REPORT ON DEVELOPMENTS WITHIN THE SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC)

18 February 2007

'It is obvious that these developments (the Free Trade Area and the Customs Union) would represent major steps forward towards the economic integration of the SADC region. Of course, we must make the point that this integration is not an end in itself.

It is an important part of the objective shared by SADC member states, as rapidly as possible to reduce poverty and underdevelopment, improve the lives of all our people and achieve balanced and shared growth and development for the countries of our region. It therefore follows that the steps we must take along the path to integration cannot be measured just against technical indicators but by the extent to which they contribute to our shared developmental goals'.

President Thabo Mbeki

Introduction

The aim of the Southern African Development Community (SADC) is to promote sustainable and equitable economic growth and socio-economic development through efficient productive systems, deeper integration and cooperation, good governance, and durable peace and security, in order for Southern Africa to emerge as a competitive and effective player in international relations and the world economy. To this end, SADC pursues a development integration approach, recognising the political and economic diversities of the constituent member states, including their diverse production structures, trade patterns, resource endowments, development priorities, institutional affiliations and resource allocation mechanisms.

As stated by President Thabo Mbeki at the conclusion of the Extraordinary Summit of Heads of State and Government held in Midrand on 23 October 2006, SADC strives for the achievement of balanced and equitable regional integration as a fundamental condition for:

·         The sustained and sustainable development of the Southern African region;

 

·         The shared success in freeing the ordinary working people of the region from the scourges of unemployment, poverty and underdevelopment;

 

·         Creating a firm basis for the region successfully to respond to the challenges of globalisation, including strengthening South-South relations of equitable and mutually beneficial cooperation;

 

·         The creation of the possibility for Southern Africa to make its necessary contribution as a region to the vitally important project of African integration and unity; and

 

·         The region's related capacity to contribute to the emergence of a new world order that would fully restore Africa and the African Diaspora to their rightful place among the world community of nations.

 

Implementation of the Regional Indicative Strategic Development Plan (RISDP)

In August 2003, the SADC Summit adopted the Regional Indicative Strategic Development Plan (RISDP), as the basis for the rationalisation of the SADC Programme of Action resulting from the restructuring exercise. Essentially, RISDP provides strategic direction for achieving SADC long-term goals of deepening regional integration. The plan outlines strategies and timeframes for achieving these goals over the next fifteen years. The road map for deepening regional integration is to establish a Free Trade Area by 2008, a Customs Union by 2010, a Common Market by 2015, and a Monetary Union by 2016. Naturally, the effective operationalisation of the SADC Organ on Politics, Defence and Security Cooperation, and the Strategic Indicative Plan of the Organ (SIPO) as its programme of action, will underpin R!SDP. The core purpose of the two programmes is deeper regional integration, to be achieved through:

·         Peace and security;

 

·         Transparent and accountable governance; and

 

·         The establishment of a common market.

 

In his address to the SADC Council of Ministers in Gaborone in February 2006, the SADC Executive Secretary, Dr Thomas Salornao said that initial analysis of the priority intervention areas within the SADC Secretariat shows that the following two intervention areas are central to the overall process of economic development and integration:

 

·         The first area is trade/economic liberalisation and development including, among others, free movement of goods, services and factors of production, and intra­regional investment and foreign direct investment.

 

·         The second priority area is related to the development of efficient infrastructure and services to facilitate the free movement of people, goods and services across the region, to be enhanced through interventions in the following key areas: transport and communications; Information and Communications Technology (lCT); energy; water and the establishment of a Project Preparation Facility as part of the SADC Development Fund to enhance these development efforts within the SADC region.

 

Dr Salomao furthermore said it was clear that SADC also has to deal with the regional dimensions of emergencies such as PiIV and AIDS, natural d.isasters and food security.

These interventions are included as priorities in the implementation of RISDP, as directed by the Extraordinary Summits on HIV and AIDS and Food Security. Dr Salomao suggested that all other intervention areas, including social and human development, gender and development, environment and sustainable development, must be pursued in as much as they contribute and add value to the core interventions as outlined.

The SADC Heads of State and Government, meeting in Maseru during the annual SADC Summit from 17 to 18 August 2006, validated and endorsed the following areas of regional cooperation and integration as the main priorities of SADC to deepen regional integration, at the current stage, based on the prioritisation process undertaken by the SADC Secretariat and approved by the Executive Council in February 2005:

·         Politics, defence, peace and security;

 

·         Trade and economic liberalisation;

 

·         Regional infrastructure and services;

 

·         Special programmes of regional dimension such as food security, HIV and AIDS and gender equality.

