Is Havana on brink of change?

In late August 2011, the government of President Zuma, represented by the Deparment of International Relations and Cooperation will meet with the Cuban government to explore ways in which both countries can work closer.

Since Fidel Castro fell ill and handed the reigns to his younger brother, we have seen some small changes in the policies of Cuba's communist government. The most recent change took place recently when the Cuban National Assembly voted in favour of private property, effectively allowing Cubans the opportunity to buy and sell private property for the first time since Fidel Castro came to power. Somewhat of an anathema in communist philosophy and something sure to make Stalin and Lenin turn in their graves. Ownership of private property is the first step towards a free-market economy and Cuba could well be on its way towards a free-market economy, perhaps not tomorrow but in my opinion, certainly within the next couple of years, or immediately after the death of Fidel Castro, whichever comes first.

Outside of tobacco, sugar, nickel and steel, Cuba has some proven oil reserves, estimated at over 178 million barrels. The country is on the brink of a major transformation and South Africa could be at the forefront of reaping early rewards, through early engagement with the Castro government.

Scary thing about Swaziland bailout

Manzini CBD

A lot has been written about Souh Africa's R2,4 billion bailout of the Swaziland government, and the debate revolves around whether not SA should have made the funds available, given the challenges the country faces on home soil. I'm not sure where I stand on the matter, perhaps because I'm more concerned as to how Swaziland, or any country for that matter, got into a situation where revenue streams dried-up seemingly overnight without alternatives or substitutes. Since losing  a big chunk of its lucrative share of the SA Customs Union revenues, the Swaziland economy has been on a steady slide, and my fear is that this slide will continue foe a while yet.

It is clear that in order for Swaziland to survive as  a nation, those in leadership position in that country have to find other means through which the state can earn much needed revenues to keep the economy ticking along.

To my mind, by far the most scary aspect of SA's bailout is the size of it in relation to the Swaziland economy. The R2.4 billion which South Africa has offered represents just over 5% of the Swaziland's GDP. To put it into perspective, if South Africa was to require a bailout equal to 5% of the country's GDP of R2.7 trillion, this would be equal to a staggering R150 billion. An injection equivalent to 5% of the country's GDP indicates just how distressed the Swaziland economy is and I suspect there will be more such bailouts before the country can stand on its own feet. Forget about economic turmoil in Europe, we have turmoil right on our door step and the next country to watch is Lesotho.

The Dictatorship Dilemma, Mubarak et al...

There have been many dictators in the history of human kind, some were benevolent and others were downright cruel and heartless. Some of the more famous dictators include the irrepressible Idi Amin, the high-spending Mabuto Sese Seko, and the unapologetic Augusto Pinochet. Almost every continent, except parhaps for North America has produced a fair share of dictators. One thing common about dictators is that once in power they hold on to it with their dear life. Over time these dictators amass absolute power and with it comes corruption at a grand scale.

For such dictators, the biggest fear is that of losing power and being brought to book by the angry citizens. Therefore, in an effort to avoid possible recriminations, dictators often devise ways in which to legitimize their position and the methods used range from silencing those who oppose them to simply postponing elections indefinitely. Recent examples of dictatorships include the Castro brothers in Cuba and perhaps more topical, Hosni Mubarak of Egypt.

Mubarak is one dictator who made the biggest mistake, which no dictator should ever make, which was to give up his power in the hope that the angry citizens would forgive him for being a reasonable man who stepped down when the crowds demanded it. Having stepped down, what most dictators fear came to pass, he was arrested and now Mr Mubarak is facing the music in the courts of Egypt where he is being tried for crimes against humanity.

The dilemma Mr Mubarak must have faced at the height of the protests, was whether to hold on to power with his life or step down and risk being brought to book. Clearly he decided to do the latter. The truth is that no leader should ever be faced with the choices that Mr Mubarak had to make. Indeed, leaders are supposed to come and go either through the normal election process or through the limited term approach. History will show that countries where leaders come and go peacefully tend to be more prosperous and progressive than countries where leaders cling to power.