Enhancing human development through regional integration in SADC : HDR-SA 2012 human development report for Southern Africa.

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Economic Commission for Africa (ECA) Southern Africa Office (SRO-SA)

HDR-SA 2012 Human Development Report

for Southern Africa

Southern African Development Community

Enhancing

Human Development

through Regional

Integration in SADC

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Economic Commission for Africa (ECA) Southern Africa Office (SRO-SA)

E/ECA/SA/HDR-SA/2013 Southern African Development Community

HDR-SA 2012 Human Development Report

for Southern Africa

Enhancing Human Development through Regional Integration in SADC

April 2013 Lusaka, Zambia

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Ordering information

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First printing February 2014

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Acronyms and abbreviations

$ United States dollar

AfDB: African Development Bank

AGR African Governance Report

AIDS Acquired immunodeficiency syndrome

ARV Antiretroviral

AU African Union

COMESA Common Market for Eastern and Southern Africa CSO Civil-society organization

DRC Democratic Republic of Congo

EAC East African Community

ECA United Nations Economic Commission for Africa ECA-SA United Nations Economic Commission for Africa

Sub-Regional Office for Southern Africa

EU European Union

FAO: Food and Agriculture Organization of the United Nations

FDI Foreign direct investment

FTA Free-trade area

Ha Hectare

HDI Human Development Index

HDR Human Development Report

HIV Human immunodeficiency virus

HPI Human Poverty Index

GDI Gender-related Development Index

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GDP Gross Domestic Product

GEM Gender Empowerment Index

GII Gender Inequality Index

HIPC Heavily Indebted Poor Countries

ICT Information and communication technology

IEA International Energy Agency

IMF International Monetary Fund

IPCC Intergovernmental Panel on Climate Change

LDC Least developed country

Km Kilometre

LHWP Lesotho Highlands Water Project MDRI Multilateral Debt Reduction Initiative

MNC Multinational corporation

PIDA Programme for Infrastructure Development in Africa

REC Regional Economic Community

RISDP Regional Indicative Strategic Development Plan

RSA Republic of South Africa

SA South Africa

SADC Southern African Development Community

SARDC Southern African Research and Documentation Centre

SSA Sub-Saharan Africa

TCM Transport, communications and meteorology TFTA Tripartite Free-Trade Area

UN United Nations

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UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific and

Cultural Organization

UNFCCC United Nations Framework Convention on Climate Change

WDI World Development Indicators

WEO IEA World Energy Outlook

WTO World Trade Organization

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Acknowledgements

The United Nations Economic Commission for Africa Sub-Regional Office for Southern Africa (ECA-SA) is grateful to the Zambia Institute for Policy Analysis and Research, a consultancy firm led by Pamela Kabaso (Executive Director) and Caesar Cheelo (Research Fellow, Trade and Investment) for preparing this report. It was produced under the overall guidance of Beatrice Kiraso (Director of ECA-SA). Jack Jones Zulu (Social Affairs Officer) was the project coordinator working under the supervision of Susan Mokonyana (former ECA-SA Liaison Officer to the SADC Secretariat) and Sizo Mhlanga (Chief of the Sub- regional Data Centre). Technical inputs through several reviews of the draft report were also provided by the rest of the ECA-SA team comprising Maame Agyeben, Benjamin Banda, Oliver Maponga, Jean Luc Mastaki Namegabe, Matfobhi Riba, Anthony Taylor and Nozipho Simelane. Additional technical contributions from staff at ECA headquar- ters and United Nations agencies resident in Zambia, including the Joint United Nations Programme on HIV/AIDS (UNAIDS) and the United Nations Development Programme (UNDP), are also gratefully acknowledged.

Experts from the subregion validated the report at the review workshop held in March 2013 in Pretoria, South Africa. The report also benefited from inputs received from the SADC Secretariat and particular thanks are extended to Stephen Sianga (Director So- cial, Human Development and Special Programmes) and Arnold Chitambo (Senior Pro- gramme Officer, Employment and Labour) who coordinated SADC inputs from within the Southern African Development Community (SADC) into the report.

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Foreword

The Human Development Report for Southern Africa 2012 (HDR-SA 2012) has been pro- duced in line with the mandate of the United Nations Economic Commission for Africa Sub-Regional Office for Southern Africa (ECA-SA), which is to generate knowledge to inform policy debates and processes in the subregion. This is the third report in the series.

The first SADC Human Development Report 1998 focused on “Governance and Human Development” and the second one, produced in 2000, on “Challenges and Opportunities for Regional Integration in Southern Africa”. The theme of the current report is “Enhanc- ing Human Development through Regional Integration in SADC” and it advocates that thinking about subregional integration should shift to a wider focus than purely on trade and economics.

There is an urgent need to address human development imbalances in the subregion, but there is also a critical gap in the data on social and human development in Southern Af- rica, which ultimately impairs meaningful assessment of progress in development indicators. The HDR-SA 2012 aims to provide current data on social and human development in Southern Africa and to facilitate the easy tracking of social and economic progress in order to provide a firm basis for policy formulation and interventions by member States and other stakeholders. The report highlights progress being made in human development in the subregion using a set of indicators that measure poverty and income inequality; employment and labour; education and the youth; health and HIV/AIDS; gender equality and women’s empowerment; and food and nutrition. It draws attention to several potential benefits that integration can deliver to the subregion through wider markets, creating employment, enhanced education and health services, ICT connectivity, prudential management of the environment, promotion of gender equality and poverty reduction. It also makes critical recommendations to support improved subregional policy formulation and implementation around human development issues in the context of integration. It thus constitutes a mechanism for linking human development to development efforts at national and subregional levels.

It is my sincere hope that the analysis and recommendations of this report will advance policy debate on social and human development and the role of subregional integration in member States, and facilitate appropriate interventions by governments and other stakeholders in the subregion and beyond. The HDR-SA 2012 complements and adds value to the work of UNDP at country and global levels by introducing a subregional dimension of comparative analysis in social integration and human development.

Beatrice Kiraso Director United Nations Economic Commission for Africa Sub-Regional Office for Southern Africa

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Executive Summary

Subregional integration has been both a driver and a vehicle of economic and social prog- ress. The Human Development Report for Southern Africa (HDR-SA 2012) explores how it had and continues to have an impact on human and social development in the subregion.