 

Implementation of the Strategic Indicative Plan for the Organ (SIPO)

The strategic focus of the SADC Organ on Politics, Defence and Security is aimed at the gradual development of a common regional foreign and security policy, aimed at the following:

·         Strengthening the security of SADC and its member states;

 

·         Promoting democracy and the rule of law, and safeguarding human rights and basic freedoms, also including the free movement of persons within the region.

 

·         Enhancing continental peace efforts and increasing international security;

 

·         Promoting better communication and greater convergence of the member states' positions on all major foreign policy issues, and, if possible, a joint course of action;

 

·         Strengthening cooperation between law enforcement and judicial authorities in all aspects related to joint prevention and combating of crime (especially terrorism, trafficking in arms, illicit drugs and human beings, corruption and fraud).

 

The Strategic Indicative Plan of the Organ (SIPO) was adopted by the SADC Heads of State and Government in August 2004, in order to provide guidelines for the implementation of the Protocol on Politics, Defence and Security Cooperation in terms of a five-year plan. In essence, SIPO serves as an enabling instrument for the implementation of the SADC developmental agenda, as embodied in RISDP. The core objective of SIPO is to create a peaceful and stable political and security environment through which the Southern African region will endeavour to realise its socio-economic objectives. Comparatively, RISDP and SIPO are distinct, yet complimentary. It is imperative that, with respect to their respective implementation processes, special attention be paid to the maximisation and their synergies and the rationalisation of cross-cutting issues. SIPO provides for four main sectors, as follows:

·         Political sector;

 

·         Defence sector;

 

·         State security sector Intelligence); and

 

·         Public security (police) sector.

 

In his report to the SADC Summit in Maseru on 18 August 2006, President Hifikepunye Pohamba of Namibia, in his capacity as outgoing Chair of the Organ on Politics, Defence and Security Cooperation, outlined the current priorities of the Organ as follows:

 

·         Implementation of SIPO;

 

·         Consolidation of democracy and political stability in Southern Africa (with specific reference to elections in the region);

 

·         Establishment of the SADC Standby Force, comprising the following:

 

−        SADC Standby Brigade (military component);

 

−        Civilian Police (CIVPOL - police component); and

 

−        Region.ai Early Warning Centre Ontelligence component).

 

 

Extraordinary SADC Summit, Midrand, 23 October 2006

The Extraordinary SADC Summit held in Midrand on 23 October 2006 was convened for the specific purpose of reviewing the status of regional economic integration in Southern Africa, and to propose measures to accelerate the implementation of the SADC economic integration agenda. The Summit reaffirmed its commitment to regional economic development and underlined the need to mobilise resources in order to address issues of infrastructure, food security and other supply side challenges within the Southern African region.

The Summit noted that it is through the development of supportive infrastructure that the regional trade potential can be harnessed to the benefit of the people of the region. The Summit recognised the need for complementary instruments and policies to support the regional economic integration process, in order to achieve high and sustainable economic growth and development in order to eradicate poverty. To this end, the Summit urged all member states to formulate policies to forge convergence of SADC economies. The Summit reaffirmed the need to ensure that the process of deepening integration in SADC must always observe the principle of member states' equity, balanced development and mutual benefit.

The Summit also noted that SADC's trade patterns consisted mainly of commodities, to which end there was a need to diversify the economies of SADC member states and increase intra­regional trade and growth. In addition, the Summit noted that the establishment of the SADC Free Trade Area must take cognisance of developmental integration elements such as infrastructure, poverty alleviation and sustainable development.

To this end, the Heads of State and Government reiterated their commitment and underscored the need for SADC to complete its Free Trade Area by 2008 and to achieve a Customs Union by 2010, 2S planned for in RISDP, as this was important for the region to comply with the continental integration agenda and, concurrently, to ensure a meaningful participation in the world economy. Of particular significance, the Summit concluded that the SADC Free Trade Area programme was on course and that it will be launched, as planned, by 2008. The Summit noted that the Ministerial Task. Force and the Secretariat would undertake and finalise, by March 2007, a study that will evaluate an appropriate model for the SADC Customs Union, as well as road map towards the SADC customs union.

