Integration has the potential to promote growth and reduce poverty through the increase of exports of domestic goods. Donor countries therefore support efforts at regional integration. This paper argues that whilst regional integration can increase growth, the gains are not evenly distributed between or within countries in SADC. Donors can play a role in regional integration by supporting efforts towards facilitating regional trade through the reduction of impediments at borders, through support for the development of complementary policies nationally, and can maximise the beneficial impact by support in assessing likely 'winners' and 'losers'. Whilst it is not the role of donors to compensate losers, they can also assist in developing systems for such support. Donor governments should ensure that their preferential trade agreements with regions do not impose restrictions that undermine integration. Finally, donor governments need to liberalise their markets for developing country goods, particularly on agricultural produce, and make the next trade round of the WTO negotiations truly developmental. This paper considers the role of donors and regional economic integration, with a special focus on the UK.
This paper has sought to argue that regional integration is important to donors because of its importance for stimulating growth and reducing poverty. Yet for benefits to be fully realised, complementary policies are needed as well as a focus on trade-creating rather than trade-diverting regional integration blocs, and in parallel to multilateral trade participation. This support should be neutral with respect to the existing regional organisations. Independent support can be given to national governments to help decide where their trade interests lie.
Donors can also play a role in promoting the perspective of the conventionally weaker voices of the poor, such as those of small cross border traders and women. Simultaneously, donors could also assist in the mainstreaming of issues such as HIV/AIDS, gender and the environment through infusion of these issues into their regional integration programmatic support.
Finally this paper seeks to show that for donor country governments to be serious about supporting developing countries to 'trade their way out of poverty', donor governments should liberalise their tariff barriers, particularly on agricultural products. Non-tariff barriers such as those pertaining to strict rules of origin should be revised, and other means found to allow developing countries to maximise the opportunities preferences offer. Both developed and developing countries have a long way to go before the benefits of regional integration can be reaped. Donors and donor governments have a crucial part to play in this process.