all due respect any opinions or ideas expressed herein are not meant to insult the authorities of our country. The opinions and ideas expressed herein are also not in any way associated with any terrorism activity.
In crafting this piece I made it my responsibility and I tried my level best not infringe on anyone’s personality rights. If it in any way and by any change stepping on anyone’s toes, please consider it unintentional, because there is not offence intended.
Yours Truly Lobengula MT Dlamini ePitoli
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