The report assigns a high premium to subregional integration as a springboard for enhancing social development in Southern Africa while recognizing the differential impacts of subregional integration arising from the unique political, economic and social realities of the individual economies of the subregion.

The HDR-SA 2012 notes that Southern Africa includes some of the poorest economies in the world, despite being endowed with vast wealth in the form of natural resources. For instance, in 2010 approximately 45 per cent of the total population lived on $1 (United States dollar) per day; the prevalence of malnutrition averaged 36.1 per cent of the population across the subregion, although the range was 44 per cent to 72 per cent; life expectancy had fallen over the years from 60 years to slightly less than 40 years; while infant mortality rates are in excess of 50 per 1,000 live births. These statistics reflect the gravity of the poverty situation in Southern Africa. Furthermore, the subregion faces enormous challenges such as HIV/AIDS, unemployment among youth and women, increasing numbers of vulnerable populations such as refugees, internally displaced persons, older persons, and people with disabilities. Human development indicators in education, health, and reproductive health remain relatively low compared to other regions, while gender imbalances are stubbornly high.

In order to inform its own perspectives on Southern Africa, the HDR-SA 2012 critically analyses various thematic areas such as macroeconomic policies and economic convergence; subregional integration and human development; infrastructure and human development; environment, climate change and food security; and the experiences of other regions. It notes that sustained implementation of subregional integration has advanced economic growth but has not sufficiently ameliorated the high poverty levels across the subregion. The report findings indicate that subregional integration, supported by intra- regional trade and physical infrastructure development, has led to modest human development gains for Southern Africa. The findings further suggest that these gains could be even higher if member States addressed the ravaging effects of HIV/AIDS and other communicable diseases that deplete the human resources, which are critical in development.

The HDR-SA 2012 calls for robust policies that facilitate value addition and beneficia- tion at various levels of production in order to enhance job creation and alleviate poverty.

In this context, the report underlines the importance of inclusive growth, which is based around creating employment opportunities for the poor and marginalized groups (particularly women and the youth) for the achievement of meaningful progress in human development. In this vein, the study assesses subregional strategies for improving human welfare. These include a wide range of policy and programmatic interventions, namely:

intra- and extra-regional trade, social protection for vulnerable yet viable groups, empowerment for women, providing access to health and education services, access to affordable

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finance, investment strategies and cross-border initiatives, technology transfer and employment initiatives.

The HDR-SA 2012 recognizes the huge potential gains that investments in several social sectors could provide in terms of generating incomes for the poor and vulnerable households. However, the general picture since 2000 is that the subregion has not made significant progress in four facets of human development: income, access to education and health services, and gender equality. Using the 2011 HDI ranking, the Southern African Development Community (SADC) subregion falls in the low human development category, despite impressive growth rates during the same period.

The report also notes the critical roles that peace and stability, sound macroeconomic management, good governance and strong institutions, clear property rights, and adequate physical infrastructure play in driving economic and social development in South- ern Africa. It calls for the mitigation of the adverse effects of climate change and variability on the environment and on the overall economies of Southern Africa.

It acknowledges some of the challenges that stand in the way of subregional integration policies and initiatives, such as the lack of comprehensive datasets to inform policy-making processes. For the future, the report advocates evidence-based policies that explicitly address human development imperatives in order to deliver wider benefits across the subregion. In pursuing such benefits and taking forward the subregional integration agenda, the HDR-SA 2012 calls for a number of interventions ranging from clear subregional development frameworks, sound infrastructure development and favourable investment climates anchored on good governance and strong institutions, to mobilizing adequate domestic resources for financing human and social development. It ends by reiterating the need for inclusive growth, emphasizing the promotion of social integration and economic cooperation, enhancement of local and international trade, promoting interlinkages between sectors, and the harnessing of natural resources in order for Southern Africa to reap full dividends from international markets.

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Chapter 1: Introduction

1.1 The rationale for the study

The Human Development Report for Southern Africa (HDR-SA 2012) was commissioned by the United Nations Economic Commission for Africa Subregional Office for Southern Africa (ECA-SA).

The main purpose of the HDR-SA 2012 is to raise public awareness and to trigger policies and actions on critical human development concerns in the subregion. In this regard, this HDR-SA 2012 specifically seeks to achieve three interrelated objectives, namely: (a) to add value to the understanding of subregional human development by breaking new ground in describing the nexus between subregional integration and human development in SADC; (b) to update previous reports on human development in the subregion by bringing in new statistics, indicators, sectoral improvements and best practices, backed by solid analysis; and (c) to demonstrate how subregional integration supports human development through existing protocols, policies and strategies. An implicit objective was to learn lessons about subregional reporting of human development, documenting what works and what does not in the preparation of human development reports. The importance of using appropriate sets of indicators in the formulation of the HDR-SA 2012 as well as the potential contribution to strengthening national statistical and analytical capacity was also an essential part of this research work.

The central focus of the HDR-SA 2012 on SADC is naturally human development. Spe- cifically, the theme of this HDR-SA 2012 is: “Enhancing Human Development through Regional Integration in SADC”. Within this context, the HDR-SA 2012 attempts to be as broad in content and scope as possible. It pays attention to the fact that SADC has given priority to social and human development within the context of subregional integration.

It is generally well recognised that many regional-integration initiatives tend to focus more on trade and economic integration to the exclusion of social integration. In this respect, the treatment of human and social development in many reports is often on the periphery of policy debates. This is despite the fact that a range of global policy commitments – such as the United Nations Charter (1945); Universal Declaration of Human Rights (1948);

the Covenant on Economic, Social and Cultural Rights (1966); the Convention on the Elimination of All Forms of Discrimination against Women (1979); the International Conference on Population and Development Plan of Action (1994); the World Sum- mit for Social Development Copenhagen Declaration and Programme of Action (1995);

the Beijing Platform of Action (1995); the Millennium Declaration and the Millennium Development Goals (2000) and the Global Jobs Pact (2009) – were all crafted with core social development and social integration objectives and outcomes in mind.

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This report is an attempt to close the existing gaps in relation to social integration at the subregional level. It explicitly asserts that regional integration can contribute to the development of any region and enhance its social welfare gains. The report points out that this is likely to happen if regional integration has strong social dimensions, which empower people and countries to manage global and regional economic challenges better, particularly through building the capabilities needed to take advantage of global and regional opportunities and through improving the conditions under which people connect to the global economy.

