14 December 2000
INTRODUCTION
It is my pleasure to welcome you ladies and gentlemen of the media to this briefing which affords us an opportunity to share ideas on events and issues of importance for the development of the SADC region. My intention this afternoon is to give you a brief overview of the current political, economic and social situation in the region.
POLITICAL DEVELOPMENTS
The SADC region has generally maintained a stable and peaceful atmosphere characterised by regular consultations and collective engagement to manage conflicts as and when they arise in the region.
Another feature of the stability of the region has been its strict adherence to democratic principles and the rule of law. The region has pressed ahead with the consolidation of the process of democratization. In this regard, eight countries have held democratic elections in the past two years up to October this year and these are: Malawi, Botswana, Mozambique, Namibia, South Africa, Zimbabwe, Mauritius and Tanzania. Lesotho is expected to hold elections next year.
Regrettably, hostilities and human suffering are continuing in Angola and the Democratic Republic of the Congo.
ANGOLA
SADC continues to support all regional, continental and international initiatives aimed at ending the conflict in Angola which has inflicted massive damage to the economy and continues to perpetuate the killing, maiming and displacement of the thousands of people. Dr Jonas Savimbi and his UNITA movement remain the main obstacles to peace, reconciliation and reconstruction in Angola.
For SADC, the 1994 Lusaka Protocol remains the only concrete and viable way of achieving peace and stability in Angola. In this regard, the Angolan government has kept its side of the bargain by respecting all the provision of the protocol despite UNITA's constant provocation's. At the recent SADC-EU Ministerial meeting in Gaborone, Botswana, the delegation from Angola briefed the meeting on the latest government efforts to re-open constitutional dialogue with a view to holding elections in the not too distant future. For his part, President Jose Eduardo dos Santos has passed a decree to pardon all those who have been waging war against the government. This is an indication of the extent to which the government is willing to go to bring democracy, peace and stability to Angola.
We also demand full compliance by all concerned with United Nations Security Council Resolutions, including on sanctions as contained in Resolutions 864, 1127, 1137, 1173, 1189, 1202 and 1295. We call on the countries and individuals that are still providing logistic and material support to UNITA to co-operate actively with the Monitoring Mechanism created by UN Resolution 1295 with a view to immediately ending all support for UNITA. In view of the deteriorating humanitarian situation in Angola, we call upon the international community to continue to provide support for Angola in the areas of humanitarian aid, rehabilitation and peace building.
DEMOCRATIC REPUBLIC OF CONGO
The situation in the DRC remains a matter of great concern for the whole region. We are concerned by the slow progress being made in the deployment of the UN peace-keepers. However, there are recent developments which indicate that the peace process in back on track. These include the arrival of observers from the UN in the DRC to identify sites for the UN peace-keeping. In addition, the recent Maputo meetings of some SADC Heads of State and those of countries involved in the DRC conflict are reported to have borne fruit by securing assurances of co-operation from the belligerents.
Meanwhile, the Political Committee for the implementation of the Ceasefire Agreement in die DRC met in Lusaka, Zambia on November 29, 2000. The Committee adopted Sub-Plans for the disengagement and redeployment of forces in the DRC in accordance with the Kampala Disengagement and Redeployment Plan. The Committee also registered its grave concern at the continuing shortage of resources for the Joint Military Commission and agree to renew appeals to the international community to fulfil outstanding pledges and provide additional contributions. The Political Committee also regretted the ceasefire violations taking place in some parts of the DRC and called on all parties to comply with the Ceasefire Agreement.
It is our hope that peace and stability will return to the DRC soon and that the inter-Congolese dialogue will begin with a view to finding a lasting solution to the problems of the DRC.
ECONOMIC DEVELOPMENTS
SADC Member States have continued to implement economic reforms aimed at achieving both macro-economic stability and putting their economies on a high sustainable growth path. Consequently, the region achieved a positive weighted GDP growth rate of 1.4 per cent in 1999 compared with 1.2 per ent in 1998. This growth rate is however still below the average population growth rate. An improvement is expected for 2000 when the economic growth rate is expected to reach 3.5 per cent.
