Saturday, December 3, 2022

SADC economic model flawed

A University of Botswana researcher, Dr. Trywell Kalusopa, says that the Southern African Development Community region has a “flawed economic paradigm” that makes it difficult for it to forge ahead in global trade.

He was speaking at a workshop held at Oasis Motel last Monday that brought together SADC MPs and affiliates of the Southern Africa Trade Union Coordination Council.

“States within the region are competing amongst themselves for foreign direct investment,” Kalusopa said, citing as his first example, Malawi which has lowered its labour and environmental standards in order to attract foreign investors to its shores.

Not too long ago, the world watched with horror as South African riot police gunned down striking miners at a place called Marikana. Kalusopa said that what is now known as Marikana was an expression of revulsion at the collusion between global capitalist barons and the state against workers.

As regards Botswana, the UB senior lecturer lamented the length of time it has taken the country to effect beneficiation, a process by which the cutting and polishing processes within the diamond value chain is to be conducted in-country to maximise the local economic contribution.

Botswana produces 25 percent of the world’s rough diamonds. The value of rough diamonds is a fraction of the value of cut and polished diamonds, and that in turn is a fraction of the value of retail in diamond jewellery.

Not too long ago, the government set up the Diamond Hub which aims to develop a new industry in manufacture and retail of diamond jewellery. As part of the beneficiation process, Botswana is moving its aggregation activities from London to Botswana.

Over the next two years, the allocation of rough diamonds for beneficiation is expected to increase to US$800 million, thus increasing the mining sector’s contribution to GDP.

Kalusopa’s native Zambia has one of the largest copper reserves on earth but the UB academic lamented the brazen manner in which the copper is exploited by foreign companies, with very little accruing to ordinary people.

Kalusopa said that he recently watched a documentary titled “Raped” that shows how those mining companies have economically violated Zambia.

He also pointed out the Angolan example where ordinary people are not benefitting as well as they should from the country’s vast oil wealth. Contrasting the Southern African scenario with that of the United Arab Emirates, he quipped: “Look what oil did to Doha.”

Kalusopa touted regional economic integration as the ideal because individual countries don’t have enough clout when they partake in global trade.

A Botswana trading alone has a small market which translates into little leverage on the international stage.

However, by aligning itself with other SADC countries, Botswana would be well-positioned to exercise greater leverage.

As further illustration of how the divisions in SADC are wreaking havoc on the economic fortunes of the region, Kalusopa pointed out that South Africa’s big brother mentality propelled it to become part of what is known as “BRICS” – an association of emerging economies made up of Brazil, Russia, India, China and South Africa – when the ideal would have been for it to harness the economic growth potential of SADC.

Echoing this sentiment later own in her own presentation, Tendai Makanza of the Alternatives to Neo-liberalism in Southern Africa (ANSA), expressed skepticism about SADC viewing BRICS as an alternative development partner.

“Can’t we as a region develop a position of how we engage BRICS?” she said, adding that there was need for SADC to develop a specific China policy in response to the Asian country’s increasing presence in the region.

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