For example, regional groupings or countries can be expected to achieve a higher degree of regional integration and stability if they provide for the free movement of peoples and for increased social solidarity within the region. Regional integration is strengthened by cross-border redistribution, cross-border social regulations and the articulation of regional socioeconomic rights. Concurrently, regional integration can be enhanced through cross- border cooperation in health, education and social protection policies. Policies to address issues of cross-border migrant labour are of particular importance. Regions may adopt a number of instruments to enhance the social dimensions of regional integration and development, including laws, funds, benchmarking, monitoring systems, intra-regional social policy dialogue and awareness platforms, and so on. Regional civil society organisations are often allies in enhancing the social dimension of regionalism (UNU-CRIS, 2008).

The HDR-SA 2012 on Southern Africa builds on previous reports, acknowledging the efforts through which similar reports were produced by other authors. In particular, the 1998 and 2000 SADC HDRs are notable milestones in the gathering and compila- tion of critical information on human development in the SADC subregion. The 1998 SADC HDR focused on the interface between governance and human development in the SADC subregion. The report observed that, although most SADC countries were still in difficult economic and political situations, many had started reaping the fruits of economic reforms and political transformation. It asserted that the reforms had however not yet reached the majority of the people of the subregion. It was recommended that the subregional integration strategy of SADC be implemented with vigour to ensure sustained improvements in human development in the subregion. It was strongly felt that the report would help SADC member States to focus their policies and actions on improving human development.

In a similar manner, the 2000 SADC HDR gathered and collated important information on the extent to which subregional integration – historically SADC’s main strategy for improving human development outcomes – can promote human development. It illustrated this by pointing out the main challenges and opportunities for deeper integration and it made salient policy recommendations. The purpose of the HDR-SA 2012 is also to assist member States to identify the right policies and actions for enhancing human development and to focus their efforts in the identified areas.

These reports make clear the importance of understanding the nexus of subregional integration and human development through human development reporting and the HDR- SA 2012 makes a modest independent contribution to this. It is expected to raise public

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awareness and to catalyse salient actions for subregional integration and human development. The anticipation is that the findings of this report will contribute towards a fuller appreciation of the situation of subregional economic and social integration, poverty and human development in the SADC subregion, and of how to track and evaluate these aspects on an ongoing basis. The contributions are relevant for subregional policy-making and implementation as well as for supporting the improvement of general economic literacy, knowledge and debate.

A natural starting point in establishing the nexus of human development and subregional integration is to define the terms clearly and carefully, and this is done in the ensuing sec- tions.

1.2 Defining “human development”

People have sought to define, explain, measure, alter and redefine the meaning of “human development” throughout recorded history, particularly in the recent past (SARIPS, 2000; UNDP, 2004; UNDP, 2011a). The HDR-SA 2012 defines “human development”

as “a process that enlarges human choices and improves the quality of life for every man, woman and child across generations”. This definition is a summarised version of the defi- nition used in the 2000 HDR, which stated: “Human development is the process of enlarging people’s choices so that they can live a long and healthy life, be educated, have access to resources for a decent standard of living, enjoy political, economic, social and cultural freedoms, and have human rights, self-esteem and opportunities for being creative and productive”. The main point in both definitions is that human development is about putting people at the centre of development. It is about allowing people to realise their potential now and in the future, increasing their choices and enjoying the freedom to lead lives that they value.

The success of human development will depend on the elimination of barriers to economic, social, political and cultural opportunities, thus fostering the creation of human capabilities and freedoms for all human beings. These concerns are by no means easy to address. The HDR tries to bear this in mind throughout.

The HDR-SA 2012 on SADC acknowledges the many annual Human Development Re- ports (HDRs) produced by the United Nations Development Programme (UNDP) and others in the last few years. These have explored the challenges of development using different themes such as:

• Fighting climate change and supporting human solidarity in a divided world (2007/2008)

• Overcoming barriers to human mobility and development (2009)

• The real wealth of nations (people) and pathways to human development (2010)

• Sustainability and equity towards a better future for all (2011)

• Towards a food-secure future (2012).

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Their main thrust has been the Human Development Index (HDI), which provides a general measure of human progress through three components of human development, namely longevity, education levels and living standards. The important contribution of the HDI to our understanding of poverty, human development and progress cannot be overemphasised.

However, the HDI suffers from some limitations and is perhaps best used to complement other measures of human social progress. For instance, it does not give sufficient weight to the importance of other indicators in weighing the satisfaction of desires and needs which allows citizens to enjoy their rights of citizenship. In an era when freedom of expression and of participation are taken for granted as gains and unequivocal forms of democracy, measures of participation in the decisions and destinies of countries and regions, analysed by gender, are important determinants of the extent to which citizens of both sexes enjoy the same rights as enshrined in the constitutions of their countries and the policies of their regions and subregions.

Various observers have attempted to address some of the limitations of the HDI, partially addressing these by exploring alternative indicators. One example is the Human Poverty Index (HPI), which indicates the proportion of people living below the threshold in basic dimensions of human development. Another is the Gender Inequality Index (GII), which measures the extent to which gender inequality erodes development in three aspects of human development: reproductive health, empowerment and the labour market. It is well documented that UNDP and others have done important work in the area of tracking human development progress along different dimensions. The summary below – drawing mainly from a paper of Prof V. Seshamani (2010)¹ – presents a useful account of some of the most ground-breaking efforts:

Gross National Income (GNI) per capita, Atlas Method: a measure of income, it works on the principle of firstly measuring a society or country’s output in monetary terms as national income and then dividing the result by the mid-year population size to get the broad average income share of each member of the population. This was popularised by the World Bank.

The Human Development Index (HDI): the concept of human development, which is sum- marised in the HDI, was introduced in 1990 and went beyond the concept of per capita income. The HDI included non-money metric variables (average life expectancy at birth and education) in addition to money-metric income, adjusted for purchasing-power par- ity. The concept was popularised by UNDP.

Human Poverty Index (HPI): In 1997, the Human Development Report of UNDP intro- duced the concept of the HPI in addition to the money-metric indices of poverty. Ac- cording to the UNDP²: “The HPI concentrates on the deprivation in the three essential 1 V. Seshamani is a professor of economics at the University of Zambia. The paper cited here is a

revised version of a paper presented at an Annual National Economic Development Conference organized by Zambia Institute of Policy Analysis and Research (ZIPAR) on the theme “Achieving Middle Income Status” on November 25, 2010 in Lusaka, Zambia.

