South Africa is the current chair of SADC, and as such its leadership is of paramount interest. South Africa is also the gateway to foreign direct investment to the developing world. The country also holds the key for the success of SADC both at economic and political level. However, since 1994 Pretoria has only intermittently, and reluctantly so, demonstrated leadership in SADC. More than 24 years later, a majority of key institutions for regional integration are largely inefficient and the prospects for human development index are painfully blur. A number of factors were earmarked to comprehend the lethargic state of regional integration and development in SADC. These include the lack of political will amongst member states to integrate for development purposes, various levels of economic development and systems.
Retrospectively, since the achievement of a democratic state, South Africa earmarked Southern Africa as its foremost foreign relations priority. This relationship with the region is a delicate one for Pretoria as it has to fulfill its roles as regional, continental and global player. South Africa assumed the region’s responsibility as to address such issues as closer collaboration and economic integration and utilised the SADC as a vehicle to steer the developmental agenda of the region. Arguably, this has benefited the region since South Africa’s spotlight on the global arena helps intensify the regions potential in many aspects. Notwithstanding the fact that this has not always brought the desired results for the region and beyond. Subsequently, South Africa has, overtime, continued to isolate itself from the region and likewise the region may have also chose to isolate South Africa in its own dealings. South Africa acceded to the SADC Treaty on 29 August 1994 at the Heads of States Summit in Gaborone, Botswana. This accession was approved by the Senate and National Assembly in September 1994.After joining SADC South Africa was given a sector responsibility for finance, investment and health. This was a decision that was formed by South Africa’s comparative advantage in this area. It is undeniable that South Africa is the most developed and advanced economy in SADC and on the continent of Africa. This position cannot be ignored if the possibility of regional integration is prioritized on the region and the continent itself. For this reason, it is perhaps essential to earmark the owing to its economic strength South Africa also holds the capacity to make or break regional integration within the SADC and the continent. Moreover South Africa can be described as the economic hub of the region.
Consequently, South Africa is often confronted with a crisis of trying to balance its domestic, regional and global interests especially with the rise of transnational cooperation’s including membership into the BRICS group of countries. Evidently, in the process the probability of conflict of interest is inevitable. On the other hand, the success of the SADC unequivocally rely on South Africa’s will to support and develop it as envisaged. SADC established the Regional Indicative Strategic Development Plan as a thorough guide to intensify integration. According to the 15 year plan, the key milestone are to reach a Free Trade area in 2008, Customs Union in 2010, Common Market in 2015, Monetary Union in 2016 and regional currency in 2018. The Regional Indicative Strategic Developmental Plan (RISDP) remains the strongest indicator of SADC’s desire for deeper integration with an objective of achieving a level of intra-regional unrestricted flow of goods, services and investment. The RISDP cannot be implemented without the support of the biggest economy of the region. SADC needs South Africa but the fear is that the same cannot be said of South Africa needing SADC.
According to Alde and Pere, South Africa’s biggest export market is SADC. This is often overlooked when surveying South Africa’s trade figures, the reason being that a great portion of South Africa’s exports to other countries are concealed within SACU. Evidently, the relevance of the SADC market to South Africa should not be underestimated. Since 1994 the South African government has regarded the Southern African region as the foremost priority of its foreign relations. To exemplify the prominence attached to this region, the first foreign policy document adopted by its democratic government was in fact a “Framework for Co-operation in Southern Africa” endorsed by Cabinet in August 1996. In terms of this “Framework”, the vision for the Southern African region is one of the highest possible degree of economic cooperation, mutual assistance where necessary and joint planning of regional development initiative, leading to integration consistent with socio-economic, environmental and political realities.
South Africa has taken a leading role in the region to address such issues as robust cooperation and economic integration. These include the establishment of a free trade area within the region, the development of basic infrastructure, the development of human resources and the creation of the necessary capacity to drive this complicated process forward, as well as the urgent need for peace, democracy and good governance to be established throughout the region. Nevertheless, history has proven that South Africa bullies its fellow member states within the region. South Africa opts to wield its economic power when negotiating with partners in both SACU and SADC. This oversight plays itself out in how some South African government officials view their regional partners. For example in response to questions about the consequences of the negative impact that an EU/SA Free Trade Agreement would have on its SACU member states. Former Director of Regional Economic Organisations within the South African Ministry of Foreign Affairs Willem Bosman maintained that, there is a need for a shock treatment that is necessary to fellow SACU member states. Bosman further maintained that SACU members are on their own, as South Africa would no longer provide for the 50% of their budget….”now you will have to tax your own people; you also have to work according to the structures of a free independent country”. The irony of this statement is that even if the new SACU agreement replaced the old agreement in 2002, SACU largely remains an apartheid-created relic, designed to ensure that South Africa would have a captive market for its agricultural and non-international competitive manufactured products. This economic dependency of the SACU states on South Africa was “part of a strategy to ensure that South Africa’s economic hegemony in Africa. If SACU states experienced economic deterioration as a result of the EU/SA Free Trade Agreement, who will buy South Africa’s non-international competitive manufactured products? By placing integration at the global level a priority, South Africa has always risked national and regional economic destabilization.
