«ANSA Alternatives to Neo-liberalism in Southern Africa The search for Sustainable human development in Southern Africa Editors: Godfrey Kanyenze, ...»
However, any viable and sustainable alterative trade policy that is peopledriven and people-centred cannot be developed without factoring in labour. At the same time the labour movement must choose a strategic partner to address the challenge of aid dependency, poverty, disease, deindustrialisation, unemployment etc. For a start, mutuality of interest in fighting these scourges between labour and capital is a myth. This therefore becomes a collective challenge to the state and to labour not to fight each other but alongside the other against a corporate company enemy.
From the foregoing it is clear that both the state and organised labour run the risk of allowing their people-centred aspirations to be hijacked by global capital. There is a need to have a strong state to facilitate and steward a people-centred development agenda. For the state to achieve that strength, it must enter into strategic alliances with other stakeholders especially labour and a vibrant indigenous business class. The relations between these stakeholders should not be antagonistic but based on a common development focused and a people-centred national agenda.
While these stakeholders can still pursue their narrow sectional interests in the tripartite, they should however operate within a harmonised ideological framework, which seeks to empower the region's citizens and improve their bargaining strength and position in the international division of labour.
The challenge is simple and familiar. As Mhone put it, "if a developing country does not take proactive steps to modify its international economy and its position in the international division of labour, automatic market forces will tend to reinforce its status of internal dualism and external dependency and trade, aid and foreign investment will tend to be facilitators of such as situation" (Mahone 1997).
Bemoaning the continuation of economic and trade policies in the postcolonial states that are biased towards the formal sector, Mhone observes that "the critical factor has been the absence of a conscious strategy of agrarian and industrial transformation that would lead to the precipitation of a virtuous circular of dynamic interaction in the economy that would enhance labour absorption and internal accumulation on a self sustaining basis" (Mahone 1997).
Such a strategy can only be developed if there is a convergence of interest and resolve between those who have the executive and legislative powers and the various proactive interest groups. SADC members are at different stages of implementing empowerment policies, which vary in scope and intensity.
3. Towards an alternative trade policy From the foregoing, it is clear that the structure of Southern African countries with economies characterised by enclavity and dualism, does not allow for the development of vibrant internal trade as effective demand is suppressed and marginalised. It also does not cater for a dynamic and diversified external trade because of the dependent and unequal trade relations fostered by colonialism.
It is therefore imperative that any alternative trade policy should primarily challenge the structure of Southern Africa's individual country economies through the adoption of carefully designed policies and programmes to fight enclavity and dualism. Such a policy should aim to involve the region's citizens in the ownership, production and trade structures of the economy in a much more meaningful and sustainable way.
Elements of an alternative trade policy are already included in various chapters elsewhere in this book. Below are some of the issues we consider critical at the national, bilateral, regional and multilateral levels.
3.1 National level The key challenge at the national level is the formulation and implementation of economic policies and programmes that are peoplecentred and people-driven as opposed to the continuation of inherited formal sector biases that entrench dualism and enclavity. In this regard, the individual countries should redefine the relationship between their citizens and the natural resources endowments of those countries. These resources endowments, including human capital, should be the basis of the salvation and not the curse of Southern Africa.
It has already been observed that the region is richly endowed with natural resources, human capital and relatively well-developed infrastructure and yet its citizens remain poor and marginalised.
Bold policies of empowerment in critical sectors such as agriculture, mining, services and manufacturing are an urgent necessity. While the level of ambition and implementation modalities will differ from country to country, what is critical at this stage is to initiate and sustain the process.
As Tandon has observed, "there is no nation in the world (including the USA) that can afford to surrender the well being of its citizens to the risk of foreign ownership of the bulk of its resources and assets. And this is exactly what prevails in Southern Africa" (Tandon 2004).
Beyond ownership, attention should also be focused on production and marketing structures as well as the technology and/or research and development requirements. A number of policy instruments ranging from the legislative to distributive fiscal and monetary policies should be used to ensure that both the legal and financial environments are conducive to the development and growth of a vibrant indigenous enterprise sector.
Against the background of small population sizes and low effective demand, it is argued that the adoption of people-centred economic policies at the national level is meant to position those countries strategically in the international division of labour. This becomes the basis for developing alternative trade policies at the regional, continental and global levels.
The governments should therefore pursue the following policy targets:
• Redistribution of resources (land, water, infrastructure, capital etc.)
• Transformation of non-formal economic activities that are characterised by pervasive under-employment into dynamic activities on the way to formalisation and to being interlinked with the global economy as well.
• The promotion of mutually reinforcing linkages between formal and transforming non-formal activities, between micro, small, medium and large scale enterprises, between agriculture and industry, between mining and industry and generally among all sectors of the economy.
• Enhancing the exploitation of production, distribution, marketing, supplier and buyer value-chains in the domestic and international markets (ZCTU 1996:20).
3.2 Bilateral level As already argued, the small population sizes as well as suppressed demand limit the scope for bilateral trade agreements to emerge as a viable trade policy option for Southern Africa. In any event, a series of bilateral preferential agreements would be difficult to administer at government and enterprise levels with different countries.
However, in view of the actions proposed at the national level, it is possible that at the bilateral level some countries may decide, on the basis of comparative advantage and comparable levels of development, to pool resources and establish joint ventures for the production of certain products for local consumption and for export. Such ventures might be open to the participation of other regional countries in order to maximise on economies of scale and competitiveness.
