Reframing Institutions: A Study of the Relevance of Southern African Customs Union

Chair: Amb. HHS Viswanathan
External Discussants: Dr SK Mohanty
Internal Discussants: Ms Ruchita Beri, Ms. Shebonti Ray Dadwal

Major Highlights of the Paper: This paper broadly addresses the significance of the African continent in India’s foreign policy with special reference to the Southern African Customs Union (SACU) in India’s engagement in southern and sub Saharan Africa. A study of SACU’s relevance becomes significant in light of the increasing regional and sub-regional integration in Africa.

The study traces the development pattern of southern Africa and the underlying components of economic power. It then reviews the SACU Agreement of 2002 and how it deviates from the 1969 agreement. The author also focuses on the nature of inequality among the SACU member states – South Africa, Botswana, Lesotho, Namibia and Swaziland - and its bearing on inter-state relations. The possible roles that SACU can play in the future and how, if at all, it could contribute to redefinition of the geopolitical environment of the region are also explored. On policy considerations, this paper addresses the implications of SACU for Indian foreign policy specifically towards Southern Africa.

SACU’s role is seen as crucial in addressing the inequality in inter-state relations, given that South Africa also dominated in its hinterland for decades. Among SACU member states, inequality between South Africa and the BLNS states exists not only on economic terms but also in their respective views towards international politics. At the regional level, SACU can represent the interests of its members in other oragnisations such as the Southern African Development Community (SADC). In a region peppered with landlocked countries, an integrated approach becomes essential; SACU can help members coordinate policies and reconcile sovereign differences. SACU will prove to be a decisive player in formulating the equation of regional power in the years to come, according to the author.

Since SACU as an organization is more homogeneous and more open to diplomatic efforts, its relevance for India becomes imminent. One role it could play is in hedging three primary types of risks associated with engaging in a region such as southern Africa – political, legal and financial. SACU could also assist in greater Indian engagement in the form of institutional capacity-building at the national, regional and pan African level. In general, SACU can help solidify India’s role in South-South cooperation and portray it as an ‘inclusive power’. It could also help facilitate stronger ties with Angola, Mozambique or Tanzania which could further India’s engagement with the SADC. In addition, building stronger bilateral ties with Namibia and Botswana can give India strategic access to the Atlantic Ocean and Central Africa. India could also assist Namibia and Botswana in setting up institutions in public governance, professional banking and other tertiary sector businesses, in order that it counters exploitative tendencies in the region and enhance its image in the development sector.

Major Points of discussion and Suggestions to the Author:

• The mechanism through which resources have been shared in SACU’s common reserve pool could be explored further, since this could be relevant for other regions in the world such as South Asia where the idea of common reserve pool could be implemented.
• Further study of SACU’s importance and implications for India could be useful for policy making bodies, for example how India can gain from integrating with SACU (India currently cooperates with at least eight other regional economic communities in Africa), and vice versa. In addition, SACU cannot be studied in isolation from Africa’s numerous other regional economic communities. Given South Africa’s dominant role in this organisation and the region, the question of whether SACU has succeeded in addressing inequities among member states needs to be explored further.
• A review of China’s role in Africa relating to this study could be undertaken given the level of China’s engagement on the African continent.
• A comparative study could be undertaken to study the relevance for India of signing a Free Trade Agreement (FTA) with SACU versus the Common Market for Eastern and Southern Africa (COMESA), which includes all SACU member states. Also, if SACU has succeeded as an institution, the study could explore what lessons India could draw from this (particularly relating to the SAARC).
• While the study suggests that South Africa could act as a gateway to sub-Saharan Africa, given that there is an amount of resentment regarding South Africa’s dominant role in the region, it would be worth exploring if this is indeed useful.

Report prepared by Princy Marin George, Research Assistant, Africa, Latin America, Caribbean and UN Centre