Industrialization prospects for Swaziland and the experience of newly industrialized countries

This paper analyzes Swaziland"s potential for industrialization by comparing its situation to those of four newly industrialized countries - Mauritius, South Korea, Taiwan, and Hong Kong - at the time when they were entering rapid growth periods. According to the report, Swaziland compares favorably to the four countries in terms of socioeconomic stability, cheap labor, climate for foreign investment, trade advantages, savings rates, and general macroeconomic policy. There is clear potential for increased employment through the manufacturing and export of labor-intensive consumer goods, and this process has already begun with investments in footwear, textiles, garments, furniture, and other products. The current level of investment is high (about 30% of GDP), and South African investors may increasingly locate in Swaziland to circumvent sanctions against their country. However, Swaziland is well behind the four comparison countries in terms of property rights, health, management skills, resident entrepreneurial skills, government administration, and degree of foreign ownership. The final section of the report makes recommendations for A.I.D."s role in helping Swaziland overcome these constraints to industrial development.