2 See for example the UNDP definitions at http://hdr.undp.org/en/statistics/understanding/indices/

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elements of human life already reflected in the HDI: longevity, knowledge and a decent standard of living”. The index suggests that even if a country is making progress in GNI and HDI, it can be deemed to be developing only if it was making progress in reducing deprivation based on both the HPI and money-metric measures of poverty.

Happy Planet Index: There is growing realisation globally that happiness is a more funda- mental goal to strive for than income and wealth and attempts are being made to develop methodologies to quantify happiness. Some scholars believe that the use of the GDP is not appropriate as the most people’s ultimate aim is to be happy rather than rich. Prosperity in the sense of human well-being is characterised as “Happy Life Years”. A Happy Planet Index has been developed based on life expectancy, subjective life satisfaction and ecologi- cal footprint. The third factor is considered important to gauge sustainability of welfare over time.

Multidimensional Poverty Index (MPI): Pursuant to developing HDI and HPI, in its Hu- man Development Report 2010, the UNDP developed a new MPI. Seshamani (2010) ex- plains: “The MPI considers deprivation in three dimensions with several constituents:

Living Standards (assets, floor, electricity, water, toilet, cooking fuel); Education (children enrolled, years of schooling); and Health (child mortality, nutrition).”

The Millennium Development Goals (MDGs): Another avenue for measuring and tracking progress in human development is through the MDGs (which are not discussed in Ses- hamani’s paper). The MDGs are part of a global action plan. They are a set of eight anti- poverty goals (eradicate extreme poverty and hunger; achieve universal primary education;

promote gender equality and empower women; reduce child mortality; improve maternal health; combat HIV/AIDS, malaria and other diseases; ensure environmental sustainability; and develop a global partnership for development) that the global community has committed to achieve by 2015.

Although there is this extensive array of definitions and measurement efforts, there is appreciation for the need to provide a comprehensive report on progress made in the SADC subregion in human development using appropriate sets of indicators, supported by sound empirical research and policy analysis. The HDR-SA 2012 on SADC does not seek to include or draw on each of the listed measures of human development. The list is simply meant to illustrate that understanding what human development is and what it takes to make meaningful gains in this area has been a preoccupation of many development scholars. It shows that the subject matter of this report is very important throughout the world.

Social integration aspects of human development in a subregional context are another very important element in understanding true human progress. Social integration has to do with progress beyond economic aspects of integration and it includes things such as cultural integration and exchange, free movement of natural persons, harmonisation of political systems, like-mindedness in security and conflict-resolution efforts, and so on. It is also important to understand bottlenecks to social integration, such as overly prohibitive

hpi/ (accessed on 6 July 2013).

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laws and regulations, and “sticky” traditions. These aspects have important implications for human development and ideally should be included in any effort that seeks to measure and track human progress.

Ultimately this simply underscores the need to appreciate but also to go beyond the traditional indicators of human development, which are captured in many UNDP reports, to include various aspects of human progress, including from a subregional perspective.

The tracking, monitoring and evaluating of human development on an ongoing basis and using the ensuing knowledge to achieve further human development through appropriate policy formulation and implementation is at the heart of the development agenda. It is quintessential at international, subregional, national and sub-national levels. Elaborating an HDR on the SADC subregion is very closely related to the core mandates of SADC (see www.sadc.int).

1.3 Defining “regional integration”

Regional integration³ is a process by which countries enter into a regional agreement for purposes of enhancing regional cooperation through regional institutions and rules.

Regional integration is generally a political choice made by any country, regardless of whether it is based on political, social and/or economic considerations. Regional integration can be aptly defined in terms of its scope, coverage and depth. The scope is geographical in nature, as it relates to the number and locations of countries involved in a regional integration arrangement. “Coverage” defines the sectors that will be covered within the regional integration agreement. The coverage of regional integration schemes can be based on one or more of the following reasons:

• Regional Public Goods: Regional public goods are those goods whose benefits/

costs tend to spill over national boundaries (cross-border externalities) and thus, their effective supply requires shared commitment and involvement of more than one country. Economic theory posits that, in the absence of cooperative schemes, there would be a “shortage” of supply of goods with positive spill-over, because countries producing these goods may not reap the full benefits. For instance, if a country were to implement health programmes to contain an endemic disease (for example malaria), neighbouring countries not undertaking such measures may benefit from this. There is an incentive for non-proactive neighbours to “free-ride” on the efforts of the pro-active countries and in the end, pro-active countries may be “discouraged” to continue the costly exercise. In like manner, there would be “too much”

supply of those goods with negative spill-over, because countries do not bear the full costs of their actions. For example acid rain may fall in one country as a result of economic agents engaging in sulphur-emitting activities in another country.

3 Many of these conceptual definitions are taken from Laursen, 2008.

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• Competition and Scale: There are some goods that are produced within national boundaries but, because of small domestic markets, these goods tend to be supplied by few firms or even “natural monopolies”. Such goods can prosper from scale and/or competition through larger markets availed by regional integration. In certain cases (such as air-transport), scale and competition tend to reinforce each other. In other cases (such as telecommunications and labour markets), larger market size may be a means of fostering competition.

There are also cases where scale may the overriding factor, for instance in the creation of power-pools, where the broader the space and the more complementary the sources of power (for example hydroelectric or thermal generation), the more reliable and cost-effective the supply of energy.

• Consistency and Credibility: There are some activities that a country may wish to undertake but it happens that consistency and commitment are important for credibility and hence maximum effectiveness. This usually happens in policy contexts where macroeconomic policies (monetary and fiscal), trade and investment policies and regulatory and legal forms may need to be locked into regional agreements as a commitment and credibility mechanism. Such joint commitments may be effective, depending upon the degree of economic interaction and credibility of punishments in case of default. In as much as the implementation is done at national levels, the harmonisation or integration of these activities would require setting up public supra-national organisations.

The “depth” of regional integration agreements refers to the intensity of regional cooperation, as characterised by the scope of activities and loss of sovereignty (from full country control to full delegation to a supranational entity).

