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IV. Reform proposals and conclusions

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7. Towards enhanced EU-SADC co-operation efficiency: a synopsis of recommended adjustments

Having discussed the present pattern and impact of EU-SADC co-operation within the framework of the LC, we point out some reform proposals which we believe are necessary in order to enhance the efficiency of future co-operation arrangements between the SADC States and their EU counterparts. The suggestions made aim at contributing to a constructive debate about alternatives for a beneficial development strategy to guide co-operation between the EU and its Southern African Associates. Evaluating these proposals, one has to bear in mind that there is no universally successful development strategy that any economy can subscribe to irrespective of the time, the socio-economic set-up, and other environmental limits.

7.1 Development policy orientation of a future EU-Southern African co-operation strategy

If future co-operation between the EU and their Southern African ACP Associates is not to be a further victim of the mistakes experienced in the past, it must be guided by a mutually beneficial strategic alliance. Envisioned policies have to be capable of transcending vested interests tied to political and/or other aid returns. They should be defined along objective development priorities and needs of the recipient countries. Also, the assistance should focus on competitive utilisation of aid.

The ultimate objective of this alliance should be the enhancement of competitiveness by strengthening the internal development impulse. Therefore, such an alliance should focus at the consolidation of the internal development base in the SADC States to fulfil the requirements for the creation of competitive and self-sustaining economies in the long run. Among others, enhancement of structural transformation of the economy as well as fostering a new form of internationalism and global partnership for development are main factors to attain competitiveness.

7.2 Contractual base

In the formulation of the contractual base of future EU-SADC co-operation, it is important to consider five elements upon which the actual contract should be built: the essence of institutionalisation, the spectrum of stakeholders, the continuance of the contract, openness to potential new members, and the requisite conditionality in order to uphold aid efficiency. As under the LC, it will also in future be desirable to maintain institutionalised linkages in order to uphold management efficiency. Similarly, such linkages should be based on a contract, committing the parties to respect the mutually agreed upon rules of the game. This is necessary to guarantee some degree of continuity and give the recipient country the security required for long-term planning (cf. Dauderstädt and Kesper 1994). Throughout Lomé I to Lomé IV, the states represented by their governments have been the central parties of the co-operation treaty between the EU and their ACP associates. In future, too, the role of governments as legitimate institutions in modern states will continue to be important. However, future arrangements should consider the essence of adequate integration of other actors including the private sector, NGOs and the community at large. Focus on community-based development projects will be indispensable for the battle against poverty. Moreover, considering the uncertainties due to the

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transient character of the LC it is desirable to model future co-operation as a permanent agreement like many other international ones. Also, the adopted arrangements should be open for reforms to bring them in line with the evolution of the international system.

While access should remain open to all ACP States as it used to be [We are of the opinion that, if the goal is to attain economic efficiency, there is nothing against the incorporation of the non-ACP states at comparable levels of development, e.g., by combining the LC, the GSP, and the SGSP, etc., in a global arrangement (cf. Matambalya 1997: 208209).], to improve aid utilisation efficiency, it will be necessary to think about more strict measures to evaluate the performance of projects financed through aid. Unlike under Lomé I to Lomé IV, when it was rather a taboo, some conditionality based on plausible criteria should be introduced. For example, in the economic field, there should be no excuse for countries which ignore gender issues and do not attempt to reduce the urban-rural development gap, while in the political field, there will be no justification for the EU to support regimes that abuse minority and/or human rights generally, military regimes or any other regimes not democratically elected in the ACP States (cf. Matambalya 1997: 208–209).

7.3 Requisite form of institutional framework

Inasmuch as the continuation of links between all EU and ACP States appears to be indispensable, some kind of supra-national institutionalised links of the LC-type still possess political and organisational relevance. Supranational institutional links will safeguard the continuation of the political North-South dialogue on a broader base, and provide an important device for co-ordination. In this regard, the maintenance of a joint forum for all ACP States will provide a global platform of South-South dialogue and uphold the chances of the ACP States to negotiate with the EU as a single entity. This will help towards a more optimistic view for the future of the co-operation.

In addition to supranational links, given the diversities that exist within the ACP and even within the African ACP economies, regionally differentiated economic co-operation programmes (i.e., programmes designed to especially focus on regional problems) between the EU and the ACP States will be more apt to address the development potentials, needs and priorities of the ACP Associates. To achieve higher development efficiency, the specific economic co-operation programmes should try to reflect the interests of relatively homogeneous constituent regions within the ACP. Plausible demarcation lines could be provided by the different regional integration groups that already exist within the ACP economies, such as the CARICOM, the CARIFTA, etc. (Caribbean), the ECOWAS, the SADC, etc. (Africa), etc. The separation of the ACP economies into more homogeneous groups and the initiation of a separate development programme for each does not rule out the upholding of close co-ordination of the regional programmes, the exchange of experiences, and, most importantly, the direct co-operation among the different regional groups. As opposed to a rough segregation of the ACP States into the A, C and P components, a demarcation modelled along regionalisation schemes will enhance the internal consolidation process, and accelerate competitiveness. It will also be in line with the EU's policy of maintaining relatively differentiated economic programmes with other regions. In Africa, the arrangements between the EU and the Maghreb States as well as the one with the Mashreq States provide plausible examples of relatively adequately differentiated regional co-operation programmes (cf. Matambalya 1997: 79 and 211).

