International competitiveness at the expense of strengthening the local economy: what future for the Southern African Development Community (SADC)?
By Henning Melber
The New Partnership for Africas Development (NEPAD) seems to emerge increasingly as a type of mega-NGO to channel aid-funds into developmental projects, which at best claim but in reality fail to be driven by a desire towards enhanced regional collaboration.
The programmes and policies funded under NEPAD are implemented mainly by countries and not by regional bodies. Hence NEPAD in effect more undermines than strengthens an agency such as SADC (or any other regional institution).
This is a trend notwithstanding the fact that NEPAD attributes substantial relevance to regional bodies when identifying ways and means to achieve the defined socio-economic goals.
NEPAD claims that its agenda is “based on national and regional priorities and development plans”, which ought to be prepared “through participatory processes involving the people”. So far, however, no visible signs in the SADC would indicate that the collective (multilateral) efforts aim at a united approach of the region in its relations with the outside world.
Nor does NEPAD so far translate its noble aims into practical steps for implementation. The blue print emphasises sub-regional and regional approaches even under a separate sub heading. It stresses “the need for African countries to pool their resources and enhance regional development and economic integration – to improve international competitiveness”.
But the crux of the matter lies there: the emphasis on international competitiveness comes at the expenses of strengthening the local economy and the local people. Instead, integration in Africa should as a priority meet the socio-economic and environmental needs of its citizenries and not seek to turn even more into an export platform.
NEPAD claims further to enhance the provision of essential regional goods as well as the promotion of intra-African trade and investments, with another focus on “rationalising the institutional framework for economic integration”.
But again, such an approach neglects the local/internal in favour of the global/external orientation. The implementation of NEPAD will hence most likely have an adverse effect and assist in an increased outward orientation of a regional bloc at the expenses of internal consolidation.
It is interesting to note in this context, that notwithstanding the decisive role of South Africa within NEPAD, SADC has so far hardly acknowledged and certainly not embraced the initiative.
DIVISIVE FREE TRADE AGREEMENTS
The Free Trade Agreement between the European Union and South Africa (EU-SA FTA) negotiated since the mid-1990s, had a similarly divisive effect on the Southern African region by entering into a preferential trade relation with one country and thereby enhancing differences within the region resulting from existing conflicts of interest among the national economies.
South Africa herself, the monetary zone, the South African Customs Union (SACU) and SADC are already not in harmony and even less so given the effects of the FTA on regional economic matters. Hence the EU intervention adds more friction.
The new Economic Partnership Agreements (EPAs) negotiated between the countries in Africa, the Caribbean and the Pacific Islands (ACP states) on the one hand and the EU on the other hand not only seek to replace the previous Cotonou Agreement by means of sub-regional separate negotiations but also aim towards compatibility between EU-ACP trade relations and the World Trade Organisation (WTO).
They are hence dependent upon the settlement of the Doha Development Agendas controversial and yet unresolved issues.
In addition, the negotiations by the EU aim at separate accords with each region, and no country may negotiate in more than one bloc. As such, SADC is reduced to seven member countries (half of the 14 SADC states) under the EPA negotiations.
Countries may differ over the advantages between benefits from the continued protection of regional arrangements or the creation of individual preferential access within other trade agreements.
But, if regionalism is considered as a problem or obstacle towards further global harmonisation under the WTO, it stands little chances of being a viable point of departure for strengthening in particular the Least Developed Countries (LDCs) in the South within the global trade arrangements.
Instead, the predictable outcome of the current negotiations under the WTO related agreements will be a shrinking of “development space”. To avoid such in-egalitarian pseudo-partnerships, a shift in balance from the drive to homogenize trading commitments to other states towards granting states reasonable scope to choose appropriate levels of national protection is required.
A development strategy would therefore have to operate in a zone where both internal as well as external integration reinforce rather than undermine each other. Instead, issues of internal integration (including issues of regional integration) have largely dropped out of the development agenda as the gospel of the free trade paradigm dominates the discourse.
EU AND US AS PARTNERS?
The same limiting effects can be expected from the Free Trade Agreement between SACU and the USA.
The SACU-US FTA seems to promise nothing different from the US-American African Growth and Opportunity Act (AGOA), which tends to separate and divide instead of bringing African economies and interests closer. The benefits from AGOA differ among African countries according to their resources.
Ironically, within those countries having been allocated a LDC status under AGOA (receiving additional preferential treatment), external capital (from mainly East Asian countries) has managed to exploit the opportunities created for supplying the US market under preferential tax regimes with cheap textiles from these countries.
The by and large unqualified and underpaid workforce in the local sweatshops is hardly reaping any benefits from this super exploitation. Nor do these states, as initial investments and running costs for operations are substantially subsidised with public revenue.
Such recent trends indicate less rather than more regional cooperation and integration. Political and security interests might provide with increased support by the G8 (the group of 8 most industrialised countries of the Northern hemisphere) and the strengthening of initiatives towards closer regional collaboration in reducing armed conflicts and securing more stability.
Such stability continues, however, to be perceived as regime security, in contrast to a concept of human security. The latter would give primacy to human rights in favour of the citizens and not preference to the governments in power.
Even if there were achievements in this direction, the multidimensionality and heterogeneity of a region like Southern Africa is likely to persist and may eventually increase.
This does not prevent external support towards further positive regional interdependence. But this requires more than merely the opening up to the global economy. More so, it would have to re-visit matters of regional economic collaboration and seek involvement of the majority of the African population in these countries.
The current initiatives by the EU and the US under the WTO offer little to no promise to contribute to such a desirable tendency, neither in SADC nor elsewhere.
Henning Melber is Director of the Swedish Dag Hammarskiöld Institute. He has been Research Director at The Nordic Africa Institute in Uppsala and Director of the Namibian Economic Policy Research Unit (NEPRU) in Windhoek between 1992 and 2000.
Kilde: Swaziland Newsletter no 46, udgivet af Sydafrika Kontakt
