Africa Lags in World Shift to Trade Blocs
Dependence on Western donors, unequal terms of trade, red tape, hobble Africa's efforts to become the next NAFTA
KEMPTON PARK, SOUTH AFRICA — THE talk was uplifting enough - a trade bloc in which a dozen southern African countries would join forces to better face the world. But there was a big problem - they barely trade with each other. Discussions on forming a new regional trade group at the annual summit of the Southern African Development Community (SADC) Monday went the path of previous talks on the topic: noble intentions, but scant resources to carry them out. Hopes of better cooperation to uplift nations on the world's poorest continent have been undermined by dependence on Western donors, unequal terms of trade, and nightmarish bureaucracies that often hinder trade. The SADC, formed in 1980, comprises South Africa, Namibia, Malawi, Swaziland, Botswana, Zambia, Angola, Lesotho, Mozambique, Zimbabwe, Tanzania, and Mauritius (which just joined). ''The problem with these African organizations is a lack of political will to do things, stemming from problems such as internal security, coups, and natural disasters like drought,'' says Gavin Maasdorp, an economist at the University of Natal in Durban, South Africa, who specializes in regional economic groups. ''They have also been unable to translate treaties into practice,'' he adds. Africa would like to follow the world trend that has seen the formation of the North American Free Trade Association (NAFTA), the Association of Southeast Asian Nations (ASEAN), and the European Union (EU). No one disputes that Africa, which mainly exports agricultural and mining products, could solve many of its problems by forming regional trade alliances. Languages, ideology separate But disputes between countries often prevent closer ties. A cultural divide between English- and French-speaking states has hurt the Economic Community of West African States. The ECOWAS has also been harmed by some nations having overlapping memberships in other groups and by treaties never implemented. The one successful initiative embraced by Africa's Francophone countries - national currencies pegged to the French franc - lost its effectiveness when their former colonizer devalued the franc earlier this year. Meanwhile, an East African Economic Union fell apart partly because of ideological differences between members Tanzania and Kenya. Efforts to revive it now are undermined by political tensions between Kenya and Uganda. This week's SADC summit outside Johannesburg was overshadowed by debate over whether to force nine members to break away from the rival 22-member Common Market for Eastern and Southern Africa. Delegates agreed to call a summit soon with COMESA countries to resolve the issue. One emerging bloc Experts say the most effective trade bloc in sub-Saharan Africa is the Southern African Customs Union, which has linked South Africa, Lesotho, Swaziland, Botswana, and Namibia since 1969. Its success is due mainly to a negligible bureaucracy. But the agreement is being renegotiated, and South Africa says it can not support neighboring states as generously as before. SADC, which was set up to reduce dependency on South Africa's then-apartheid government, has changed since that country joined last year. Largely ineffective before, it is trying to promote more integration and cooperation now that most of its 12 members are politically stable. The group signed its first protocol on Monday to establish cooperation in managing water, a vital resource. Moves are under way on treaties on tourism cooperation and establishing a regional electrical power grid. Most observers say SADC should stick with such technical matters and leave the trade to COMESA. The 10-year old COMESA argues that it represents a market of 320 million people, from the Indian Ocean to the Horn of Africa. It has reduced tariffs on intraregional trade and instituted a system facilitating cross-border traffic as well as a clearing house for settling trade-related debts. Now SADC wants to eliminate trade barriers between members and create a common currency by 2000. SADC's Industry and Trade Coordinator Abraham Pallangyo said a final free-trade agreement could be signed by August next year. Foreign observers say this is very ambitious for the group, which has an economy about the size of Finland's. Pallangyo himself noted that the rivalry with COMESA could be detrimental to the region. ''The competition is like that between Pepsi Cola and Coca Cola,'' he told the Monitor. South Africa (SADC's economic power) and Botswana, site of the group's headquarters, refuse to join COMESA. They argue that a smaller trade group - in a region where democratization and political stability are becoming the norm, unlike the rest of Africa - makes more sense. ''In Africa there is the tendency to impose big structures. It is better to go for smaller, more workable ones,'' South African Deputy Foreign Minister Aziz Pahad said in an interview. ''We don't want just agreements. We need viable regional integration that is carefully planned.'' COMESA's track record is not great - at most 9 percent of its trade is among members. But this is better than SADC's average of 5 percent. S. Africa: still the giant One problem SADC will have to come to terms with is the huge trade imbalance of South Africa, which exports to the region more than four times what it imports . South African President Nelson Mandela and other officials stressed at the meeting that their intention was not to swamp the other countries, but to help. Pahad said SADC was different from other groupings on the continent, thanks to its members' superior infrastructure, political stability, and a common language and colonial history. ''Coming last in the process of democratization we can learn from others. Plus the anti-apartheid struggle led to a very good coordination,'' he said. ''It is not an easy task. SADC is like a baby that must learn to run quickly. The world will not allow us to walk.''