• Cooperation: This is generally thought of to be the weakest and issue-focussed kind of arrangement. Countries may cooperate for a joint development project and may also cooperate for purposes of facilitating exchange of information and best practices. Countries usually retain full control and can opt-out of the arrangement with relative ease. “Regional common goods”

would typically be the subject of some form of joint development and management scheme or specific subregional initiatives. There is no need to establish a supranational entity for purposes of cooperation.

• Harmonisation/coordination: This is merely a higher and more formalised degree of cooperation and commitment, compared to that outlined above.

Harmonisation is usually intended to address issues of policy inconsistency, while coordination is used to overcome issues of time consistency. Countries may want to harmonise policies, such as tax and trade policies (for instance tariff and trade facilitation), and legal and regulatory frameworks. Although

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harmonisation involves a higher degree of commitment, it does not necessitate establishing a supranational entity. Countries may harmonise tariff and trade policies and use a common legal framework, but still retain national customs, fiscal and judicial administrations.

• Integration: Integration implies a higher degree of lock-in and loss of sovereignty as it tends to apply to a broader scope (although it may be limited to a specific market). It may imply more united markets for goods (such as a free-trade area and customs union) and factors (common markets), and a common currency. The deepest form currently observed is a federated union (e.g. the United States of America) which includes political as well as economic integration. At this level, all countries are to relinquish sovereignty to a supranational agency, the purest form being a federal government.

1.4 Subregional context of SADC

SADC is a subregional grouping of 15 member States, namely: Angola, Botswana, Dem- ocratic Republic of Congo (DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozam- bique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. A SADC Secretariat coordinates the socioeconomic and political activities of SADC member countries that are related to subregional integration and development. SADC’s broad objectives are to achieve development and economic growth, alleviate poverty, enhance the standard and quality of life of the people of Southern Africa and support the socially disadvantaged through subregional integration (www.sadc.int).

The subregion remains one of the poorest in the world, despite a large population of over 275 million inhabitants (2010 estimate) and its endowment of diverse and abundant natural resources. For a long time SADC has recorded weak performance on a range of social and economic indicators compared to other global subregions. For instance, as of 2010: approximately 45 per cent of the total population lived on $1 per day or less; the prevalence of malnutrition averaged around 36.1 per cent, with a range of 44 to 72 per cent⁴ of the population across the subregion; life expectancy had fallen over the years from about 60 years to slightly below 40 years; and infant mortality rates were high at over 50 deaths per 1,000 births. As noted in a SADC Regional Poverty Profile Summary background document (SADC, 2008a), the severity of the low living standards and high incidences of poverty in the subregion cannot be overemphasised. The SADC subregion therefore recognizes the daunting task that lies ahead if it is to achieve the broad objectives highlighted above.

4 FAO is one of the lead international organizations in the understanding of food, hunger and poverty. This report therefore referenced FAO widely in this regard. However some of the references might appear somewhat out of date because FAO has not provided recent estimates on the extent of poverty and hanger. As of 2011/2012, the organization was still in the process of reviewing its methodology for estimating hunger.

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The subregion faces enormous challenges in terms of poverty, HIV/AIDS, unemployment, social integration (refugees, elderly persons, people with disabilities, etc.), human development (education, health, developing skills and building capacity), gender equity, children and youth, among many others. But the challenges are not insurmountable. Ob- servers have suggested that if individual member States achieve annual average economic growth rates of over 7 per cent, they will be able to reverse these negative trends and reduce poverty. This estimate is in line with the goals, targets and aspirations of the African Union’s New Partnership for Africa’s Development (NEPAD) and with the MDGs.

Unfortunately attainment of these aspirations remains elusive. The MDG Progress Reports - Africa⁵ indicates that by 2004 only a few SADC countries, notably Botswana, Mauri- tius, Mozambique and Tanzania, had achieved sustained annual average Gross Domestic Product (GDP) growth rates of between 7 and 8 per cent. And thereafter, between 2005 and 2010, only Angola, Malawi, Mozambique, Tanzania and Zambia achieved a period average GDP growth rate in excess of 6 per cent. Perhaps more importantly, as discussed below, most SADC countries have a far more dismal record of achieving inclusive growth through poverty reduction and reduction of income gaps and other inequalities.

Over the years SADC has formulated and implemented a clear subregional development framework supported by a range of specific protocols in order to support subregional integration and development, including in the areas mentioned above. As detailed below (chapter 2), SADC established the Regional Indicative Strategic Development Plan (RISDP) and the Special Organ on Politics, Defence and Security towards responding to the above-mentioned challenges and providing strategic direction in the subregion. The RISDP was launched in March 2004 as an instrument to guide and foster social and human development among the core areas of cooperation and integration through a broad spectrum of priority intervention areas, strategies and activities,. It essentially re-affirms the commitment of SADC member States to good political, economic and corporate governance entrenched in a culture of democracy, full participation by civil society, transparency and respect for the rule of law. This has designated the RISDP as the main blueprint for tackling poverty and human development progress in the subregion.

The HDR-SA 2012 is written with substantial reference to SADC’s subregional policies and strategic planning frameworks and is a critical input into subregional policy formulation, revision, implementation, monitoring and review. It provides information for as- sisting member States of the SADC subregion to identify and implement appropriate policies, strategies, activities and actions that foster and enhance human development throughout the subregion.

5 For the latest, see http://www.undp.org/content/undp/en/home/librarypage/mdg/mdg-reports/

africa-collection.html. Useful information was also shared at the SADC Special Ministers Meeting for Social Development, held on 27 November 2004 in Cape Town, South Africa.

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1.5 Study objectives

Against this background, this study is aimed at presenting progress on human development in SADC member States and assessing in particular how subregional integration has contributed to socioeconomic development in the subregion. It is aimed at raising public awareness and triggering actions on critical human development concerns in SADC.

In this regard, the specific objectives of the study were broadly:

• To provide a comparative analysis of the levels of development and resource endowments in the SADC subregion

• To assess the achievements of the SADC member States in the various areas of human development by analysing the human development dimension together with the human development indicators and social integration efforts over the period 2000-2011 and

• To make concrete recommendations on measures for building capacity to enable the SADC Secretariat to produce future HDRs periodically.