South African’s global integration agenda
In the interest, for many, South Africa has an urgent need to further integrate its economy into the world economy. This could also be at the expense of its SADC counterparts. Nevertheless, for South Africa to attract good foreign direct investment, therefore there’s an urgent need for South Africa be seen as an environment of peace and tranquility not just in South Africa but the region. Many global players who take interest in investing in Africa perceive South Africa as the gate way. Nonetheless unfamiliar circumstances arise from the role played by external partners in the region, especially the EU and the USA. In respect of the EU, the outcomes of the Economic Partnership Agreements negotiations will fundamentally alter the peace and nature of regional integration in Africa. Other global players refuse to be side-lined. This was illustrated by the recent introduction of the China-Africa office in South Africa in March 2008. South Africa has to assume leadership in ensuring that the Zimbabwean problems are resolved since regional peace is important for the national economy of South Africa. Nonetheless, many have questioned South African former President Thabo Mbeki’s impartiality in the process. What this means is that there has to be a balance of interest between national, regional and global integration aspirations for South Africa.
Moreover, there are ways in which South Africa has attempted to integrate its economy in the world economy at the expense of its regional counterparts. It is also noteworthy to point out that this was inevitable in light of long term planning. The EU/SA TDCA agreement stabling a free trade areas demonstrate this phenomenon. South Africa become a signatory to this trade agreement with full knowledge that it would bare devastating impact on both the members of SACU and SADC. In light of the SACU, the agreement was endorsed without consultation without consultation with the other BLNS SACU member states. This was a precise disregard of the SACU Treaty that stipulates that such agreements must be approved by all SACU members. By acting unilateral, it is clear that South Africa is trying to monopolise/maximize these economic benefits for itself at the expense of the other members.
In light of SADC, the fear of EU goods flooding the regional market has been duly noted. This is because when EU goods have entered South Africa, it becomes relatively easy to have them anywhere else within the SADC region and Africa at large. Evidently, this has undermined the agricultural and industrial sectors. A number of SADC states launched a complained that South Africa only became serious about completing the negotiations for the SADC FTA when it had completed negotiations with the EU. However, a few South African trade officials felt that the EU/SA FTA allowed them to become more integrated into the world economy, notwithstanding the fact that the consequences could also be severe for South Africa’s own economy.
A look at the TDCA agreement will show that South Africa has divided attention, with more emphasis place on the EU and not the SADC region. This agreement follows several aspects; strengthening dialogue between the parties, supporting South Africa in its economic and social transition processes, promoting regional cooperation and the country’s economic integration in Southern Africa and in the world economy, and expanding and liberalizing trade in goods, services and capital between the parties. The amount of loss of revenue is very high since SACU and SADC states will not be able to levy duties on the EU products. “Based on respect for democratic principles, human rights and the rule of law, the Agreement establishes a regular political dialogue on subjects of common interest, both at bilateral and regional level (within the framework of the EU’s dialogue with the countries of Southern Africa and with the group of the African Caribbean and Pacific (ACP) countries. The duration of the agreement is unspecified, but provision is made for its revision every five years of the date of its entry into force in order to consider possible amendments. The agreement covers a number of areas and includes a future developments clause making it possible to widen the field of cooperation”.
South Africa’s dominance in southern Africa, most prolific in the economic sphere, remains uncontested. South Africa accounts for about 60% of SADC’s total trade and about 70% of the regions GDP. The country is also within the region, the most diversified economy and thus critical to SADC’s drive towards developmental regionalism. Nevertheless, it is also true that a relationship of interdependence binds South Africa to the region. Moreover, in varying degrees, the economies of other SADC member states also benefit from employment opportunities, skills transfer, tax revenues and global linkages as a result of the business activities of South Africa firms.