ECONOMY: South Africa Maintains Ambigious Relations With SADC

By IPS Correspondents Reprint | | Print |

Gumisai Mutume

JOHANNESBURG, May 18 1998 (IPS) - When president Robert Mugabe recently lashed out at Pretoria for dragging its feet on the reduction of tariffs on Zimbabwean products his statement highlighted South Africa’s ambiguous regional relationship.

While South Africa is a member of the 14-nation Southern African Development Community (SADC) she runs a series of bi- lateral treaties with other SADC members and continues to enjoy a positive balance of payments at their expense.

South Africa is also part of a series of smaller regional trade groups such as the Southern African Customs Union (SACU), and is currently negotiating access into the European Union market, agreements which commentators say will harm priority given to SADC.

The most common utterances here on the importance of SADC to South Africa is that South Africa cannot be an island of prosperity in a sea of poverty hence she must stretch out a hand to the region and assist in re-construction and development.

But of prime importance is the market SADC presents, with 130 million people. Pretoria exports 10 times as much as it imports from its neighbours and it is this state of affairs that has continued since South Africa joined SADC in 1994 and which raises questions about the regional super power’s good will.

According to a report by the South African Institute of International Affairs (SAIIA), SADC countries are important to South Africa economically but SADC as an organisation is not.

“Because South Africa can deal with its neighbours on a bi- lateral basis — and most of its neighbours want preferential arrangements with the largest economy in the region — SADC is not essential to increase the type of trade that brings advantages,” notes the report.

For instance, South Africa is party to a preferential trade agreement with Zimbabwe signed in 1964. The accord which offers reduced tariffs on Zimbabwean textiles and agricultural products expired in 1987 and South Africa has still not renewed it prompting Mugabe to cry foul.

“South Africa is expected to play a leadership role. South Africa is not clear on how to lead the region without forcing its way, nor do the other countries know what kind of leadership they would respect, if any,” notes SAIIA. “Many of the impasses within SADC are related to South Africa’s role.”

Ironically SADC was created to counter dependence on South Africa during the height of apartheid, in 1980.

There is growing debate within South Africa about the relevance of SADC, an organisation which business deems ineffective.

According to businessman Bertie Lubner, SADC has failed the region and what is needed is a revamped, leaner organisation that will put into effect the various agreements member countries have signed.

Others argue that the chances of success for market-driven regional integration in Africa need to be qualified as the majority of countries lack the economies capable of driving the process. Many economies produce a high proportion of raw materials and non-durables, and possess poor infrastructure and restrictive investment climates.

Given the tariff wars plaguing the region there is very little in the way of seriousness towards a regional free trade area. The Free Trade Protocol was signed by SADC heads in 1996 and should take effect in 2004.

“Any moves toward the implementation of a SADC free trade protocol is likely to be fraught with difficulties,” notes Garth Abrahams of the University of the Witwatersrand. “The complications include a lack of sufficient commitment on the part of certain member states …”

South Africa says it is more concerned about the sensibilities of its neighbours and prefers a cautious approach to regional matters.

“We are not the United States of southern Africa and will not do anything single-handedly,” trade minister Alec Erwin told a conference on regional integration here over the weekend.

While Europe is Pretoria’s biggest market, SADC countries import manufactured goods contributing to the country’s industrialisation compared to the raw materials and commodities bought by European countries.

South Africa’s trade and investment ties with other countries remain skewed out of the continent. Foreign direct investment by South African firms abroad stood at 14 billion U.S. dollars in 1994 and of this only one billion dollars was in African coun tries. Since independence in 1994 the figure for Africa has risen to about 2 billion dollars.

Only about 8 percent of South Africa’s total trade flows are with other African countries. SADC countries are also to blame, only 30 percent of their imports originate in South Africa, the rest coming in from traditional overseas trading partners such as the Commonwealth and the European Union (EU).