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Political Economy of Regional Integration in SADC

Political Economy of Regional Integration in SADC

Regional integration is still elusive, especially to those not familiar with the international political economy. For the most part, this process is understood through the plethora of political institutions and regional economic communities (RECs) such as the European Union (EU) and the Association of Southeast Asian Nations (ASEAN). The African Union, Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Customs Union (SACU) are the most prominent RECs in Southern Africa. These political institutions are the face of Southern African regional integration, but what do these institutions do and what is the role of member states within them?

These RECs, like most multilateral groups, have Secretariats, which coordinate the administrative process of meetings and trade negotiations. On occasion, the Secretariat may be tasked with managing common regional development projects or a central ‘Work Programme’ in conjunction with individual member states, other RECs and other appointed organisations and agencies involved in regional integration. This involves, but is not limited to, activities such as project management of infrastructure development, trade roadshows and multilateral trade negotiations. The political structure often consists of a ‘Summit’ of Heads of States and Government that is often the highest decision-making body. This is often followed by a Council of Ministers constituted by one, or a combination of the troika, of Minister of Finance, Minister of Trade and Industry, and Minister of Foreign Affairs from the respective member states. Lastly, there is usually a Commission of senior government officials or various sub-committees, which report to the ‘Council’, which in turn reports to the ‘Summit’.

Regional integration is not purely a political process because the plethora of trade agreements and political bargains are often informed by economic considerations such access to markets and production networks and sometimes by geopolitical or security considerations. The abovementioned institutions are also central to regional economic and industrial policy as is the case with the common external tariff applied by the SACU, which means individual member states do not set their own customs duty rates. In these instances, states give up individual sovereignty in return for direct or positional benefits, which are only possible through regional cooperation such as greater markets, better regional security, increased trade and freer movement of capital, goods and people. For example, in SADC there are various protocols which are multilaterally-determined rules governing various parts of the regional development process like the SADC Protocol on Finance and Investment that seeks to harmonise finance and investment policies of SADC member states to make them consistent with the objectives of SADC. Another example of this is the SADC Regional Industrialisation Strategy and Roadmap that aims to harmonise industrial policy of SADC member states based on three principles namely: industrialisation as champion of economic and technological transformation; competitiveness as an active process to move from comparative advantage to competitive advantage; and regional integration and geography as the context for industrial development and economic prosperity.

It is often this trade-off that states consider as a primary criterion for participation in RECs. If the general perception is that participation has led to encroachment on sovereignty in the context of benefits that do not adequately compensate this loss, the public may push for the state to exit the REC as was seen in the most recent ‘Brexit’ case. Therefore, regional integration is not a natural consequence of the development of capitalism. Instead, states always seek to secure national interest through involvement in RECs; and if the process of regional integration contradicts national interest, they are willing to reverse the process. In this context, the role of the state is to coordinate complex processes towards concerted national or regional goals in order to harness economic growth and development.

Most Southern African states are members of more than one REC and involvement in RECs is often informed by the need to balance various benefits in one REC, which may not be achievable in another REC. States also use their position and voice in one REC to bargain for their position and voice in another. This process enables businesses to conduct trade and business across different regions more easily and expand markets, thereby encouraging economic growth and development. Despite best efforts, the outcome of a state’s involvement in RECs is not always consistent with the national interest. This is why South Africa’s involvement in SACU is often criticised as costly and unsustainable despite the economic and political benefits that accrue disproportionately in favour of South Africa. Moreover, even when a current agreement is not beneficial or strategically leveraged towards the national interest, a state may remain a member of a REC for political expedience or prestige.

SADC Heads of State and Government
SADC Heads of State and Government at the 36th Ordinary Summit at Lozitha Palace in Mahlanya, Kingdom of Swaziland.

The process of regional integration is becoming increasingly more consolidated with the rise of agreements that tie together various RECs into super-RECs such as the Tripartite Free Trade Area (TFTA) consisting of SADC, COMESA and the East African Community (EAC) that is currently negotiating agreements with the EU. Another example of these consolidations is the Continental Free Trade Area negotiations, launched in June 2015, aimed at creating a free trade area consisting of all 54 African states by 2017.

Some of these objectives may seem overambitious, and given that often various agreements are negotiated simultaneously, the state’s ability to balance involvement in RECs and coordinate the different political and economic outcomes to harness growth and development is diminished.

However, with concerted collaboration with the private sector, the state can participate in RECs and secure national interest through expanded economic opportunities that lead to growth. The ASEAN, which was established in 1967 and consists of 10 Southeast Asian states, is a notable example of the possible benefits which can be drawn from regional integration. ASEAN achieved an average GDP growth of 5.2% between 2011 and 2014 with an annual average population growth of 1.3%[1]. The ASEAN region had a population of 622 million and a nominal GDP of USD 2.6 trillion in 2014, which equates to an average GDP per capita of approximately USD 4,100.0[2]. Southern African states have also achieved some regional integration milestones despite constraints such as high inequality, low regional incomes, and less integrated production. SADC annual GDP growth was 3.8% between 2011 and 2014 with an annual average population growth of 2.5%[3]. SADC had a population of 292 million and a GDP of USD 705.8 billion in 2014, which equates to an average GDP per capital of approximately USD 2,374.0[4].

Figure 1: SADC Exports by Region (1995-2014)

Source: UNCTAD 2016. UNCTADStat Database, United Nations Conference on Trade and Development: Geneva. Available At: http://unctadstat.unctad.org/ [Last Accessed: 25 July 2016].

By forming strategic partnerships with the private sector in order to develop the necessary infrastructure for regional value chains and production networks, the Southern African regional integration process could deliver the African dream. Moreover, the prospects of consolidating regional integration across the continent could connect the economic centres that are spread across Southern, East and West Africa in order to bridge the divide created by low per capita incomes and high inequality in Sub-Saharan Africa. Thus, the African regional integration story, albeit complex, is highly promising and exciting to experience as the future unfolds.

By Siyaduma Biniza


[1] ASEAN 2015. Selected Basic ASEAN Indicators, ASEAN Secretariat: Jakarta. Available At: http://www.asean.org/ [Last Accessed: 24 July 2016].
[2] ASEAN 2015. Selected Basic ASEAN Indicators, ibid.
[3] SADC 2015. SADC Statistic Yearbook 2014, SADC Secretariat: Gaborone. Available At: http://sadc.int/ [Last Accessed: 24 July 2016].
[4] SADC 2015. SADC Statistic Yearbook 2014, ibid.

Siya Biniza

Role: Executive Director
Contact: siya@politicaleconomy.org.za
Siya is a Political Economist specialising in Development Finance, Industrial Development, and Regional Integration...

Michelle Livie

Former Editing and Research Specialist

Khanyisa Mchavi

Former Communications Specialist

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