By IPS Correspondents
WINDHOEK, May 27 1998 (IPS)

While Southern African leaders ran through the usual list of calls for debt relief and political stability during their recent economic summit, a new spirit emerged as leaders recognised the need to work more closely with the private sector and labour.

The message which emanated from more than 60 working sessions of the Southern African Economic Summit in Windhoek, the Namibian capital, was clear — increased productivity within the framework of liberalising economies and political stability is a necessity, but this has to be co-ordinated within a regional framework, taking in account a tripartite alliance, involving government, the private sector and labour.

“African governments used to think that the private sector exploited workers, but now they realise the private sector can strengthen the economy. The most promising strategy for a prosperous future for Africa is the formation of a partnership between the public and private sector,” said Koosum Kalyan of Shell South Africa.

“PPP’s(Private-Public Partnerships) enable the private sector to influence the attitudes and opinions of political leaders, while the public sector in turn, can uplift communities by providing better service delivery,” Kalyan added.

From the outset of the two-day summit (May 17 and May 18), the Southern African heads of state set the agenda by declaring their unequivocal support for the liberalisation process, spearheaded by privatisation of state-owned companies, which is taking place in the majority of the countries.

But in order for their efforts at market reforms to succeed, the leaders once again called for debt forgiveness. Zambian President Frederick Chiluba led the way by saying that the debt should be written off so that African countries can spend their resources on industrialisation, human resources development and economic development.

“The developed world cannot claim to be helping Africa to reform when it is, at the same time, holding a gun to its head,” he said.

Well-known Harvard economics professor Jeffrey Sachs, who led the team which compiled a report on African Competitiveness which was presented at the summit, supported this call, saying that African countries had to make a bolder and unified appeal, while developed countries had to realise that debt forgiveness was the only realistic option.

Some economists in the region however differed with the politicians and warned that the debt issue was not so simple.

Rudolph Gouws of Rand Merchant Bank South Africa said that guidelines would have to be attached to debt write-offs and that debt forgiveness could only apply to bilateral debt and not commercial debt.

And, Nico Czypionka of Standard Bank South Africa expressed dismay at the “populist groundswell” for debt forgiveness, and questioned the sincerity of leaders who called for debt forgiveness, while arriving in falcon jets at such summits.

Participants to the meeting also recognised the increasing role of labour, noting that labour productivity and a low skills based had hampered Africa’s competitiveness.

Other problems, they added, included the lack of co-operation, or a common vision, between management and workers; unharmonised regulations with regard to work permits and visas; and the existence of too many non-tariff barriers, of which telecommunications and transportation deficiencies were common.

According to Malcom Hughes, the chief executive officer of Proudfoot in the United Kingdom, the countries in the Southern African Development Community (SADC) face the difficult challenge of transforming “their businesses to compete globally without endangering the hard-won stability and the fragile social contract between management and labour”.

Inefficient labour markets have become a major impediment to foreign investment, Kwesi Botchey of Harvard University said. “The inability of labour markets to supply appropriately skilled labour in the right numbers has a negative effect on investment and productivity. With widespread poverty, there is a tendency to push up wages through legislation. If this trend is compounded by overvalued exchange rates then Southern African labour costs are not competitive,” he said.

SADC members are Angola, Botswana, Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Swaziland, Seychelles, South Africa, Tanzania, Zambia, Zimbabwe.

If the SADC region is to truly transform itself from a “co- ordinating body” to developing long-term goals, participants constantly reminded the regional heads of state that they can no longer go it alone.

Business, labour and government have to establish a common vision which would lead to common strategies, said Humphrey Khoza, President of the South African Chamber of Business.

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