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Al-Ahram Weekly On-line 9 -15 November 2000 Issue No.507 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly On-line 9 -15 November 2000 Issue No.507
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Books Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Contradictions of COMESA
By Gamal NkrumahExpectations are running high at the headquarters of the Common Market for Eastern and Southern Africa (COMESA) in the Zambian capital Lusaka at the moment. Last week, at the first extraordinary summit of COMESA in Lusaka, country representatives launched the COMESA Free Trade Area, which aims to create a "fully-integrated and internationally competitive economy," as the secretary-general of COMESA Erasmus Mwencha told Al-Ahram Weekly.
No less than 11 presidents were in attendance. Also present was the secretary-general of the Organisation of African Unity Salim Ahmed Salim; the executive secretary of the Inter-Governmental Authority for Development (IGAD) Attala Bashir; the secretary-general of the Indian Ocean Commission Caadi Mohamed; and the acting executive secretary of the Southern African Development Community (SADC) Prega Ramsamy.
COMESA includes some of the world's poorest and most underdeveloped nations and is struggling to attract foreign investment and improve the economic performance and competitiveness of its member countries. The organisation groups 27 countries in a vast region that stretches from Egypt in the north to Zimbabwe, Namibia and Swaziland in the south and includes Indian Ocean islands such as Mauritius, Madagascar and the Comoros.
With an estimated GDP in 1998 of $165 billion, COMESA is not a large market by the standards of other international regional economic groupings. While COMESA has made more progress along its self-charted quest for economic union than expected, the organisation is bedevilled by a plethora of problems. Key among these challenges is rampant poverty and low social and health indicators. Poverty-related health concerns such as the AIDS epidemic have taken their toll. Life expectancy is only 52 years, infant mortality rate averages about 77 per 1,000 live births and only 48 per cent of COMESA's population have access to safe drinking water.
"In addition to expanding the effective size of markets, improving access to export markets and providing incentives for foreign direct investment (FDI), the main challenge facing COMESA, is how to spur economic growth and investment through increased productivity," Mwencha told the Weekly.
But this last goal is no mean feat. As Mwencha explained, "Increased productivity will require a restructuring and diversification of the productive base. Also, COMESA countries cannot compete in global markets in terms of high productivity and high quality on the basis of low labour wages alone. Access to technology and knowledge is critical."
Interaction among member countries is key to overcoming such challenges, explained Mwencaha. "Through greater regional cooperation and networking between domestic, regional and international partners, COMESA will strive to improve access to technology and other resources, and thus enhance productivity and competitiveness in the global marketplace," he said.
Another of the pressing issues raised in Lusaka was the role played by multinational corporations, international financial institutions and the World Trade Organisation (WTO). "COMESA's position is that Africa should remain committed to the multilateral trading system because of the opportunities that it presents. However, to take advantage of these opportunities and to reap gains, the multilateral trading system should assist Africa to overcome its real difficulties; namely, severe supply-side impediments; insufficient capacity for formulating and implementing trade policies; and institutional weaknesses," asserted Mwencha.
Clarifying his point, Mwencha said, "In other words, integration in the world economy should be treated as a means to development rather than an objective in its own right. Efforts to maximise the advantages of the trading and financial system for the weaker partners should constitute a key moral imperative."
However, new and formidable obstacles face COMESA countries in trying to live up to this orientation. "The [industrially advanced countries of the] North are consolidating their competitive advantage through a new breed of global multinational corporations whose tentacles span the world in a complex network of business and investment alliances. This, like the growing volatility of capital flows, poses a severe challenge for COMESA and Africa as a whole," Mwencha said.
While this highlights the work that the Lusaka-based organisation still has to do, the game is a long way from over. The challenge for COMESA is to ensure domestic growth and the competitiveness of the small economies of its member-states. The President of Mauritius Anerood Jugnauth, who chaired the meeting, called for greater participation of private sector interests in regional integration. He called for the regionalisation of COMESA business and warned that efforts to mobilise the local private sector have to be doubled. Jugnauth also said that foreign investment must be channelled in a more strategic and focused fashion.
Above all, COMESA must redefine its relationship with South Africa. There are distinctive signs of disenchantment about South Africa's non-participation in the grouping. Last year, signs of a cooling in enthusiasm for COMESA emerged after Tanzania and Mozambique pulled out of the Lusaka-based organisation mainly because they felt their economies were more closely linked to that of South Africa which adamantly refuses to join COMESA.
One of the major stumbling blocks to the creation of a viable COMESA is the conspicuous absence of South Africa from the bloc. South Africa is by far the largest economy in the region. As the economic powerhouse, it is also the major trading partner of most of COMESA's smaller eastern, southern and Indian Ocean member states. Enclaves of successful African economies will profit from the free trade agreement (FTA) under COMESA, but the poorer ones will be left alone, it is said.
It is feared that the FTA will heighten asymmetries in the regional economy. Smaller and weaker economies are afraid of being swallowed up by larger and more dynamic economies like those of Kenya and Egypt. However, it is healthy that these fears are being aired, albeit somewhat late in the day.
Related stories:
Juggling aims 2 - 8 March 2000
Economic, and moral, imperatives 2-8 March 2000
Ambassadors take the lead 27 May - 2 June 1999
Talking politics for business 27 May - 2 June 1999
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