From SADCC to SADC and beyond: The politics of economic integration

The state-led model was also adopted in most African countries, whether they identified themselves as ‘market economies’ (such as Botswana or Kenya), as social welfare-ist ‘humanist’ mixed economies (Zambia), as ‘African socialist’ or ‘Arab socialist’ economies (Tanzania or Algeria), or as ‘Marxist’ economies (Angola and Mozambique). However, the other common characteristic of most African governments in this period was that, while claiming to be pursuing new independent ‘post-colonial’ paths, they were not dismantling the colonial structuring of their economies or even their colonial ties. With few exceptions, African countries remained tied into relations of neo-colonial aid, trade and investment dependency upon their former colonial rulers, as well as new neo-colonial ‘partners’ such as the United States, Canada and Japan.

Even with the best of intentions, breaking out of inherited structures and charting alternative development paths was bound to pose extremely complex choices and difficult challenges. But, while feeling their way forward, even (and especially) the more independent African governments were faced with many direct and indirect interventions by European and other governments and their companies determined to maintain their economic hold on Africa’s valuable resources.

On the other hand, however, such continued dependency was due also to the failures of African governments, themselves, to act decisively on their own selfdeclared aims to build stronger economic and political bases from which to create less dependent and subordinate relations with the rest of the world. Since the possibilities were extremely limited for any African countries, on their own, to achieve such fundamental changes, it was essential that they enter into regional groupings with their neighbours to create such stronger bases, and that they cooperate politically and economically in the context of the whole continent.

National State-led Development

Instead, while speaking the language of African unity and integration, African governments focused their efforts on following national plans and programs. On the basis of various political, economic social, cultural and other factors, some were more effective than others.

  • Many such governments undertook essential expenditures in education, health and other welfare provisions, achieving markedly improved human development indicators in these earlier years.
  • Some carried out large investments in transport and communications, in energy and irrigation schemes and in other infrastructures that were so lacking in the inherited economies and yet so crucial to more internally integrated and balanced national development
  • But many African governments also undertook large non-productive expenditures on expensive ‘national prestige’ projects, as well as grandiose government buildings and luxury accommodations for presidents and the governing elites.
  • Most governments also maintained huge military/security systems enjoying ever-growing shares of national budgets, to serve and secure themselves in power, whether as civilian or military rulers, or to keep the security/military segment of the elite ‘sweet’.
  • On the other hand, in many states in Southern Africa such heavy military expenditures were also imposed by the wars of destabilisation fomented in their countries by the apartheid regime, especially during the 1980s.
  • Some of the worst affected, such as Mozambique, also incurred heavy burdens and external debts in a constant struggle to rebuild and repair the war ravages of those years.

Whether chosen or imposed, whether positive or negative, all these aspects of state expenditure were adding to the financial burdens on African governments and their countries. But during the later 1970’s, they faced the added problems of

  • surging international oil prices;
  • soaring inflation in the most industrialised economies the rising costs of manufactured imports
  • all coinciding with declining prices for African mineral and agricultural commodity exports.

These factors in combination subjected African economies to vast financial losses through deterioriating terms of trade. They faced increasing financial difficulties in maintaining their levels of imports, whether necessary or unnecessary, and their national social and economic projects, both the necessary and unnecessary. For these and other reasons, African governments resorted to increasing external borrowings and slid into deepening external indebtedness.

But, most seriously, as the years advanced, the ruling elites all over Africa began to lose whatever ‘nationalist’ and ‘popular’ commitments they had had – or had expressed – during the anti-colonial liberation struggles. With few exceptions, they gradually degenerated into self-serving bureaucratic and parasitic burdens on their countries and even oppressive forces against their peoples. And, with the absence or suppression of independent popular organisations in most African countries, there were weak countervailing forces and ineffective resistance against such ruling elite betrayals of the promises of independence.

As domestic economic and political situations deteriorated – and contributing further to such deterioration – an escalating outflow of national financial resources went into the ruling elites’ private properties and bank accounts abroad …. with the cooperation of international banks. These same banks and other lending institutions were also very happy to continue providing low-interest loans to such governments And the more they lent, the greater were the outflows back into their bank vaults in an upward-spiraling financial dance.

From Neo-colonialism to “Recolonisation”

On top of all this, from the late 1970’s international interest rates on bank loans underwent a massive rise due, in large measure, to economic needs within the United States. The international effects of Washington’s self-serving financial policies hit the poorer and highly indebted governments of Africa. (and Asia, Latin America and the Caribbean) particularly badly. The ‘Third World debt crisis’ that exploded from the early 1980s gave the International Monetary Fund and World Bank the opening to move into African countries from the mid-1980s in order to’stabilise’ their finances and help them’manage’ their external debts. But, in fact, these debts were utilised – and deliberately sustained – in order to justify and maintain IMF and WB neoliberal policy controls on such governments and countries.