1.6 Methodology: Scope, concepts, methods and data

1.6.1 Scope of the study

This study endeavours to analyse the human development dimension of the SADC subregion and the key social and economic human development indicators, which provide an assessment of the subregion’s achievements in the various areas of human progress. The study covered the reference period 2000 to 2011 but extends back as far as the data would allow, but not before 1990. It covered all 15 SADC member States: Angola, Botswa- na, DRC, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.

1.6.2 Conceptual framework and concepts

The study took a multi-pronged approach to coverage and analysis of human development in its widest sense. Conceptually, this meant elaborating a partial framework for ongoing comparative analysis of the SADC subregion, taking into account the heterogeneity of member States in terms of the levels of development and resource endowments. At the conceptual level, the following focus areas are covered in the HDR-SA 2012:

i. Macroeconomic situation: This is considered based on macroeconomic variables such as GDP, inflation, unemployment/employment, monetary and fiscal outcomes, and external economic performance (trade, debt, balance of payments, foreign direct investment and so on)

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ii. Geographic situation and resource endowments: This is elaborated based on the country’s land area, water area, other natural resources (minerals, forest, arable land, etc.), population size and composition (as bearing on markets), population density, ethnicity and culture, demographic dimensions (mortality, morbidity, human settlement, household dynamics, etc.) and other factors

iii. Business environment and regulation: Looking at conditions for doing business, drawing from World Bank’s ease-of-doing-business reports

iv. Microeconomic situation: Covering aspects to do with disaggregated views of employment and unemployment, labour and poverty, and firms or the private sector

v. Policy environment: national laws, policies, plans, strategies, frameworks, institutions and other relevant factors, and their various roles in national and human development

vi. Infrastructure: state of transport (roads, railways, airways and waterways), water and sanitation, housing, energy, telecommunications, and so on.

These areas are expected to cover the social, economic, political and geographic dimensions of human development and progress in a broad sense in every SADC member State.

In terms of specific concepts, the study addressed the following key indicators and sectoral issues⁶: (1) poverty and (income) inequality; (2) primary, secondary and tertiary enrolment rates; (3) adult literacy; (4) life expectancy; (5) infant mortality and maternal mortality rates; (6) malnutrition; (9) human capital capacity and skills; (10) employment and labour; (12) education; (13) health; (14) access to water and sanitation; (15) communicable diseases such as HIV/AIDS, tuberculosis and malaria; (16) gender; (17) people with special needs (for example people with disabilities, refugees, internally displaced people); (18) social dimensions and culture; (19) ICT and e-commerce/business opportunities; (20) infrastructure; (21) energy; (22) land and agriculture; (23) climate change and sustainable environmental management; (24) human settlement and industrial location; (25) good governance (transparency, accountability in service delivery); and (26) peace, security and conflict resolution. As far as possible the 26 key indicators and sectoral elements will be country-specific and disaggregated by age (children vs. adults), sex (male vs. female), and geography (urban vs. rural).

In part, the value addition of this study was in its effort to establish the salient nexuses among the five thematic areas described above, as well as in offering both synthesised subregional and detailed subregional perspectives on the status of and prospects for human development in SADC. There is obvious policy significance to these contributions to national and subregional policy formulation, strategic thinking and plan implementation. The insights of this study make a modest contribution to informing and furthering SADC’s development agenda.

6 All of these are well-known and theoretically and/or operationally defined, for instance in Seshamani (2010) or www.un.org/millenniumdevelopmentgoals.

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1.6.3 Methods of analysis

The study collected and analysed both primary and secondary data using a variety of methods. Specifically, the methods of analysis involved:

Key informant consultations: this was mainly with ECA-SA, towards ensuring the effective and customised execution of this assignment and towards the formulation of robust and reliable dissemination, policy uptake and sensitisation strategies and plan. The formulation of draft frameworks for routine data collection, production of future HDRs and dissemination, as well as preparation of the draft road map, all critically depend on continu- ous close consultation with ECA-SA, the contracting authority.

Desk review analysis: this confronted the subject matter from the perspective of empirical and “grey” literature (informally published written material, such as reports). This also ac- commodated a retailed policy review based on insights from official national documents (such as governments’ development plans and frameworks, donor agreements, subregional agreements and treaties, etc.).

Secondary data analysis: this offered comparative static and trend descriptive statistics of the subregion and member States therein, based on secondary (meta) data from authentic sources.

1.6.4 Data collection process, data tools and data management

In keeping with the methods of analysis and the overall study approach, the data collection process was multi-pronged. The format of key informant consultations was informed by the preferences of the contracting authority, ECA-SA. Naturally the main source of information for the key informant consultation component was the key informants themselves, who provided the terms of reference and report outline of the HDR, among other things.

For the desk review and secondary data collection processes, data collection guidelines and checklists were developed as part of the research undertaking, and were internally and externally vetted for quality, completeness and reliability. As earlier stated, this study builds on past efforts, including similar reports produced by SADC and various authors, and so reference was made to key relevant materials. ECA-SA played a key facilitation role in the identification of secondary sources of data from previous efforts. The data collection covers all 15 SADC member States and yields both qualitative and quantitative data.

The main sources of data were publicly available government, donor, and local and international development partner documents, including data available at national statistical offices or bureaus and reference materials on the Internet at officially recognised websites.

Such sources include the World Bank, International Monetary Fund (IMF), African Eco- nomic Outlook (AEO), UN institutions, etc. A database was created using MS Excel for the management of quantitative data. Some of the quantitative data are summarised in Annex 1. The qualitative data were managed in transcript- and checklist-form using MS Word.

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1.7 Organisation of the report

The HDR-SA 2012 is organized as follows: Chapter 1 provides an introduction to the report, and is followed by Chapter 2 which presents an overview of the status of human development in SADC. Chapter 3 outlines the linkages between regional integration and human development. Chapter 4 covers macroeconomic policy and economic convergence in the subregion, while Chapter 5 presents a discussion on infrastructure developments and human development in the subregion. Environment, climate change and food security in SADC is the focus of Chapter 6 and, finally, Chapter 7 is the conclusion and offers policy recommendations for SADC.

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CHAPTER 2: Status of human development in SADC

The reasons for regional integration in Africa have been evolving over time. These have shifted from the initial focus on the political decolonisation of Africa to the current emphasis on socioeconomic cooperation in the post-independence era for a stronger bargain- ing base in global forums and for mutual benefit in the form of accelerated development.

