REGIONAL INDIC ATIVE STRATEGIC DEVELOPMENT PL AN 6 5 the changing global environment, the creation of large As SADC establishes a Customs Union, it will be markets has become synonymous with increased foreign necessary to take steps to deepen monetary cooperation investment and economic growth as investors search for in the region which would lead to the establishment of a economies of scale and efficiency gains in the production monetary union. This process is linked to achieving process. Markets have to be competitive at local and macroeconomic convergence, stable and harmonised international levels. Small and protected markets have exchange rates systems, liberalisation of the capital and been rendered non-viable by globalisation. current accounts transactions and adoption of market Developments in the African continent show that oriented approach to the conduct of monetary policy. many regional economic communities are integrating The policies and strategies that are adopted for trade, their markets with some having long established customs industry, finance and investment should take into unions while others are at advanced stages and moving consideration the special needs of less developed towards common markets. Within SADC there is the member countries and ensure that a win-win situation Southern African Customs Union (SACU). Some SADC prevails. In the case of the trade protocol, the principle of Member States are in the Free Trade Area of the Common asymmetry was adopted to address the concerns of less Market for Eastern and Southern Africa States (COMESA), developed member countries in terms of tariff reduction which envisages establishing a customs union by the year and also on rules of origin for some products, which were 2004. The issue of multiple memberships of SADC made less stringent for them, at least in the first three Member States in regional integration blocs should be years. Deliberate policies will also be required to deal resolved as a matter of urgency in order to facilitate the with industrial development for the periphery areas or establishment of a SADC Customs Union. The United States has proposed negotiating a free trade agreement with SACU. These developments have serious implications on SADC's future, particularly in deciding on the geographical configuration for the second phase of the negotiations on the economic partnership agreement with the European Union in the context of the Cotonou Agreement. SADC has been implementing the Trade protocol, since September 2000 that will lead to a Free Trade Area by 2008. As one of the building blocs of the African Union, SADC has to keep pace with developments on the continent in order to avoid slowing down the continental integration agenda of achieving an Africa wide single market. countries that may not be as competitive as others. Such development variations could also be addressed through targeted cross-border investment in productive activities and corridor development, which would spread development across the region. Strategies will therefore be required to develop a competitive and balanced industrial base in SADC that optimally utilizes local resources through comprehensive value addition and creating an enabling environment for increased investment and sustained economic growth. The process of value addition of local resources particularly in mining and agriculture, will also take into account environmental concerns in order to ensure sustainable development. At the same time cross-cutting issues such as gender, HIV It is imperative, therefore, that as a way of fostering a and AIDS, information and communications technology, global partnership for development, SADC further statistics and science and technology will be main- develops trade and financial systems that are rule-based, streamed into all areas of focus. predictable and credible. The Regional Indicative In developing the policies and strategies for industrial Strategic Development Plan considers trade and and mining development, the question of the informal economic liberalization for deeper integration and sector both in terms of trade liberalization and actual poverty eradication as one of its key catalytic intervention production should be taken on board. Although there are areas. The pursuit of this intervention area entail no statistics, it is known that informal cross border trade implementing programmes on achieving a free trade area, is substantial and is thriving throughout the region. A a customs union and would lead to the establishment of large proportion of the population derives its livelihood the SADC common market. from informal employment.