These neo-liberal programs were designed to ‘reform’, restructure and open up African economies in the service of the most powerful countries and their corporations… although expressed in terms of the ‘common benefits to all’ in the emerging ‘open global economy’. Throughout the two decades of IMF/WB take-over and virtual rule in Africa a determined offensive was launched to discredit and dismantle what they called “statist”, or “dirigiste” or “commandist” or even “communist” models of national development.

The state-led development model had included nationalised land and mineral resources, large state production enterprises and public funding institutions, parastatal research and development and planning institutes, and government marketing boards and export agencies to support domestic producers. Most ‘obstructively’ in the view of neo-liberal theorists, such models had also been based on:

  • trade and tariff policies aimed, in part, to reduce unnecessary foreign imports and external expenditures by creating ‘import substitution industries’, and protecting vulnerable domestic infant industries from more powerful foreign producers;
  • performance criteria for foreign investors, requiring them as conditions for their operations, to undertake profit reinvestment and the utilisation of local production inputs, management skills and technology transfer, and in some cases even labour rights and training.

Although there were various problems as well as successes and effectiveness in such policies, the IMF and WB used these countries’ financial difficulties to discred it these approaches altogether. The removal of such restrictive barriers’ and such ‘inefficient protectionism’ as demanded by the IMF/WB amounted to the virtual recolonisation of African countries through their national structural adjustment programs. But IMF and WB policies also impacted directly and deliberately on the plans and proposals for regional development strategies.

Neo-liberal Interventions Affecting Regional Perspectives

In direct contradiction to the kind of government-led and politically negotiated mutual accommodations and mutual benefits required to redress inherited national and regional inequalities and imbalances, and to promote more self-sufficient and self-sustaining development [see AIDC Regional Briefing #1], IMF/WB ‘market-driven’ programs are based upon and actively encourage self-serving economic competition within and between countries and between their ‘national’ companies. Equally damagingly, they not only pressurise their client governments to depend upon and open up to foreign investors, but encourage competition between governments to provide the most generous terms to attract such investors and other international capital and trade flows. This undermines the potential for joint investment strategies between such countries in order to reduce their dependence upon exploitative, damaging and unreliable external financial sources, or at least to deal with them collectively and avoid being played off against each other.

From the early 1990’s, the World Bank was alerted to the significance of potentially more effective regional development strategies indicated by the upgrading in 1991 of the previous looser Southern African Development Coordination Council (SADCC) into a planned Southern African Development Community (SADC). Even more significantly, South Africa was beginning to move towards a post-apartheid dispensation with the prospect, at last, of ‘rejoining’ the rest of Africa. Concerned at the potential regional ‘challenges’ from a fairly considerable economy such as South Africa joining SADC, the World Bank targeted South Africa with volumes of neo-liberal ‘advice’ and projects. These were designed to restructure and redirect the South African economy in favour of the global economy. But the World Bank also took the precaution of belatedly launching its own ‘regional’ counter-strategy in Africa. This was aimed to ensure that emerging groupings would be “stepping stones” to fit their member countries into the globalising economy and to be open to that economy. This demanded that any existing or future regional groupings should not “discriminate against third parties” in the global economy. ‘Ibwards this end, all such groupings should implement “open regionalism” based, above all, on free trade and liberalised international investment and capital flows [see AIDC Regional Briefing 3].

By the mid-1990s, the European Commission – despite its own region having been developed on the basis of politically negotiated, government-directed and protected regional programs – gave full support to the World Bank’s “open regionalism” strategies in Africa. In cooperation with the World Bank’s partner the African Development Bank, the EC devised a so-called Cross-Border Initiative (CBI) in Eastern and Southern Africa from the mid-1990s, bringing together national government technocrats, local business interests and international economic institutions. This program encouraged and funded (or bribed) governments to implement rapid unilateral cross-border trade and investment liberalisations. The CBI was designed, on the one hand, to consolidate national structural adjustment programs through such cross-border regional commitments. At the same time, an internally liberalised region would be created pre-emptively, that is even before the governments came together to negotiate variable and targeted multilateral regional trade, investment and other development agreements, as foreseen in the SADC treaty.

Throughout this period and through these programs, these international political and economic agencies focused also on’reforming’ and winning over the ruling elites in Africa. This was achieved, on the one hand, by employing financially susceptible and intellectually persuadable (or opportunistic) African professionals and academics to undertake ‘consultancies’ with the Bank, or even to become nominal directors in the IMF and related institutions. The same seductive methods were used with African government technocrats, or even political figures shifting their roles backwards and forwards between national governmental and international institutions. But the deeper and most successful cooptive strategy employed by the IMF/WB was to encourage those well-positioned in African state structures and societies – those with technical/management skills, or money, or ‘contacts’ – to become the main internal beneficiaries of the sweeping privatisation and marketisiation of African economies; and, hence, the new ideological converts, ardent defenders and promoters of ‘market economies’ within their countries and their accommodation to the globalised capitalist economy.