Despite the modest increase in growth in 1999, the Southern African economy continued to lag behind those of other African regions, as was the case in 1998. The mean growth rate for Southern African in 1999 was 2.2 per cents, in comparison with 3.3 per cent in West Africa, 3.6 per cent in North Africa, 4.1 per cent in East Africa, and 4.5 per cent in Central Africa. Accordingly GDP growth needs to be pushed and sustained to achieve the 6 per cent defined in the United Nations New Agenda for Development in Africa (UN-NADAF) as the minimum required for sustainable economic development. However, Mozambique succeeded in surpassing the GDP growth requirement of 6.2 per cent for reducing poverty by half in 2015, the target agreed to in 1995 at the World Summit for Social Development. Other member States such as Botswana, Mauritius and Namibia are maintaining growth rate of around 5%.
With regard to inflation, there were significant reductions in inflationary pressures in Tanzania, South African and Zambia. The lowering of inflationary pressures was primarily a result of greater fiscal and monetary discipline, which contributed to a sharp reduction in budget deficits. In this respect, budget deficit as a percentage of GDP was below 5 per cent in most Member States. However, there were strong inflationary pressures in Angola and the Democratic Republic of Congo (DRC) as can be expected due to ongoing conflicts in those countries. In the former, inflation was reported at a high of 329 per cent in 1999 and a projection of 100 per cent in 2000. In the DRC inflation reached levels estimated at 243 per cent in August 1999.
Consequently, the SADC region has become a much more lucrative and secure destination for investment as well as an attractive emerging market.
IMPLEMENTATION OF THE TRADE PROTOCOL
Another effort to further out integration agenda and enhance the economic environment in order to attract FDI is the launch of the implementation of the SACD Trade Protocol was launched on September 1, 2000
The Launch of the implementation of the SADC Trade protocol marked the countdown to the SADC Free Trade Area, which we believe will be attained in 2008. We consider the Trade Protocol as a major catalyst to our regional integration efforts and we expect intra-SADC trade to increase from the current estimate of 20-22 per cent to about 35 per cent by 2008.
The SADC Ministers of Trade worked tirelessly over the past two years to lay the ground for the launch of the implementation of the Trade Protocol Consequently, in August 2000, In Windhoek, Heads of State signed and Amendment Protocol modifying the originally signed SADC Trade Protocol in some significant areas and containing the following annexes:
Following the launch of the implementation process, Member States are expected to submit to the SADC Secretariat their instruments of implementation which will allow preferential trade to take place. So far, five countries: South Africa, Mauritius, Swaziland, Botswana and Lesotho have done so and we expect all the other member States to do so soon.
Trade integration represents a process and therefore negotiations will to continue on the outstanding issues. We still need to reach agreement on the outstanding areas where compromise could not been reached as of September 1, 2000. The TNF has already started looking at possible liberalisation of trade in services initially at regional level and later at the multilateral level.
SPATIAL DEVELOPMENT INITIATIVES
In an effort to further enhance the potential for investment in the region, the SADC region has developed the Spatial Development Initiatives (SDIs) in specific locations in the region. The aim of the SDIs is to unlock the economic potential of certain locations by using public resources to leverage private sector investment. Through the SDIS, infrastructure and other resources are put in place to create an investment-friendly environment.
Already under implementation is the Maputo Development Corridor SDI which brings together the governments of Mozambique and South Africa. This SDI has already attracted over US$3bn in investment. Also under implementation is the Lubombo SDI. This is a tourism development initiative between the governments of Mozambique, South Africa and Swaziland.
Another intra-country project which is under implementation is the Kgalagadi Transfortier Park (KTP), a 37 991 square kilometre park jointly managed by Botswana and South Africa as a single ecological unit. It was launched on May 12, 2000.
The KTP is a result of a merger of two parks, the Kalahari Gemsbok National Park in South Africa and the Gemsbok National Park in Botswana. This merger is aimed at guaranteeing the long term conservation of the valuable wildlife resources in the area. The joint management of the KTP is also expected to raise the international profile of this important conservation area, thereby enhancing its status and potential as a tourist destination.
