Inclusive approach key to SADC region integration

| Monday November 29, 2010 00:00

 

'Integration has to be inclusive, though it is the role of government to drive it,' said Joaquim Chissano foundation CEO Leonardo Simao.

A bottom-up approach to regional integration might take longer, but the foundation would be stronger, he said, adding that the private sector had an important role to play in this.

He also stressed the importance of the informal sector and said that this part of the economy should not be seen merely as a market, but also as potential suppliers of goods and services.

'Informal traders can add value, and we must make space for them to be part of our economy.'

Simao was addressing delegates at the Southern Africa Trust's dialogue on doing responsible business in Southern Africa, at the Development Bank of Southern Africa (DBSA) on Thursday.

The discussion was centred on the notion that there is a need to re-engineer development plans and policies at national and regional levels, to ensure that there is an effective and inclusive approach to economic growth and development.

The SADC was considered one of the more successful sub-regions on the continent, and yet it still struggled with poverty, thus regional integration should work for the poor and spread the benefits of economic growth, Simao said.

He noted that government intervention was crucial to ensure that the gains of trade were distributed across society, rather than merely among a few. To do this, governments should create an enabling environment to allow the private sector to thrive and create jobs.

Simao stated that a free-trade area was the right step forward, but the region would have to tackle supply constraints and physical and non-physical barriers hampering this trade.

In this regard, key infrastructure constraints such as energy, transportation and telecommunications would need to be rectified to spur industrialisation and confidence in the business climate.

DBSA division executive David Jarvis explained that the reality from a project financing point of view, was that it was difficult to bring regional integration, or crossborder projects to financial close.

This was largely because much project preparation was lacking, such as environmental obligations and technical project details.

He added that there were four major complexities that needed improvement to get cross-border projects implemented, the first of which was the harmonisation of standards, regulatory frameworks, and policies between the relevant countries, followed by clearing up national priorities and regional priorities.

High-level political support and buy-in was also required, while decisions on what the best project financing structures were for cross-border projects had to be made.

Former Zimbabwean Finance Minister Simba Makoni emphasised that working on standardisation and quality assurance across borders was vital to facilitate trade in the region.

'We must all know and play by the same rules of the game. It is important that the rules and regulations are observed, enforced and complied with. Otherwise the real benefits will be suboptimum,' he said, discussing in detail some of the logistical difficulties experienced by companies trading across borders.

He said that the SADC must make doing business in the region easier and streamline the rules. Government support services were viewed as vital.

He also emphasised that the region should clearly define its priorities according to its capacities and deal with them effectively.

'If the capacity we have was not 'paddocked' by government Ministers, officials and academics, we would be doing a lot more for the people of our region,' he stated.

'Finance is important ... but the most important elements are consistent, stable, predictable policies, and conditions that business people know prevail now, and will continue to prevail,' he concluded.