Southern Africans Seek Economic Cooperation

As South Africans work to save talks, their neighbors consider how to involve the economic giant in regional development

SOUTH Africa's black-ruled neighbors, eager to reap the benefits of a closer economic relationship with Pretoria, fear that the break in negotiations and spiraling violence could thwart the goal of regional cooperation.

This concern was clear at a recent three-day conference on cooperation in southern Africa held here under the auspices of the German Foundation for International Development.

There is a growing fear in Africa that the continent is being economically marginalized as a result of changing priorities following events in Eastern Europe and other areas.

Delegates at the conference argued that the most effective strategy to prevent Africa from being left behind was to develop regional trade blocs, which would give nations collective leverage in trade and economic relations. But it was noted that previous attempts to establish economic groupings in Africa had failed.

In recent months several studies by leading economists have cautioned against hasty moves to set up a southern African common market, opting instead for a gradual approach where South Africa would extend existing arrangements with its immediate neighbors to other states in the region.

But debate on integration at the conference was repeatedly diverted by heated exchanges over the security situation in South Africa, sparked by the massacre of at least 41 civilians in the township of Boipatong, south of Johannesburg.

"Violence is on the increase and is assuming paralyzing proportions [in South Africa]," said Gen. Olusegun Obasanjo, the former Nigerian head of state who chaired the conference. Integration despite fear

The roundtable was attended by some 55 delegates from seven African states and development and international agencies in Germany, Britain, and the United States.

Despite fears that the violence will engulf them too, the 10 countries of the Southern Africa Development Coordinating Conference (SADCC), a regional trade bloc founded to reduce economic dependence on South Africa, are exploring ways to include South Africa.

General Obasanjo warned delegates not to pitch their expectations too high. "To the rest of southern Africa, South Africa might seem a powerhouse," he said. "But it is an economy suffering from severe distortion and mismanagement."

South Africa's economy contracted for the third successive year this year. Inflation is running at 16 percent and unemployment is estimated at 40 percent.

Despite its status as a relative giant in the region, South Africa is battling to find a formula for restructuring its economy in such a way that it can both achieve economic growth and compensate for the effects of apartheid in housing, education, and health care.

Delegates discussed the need for regional bodies like the SADCC - and the Preferential Trade Agreement (PTA), which includes nine of the 10 SADCC states as well as East African countries - to restructure themselves to make regional integration a more attractive proposition for South Africa.

But in spite of its structural weaknesses, South Africa remains an economic powerhouse in the region likely to dominate any bloc. "South Africa would not join the SADCC but rather the SADCC would join South Africa," said Klaus von der Ropp, an adviser to the German government.

The African Development Bank and the African Economic Commission are two continent-wide bodies preparing to admit South Africa as soon as an interim government is in place, opening the way to full access to the World Bank and the International Monetary Fund. Existing blocs to stay

Pretoria officials, while promoting the idea of regional cooperation, are unlikely to jeopardize area groups like the five-nation South African Customs Union, the Rand Monetary Area, and the Southern African Development Bank.

There was a consensus at the conference that such bodies would have to be reshaped to serve the interests of the whole region, while SADCC and the PTA would have to be redesigned to accommodate South Africa.

"South Africa must see itself for what it is," said Obasanjo, "a developing economy geographically located on the southern tip of Africa.

"Adequate and relevant institutions must be created to initiate and sustain the process of regional cooperation and integration."

He added: "As far as possible, this should be on the basis of utilizing, refurbishing or transforming existing institutions rather than forming new ones."

SADCC is locked in a power struggle with the PTA to be the primary vehicle for integration.The PTA wants to merge with SADCC and prepare for South Africa's inclusion.

"There are high expectations in the region as to what South Africa can do to assist other states and there are high expectations within our own country," said Albert van Niekerk, South Africa's ambassador to Germany.

He said many development programs could begin before a political solution to South Africa's problems was finalized.

But other delegates were sceptical about progress in the region until South Africa resolved its internal problems.