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- Report of SARPN-IGD Policy Dialogue -
The Impact of Liberalisation on the South African Economy: The case of the tourism and clothing sectors


Southern African Regional Poverty Network (SARPN)
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23 May 2007

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Introduction

The Southern Africa Regional Poverty Network (SARPN) and the Institute for Global Development (IGD) co-hosted a policy dialogue on "The Impact of Liberalisation on the South African Economy: The case of the tourism and clothing sectors" on 23 May 2007 at Gallagher Estates in Midrand, South Africa. The policy dialogue brought together a number of experts to discuss two research studies carried out by IGD. Participants provided feedback on the two papers and discussed the relevance of the studies and the issue of trade liberalisation more broadly, in the context of the Southern African Development Community (SADC) region. The studies and the policy dialogue were financed by the Consumer Unit Trust Society Africa Resource Centre (CUTS).

Mr. Jack Jones Zulu, head of the Economic Dimensions programme at SARPN, welcomed participants and explained the objectives of the policy dialogue. These were to:

  1. input into the case studies on the tourism and clothing sectors in South Africa;
  2. examine the linkages between trade, development and poverty in South Africa and the SADC region; and
  3. draw out key messages to engage with policy makers on trade, poverty and development.
Dr. Siphamandla Zondi, Africa Director at IGD, noted that the policy dialogue coincided with the closing of the Common Market for Eastern and Southern Africa (COMESA) Heads of State Summit. He noted that COMESA took nearly ten years from the point of deciding to work towards a customs union, in 1997, to adopting common external tariffs, which were decided by the Council of Ministers at the most recent Summit. The delay highlights a number of challenges facing the establishment of a customs union in the region, including: a) the need to consider the consequences in terms of membership in other customs unions, such as the Southern Africa Customs Union (SACU); b) the policy instruments that need to be put in place to establish a customs union; c) the legislative interventions that must be undertaken by Member States, in order to harmonise trade and other policies; and d) the broader question of how to promote competitiveness at regional level. Dr. Zondi noted that COMESA, SACU and the East African Community (EAC) have already begun discussions about the steps needed for a single effective customs union across the entire region. Such a customs union would need to address: the balance between encouraging global competitiveness and opening up economies; the promotion of diversification; how to overcome supply side constraints; how to mitigate against the negative effects of liberalisation; and the prioritisation of key sectors for economic growth and transformation.

Dr. Zondi raised a number of questions to guide discussions over the course of the policy dialogue, including:

  1. What nature of state would be desirable to put in place these economic policies?
  2. Do we want a developmental state? What does that mean and what should it do to manage development?
  3. What should be the role of the regional economic communities (RECs) and the customs unions?
  4. Is deeper trade integration the way to go? Should we go more slowly and build capacity before integrating?




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