by Rhoda Njanana
Southern African heads of state, ministers, prominent business leaders and academics converged in Midrand, Johannesburg, from 11-12 May 1995 to determine and share ideas on the economic future of the region.
The Economic Summit debated around the theme “Translating Reconciliation Into Regional Reconstruction” and was jointly organized by the Swiss-based World Economic Forum (WEF), the world’s largest organization of business executives, and the Southern African Development Community
(SADC).
The main objective was to promote dialogue between SADC political leaders and business executives from within and outside the region on how to translate the region’s political gains into economic growth.
Opening the summit, President Nelson Mandela of South Africa told the more than 600 delegates that the people of southern Africa have declared their preference for democracy, reconciliation and peaceful resolution of conflicts.
He said that developments of the past year have made the region more confident than ever that the nations of southern Africa, their leaders and peoples, have the capacity and the determination to solve the problems that they face. The region, he continued, has turned itself through its own efforts, into an ideal destination for foreign investment.
“Conditions for regional cooperation and integration have never been so favourable. Within this context, South Africa is ready to play its part, as an equal partner. For us, integrated development of the region as a whole is a priority of the highest order,” said Mandela.
Since South Africa’s multi-party democratic election in April 1994 and the subsequent acceptance of the country as the 11th member of SADC, there have been fears that South Africa might dominate the region economically.
Dismissing these fears, Swaziland’s Deputy Prime Minister, Sishayi Nxumalo, pointed out the importance of interdependence and hoped that South Africa will not adopt a “too inward-looking” development strategy.
“In Africa, you get indigestion if you eat next to your starving brother. South Africa will find growth extremely difficult if its neighbourhood remains poor,” said Nxumalo.
Emphasizing this point, Sir Ketumile Masire, President of Botswana and also Chairman of SADC, recalled that the destinies of southern African countries are tied together. “Unless the political will is lost, we don’t envisage a stage where we shall battle over who has what,” he said.
On the question of regional trade, the SADC leaders agreed that opportunities for trade were promising, because the region could boast of a regional market in excess of 120 million people.
Masire said that an integrated regional market in southern Africa should provide sufficient incentives for local and foreign business to invest in productive enterprises to meet the region’s requirements.
Chairman of John Laing Plc, from Great Britain, Martin Laing, asked during the deliberations whether the different levels of development in SADC countries would not create integration problems. But participants agreed that this was a strength rather than a weakness.
“Different countries within the region have different advantages. The greater the divergence in economic development, the higher the profit margin for the investor,” added Ntsu Mokhehle, Prime Minister of Lesotho.
Country project proposals were presented during the summit that impressed investors. They agreed with SADC leaders that the region offers tremendous opportunities for business.
Meanwhile, southern African business executives discussed at length ways of fighting corruption – both in government and in business, that afflicts their societies and give rises to concern. South Africa was sighted as one of the countries with high levels of corruption, following scandals involving millions of Rands in the past three years.
Piet Liebenberg, chief executive of the Council of Southern African Bankers (COSAB), said corruption has reached intolerable levels in southern African societies, and that business can and should take the lead in fighting it and in restoring fundamental values.
To show their commitment on this issue, the southern African business leaders will be holding an anticorruption conference on 15 August 1995 in Kempton Park, Johannesburg with about 1 000 participants. Liebenberg said the main goal would be to produce a detailed action programme with new approaches to combating corruption.
While proposing a number of steps to combat corruption in the region, South African businesses were urged to adopt the King Commission`s recommendations on corporate governance, the adoption of formal codes of ethics by industries and companies, and greater efforts at self-policing by businesses themselves.
”We are facing a real moral crisis in our society, and business must begin to point a way out of this crisis through leadership, by example,” said Liebenberg.
During a plenary session, Klaus Schwaba, President of the WEF, said the summit came at an appropriate time, when southern Africa’s climate is one of political stability, market-oriented reforms and democratization.
The chairman of the Southern Life Association, Neal Chap man, speaking on behalf of the business leaders, said the most significant feature of business confidence in South Africa’s new democracy was the economic upswing led by growth in fixed gross domestic investment.
He added that this business confidence spreads across the broad spectrum of business in South Africa.
Business leaders and other participants proposed that SADC leaders should implement investor-friendly tax policies to increase financial liquidity, deregulation, accessibility and the development of a regional stock exchange to improve financial markets in Southern Africa — a prerequisite to meaningful investment.
“Finance follows trade and investment follows finance,” says the South African Minister of Finance, Chris Liebenberg.
SADC and its international business partners agreed that there is need for a coordinated approach to investment promotion. They noted that the region’s natural resources alone will not necessarily attract investors to southern Africa, but should be complemented with incentives.
Already, SADC leaders have adopted common principles OD investment in the region. These include cuts in corporate taxes to promote investment, the right to repatriate profits to lure foreign investors as well as fair and independent Mbit-ration in company disputes.
There was consensus on the need for a regional development strategy, in the form of a regional Investment/Development Bank.
President Masire informed participants that the next SADC Consultative Conference will be held in Johannesburg in January 1996, and will adopt the form of a trade and investment forum. The third summit of the WEF on southern Africa also encouraged continued dialogue and partnership between government and businesses were encouraged.
Mozambican President, Joaquim Chissano, reiterated that the regional reconstruction and development is a collective responsibility for SADC members. He urged the private sector to see itself as a partner and not merely sit back and wait for governments to create conditions for investment.
Governments were urged to work for stability and security to enhance democracy. Through popular participation this is expected to become the bedrock of the region’s efforts to build a prosperous and united southern Africa.
Manpower development and technological training should be a priority for SADC countries. Skills and
know-how are a pre-requisite for investment opportunities necessary for economic growth, and therefore leaders agreed to give priority to training and development of manpower in all sectors of the economy. Both political and business leaders agreed that there is need for a well-developed regional infrastructure to strengthen regional integration, especially in areas such as transport and communications.
Apart from SADC heads of state, the president and official of WEF and top business executives, other dignitaries who attended the summit, included the United States Deputy Assistant Secretary of State, Regina Brown, and the European Union Commissioner, Joao de Deus Pinheiro.
In order to encourage positive developments now beginning to take place in Angola, a country still suffering from political instability, President Nelson Mandela asked the delegates to join him in welcoming the Angolan Foreign Minister, Venancio de Moura who represented President Jose Eduardo dos Santos, and wishing him and the people of Angola a successful outcome in their endeavor to secure peace in their country. (SARDC)
