2 4 S O U T H E R N A F R I C A N D E V E L O P M E N T C O M M U N I T Y and intermediate goods. Only the Republic of South Africa The policies that have so far been developed in all the (RSA) and to some limited extent Zimbabwe have the above sectors will be evaluated on the basis of their capacity to produce capital and intermediate goods. This relevance to overall objectives of the SADC region as well impacts negatively on the development of the Region and as the progress so far made by Member States in effecting leads to imbalances in economic levels. Furthermore, the them for the development of trade, industry, mining, Region produces similar primary goods, which are mainly finance and investment in the region. This will also be agro and mineral based. looked at in context of constraints arising from lack of The SADC region produces significant quantities of capacity of Member States to implement regional policies. major metals and minerals. It contributes about 53% of vanadium, 49% of platinum, 40% of chromite, 36% of gold, 50.1% of diamonds and 20% of cobalt to the world 3.2.2 TRADE production. A number of SADC countries rely on this sector for their foreign exchange earnings and there is 3.2.2.1 potential for investment and wealth creation in it. Review of Current Policies and Strategies However, the region has been experiencing incidences of The SADC Protocol on Trade, as amended, envisages the illegal mining and trade in diamonds and gemstones. With establishment of a Free Trade Area in the region by 2008 respect to diamonds, the Kimberly process that certifies and its objectives are to further liberalise intra-regional the source of diamonds has already started making an trade in goods and services; ensure efficient production; impact in dissuading illegal mining and trade in contribute towards the improvement of the climate for diamonds. With respect to gemstones, SADC is working domestic, cross-border and foreign investment; and on improving the legal and regulatory framework that enhance economic development, diversification and governs production and sale of gemstones in order to do industrialisation of the region. The specific strategies away with illegal mining and sale of gemstones. adopted to achieve these objectives are: Gross Domestic Savings (GDS) fell short of regional • The gradual elimination of tariffs; Gross Domestic Investment by 2.7% during the period • Adoption of common rules of origin; 1980-99. SADC is undertaking major financial sector • Harmonization of customs rules and procedures; reforms in order to increase gross domestic savings. • Attainment of internationally acceptable standards, In the early 1990s SADC as a group attracted an average of US$ 691 million FDI, which quadrupled during quality, accreditation and metrology; • the period 1995-98 to US$3061 million and of this investment, South Africa accounted for two-thirds. RSA also accounts for 50% of FDI inflows to other SADC Harmonization of sanitary and phyto-sanitary measures; • Elimination of non-tariff barriers; and • Liberalization of trade in services. countries and 25% of FDI in Sub-Saharan Africa was directed to the RSA between 1995-2000. The level of 3.2.2.2 investment for the rest of SADC averaged 23 % of GDP. Evaluation of Trade Policies and Strategies In general, inflation rates showed a declining trend The overall objective of the SADC Trade Protocol is to for the more stable countries of SADC during the first half attain a Free Trade Area as a step towards achieving a of 2000. However interest rates have remained high for Customs Union and subsequently a Common Market. On the whole of SADC with very wide variations from rates the whole, the SADC trade policies and strategies are below 20% to rates ranging between 40 and over 100%. In consistent with the objectives of eliminating obstacles to addition to this, most Member States have experienced the free movement of capital, labour and goods and an increasing external debt burden in the last two services and the improvement of the region's economic decades. This calls for sound regional debt management management policies in SADC. cooperation with the ultimate goal of eradicating poverty. and performance through regional