Altogether, the transformation of the LC into a two-level (global vis á vis regional) and multi-tier arrangement (indicating linkages of the various regional groupings and the EU) is recommended. The EU and the ACP should be linked through a supranational institution modelled along the LC, but decentralised along regional lines. The global-level ties should be guided by a common supranational organ and bring together all the ACP and the EU. Important ne-

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gotiations including the allocation of development assistance funds might be conducted at this level. Besides, the links at this level will enable the member states of the LC to, (i) harmonise and co-ordinate their positions, (ii) exchange experiences, (iii) plan and implement inter-regional co-operation programmes (e.g., in areas like investment and trade), etc. (cf. Matambalya 1997, Gonzales 1996, European Commission 1996). The regional-level ties should be maintained by regional-specific organs. They should be the actual organs responsible for technical issues pertaining to these regions. Their focus should be on development programmes adapted to the development potentials, needs and priorities of the regions in question. Insofar as the existing regionalisation schemes within the ACP States provide an adequate bases upon which sub-regional groupings of the ACP States could be built, the SADC provide a natural partner for EU's co-operation with the Southern Africa region (cf. Matambalya 1997: 210–211).

7.4 Content of the requisite economic concept

The LC contains many positive aspects which should not be amiss in the concept for future co-operation between the EU and its Southern African ACP Associates. However, it will be necessary to give the LC a leaner structure by omitting economically futile aspects and augmenting it, instead, with aspects deemed necessary for the creation of competitive structures. In this part, we shortly review some of the conceptual contents of a future-oriented programme of action, which we suggest should focus on regional differentiation and utilise the unique potentials of the various ACP regional groupings to enhance competitiveness. Such a programme should be extended by a comprehensive structural transformation programme, as well as efforts to promote global partnership for development.

7.4.1 Regionally differentiated programme of action

In the first place, therefore, a shift towards a regionally differentiated and qualitatively more efficient and pro-competition arrangement with the EU should be at the core of the reform proposal. Such a programme of action should be geared to meet the special requirements of the SADC region, to enhance competitiveness through structural transformation of the SADC economies, as well as through a new form of internationalism and global partnership for development. The long-term goal should be to pool the region's efforts and to consolidate its capacity to utilise the internal development potentials through the establishment of a Customs Union in Southern Africa, and subsequently to establish a Free Trade Area between this Customs Union and the EU.

The proposed path towards attaining the envisioned co-operation objective should constitute a transitional phase, based on relative reciprocity, which should precede the establishment of a Free Trade Area between the EU and Southern Africa. In the transition phase, the relative reciprocity programme between the EU and the RSA (cf. Wellmer 1996: 113–142) could provide a starting point for a broader programme of relative reciprocity between the EU and its Southern African ACP Associates. Through relative reciprocity, the potential gains should deliberately be distributed disproportionately in favour of the SADC, to uphold the development assistance attributes of the co-operation arrangement. Also, a country differentiation may be considered, taking into account the varying economic capabilities of the SADC States. For instance, while the most SADC economies urgently need effective programmes to support the development of human resources, the RSA will highly benefit from a regional cumulation of production. Moreover, comprehensive liberalisation in the spheres of investments, production and trade should be attained within the region during the transitional phase to create economic competitiveness.

At the end of the transitional phase, a complete FTA between the EU and the Customs Union to be formed by its Southern African Associates is to be established. This FTA should focus on such issues as the free movement of goods, the

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liberalisation of trade in services, and the free movement of capital. While the internal consolidation process in Southern Africa (during which there will be phased and relative reciprocity trade programmes with the EU) may be achieved ten years after the expiration of Lomé VI (i.e., by the year 2010), fully functional FTA links with the EU could commence after another transitional period of five years (i.e., by the year 2015).

7.4.2 Structural transformation strategy

In order to enhance competitiveness in the SADC economies, the reforms should also aim at facilitating structural transformation. Thus, both the production and export patterns of the SADC economies should be transformed to higher value economic activities focusing on trade stimulants rather than traditional products. The ultimate goal should be to foster efficient blending of the region's resource potentials with industrialisation objectives. Thus, while a viable structural transformation strategy should embrace instruments for the mobilisation of the region's potentials, the hub of such a strategy should be industrial co-operation. The adoption of prudent macro-economic management policies will enhance such a co-operation programme as well as endow it with dynamic rather than static instruments. Also, an intensification of the regionalisation efforts, especially in investment, production, and trade will consolidate the internal base for economic transformation. Besides, in order to attract competitive investments to the region, it will be indispensable to transform the character of labour force and domestic entrepreneurship structure by adopting special programmes for the development of human resources and local entrepreneurship (cf. Matambalya 1997: 213–215 and 230).