Internal Impediments to Alternative Regional Strategies

In addition to the impact of external forces in winning over or creating such self-serving neo-liberal forces within African governments and societies, there are other political, social and economic forces and factors internal to Africa that are prejudicial to balanced and equitable national development and, even more so, to re-balancing and equitable regional development programs.

Experience over the past decades has shown that, despite the framing of ambitious regional plans, and despite much political posturing and rhetorical gestures, many or most African governmental leaders – although with some notable exceptions – are not genuinely committed to regional aims and are not moved by the urgent need for such radical strategic changes … any more than they are within their own economies and societies. The most negative of their positions and practices, and the adverse forces and factors at work, can be summarised as follows:

  • Although there is much elite-bonding within and between the leadership layers in the member states of the Southern African Development Community, and leaders close ranks and give each other mutual support when needed, there are also many conflicting ‘national’ economic interests and periodic political tensions and even personal leadership rivalries within and between these two countries.
  • The vested political and economic interests of the political/ bureaucratic elites in the status quo is reflected also in their reluctance to advance processes that might result in their national
    power-bases, patronage (national bribery) resources and political privileges being in any way diminished within broader regional arrangements. This is especially objectionable to them where such plans point to supra-national democratic regional institutions and entities at some future period.
  • This is made even more problematic where well-positioned individuals in the political/bureaucratic/managerial strata are in the process of transforming themselves into new entrepreneurial players through the market-isation and privatisation programs within their countries. They, too, have vested interests in maintaining their privileged positions and more advantageous economic hold within their own national economic preserves.
  • This has regional political effects as well. As part of, or aspirants into, the new business classes in the countries of Africa, politically-linked economic players also feed into their governments’ policies to protect and promote their narrower elite interests rather than the broader cooperative development interests of the populations, and the creation of broader more effective, state-regulated and people-led developmental programs.
  • These national capitalist interests also reflect and feed into the inter-business rivalries and tensions in their regions. In Southern Africa, this is particularly marked between the much more powerful South African corporations in relation to weaker companies in the rest of the region. However, similar competitive patterns are also evident between other relatively stronger companies, for example from Mauritius and Zimbabwe, in relation to other even weaker companies; and so the pattern is repeated ‘down the economic ladder’.
  • On the other hand, although many national business interests compete with each other for maximum advantage in each others’ economies and in other regional member countries, some are also aware of their common interests in promoting preferential regional arrangements against outside economic competitors. They see the creation of a larger integrated and protected regional market as being primarily useful for their own operations, especially for those that are not ‘internationally competitive’.
  • Some national and regional business interests also co-exist and cooperate in moves towards cross-border joint-ventures and ‘mergers-and-acvisitions’ through direct market processes and business agreements.

Together, these initiatives are creating market driven competitive and exploitative processes of ‘regional integration’ rather than the politically-negotiated, government-led and regulated processes of cooperative and developmental regionalism.

Peoples’ Strategic Challenges

Peoples organisations within the countries of regional groupings, such as SADC,that are convinced of the strategic importance of regional development cooperation and integration, are faced with significant international and national counter- forces and factors as outlined above. The immediate practical challenges to such peoples organisations in Southern Africa are whether it is more effective to:

  • organise on local and national bases and, from these, create national actions and interventions to change national government policies in such a way that they will then also change regional structures and regional relations? and/or
  • engage in peoples regional cooperation in different sectors through which to strengthen national organisations, and through regionally coordinated national activities get national governments to change both their national and regional policies? and/or
  • form regional networks in different sectors, within regional perspectives and with regional plans and, through these, intervene directly in regional debates and through regional structures to change regional policies and programs? and/or
  • form peoples regional, continental and international alliances through which to engage in or around African continental structures and institutions to influence – or radically change – national and regional policies and programs? and/or form peoples regional, continental and international alliances through which to change the global system and, through such changes, be able to change national and regional policies and programs? Or is it vice versa – that the global will be challenged and changed from the national and regional? Or is it through both? And, if so, how?

Maxi Schoeman

Classical economic integration theory would have it that regional integration is an economic process occurring largely as a result of greater interaction between neighbouring states, try functioning almost like some kind of invisible hand. This theory is based on the historical example of the development of the European Union,
yet it completely discounts the fact that the European Union was first and foremost a political project. Such also has been the case with the Southern African Customs Union (SACU), store the world’s oldest customs union, and with the Southern African Development Cooperation Conference (SADCC) and its successor, the Southern African Development Community (SADC).
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