Economic integration and trade liberalisation in the Southern African Development Community

In this study, the effects of economic integration and trade liberalisation are examined. This is done in Africa in general, and the Southern African Development Community (SADC) in particular. The factors that have hindered successful regional economic integration arrangements in the SADC and the benefits that accrue to the SADC member countries as a result of this integration are analysed. The study examines in detail the pattern and structure of trade in the SADC region. The new dimension of economic integration where SADC countries have shifted their approach from North-South to South-South integration, because of the greater benefits that accrue to SADC members as a result of this new approach are analysed. The study finds that there is significant trade taking place between Asian economies and the SADC and Sub-Saharan African countries. The United States is also becoming a major trading partner of oil-rich Sub-Saharan African countries. However, though growing, there is little trade taking place between the SADC countries and the rest of Africa. The study also finds that the SADC countries are mainly exporters of primary products, but their imports mostly consists of manufactured and capital goods. Finally, the study investigates the links between trade openness, foreign direct investment (FDI) and levels of employment in 9 SADC countries. The study finds that both trade openness, and FDI have a positive effect on employment levels in SADC. In particular, a 1-percentage increase in FDI leads to 0,048 per cent increase in total employment in SADC. While a 1-percentage increase in trade openness leads to 13,4 per cent increase in total employment. These findings suggest that trade openness plays a more important role in creating employment in the SADC region than FDI.Mr. Phillip F. Blaauw Prof. Ronald R. Mear