Examples of SDIs under consideration are;
A meeting is planned in early February, 2001 for Ministers of Tourism and Wildlife to consider and approve the project for the SADC Region. it is estimated that in 10 years time this SDI would have a sustainable tourism carrying capacity of some 4 million visitors per year from the current level of 350.000 visitors. It is also estimated that investment in facilities would result in 3,400 new hotel rooms plus infrastructure totalling US$2billion. In terms of job creation, it is estimated that 35,000 new jobs would be created over the 10 year period.
Three SACD Member States namely, Mozambique, South Africa and Zimbabwe, signed an Agreement on the development of the Gaza-Kruger- Gonarezhou Transboundary Park 9GKG TFGA) on 10th November 2000. The main objective of the GKG Transboundary Park is to foster cross-border collaboration and co-operation in management of the shared natural resources (ecosystems) among Prties. The German government has pledged to support this initiative.
THE COTONOU AGREEMENT
As you may be aware, the Lme IV Convention, which provides the African, Caribbean and Pacific (ACP) countries with non-reciprocal trade preferences has been replaced by a new partnership agreement which was signed in Cotonou, Benin in June 2000.
The new agreement's primary objective is reducing and eventually eradicating poverty consistent with the objectives of sustainable development and the gradual integration of ACP countries into the world economy. I have just come back from Brussels where we were discussing the implementation process of the Contonou agreement.
Head of ACP Regional Integration Organisations met from December 7-8, 2000 to deliberate on some issues that will affect them as the Cotonou agreement makes regional integration one of the main strategies for economic development in ACP countries. The agreement provides for a preparatory period for the ACP and the European Union (EU) to negotiate new trade arrangements that are compatible with WTO rules and obligations. ACP countries will continue to enjoy non-reciprocal duty free trade preferences during the preparatory period from 2000-2007. It is anticipated that new trade arrangements will enter into force in January 2008. The negotiations on trade are expected to commence in September 2002.
With respect to the new trade arrangements, the Cotonou Agreement provides for negotiations to take place between the EU and ACP member states as groups or individually as they may decide.
However, the EU appears to favour a system through which trade negotiations should be in the form of Economic partnership Agreements which would lead to a free trade area.
Our member states need to carry out their own assessment on how they want to approach these trade negotiations. Our region has complication in that:
We therefore need to examine these issues at country and regional levels.
With regard to financial programming for the Ninth European Development Fund (EDF), there are a number of issues at stake particularly as far as the regional resources are concerned. These include:
SOCIAL DEVELOPMENTS
EDUCATION
The Human Resources Development Sector has already started the implementation of the SADC Protocol Education and Training which came into force in September 2000. The ultimate objective of this instrument includes the progressive achievement of equivalence, harmonisation and standardisation of educational and training systems in the region. To this end a technical Committee on Accreditation and Certification has been established. Apart from dealing with issues on harmonising entry and exit qualifications, the Committee is also addressing issues of comparable curricula in the region.
In addition, the Sector is implementing a project on Intra-regional Skills Development. This project is aimed at developing human resources in priority and critical skill areas through the provision of training mainly at post-graduate and specialise undergraduate levels. The training will be undertaken within the framework of Centres of Specialisation.
One such Centre has already been established at the University of Botswana in the area of Public Sector Administration and Management at a masters level and for short-term executive development programmes. For other areas of training, a feasibility study is being finalised to assess the training needs and institutional capacities, including the identification of potential Centres of Specialisation.
FOOD SECURITY
During the 1999/2000 growing season, the region experienced a delay in the onset of rains followed by incessant rainfall, which caused flooding in parts of Mozambique, Swaziland, South Africa and Botswana. Cyclone Eline, which hit Mozambique, worsened the conditions. The Cyclone also hit the northern province of South Africa, the southern half of Zimbabwe and spread into eastern and southern Botswana.