7.4.3 New internationalism and global partnership for development

Finally, the liberalisation push should be complemented by measures aimed to enhance the competitiveness through a new form of internationalism and global partnership for development. In this context, such multilateral arrangements as the WTO, the IMF, the IBRD, as well as individual and groups of developed states should be more responsive to the genuine and objective development requirements of the SADC and other developing economies, beyond mere liberalisation rhetoric. Bearing in mind that, in the past, due to conflicting policies at the global level, the realpolitik of global development has been dominated by antagonism instead of harmony of interests, it is imminent that, in the absence of consistency of policies at the global level, it will remain difficult to formulate and implement special agreements between the EU and the SADC and/or other ACP States in 'isolation'. Therefore, there is an urgent need for a constructive dialogue with, among other global actors, Japan and the USA. This will be one of the assignments of the LC as a platform of North-South dialogue and a lobby group for the South. Given its dominance, the EU can influence the process at different levels. The improvement of the international environment in favour of the SADC States may be attained by complementing measures like WTO waivers in certain areas (cf. Matambalya 1997: 216–217 and 230).

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8. Conclusions

The LC represents a model of North-South co-operation programmes. From its inception and throughout its existence, it has been envisaged to embody means of access to a bright future for the Southern African and other ACP economies. To summarise, while the European powers have unquestionably experienced a complicated history of involvement in Southern Africa, given the conditions dominating the international system, it is imperative even to the most radical observers that the institutionalised involvement of the EU in the region may be less tainted than the primordial buccaneering form of economic links that are associated with the roots of the North-South exploitative relations. The latter are partly attributable to contemporary economic marginalisation and underdevelopment. That the EU has been a crucial partner of its Southern

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African ACP Associates beyond the humanitarian sphere constituting a fundamental axis of their economic development efforts is verified by several positive attributes including the development policy pertinence of the LC, its (geo-)political significance, and its economic development impulse.

However, considering the declared objectives and the actual benefits, a general evaluation of the trade and overall economic development programmes of the LC produces rather inconclusive results. On the one hand, there was a continuous proliferation of both co-operation and its corresponding instruments, although, on the other hand, the ability to efficiently blend the LC as a development strategy with the economic development potentials and priorities of the SADC States apparently did not keep pace with this trend. Thus, its existence could not prevent the global marginalisation and the continuous deterioration of the economic prospects of the ACP States, and, as elsewhere in Africa, the benefits of the scheme have remained particularly marginal in some of the countries in the SADC region: in spite of country differences, the trade and production efforts of the SADC economies generally remain at a low level. While, on the one hand, internal and external distresses other than those ascribed to the weaknesses of the LC significantly erode the benefits accruing to the SADC States, on the other hand, it is apparent that the inherent deficits of the instruments of the LC impede the EU-SADC co-operation efficiency, so that underdevelopment and poverty could not be combated and sustainable economic development of the recipient states not be significantly promoted. In its current form, the LC constitutes a liability to both the EU and the recipient countries, because it propagates policies of questionable pertinence for the invigoration of permanent economic development and the increase of social welfare. There is evidence for the LC to become a more and more shaky base of co-operation between the EU and its ACP Associates because of the shifts in attitudes, and consequently, in political and policy priorities. In future, it will presumably become increasingly difficult for EU policy makers to justify the LC-type arrangements in front of their electorates, since such arrangements involve financial obligations that are weighing more and more heavily on the tax payers.

Considering the inherent weaknesses of the LC and the impending environmental challenges, its reforms are imminent if this important platform of North-South co-operation is to be salvaged. For future co-operation strategies between the EU and its Southern African Associates, special care should be devoted to four elements: the development policy orientation, its contractual base, the requisite form of institutional framework, and the content of the economic concept. The subject of the reform should be a shift towards a more efficient and pro-competition arrangement with the EU. The long-term goal should be the establishment of a Customs Union in Southern Africa and later a Free Trade Area between this Customs Union and the EU. The way towards the attainment of these goals should constitute a transitional phase, based on phased and relative reciprocity, which should precede the establishment of a Free Trade Area between the EU and Southern Africa. The intended relative reciprocity programme between the EU and the RSA could provide a good base for a broader programme of relative reciprocity between the EU and its Southern African ACP Associates in the transition phase. During this phase, too, development co-operation efforts should be focusing on the creation of competitive structures in the SADC economies. Using this approach, development assistance should serve as external impulse and aim at augmenting efforts to mobilise the internal development potentials. The envisaged external impulse is one to be modelled along competitive lines, i.e., in the form of intensifying dynamic economic interactions by making the SADC region attractive to various kinds of investments. Ultimately, to prepare the SADC economies for a move towards a FTA with the EU comprehensive liberalisation will have to take place within the SADC region itself.

The dynamics of intra-SADC reforms, the willingness of the LC to reform, as well as the pros-

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pects for a positive development of the global environment will determine whether, in future, the EU and its SADC partners will be able to mould a framework for mutually beneficial trade and overall economic links between them. All in all, one can only hope that the relations between the Southern African ACP States and the EU will survive the turbulences of global economic dynamism. Likewise, the ongoing debate about the future of the LC will hopefully contribute constructive ideas that might serve as a solid base for a concept upon which future co-operation between the EU and its developing associates is to be built.

© Friedrich Ebert Stiftung | technical support | net edition fes-library | April 2002

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