Paper short abstract:

On the basis of the objectives of regional integration, this paper analyses its record in Southern Africa since 2000, in terms of actual economic integration, structural change and welfare. To explain results, the paper discusses institutionalisation, distribution effects and the role of players.

Paper long abstract:

Since their independence, African countries are striving for regional integration. As all African countries are economically small, many very small, and a number land locked, there is a clear case. In a steady process countries widen and deepen their efforts in subregional bodies, through free trade areas, customs unions, and common markets. Ambition is to complement these by a continental economic union, to be added in the final stage by a political union. In addition, Economic Partnership Agreements (EPAs) with the European Union are striving for North-South economic integration.

However, economic analysis shows that the actual results and outcomes have been much lower than anticipated. Neither have countries converged to regions, nor have these regions caught up with the industrial countries. Furthermore, there was little success in structural diversification - the basis of any sustainable wealth creation. Rather, a wide process of de-industrialisation has taken place. There are also signs of increasing inequality within and between countries, deteriorating business conditions and governance standards in many countries. In sum, the record of regional integration in Southern Africa, including EPAs, over the last decade and a half falls far short of expectations.

The article argues that in order to redeem the promise of regional integration, strengthening and deepening of the institutional basis of economies are paramount (in particular involvement of private sector and professional associations, strengthening links between the policy making and research communities). Poverty, inequality, and economic polarization as a result of regional and global integration have to be countered systematically.