Despite the devastation caused by floods, overall cereal production in the region improved due to above average rainfall in most parts of the region. The latest assessment put cereal harvest at 24,21 million tonnes for the 1999/2000 growing season compared to 21.37 million tonnes in the previous year, reflecting a 13 % increase. However, the regional cereal supply situation including strategic grain reserves (SGR) remained insufficient to meet the demand. Cereal supply is estimated at 27.04 million tonnes against a regional requirement of 27.72 million tonnes, leaving an overall cereal deficit of 679,000 tonnes.
An assessment at individual Member State level shows a mixed picture, with South Africa, Malawi and Zambia showing surpluses for cereals and Angola, Mozambique and Tanzania project to record the highest cereal deficits from the 2000 harvest. Botswana and Mauritius were also projected to have significant import requirements of between 200,000 tonnes and 300,000 tonnes. In the rest of the countries, minor deficits or import requirements were projected.
The deteriorating food situation continued to be a matter of concern in the war-affected countries of Angola and the Democratic Republic of Congo.
The food situation also deteriorated in other countries that were not affected by war due to less investment targeted for food production of the subsistence agriculture, in which women are predominant. The subsistence agriculture in comparison to large-scale commercial farming, suffered the most from less capital, credit, research and technological innovations, information and land reforms targeted to enhance capacity of women to improve food production.
CHALLENGES
There is no doubt that SADC has made great strides in a number of development areas. Nevertheless, accelerated progress in hampered by a number of challenges facing the region among them the HIV.AIDS pandemic, external debt, globalisation and civil strife in two of our Member States.
HIV AIDS
The HIV/AIDS pandemic in the Southern African region continues to be a major developmental and security issue. The impact of HIV/AIDS is worse in women compared to men due to several factors.
Firstly, women are vulnerable to HIV/AIDS due to biological factors, which make it easy for women to be infected through heterosexual means compared to men. Secondly, women's subordinated status on the sexual and reproductive rights denies them the right to protect themselves from being infected by their spouses/partners. Thirdly, the high incidence levels of poverty act as push factors to some women and girls into sex work.
In the light of this, the region has adopted a Multi-Sectoral SADC HIV/AIDS Technical Subcommittee and a SADC HIV/AIDS Strategic Framework and Programme of Action: 2000-2004, particularly as it relates to women.
The SADC Council of Ministers in August 2000 also approved the Principles to Guide Negotiations with the Pharmaceutical companies on Provision of Drugs for the Treatment of HIV/AIDS related conditions. The principles include, inter alia, recognition of the critical role that poverty and malnutrition play in the epidemic provision of equipment, maintaining the continuum of care, and supplies of appropriate drugs to ensure sustainablitiy, equability, affordability and accessibility.
DEBT
High levels of debt as well as declining ratios of development aid have continued to impact negatively on the economic growth of most countries in our region. Six of the countries in the SADC region are classified as severely idebted low-income countries. Aggregate data indicate total external debt for SADC at US$9.2 billion in 1998, the last year for which complete data is available, compared to US$1.7billion in 1997.
Debt servicing requirements prevent many countries from making adequate investments in education and health care as well as from responding effectively to extreme poverty demands, natural disasters and other emergencies.
However, the aggregate data on total external debt conceals q wide variation at country level. With the exception of Lesotho, Malawi and Tanzania, where external debt increased by 2.3, 0.7 and 1.2 per cent, respectively in 1998, most countries achieved an encouraging, albeit modest, decrease in the volume of their external debt. In Mauritius, for example, debt stock decreased by over 23 per cent while in Namibia the respective decrease was 12 per cent in 1998. In the Republic of South Africa, the corresponding decrease was much more modest at 2 per cent. While Mozambique by 2 per cent in 1998, which was mostly due to debt relief rather than net payment. As a result of strict debt management policies and the avoidance of new borrowing by Member States, it is expected that total outstanding debt of SADC countries would have declined in 1999 and 2000.
We are also encouraged that Zambia and Malawi are now being assessed for inclusion in the Highly Indebted Poor Countries (HIPC) Initiative. We are happy to learn that Tanzania has been accepted into the HIPC Initiative and will now join Mozambique, in benefiting from this scheme.