Commitment to the quest for deep integration and unity was demonstrated by Africa’s first leaders when they formed the Organisation of African Unity (OAU) in 1963. The African Development Bank (AfDB), the Economic Commission for Africa (ECA) and others followed as key players in regional integration and the African Union (AU) evolved from the OAU with a further mandate towards integration. Strides towards regional integration have however not progressed as desired, mainly due to Africa’s persistent challenges that have marginalised the continent on the world stage. These include, but are not limited to, poor governance, high disease prevalence (including HIV and AIDS, malaria and maternal and child mortality), external shocks such as the global financial and economic crises of 2008/2009, and the adverse effects of climate change.

Regional integration in Southern Africa is caused by the historical, economic, political, social and cultural influences that have created strong links of solidarity and unity among the peoples of Southern Africa. Most countries of Southern Africa ultimately achieved political independence against a background of mass poverty, economic backwardness and the threat of powerful minority-ruled neighbours. As a result, the leaders saw the promotion of economic and social development through cooperation and integration as the next logical step after political independence. These influences have contributed to the formation of a distinct Southern African personality and identity that reinforces political and economic cooperation.

The Arusha Conference in Tanzania in July 1979 agreed on a strategy to launch the South- ern African Development Coordination Conference (SADCC) and accordingly the then nine majority-ruled states of Southern Africa (Angola, Botswana, Lesotho, Malawi, Mo- zambique, Swaziland, Tanzania, Zambia and Zimbabwe) met at summit level in April 1980 in Lusaka, Zambia, and declared their commitment to pursue policies aimed at economic liberation on the basis of the sustainable integrated development of their economies.

According to the SADC Secretariat, the aims of SADCC were to reduce economic dependence particularly, but not only, on South Africa; to forge links to create genuine and equitable subregional integration; to mobilise resources for implementing national and inter-State policies; and to take concerted action to secure international cooperation within the framework of the strategy of economic liberation.

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By the late 1980s, it became apparent that SADCC needed strengthening. The attainment of independence by Namibia in 1990 formally ended the struggle against colonialism in the subregion. In some of the other countries, concerted efforts to end internal conflicts and civil strife were bearing positive results. In South Africa, the process was underway to end the inhuman structure of apartheid, and to bring about a constitutional dispensation acceptable to all the people of South Africa. These developments took the subregion out of an era of conflict and confrontation, to one of peace, security and stability, which remain prerequisites for cooperation and development.

On the global scene, fundamental and far-reaching political and economic changes were taking place. Integration was fast becoming a global trend. Countries in different regions of the globe were organising themselves into closer economic and political entities. These movements towards stronger regional blocs were expected to transform the world, both economically and politically, as firms within these economic blocs would benefit from economies of scale provided by large markets, to become competitive both internally and internationally. For firms in Southern Africa not to remain behind, it became imperative for a large subregional market to be established so that they too could benefit from economies of scale.

Twelve years after its formation, SADCC was transformed into the Southern African Development Community (SADC) with the signing of the Declaration and Treaty of SADC at the Heads of State and Government Summit in Windhoek, Namibia, on 17 August 1992. The purpose of transforming SADCC into SADC was to promote deeper economic cooperation and integration to help address many of the factors that make it difficult to sustain economic growth and socioeconomic development, such as continued dependence on the exports of a few primary commodities. Transforming and restructuring their economies had become an urgent necessity for SADC governments. The small size of their individual markets, the inadequate socioeconomic infrastructure, and the high per capita cost of providing this infrastructure, as well as their low income base made it difficult for member States individually to attract or maintain the necessary investments for their sustained development.

Accordingly, SADC opted for a development integration approach which recognises the political and economic diversities of regionally integrating countries, including their diverse production structures, trade patterns, resource endowments, development priorities, institutional affiliations and resource allocation mechanisms. It addresses many of the production, infrastructure and efficiency barriers arising from the underdevelopment of the subregion. This approach also has the advantage of complementing trade liberalisation with sustainable corrective measures, designed to cushion the least developed member countries against shocks arising from the removal of trade barriers. It further allows member States to define the scope and sectors of cooperation and to identify appropriate strategies and mechanisms to overcome impediments to integration and to address subregional imbalances between them.

The SADC subregional integration agenda recognises the importance of the various human and social development facets, such as health, education, gender equality and poverty reduction, if deeper integration is sought. In this regard, specific protocols on the key

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facets of human development have been signed. These include: SADC Protocol on Edu- cation and Training in 1997, SADC protocol on Health in 1999 and SADC Protocol on Gender and Development in 2008. SADC Protocol on Science and Technology signed in 2008 also has education and gender equality dimensions. These protocols generally outline the areas of cooperation and harmonisation on the different facets of human development in the subregion.

SADC’s Heads of State and Government adopted RIDSP at the summit held in Dar es Salaam, Tanzania, in 2003. It is the key policy framework for the implementation of the SADC Common Agenda and is designed to operationalise the various protocols signed by outlining the targets and timeframes for goals in the various areas of cooperation to deepen subregional integration, promote sustainable and equitable economic growth and monitor progress. Human and social development is a priority intervention area in RISDP and should contribute to poverty reduction by improving the availability of educated, skilled, healthy, flexible, culturally responsive, productive and efficient human resources for SADC’s equitable growth, developing positive values, attitudes and practices, and increasing the utilisation of human capabilities (see SADC, 2001). Given the long gestation period required for interventions in social and human development to yield expected results, targets outlined in RISDP are largely in line with the MDGs.

In principle, SADC’s subregional economic integration agenda will influence human development through four dimensions: income, access to services, empowerment and sustainability. The link however, between subregional economic integration and human development is contingent on a number of context-specific factors. Countries may have a great degree of control over some of these (UNDP, 2011b). Context-specific impediments that may be harder to surmount include: initial factor endowments, geographical position and climate. “Softer” factors may include: policies and investment, existing institutional capacity to manage policy and programmes, and incentives facing individuals and their consequent behaviours.

This chapter gives insight into the status of human development in the SADC subregion before subregional integration and provides a comparative analysis on what is currently prevailing. It focuses on ten thematic areas, with emphasis on indicators that show how the 15 member States previously performed. The time before the reference period (2000- 2011) and before the adoption of RISDP (2003) are considered in addition to the reference period of the study.

