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1 Foundation for Analysing the Impact of Regional Trade Liberalisation on Economic Growth and Poverty Reduction
- Africa Institute of South Africa
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1 FoundationforAnalysingtheImpactof RegionalTradeLiberalisationonEconomic GrowthandPovertyReduction MosesTekere Introduction The Southern African Development Community (SADC) region is endowed with abundant natural and mineral resources (such as gold, diamonds , platinum, copper and oil), yet it also has a litany of poverty statistics . It has one of the lowest life expectancy, social and human development index per capita GDP levels, the highest level of HIV/AIDS infections, poor health services, and frequency of droughts and famine. Collectively, as a result of the current situation in Zimbabwe, the region has the highest inflation rate and unemployment levels in the world. About 32 per cent of the SADC population of approximately 245 million lives below the international poverty line of US$1 per day, while about 70 per cent lives below the US$2 per day international poverty line (SADC Conference, April 2008). The region continues to register poor socio-economic conditions , lack of access to basic social services such as clean water, sanitation and health, and lack of access to basic infrastructure. A number of historical factors and conditions, namely, the colonial policies of exclusion of the majority from mainstream economic activity, and the exploitation of the majority, in particular the expropriation of means of production and international sanctions that created and perpetuated poverty in the region. Without access to means of production, poverty became endemic and entrenched among some social groups and classes, in particular workers and peasants. Various post-independence policies across the region have attempted, without much visible success, to address these challenges at both national and regional levels. FOUNDATION FOR ANALYSING THE IMPACT OF REGIONAL TRADE LIBERALISATION 17 SADC, formerly known as Southern Africa Development Coordination Conference (SADCC), is a regional integration arrangement bringing together 15 countries in southern Africa, whose main purpose is collective self-reliance to combat poverty and promote development of the region. In 2000, SADC adopted the Regional Indicative Strategic Development Plan (RISDP) as the main framework for its regional integration programme. The RISDP identifies combating poverty as the overarching priority in its integration agenda through the implementation of a number of intertwined interventions. The overall goal of the RISDP is to promote sustainable and equitable economic growth and development that will ensure poverty reduction with the ultimate objective of its eradication. The RISDP also mentions that poverty eradication is a crosscutting issue that should be mainstreamed in all other RISDP priority intervention areas. Furthermore, the RISDP claims that the regional strategies to eradicate poverty are consistent with, and complementary to, national strategies. However, the RISDP implementation framework has not articulated how regional trade integration will contribute to poverty eradication. In addition, the implementation framework has not clearly identified specific poverty-focused activities or examined the contribution of the free trade agreements (FTA) to poverty eradication. In 2000, SADC adopted the SADC Trade Protocol (STP) and at its annual summit in August 2008 it officially launched its FTA. So far, all countries except Angola and Seychelles have joined the FTA, which will see the creation of a common space for the free movement of goods in the region. At the same time, SADC member countries have developed national policies and programmes aimed at addressing poverty at national level. There are commonalities in national poverty reduction policies and strategies that link to the regional integration policies and strategies. These commonalities are not, however, coherently managed and harnessed in order to enhance synergies between different national policies and strategies . Countries’ awareness of the regional dimensions of national poverty eradication strategies and policies would enable them to elevate the coordination of these at the regional level with a view to increasing synergies and enhancing economies of scale through collective intervention. While SADC adopted the RISDP as an instrument for development and poverty reduction, the nexus between poverty reduction and regional [54.81.33.119] Project MUSE (2024-03-28 22:57 GMT) 18 REGIONAL TRADE INTEGRATION, ECONOMIC GROWTH AND POVERTY REDUCTION IN SOUTHERN AFRICA integration, in particular trade liberalisation under the FTA, is not clear. The launch of the SADC FTA is a major historical milestone for the region towards unifying markets that, owing to historical circumstances, were balkanised. With this major milestone it is important to assess how the FTA will impact on poverty, hence the timelines of this study. Theoreticalfoundation ImpactoftheFTAongrowthandpovertyisvaried,dependingonthecountry andtheregion The essence of an FTA is trade liberalisation, which needs to be conceptualised as a process rather than a state. Trade liberalisation entails significant reduction in direct and indirect controls on foreign trade that involves greater...