Following the Extraordinary Summit, President Mbeki suggested that, within SADC, any programme to promote greater trade integration in Southern Africa must be complemented by programmes of sectoral cooperation focused on the creation of conditions that will enable producers to emerge in member states. This will enable member states to take advantage of the additional market access opportunities that regional integration would create. To this end, President Mbeki articulated the priority, areas within SADC as follows:

·         Promotion of macro-economic convergence around agreed indicators;

 

·         Progress in terms of infrastructure development cooperation programmes, Spatial Development Initiatives and sectoral programmes;

 

·         Achievement of some level of hamonisation of industrial development strategies and competition policies, as called for in the SADC Trade Protocol; and,

 

·         Elaboration of a detailed and realistic Activity Matrix necessary to create the SADC Free Trade Area, to include processes to achieve balanced, mutually beneficial regional economic integration.

 

Comment

Whilst it has been pointed out that RISDP has unrealistic targets,. it should be appreciated that RISDP is indicative benchmarks and not prescriptive. As such, the target dates could be aspired to, and should not be cast in stone. Within the wider continental context, RISDP is meant to align SADC's agenda in deepening regional integration with that of the broader objectives of the African Union, aimed at establishing an African Economic Community in six stages by 2028. Stage 3 of the Abuja Treaty has the aim for the establishment of Free Trade Areas and Customs Unions at the level of each Regional Economic Community (REC) over a 10-year period, e.g. from 2007 to 2017. Therefore, there is no binding urgency to establish a SADC customs union by 2010 as called for by RISDP.

The particular advantage of SADC is that it enjoys this political commitment towards its road map at the highest level. This could be effectively and efficiently utilised in providing the momentum-driver in the area of trade/economic liberalisation and -development, which will provide for the free movement of goods, services and factors of production, and intra-regional investment and foreign direct investment. The dichotomy within SADC is that while the integration agenda enjoys declared political commitment at the highest level, objective progress is wanting. What should be of concern to SADC is the lack of momentum-drivers regarding the development of efficient infrastructure and services to facilitate the free movement of people, goods and services across the region.

Demonstrating the benefits to each member state of pursuing economic integration, it is essential to lobby and mobilise SADC member states to actively engage in the economic integration process, as a means of overcoming the unwillingness to surrender sovereignty and to garner public support for these endeavours. An independent evaluation of both the benefits and costs of economic integration is required. In addition, bilateral efforts must be strengthened towards the delivery of regional public goods in order to create an enabling environment for market integration. This includes the management of trans-border resources, including spatial development initiatives (SDls), development corridors, growth triangles, growth centres, transfrontier conservation areas and fishery resources.

As quoted from the SADC Amended Treaty, the respective national SADC structures within the member states are responsible for the initiation of projects and issue papers as an input to the implementation of RISDP, in accordance with the priority areas set out in the SADC Common Agenda. In this regard it is critical that the practice of over-relying on the SADC Secretariat to initiate issues and to provide content should be discarded, allowing member states to exercise their freedom vis-a-vis the initiation and implementation of RISDP programmes.

There is also an urgent need within SADC member states for a closer alignment and mutual reinforcement of their multilateral and bilateral priorities. The aim of this approach should be to give actual effect to the implementation of SADC.Protocols and Agreements, to which end it should be prioritised in multilateral and bilateral engagements between SADC countries.

Furthermore, member states will need to take a decision on which REC best serves their national interests and that pursue deeper economic integration. It should be noted that the African Union (at the continental level) is dealing with the rationalisation of RECs.

Before a SADC customs union can be discussed, one needs to consider the impact of the Southern African Customs Union (SACU), the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) , the Economic Community of Central African States (ECCAS) and the Indian Ocean Commission (IOC), as well as the Economic Partnership Agreement (EPA) negotiations configuration on a potential customs union.

Currently five SADC members belong to SACU, six belong to COMESA, one belongs to the EAC and two belong to ECCAS. That leaves only one member Mozambique, which does not belong to any grouping, which would contribute to an overtapping membership dilemma.

As stated by President Mbeki, any programme to promote greater trade integration in the Southern African region, must be complemented by programmes of sectoral cooperation focused on the creation of the conditions that would enable producers to emerge in the SADC countries, who would be able to take advantage of the additional market access opportunities that regional integration would create. By implication, this means the accordance of greater priority to the promotion of macrcreconomic convergence, infrastructure development cooperation programmes, SDls and harmonising industrial development policies.