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«ANSA Alternatives to Neo-liberalism in Southern Africa The search for Sustainable human development in Southern Africa Editors: Godfrey Kanyenze, ...»

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However, it must be observed that the policy space for SADC to reorganise itself and redefine its position in the international division of labour is fast eroding. This is largely at the hands of the WTO as well as the so-called EPAs with the European Union.

3.4 Multilateral level Most SADC countries became actively engaged in GATT multilateral trade negotiations at the launch of the Uruguay Round in 1986. This coincided with the period of the SAPs when these countries were literally forced by the IMF/World Bank to undertake unilateral liberalisation measures. At the close of the negotiations in 1994, most SADC members were at various stages of implementing the SAPs. Because of the weakness of negotiating positions and limited negotiating capacity the SADC was entrapped into a rule based multilateral trading system whose rules were unbalanced in favour of developed economies. The resultant Uruguay Round Agreements merely locked-in what the SAPs had initiated.

The Uruguay Round also introduced disciplines into new areas such as Agriculture, TRIPS, TRIMS, etc. just as in the other agreements; the rules that apply to them favour the developed countries and are limiting the development options of developing countries. Legally binding Most Favoured Nations (MFN) liberalisation commitments that developed countries are forcing on developing countries through negotiations in the WTO are closing the policy space for SADC countries to develop effective promotion and protection tools for production, industry and trade in the region. The fast pace and ever expanding agenda of these negotiations are so demanding that they have overtaken the process of regional trade negotiations/integration. Thus instead of the regional integration process influencing the SADC's involvement at the multilateral level, the reverse is true.

At the same time, going into reciprocal trade with the EU through the EPA negotiations will present problems not only for SADC-EU trade but also for intra-SADC trade. The EPA would also mean that SADC products would compete for markets with subsidised EU products on the SADC market.

This will no doubt lead to the rapid de-industrialisation of the region. In this regard, what is clearly perplexing is the absence of urgency in achieving the SADC FTA in the face of challenges posed by multilateral negotiations.

Further, the EPA negotiations have split SADC as some members have elected to negotiate as Eastern and Southern Africa (ESA) and not as SADC. In any event South Africa already has concluded an EPA with the EU. It is therefore clear that the desire and moves towards regional integration and the development of a free trade area are competing with counter-forces that seek to entrench and reinforce the unequal and inequitable multilateral trading system.

Given that the challenges facing the SADC are similar to those faced by most developing countries, it should be easy for SADC countries to forge unity among all developing countries in at least delaying and at most derailing multilateral trade negotiations. However, first and foremost, there has to be a unity of purpose and action among the SADC countries themselves. Against the background of structural imbalances in the region's economy discussed above, it becomes clear that the market alone will not change but will reinforce these imbalances. What are clearly needed are conscious interventions by the governments. Above all, the region's citizens must be sufficiently mobilised to understand, participate in and drive the process towards structural transformation.

Developing countries have shown that unity of purpose can achieve strength in numbers. At the WTO, and twice in 1999 at Seattle and in 2003 at Cancun, they successfully resisted signing agreements that did not address their concerns. This was largely achieved by joint action on the part of governments, civil society and other stakeholders both in and outside the negotiating halls. This solidarity must be acknowledged, encouraged and developed into a powerful negotiating force.

Re-engagement at the multilateral level should only be considered when enclavity and dualism are destroyed, regional imbalances have been reversed, economies of scale realised and competitiveness enhanced. This

is not an easy task. Tandon proposes a three-stage approach viz:

• Undertake sectoral studies from a specifically regionalist perspective • Integrate the sectoral studies in a new synthesis that is both holistic and consistent with the conceptual synthesis • Render the final report in language(s) intelligible and accessible to the broad masses of the people (Tandon 2004).

These stages must be complemented by actions at the national and regional levels that should drastically slow-down if not stop the current integration of the SADC in a rapidly globalising world economy. Yet, as already discussed, these actions must be informed, deliberate, sequenced and decisive in a manner that changes the enclavity and dualism of both the national and regional economy.

FOOD FOR THOUGHTBox 6 Role of a developmental, ethical state

Among economists concerned about the lack of development in Africa, a debate has started in recent years about the character of the state and its role in economic development. The state in Africa has been minimalised with the intervention of the IMF and IMF-induced structural adjustment programmes.

The IMF and World Bank "experts" continue to argue that the only role for the state is to maintain law and order, including the strong enforcement and protection of private and intellectual property, and to create facilities for the private sector to engage in economic activities. It must not create an overregulatory framework or trade barriers and fiscal obstacles that hinder private sector initiatives and freedom. Give the private sector (and here their preference is for foreign private capital or FDIs) the necessary incentives to make profits and unfetter the markets of the heavy hand of the state, and Africa will be on its way to growth and the eradication of poverty.

This proposition is now seriously contested by economists who argue that the African state must resume its developmental role. While the state may not engage in production directly (although in certain sectors it may be necessary), it cannot disown its responsibility to regulate production, allocate resources, develop an educated population, provide public services connected to basic rights (water, health, education, basic infrastructure), and protect local manufacturers and traders to encourage the growth of the national economy. Things cannot just be left to the market. The market is neither a neutral agency that allocates resources where they are most needed, nor is it the most efficient. The market is driven by powerful forces that manipulate everything from prices to production and technology. So the choice is not between regulating and not regulating. It is between whether the regulation of the market is done by the IMF/WB experts and the transnational corporations, or by the African state. And it is better that it is done by the state that owes responsibility to its nationals than by the IMF that is controlled by G7(8), and the multinationals whose allegiance is to foreign investors. An ethical state looks after the interests and welfare of its population.