In this regard, bilateral agreements will become effective stepping-stones for solid regional co-operation. Such bilateral arrangements would also help position the concerned countries strategically and positively in relation to other countries in the region as well as the rest of the world.
3.3 Regional level In this paper we have argued that effective people-driven and peoplecentred regional co-operation represents the most viable option to achieve market integration and the development of an alternative trade policy. In the article, "Alternatives to neo-liberalism in Southern Africa", Tandon warns against the adoption of "what might be called 'perverse integration' – one that is crafted not by the people within the region, but externally imposed by forces of the Empire that seek to configure the countries in the South to their design and interests." (Tandon 2004).
Examples abound in Southern Africa such as the Federation of Rhodesia and Nyasaland as well as the moribund Constellation of Southern African States (CONSAS) policy attempted by apartheid forces. The same forces of global capital have systematically stymied the emergence of effective integration schemes by hijacking the integration process on the promise of massive donor assistance and FDI flows. In the case of the SADC, the SADC Programme of Action relies heavily on anticipated foreign funding as opposed to financing from its own resources. There is also a clearly discernible bias towards the formal sector/big business.
In our analysis of the development integration theory, we have argued
that we need to:
• Go beyond the assumptions of that theory, which seek to build on the status quo by challenging the current ownership, production and trade patterns in Southern Africa. In this regard, action at the national level is critical in determining the region's future. Tandon concurs that "the resources (land, forests, minerals etc.) must be owned by nationals, either through the public sector or by the private sector under public control/concessions. Furthermore, they must be managed by structures of participation so that the benefits (products, upward and downward production and knowledge linkages) are shared with communities living around these resources" (Tandon 2004).
• Build a strong regional market. This becomes easy only after appropriate policies and actions have been adopted and implemented at the national level to challenge the enclavity and dualism that characterise the SADC economies. Added to this is the need to revisit South Africa's semi-periphery role, which has tended to entrench enclavity and dualism at the regional level. In other words, South Africa should stop looking at the region as a big market for its products and destination for its investment but should seek to involve regional countries as trade and investment partners on the basis of mutually beneficial and win-win scenarios.
This should be easier to achieve now in the post-apartheid era than at the time of the CONSAS policy. However, South Africa's economic dominance of the region is so structurally entrenched and backed by the enormous powers of global capital that it will be difficult to reverse or modify. At the same time, pretending that such structural deficiencies do not exist is not an option but a recipe for disaster and a perpetuation of the status quo.
South Africa also dominates regional trade and boasts of positive trade balances vis-a-viz all SADC member states. It is also the biggest exporter into the COMESA market although it is not a member. The glaring trade imbalances are increasingly becoming a source of conflict especially against the background that South Africa is benefiting from the "free" movement of goods (mostly its own) without easing restrictions on the movement of persons (immigration laws). For instance, it is easier for a Polish citizen to enter and work in South Africa than it is for a SADC citizen.
Below is a table reflecting the sizes of the economy of individual SADC members as well as their import sources and export destinations.
Table 1. SADC members, size of their economies, imports and exports
While the need to create a strong regional market is openly acknowledged, there does not seem to be a shared commitment to make the necessary compromises to realise the requisite synergies in pursuit of a clearly defined strategic vision to make SADC a global economic player.
In this regard, as the dominant economy in the region, South Africa should take the lead in prioritising regional trade and integration. Yet it is amazing to note that before negotiating any bilateral or regional trade agreement within the region, South African entered into trade negotiations with the European Union. At the same time South African Labour Unions, in the textiles sector especially, have actively campaigned against competition from the region and there have been generalised xenophobic tendencies against migrant workers from the region. All these developments whether by design or coincidence on the part of Southern Africa, have been seen as South Africa's lack of interest and commitment to equitable regional integration. Some commentators have argued further that this is evidence of South Africa's reluctance to cede her semiperipheral role in the global capitalist system.
As a result, the negotiation and implementation of the SADC trade protocol is far from satisfactory. Kalenga has observed: "Little consideration appears to have been given to the countries' pattern of trade and current comparative advantages. Concerns over products and sectors deemed to be sensitive to domestic industrial activities and tariff revenue, have dominated the trade negotiation process. Such concerns have also resulted in substantial back loading of tariff reductions and the adoption of strict rules of origin" (Kalenga 2004:20). Negotiations on trade in services have not even started.
The situation in Southern Africa has been compounded by the countries' membership to multiple market integration schemes such as SACU, SADC, COMESA, East Africa Community, etc. all with different integration schedules and at times different standards, procedures and rules of origin criteria. This state of affairs is not sustainable and leads to high administrative and transaction costs and haphazard integration. There is therefore a need for urgent rationalisation to ensure co-ordinated approaches without losing sight of the strategic purpose of these schemes.
Debate should also be focused on whether such a strong regional market should be delinked totally or partially, from the world economy. It is our submission that, given the structure of SADC's external trade dominated by agricultural and mineral raw materials, it would be very difficult if not impossible to achieve a total delink. SADC should seek to "organize for itself breathing space and time to consolidate its own vision and future in a carefully planned and phased manner after a thorough study is made of the regional political economy" (Tandon 2004).