ZIMBABWEAN President Robert Mugabe shifted uneasily in his seat as he took the assembled business community through a long and tortured explanation of how Zimbabwe made the switch from Marxism-Leninism to a free-market economy.
The assembled crowd of South African and international business people began to shuffle. South African President Nelson Mandela sat motionless on Mr. Mugabe's right side and Mozambican President Joaquim Chissano on his left.
The fidgeting had less to do with Mr. Mugabe's economic analysis, however, and more to do with setting.
After four decades of hostility, South Africa and its neighbors were sitting down together to forge new links, and the moment resonated with awkwardness.
The June gathering was the first in a series of meetings, organized by the World Economic Forum, between South Africa and its black-ruled neighbors designed to foster a regional perspective economic development in the post-apartheid era, the ultimate goal being a common market.
But while both South Africa and its neighbors now recognize regional integration as primary, the gross imbalance in development between them is presenting obstacles to closer cooperation.
* South Africa's preoccupation with its own socio-economic problems stemming from the apartheid legacy, and unrealistic expectations of its capacity to lift the standards of living in neighboring states.
* A growing wave of illegal immigrants from Mozambique and Zimbabwe.
* Continuing civil war in Angola.
More than 40 years of apartheid cast a long and dark shadow over the 10 black-ruled countries then known as frontline states. They paid a heavy price for harboring guerrillas of the African National Congress (ANC) and providing infiltration routes for the soldiers of the ANC's military wing, Umkhonto we Sizwe (Spear of the Nation), in its efforts to overthrow white rule.
The era of South Africa's campaign of destabilization, which cost neighboring states an estimated $15 billion and more than 100,000 lives, wreaked havoc in countries such as Angola and Mozambique - already locked in conflict with anti-Marxist insurgents - and took its toll in countries such as Zimbabwe, Zambia, and Botswana.
As a countermeasure, the 10 states formed a bloc in 1980 designed to reduce the region's economic dependence on South Africa by acting as a center for international aid and investment.
Though it failed in its primary mission, the grouping nonetheless served as an effective rallying point for regional solidarity and worked to hasten the demise of apartheid and the extraordinary transformation in South Africa that culminated with the first all-race elections in April.
South Africa last month became the 11th member of the bloc, known as the Southern African Development Community. Since the Aug. 29 SADC conference, the emerging trade bloc has entered into an agreement with the European Union (EU) that saw the first minor trade concessions to SADC and the signing of a blueprint for political and economic cooperation that help strengthen ties between South Africa and its neighbors.
The importance of the first encounter between the SADC and the EU was that the European Union signalled that it was looking at the southern African region as a whole rather than South Africa on its own.
After 14 years, trade between SADC members accounts for only 4 percent of the total trade of member states and 25 percent of total trade is with South Africa.
South Africa, which accounts for 39 million of the 130 million people in the region, has a gross domestic product of $115 billion compared to about $26.5 billion for the other 10 states combined.
This is despite thriving democracies and free-market economies in Botswana and Namibia. Botswana, with a population of only 1.4 million, has maintained an average per-capita growth income of 4.5 percent since 1965 - outperforming every economy in the world.
Prosperity through trade bloc
Since South Africa has rejoined the international community - the United Nations, the Commonwealth, and the Organization of African Unity (OAU) - reality has begun to impose itself on the unrealistic expectations of the neighbors and South Africa's ignorance of the rest of the region.
President Mandela has stressed on numerous occasions that if South Africa is going to compete in the global economy - and ultimately to the revival of the African continent - it has to do so as part of a stable and growing regional trade bloc.
The reasonably peaceful political transition in South Africa has set an example for other states in the region.
But it has failed so far to bring peace to Angola, which has been bogged down in a renewed and debilitating civil war since Jonas Savimbi's rebel National Union for the Total Independence of Angola rejected the outcome of the country's first democratic elections in September 1992. UNITA lost decidedly in the parliamentary poll.
Mozambique, the other former Portuguese colony that, unlike Angola, shares a border with South Africa, is facing its first democratic elections on Oct. 27 in an atmosphere of cautious hope that the country will follow the South African rather than the Angolan model.
In land-locked Lesotho, a tiny mountain kingdom with a turbulent political history, South Africa has been instrumental - with Zimbabwe and Botswana - in crafting an agreement that this month reinstated the democratically elected government of Ntsu Mokhehle after it had been summarily dismissed last month by King Letsie III.
It was an impressive display of conflict resolution led by South Africa - the country that many of its neighbors fear will continue to dominate them even now that apartheid is over.
But South Africa's economic and political supremacy also presents problems. In the past five years, illegal immigration from countries such as Mozambique and, to a lesser extent, Zimbabwe, has more than doubled and is climbing rapidly.
Last year 96,000 illegal immigrants - 81,000 from Mozambique - were expelled from South Africa compared with 44,225 in 1988.
With half of South Africans without formal employment, the issue of illegal immigrants from neighboring states had become one of the most sensitive political issues. Illegal Mozambicans alone are said to number between 500,000 and 2 million.
Trade unionists and small businessmen have joined the tide of angry black South Africans who condemn the stream of migrants pouring in, taking low-wage jobs, undercutting prices, and sending crime and unemployment levels soaring.
The electric fence that once helped to slow the flow of Mozambican migrants is now a thing of the past. But military experts and politicians argue about the most humane way of policing the long borders with Mozambique and Zimbabwe.
Jakkie Cilliers, director of the Institute for Defense Politics, insists that the new South African National Defense Force must tackle the task of policing the country's borders more efficiently.
Others believe that the only way to resolve the problem is to concentrate on developing the neighboring states so that the flow of migrants will subside.
But herein lies the problem. The legacy of apartheid has left South Africa with such an internal imbalance in socioeconomic development that the government is finding it difficult to raise the resources to finance its own Reconstruction and Development Program.
``It is just not possible to develop the neighboring states to anything like the South African levels in even 10, 20, or 30 years,'' Mr. Cilliers says. ``I wish South Africa even had the capacity to develop itself in that time.''
* Second of three articles. The first appeared in the previous global report. Part three will appear in next week's global report.