GLOBALISATION
It is a fait accornplis that the globalisation process is one of the major challenges facing our region at the very beginning of the new Century and Millennium. Although not completely new, Globalisation is nowadays characterised by a more and more deepening of the integration of the world economy compounded by modern and sophisticated information technologies.
Globalisation results form s systematic reduction of trade barriers and the consequent growth in the volume and value of world trade, the increase in net private capital flows and in FDI. As a result of the dramatic developments in the process of world economic integration, trade increased more than 12 times since World War II, international trade capital flows to all developing countries increased from US$12 billion in 1980 to US$23 billion in 1988 and US$207 billion in 1996. A similar trend was experienced in the international foreign exchange market where the amount of money transacted increased from US$1 billion in 1970 to 1.2 trillion in 1996.
However, despite the dramatic developments brought about by the globalisation process their impact on developing countries an especial those of Africa remains marginal. Africa's share of private foreign investment continued to decline from a peak of US$10 billion in 1982 to about US$5 billion in 1996. In 1995, for instance, while Asia, Latin America and Eastern Europe attracted new private foreign investment at 18.5%, 13,9% and 12.6% of regional GDP, respectively, SSA hardly managed to attract 8% of regional GDP.
Africa's development problem in compounded by external debt. External debt has grown from a mere US$48.5 billion in the 1970s to well over US$300 billion in the 1990s. What is worse, Africa's export and imports as a share of total world trade has declined from 4% to about 2% in the same period.
I can go on and on painting the grey picture, which unfortunately still characterises Africa in general and Southern African in particular. However, the point I want to make here is that, as UN Secretary General Kofi Annan, stressed in his Millennium Report, "we have to ensure that globalisation becomes a positive force for all the worlds people instead of leaving billions in squalor. In the case of SADC we have to be able both to avoid marginalisation and to reconcile the virtues of the market forces, namely efficiency and economic growth and promotion of equity, eradication of poverty and promotion of sustainable development.
SADC cannot extricate itself from the process of globalistion, as we cannot uplift the lives of our peoples through self-contained development confined to our region. If globalisation is to be sustainable, it must also tap into the markets of the developing world and directly contribute to our development process. Hence the need for us to increase our level of competitiveness in the world economy. It is only by exporting manufactured goods and in particular, knowledge intensive manufactures that SADC countries can compete globally on an equal footing with the rest of the world.
According to World Economic Forum (2000), out of the 13 SADC member States, which were surveyed, the competitiveness index indicates that four countries were ranked high (Mauritius tops the ranking, followed by Botswana, Namibia and South Africa). The remaining six countries were middle ranking and only one country, Zimbabwe, was low ranking.
POVERTY
One of the greatest challenges that face the region is poverty alleviation. Poverty has continued to be a major economic and social problem in SADC. The incidence of poverty, measured by a minimum level of consumption expenditure per head, remained remarkably high. The proportion of the population living under conditions of poverty increased in the rural areas, where the economy continued to decline, and in the cities where there was a lack of dynamism if fostering growth and job creation in the industrial and service sectors.
In Mozambique, for example, the first comprehensive household data report published by the government indicates that the incidence of poverty countrywide is at 69.4 per cent, while in Malawi government estimates that 60 per cent of the population live below the poverty datum line. In Zambia, poverty incidence was generally estimated to exceed 70 per cent of the population. The region needs to intensify efforts to ensure a sustainable economic growth rate of more than 6.2 per cent in order to make a dent on poverty.
UPCOMING EVENTS SADC EXTRA-ORDINARY SUMMIT
The Chairperson of SADC, His Excellency President Nujoma announced that there would be an extra-ordinary summit early in the News Year to consider the report of the Restructuring of SADC institutions. We are yet to be advised by the Office of the Chairperson on the exact dates for this.
COUNCIL OF MINISTERS
This meeting will take place in Gauteng, South Africa from 18-24 February 2001. As usual we would like you to come out in full force to provide coverage for this event.
Before I invite your comments and question, I wish to extend an invitation to you all to attend a reception to be held in this room this evening at 19H00.