As the neo-liberal ideology suggests, in a free market economy where all sectors are included in the market, the state is forced to disown its obligations to the population in terms of fulfilling their basic needs. The market is expected to fulfil these needs and even rights. Market oriented "solutions" are forced under the policies of the Poverty Reduction Strategy Papers (PRSPs), the Heavily Indebted Poor Countries initiative (HIPC), donor conditionalities and, in more recent years, the UN Millennium Goals. Market fundamentalism is what was behind the spate of privatisations that swept the African continent during the 1990s. It started out with the forcible sale of state economic assets to the private sector. And since very few Africans had capital to buy into these


Box 6 The role of a developmental, ethical state (continued) assets, these were purchased (sometimes at ludicrously low prices) by multinationals, as happened, for example, in Zambia when President Chiluba came into power.

Once the state assets had been denationalised, privatisation mania swept across the public and social services. The state was forced to disown its obligation to provide for the basic needs of the population, such as water, health, education, energy, transport and so on. Water became a major issue of contention in areas such as Durban/Natal and Soweto in South Africa.

Because people were obliged to buy water when they had no money, they resorted to polluted stream water and, as expected, contracted cholera from which many perished. In Soweto the people rioted on the streets demanding access to water and energy and the poor had their water and electricity disconnected because they did not pay their bills.

There are certain basic human rights that the state has an obligation to fulfil.

The list can be lengthened or shortened according to the circumstances of each country, but at the very least, these must include food, personal security, potable water, sources of energy for cooking and heating, basic requirements for health, especially of mothers and children, basic education and minimum housing. It is unethical to have such basic human rights to be subjected to the forces of the market where only those who have access to money are entitled to access to these basic necessities of life. Furthermore, there are so-called "natural monopolies", such as roads, railways, waterworks, electricity and telecom infrastructure, that should be owned or controlled by the state in order to avoid monopoly prices and misuse by the private sector for profit seeking.

The tragedy is that, in Southern Africa, there is no reason for a single person to go without food, water or any of the above basic necessities, and yet millions do. The region has enormous natural resources and the populations are relatively small compared, for example, to countries in Asia or Latin America. The tragedy is that these resources are utilised by foreign corporations and export-oriented domestic corporations in a system of global production and trade that impoverishes the people of Southern Africa.

The result is that the state in Southern Africa has disowned its moral obligations to its own people.

Chapter 10 Services

–  –  –

The term "services" is used in this chapter to denote social services or what used to be universally-known known as "public services" i.e. those facilities such as health, education, water, sewerage, cleansing, electricity, public transport etc that need to be provided on a mass scale for citizens to engage in public life.

From the side of the struggles of the poor and oppressed, there has been a long history of trying to expand the range and quality of public services. For instance, the feminist movement has fought for public restaurants and child care facilities, open university activists have argued for public universities and progressive IT activists have argued that information and communication technology (ICT) should also be publicly provided.

But the term "services" is by no means a neutral term of which everyone has exactly the same understanding. Critically, today, in institutions such as the World Trade Organisation (WTO), the word, "services" is used by politicians seeking opportunities for Big Business to make profitable investment in poor countries, to mean one thing, while at the same time trying to convince ordinary people, who think the term means something else, that this is about removing restrictions on their access to health, education, water electricity etc.

There were two parts to public services as they evolved over the past 100 years.

• On the one hand they were "public" – as opposed to "private"

• On the other they were "services" – as opposed to commercial activities for gain.

2. Advent of public services

2.1 Historically Prior to capitalist industrialisation, most people produced their basic means of subsistence, educated children, travelled to other communities etc. "privately" – i.e. through their families, clans, local kinship systems etc. From the mid-19th century onwards, with the setting up of nation states, through to the bulk of the 20th century, increasingly these things came to be provided "publicly" on a large-scale. First local and then national authorities responded to the growth of cities, crises in public health and the needs of capitalists to have the infrastructure and labour force necessary to operate their businesses. Through mass struggles, social reforms, the way the world was increasingly restructured in the aftermath of the Great Depression of the 1930s and the World Wars, welfare states started emerging in many developed countries whose governments were dominated by Keynesian macroeconomic policies.

These welfare states became known as public services that were publicly provided as opposed to being exclusively the responsibility of families and kinship systems in the private or domestic sphere.

These social reforms and Keynesian economics turned services into a concept that was distinct from commodities produced for private profit.

Under the sway of these reforms, public authorities provided health, education, sewerage, transport etc. as a "service" to the public and not primarily to get a commercial return on investment. However, these services were on such a large scale and had to be accessible to so many that no individual capitalist firm was willing to risk investment for sustained profits. In fact, where some of these "services" were initially part of private investment, for example electricity in South Africa in the early 1900s, the inefficiencies and limited capacities of private capitalists to ensure a regular, widespread supply, led to a clamour from capitalists for the state to nationalise these services and to take over the responsibility (Christie 1984). Eventually, for a large part of the twentieth century, services became synonymous with accessible, broad-scale, restricted-commodity activities provided by public authorities.

However, there were always the following two opposing forces beneath

this consensus:

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