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Southern African Backlash Feared

2005-12-08  Staff Report 2

Southern African Backlash Feared
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"By Surihe Gaomas WINDHOEK ALTHOUGH investments from South African businesses play an increasingly important economic role in Southern Africa, that country's growing regional dominance over small neighbours may lead to a 'backlash' against regional integration. It is feared that while the region may enjoy the development stimulus from an economically stronger African country, this may ultimately undermine the development of local businesses in other SADC countries. Concerns are that a regulatory framework to deal with the increasing market integration of the region is still lacking and the impetus is upon African governments to tackle the issue head on. These are but some of the many recommendations contained in the newly launched 5th Edition of 'Monitoring Regional Integration in Southern Africa Year Book' by the Namibian Economic Policy Research Unit (Nepru) yesterday. The 225-paged edition, which focuses primarily on the process of regional integration in Southern Africa, is based on contributions to the 8th workshop on Monitoring the Process of Regional Integration in SADC which was held in Windhoek on 11-12 June 2003. Since 1999, under the funding of the Konrad Adenauer Stiftung, similar workshops were held eventually leading to the latest edition of the yearbook which is edited by the Director of Nepru Dirk Hansohm and three other political scientists and economists from Stellenbosch, South Africa, and including several other African writers. Under 12 chapters, the yearbook addresses the economic, political and institutional issues related to the topic. Focussing on the impact of South African investment dominance on the region, Neuma Grobbelaar of the Southern African Institute of International Affairs in Johannesburg writes that while this may be a positive gain for small neighbouring countries, ""the gains are not automatic"". The danger however is that of a backlash resulting from the increasing dominance of South Africa in the region. Sentiments have been expressed that regional integration should give small African countries a voice in the world of global economy and politics. A review of the region's Foreign Direct Investment (FDI) makes it apparent that private businesses take advantage of the conducive market environment in SADC. ""However, there is a need for African governments through their political willpower to break away from the ""limited implementation capacities"". Lately, a clear observation has been made of national governments' failure to implement institutional frameworks. For instance, the ""Southern African Customs Union (SACU) concluded a new agreement in 2002, which came into force in July 2004, but towards the end of this year, the operational institutions that give content to the new agreement have not yet been established."" ""Thus, while economic integration in real economic and political terms is carrying on, institutional integration is lagging dangerously behind,"" are the concluding remarks. One of the resolutions states that for prosperous economic environment, good governance plays a vital role and therefore needs to ""catch up with market-led processes of integration"". Notably, a key conclusion that has been drawn is that compared to the entire African continent, the subregion is highly integrated, better developed and better governed. At the same time, the civil society like that of the churches, non-governmen-tal organisations, trade unions and the press have come out as formidable players in reinforcing the pro-cess of regional integration. ""It is becoming increasingly difficult for governments to ignore its voices,"" stated the authors of the yearbook. It also becomes apparent that issues that were previously seen as sovereign are constantly coming under regional scrutiny. The experts say that limited capacities of national governments, including weak regional bodies of SACU and SADC, are major constraints to regional integration. It is only through new institutional economics that the region can move towards a more modern economically viable activity."
2005-12-08  Staff Report 2

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