“The basic objective of development”, wrote Mahbub ul Haq in the first Human Develop- ment

Report in 1990, “is to create an enabling environment in which people can enjoy long, healthy and creative lives.” The current chapter therefore attempts to demonstrate how common approaches to policies and protocols in the SADC subregion are contributing to human development in the subregion. The thematic areas include: (1) traditional indicators of human development; (2) poverty and income inequality; (3) education, skills development and capacity-building; (4) employment and labour; (5) health; (6) HIV/AIDS;

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(7) people with special needs; (8) youth empowerment; (9) gender equity and women’s empowerment; and (10) culture and development.

2.1 Traditional indicators of human development

In an effort to improve the management of their economies, SADC member States have made notable strides as well as varying degrees of progress in human development. The SADC Regional HDR of 1998 reported that life expectancy, adult literacy and gross enrolment ratios for primary and secondary schools had shown significant improvements since the 1960s. By the 1970s, 9 of the 15 member States had attained independence.

Repressive and discriminatory regimes were characteristic of colonial and subsequent un- democratic governance in the period just after independence in most countries.

The rate and level of growth in human development, as measured by the HDI, encom- pass adult literacy, real per capita income, gross enrolment ratios and life expectancy at birth, among other indicators. The HDI profile for SADC over the past three decades is presented in Table 2.1. SADC member States fall into two broad categories in terms of the HDI: the medium human-development category, which groups Mauritius, Botswana, Namibia, South Africa and Swaziland, and the low human development category which contains all the other countries.

Table 2.1: HDI for SADC countries, 1980-2011

Human Development Index

1980 1990 2000 2002 Global

Rank 2002

2010 Global Rank 2010

2011 Global Rank 2011

Angola - - 0.4 0.381 166 0.403 146 0.486 148

Botswana 0.556 0.653 0.57 0.589 128 0.633 98 0.633 118

DRC - - 0.431 0.365 168 0.239 168 0.286 187

Lesotho 0.518 0.574 0.535 0.493 145 0.427 141 0.45 160

Madagascar - - - 0.469 150 0.435 135 0.48 151

Malawi 0.342 0.36 0.4 0.388 165 0.385 153 0.4 171

Mauritius 0.656 0.72 0.772 0.781 64 0.701 72 0.728 77

Mozambique 0.302 0.31 0.32 0.354 171 0.284 165 0.322 184

Namibia - - 0.61 0.607 126 0.606 105 0.632 120

South Africa 0.66 0.71 0.695 0.666 119 0.597 110 0.619 123

Swaziland 0.54 0.615 0.57 0.519 137 0.498 121 0.522 140

Tanzania - 0.422 0.44 0.407 162 0.398 148 0.466 152

Zambia 0.46 0.468 0.433 0.389 164 0.395 150 0.436 164

Zimbabwe 0.572 0.597 0.551 0.491 147 0.14 169 0.376 173

No data available for Seychelles

Source: UNDP, Human Development Reports (2003, 2004, and 2011)

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In figure 2.1 below, a cursory comparison⁷ of HDI progress between 2002 and 2011 across SADC illustrates that the early part of our reference period (2002) registered higher HDIs compared to the latter part (2011) for most countries. The larger part of the subregion falls below the average HDI for SADC. Interestingly, the SADC average HDI also provides a divide between the countries in the medium-development category and those in the low-development category.

The subregion was not immune to the global economic crises, hence the observed declines in HDI for the various countries. In addition, the declines can also be attributed to decreases in the value of key variables in the HDI. For example, data from the World Bank covering the period 2002-2012 suggests that, whereas in every other subregion life expectancy improved over time, it declined for Sub-Saharan Africa and for the vast majority of SADC countries mainly due to the high incidence of HIV/AIDS and other health stresses. DRC, Mozambique and Zimbabwe experienced marked deterioration, with the Zimbabwean case being by far the most dramatic deterioration of its human development record as recorded by HDI. These declines could be attributed to social, political and economic collapse in Zimbabwe, internal conflict in DRC, and social and economic unrest in Mozambique, in addition to the global economic crises. However, a few countries maintained or marginally improved their HDI positions. It is however worth noting that while the computation of the HDI has evolved over time the relative ranking of the countries remains the same.

7 This is described as a cursory comparison because the methodology for computing the HDI had been changing over the years since the index was first published. This means the index is not prop- erly comparable from year to year, and only a crude comparison can be done.

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Figure 2.1: Comparison of HDI outcomes in SADC, 2002 vs. 2011

Source: constructed from Table 2.1

2.2 Poverty and income inequality

Human poverty varies among member States in the SADC subregion and has been subject to fluctuations in the last decade. The greatest areas of deprivation are lack of nutrition and access to safe drinking water. Also, the frequent occurrence of droughts usually manifests itself in food crises and results in starvation, thereby discouraging economic activity.

It is estimated that over a third of the SADC population are afflicted by abject poverty.

In 2005, 7 out of the 15 countries were among the 38 least developed countries in the world. By 2011 the number had only fallen to 6 out of 15 among the 48 least developed countries. From Table 2.2, it is clear that national poverty levels in the subregion have only marginally declined, if at all. Indeed, the overall poverty headcounts have increased in countries such as Lesotho, Swaziland and, to a much larger extent, Zimbabwe. Among the countries for which data were available, only four countries, Botswana, Namibia, Tanzania

Enhancing human development through regional integration in SADC : HDR-SA 2012 human development report for Southern Africa.

HDR-SA 2012 Human Development Report

for Southern Africa

Enhancing

Human Development

through Regional

Integration in SADC

HDR-SA 2012 Human Development Report

for Southern Africa

Enhancing Human Development through Regional Integration in SADC

Table of Contents

Acronyms and abbreviations

Acknowledgements

Foreword

Executive Summary

Chapter 1: Introduction

1.1 The rationale for the study

1.2 Defining “human development”

1.3 Defining “regional integration”

1.4 Subregional context of SADC

1.5 Study objectives

1.6 Methodology: Scope, concepts, methods and data

1.6.1 Scope of the study

1.6.2 Conceptual framework and concepts

1.6.3 Methods of analysis

1.6.4 Data collection process, data tools and data management

1.7 Organisation of the report

CHAPTER 2: Status of human development in SADC

2.1 Traditional indicators of human development

2.2 Poverty and income inequality