Pre-independence	1980-1989	1990-2000	2000-2008
Policies	Strong State led import substitution industry Protection White enclave	Strong State led Infant industry protection Tight controls through tariffs Foreign exchange allocation Growth with equity	IMF/World Bank led ESAP Export Promotion Trade Liberalisation Financial deregulation Export Retention Schemes Cost Recovery WTO Agreements Free market Ideology Liberalisation of almost everything (goods and services)	Weakened State attempting to regain control Highly open but Mixed economy Ad hoc state intervention Tight foreign exchange control regulations (initially) Price controls Import liberalisation EPAs (initialled)
State of the Economy	Strong/vibrant	Strong/vibrant	Gradual disintegration/de-industrialisation/de-agriculturalisation	Collapsing

• Zimbabwe is negotiating an Economic Partnership Agreement with the EU. The cornerstone of this Agreement is that it should be WTO compatible and liberalisation is the guiding principle.
• At the end of 2007, the EU and the ACP could not reach fully regional, comprehensive trade agreements as originally foreseen by the Cotonou Partnership Agreement

• Instead we initialled an Interim Economic Partnership Agreement partial scope, requiring continued negotiations to reach a full agreement by the end of 2008 or mid-2009
• guarantee a continuation of trade flows from Zimbabwe to the EU, avoiding disruptions due to the absence of a favourable trade regime as from 1 January 2008;

• The interim Agreement initialled is far from being an ideal text for Zimbabwe’s economic recovery and development

State of play

• The ACP-EU Council of Ministers adopted a joint resolution on EPAs during its meeting June 12-13 in Addis Ababa. The text echoes the EU External Relations Council conclusions of May 27 that calls for greater flexibility in the move from interim agreements to regional EPAs
• The ACP reiterated calls by African Union trade ministers to review ten articles in the interim agreements, given the haste to complete EPA negotiations at the end of 2007

• For ESA, negotiations are continuing at Senior Officials level (April, Malawi; May, Lusaka; July, Brussels; August, Madagascar; September, Comoros)

• We are currently negotiating the outstanding issues in the interim agreement and discussions have started on the other parts of a full and comprehensive agreement (services, agriculture, trips, investment policy, competition policy, trade facilitation, transparency in government procurement

The implementation of the initialled agreements is likely to have a direct impact specifically on:

• Fiscal revenues;
• Policy space available to promote developmental objectives such as economic diversification, the promotion of new industries, and food security;
• The capacity to pursue regional economic integration objectives

SADC Free Trade Area

The SADC regional integration programme includes the establishment of the FTA by 2008, a Customs Union by 2010, a Common Market by 2015, a monetary Union by 2016 and a single currency by 2018.

The SADC FTA creates a regional market worth US$360 billion with a total population of 170 million and includes economies growing by up to 7% a year. Angola and Congo DR are set to join the FTA adding a further US$71 billion and 77 million people to the SADC market.

It simply means removing obstacles to trade among the members of that FTA

SADC FTA is envisaged to:

Guarantee free movement of goods:

• No tariffs
• Non tariff barriers eliminated
• Easy cross border trade

Facilitating trade in the SADC community

• Support to importers and exporters
• Reducing costs

Creating a larger market for SADC business

• Growing from US$360 billion to 431 billion
• Value chains across the region
• Lowering input costs

Delivering value to the households

• Prices reduced through competition
• Increased employment opportunities

http://www.sadc.int/fta/index/browse/page/39

For you and me: what does this mean?

• Looks like we have jumped the gun
• SADC countries are facing serious production challenges. Until we are self reliant in productive terms, then the SADC FTA will not bring any benefits to the region. Instead we are smoothening the way for TNCs to trade unhindered.

For Zimbabwe:

1. Need first to distinguish between the REAL economy and the MONEY economy. Monetary, fiscal and foreign exchange policies are the key to stabilising the economy in the short run

2. However, no economy has ever recovered by purely monetary measures. The only cure to inflation (and many other distortions) is production – the real economy. Here is where the government has been weak and not very innovative.

3. Agriculture

• Nearly 70 per cent of the population lives in the rural areas
• The principal focus should be to improve the lives of these through ensuring that they get the support so that they engage in value-added production
• that first meets the food needs of the nation, and
• provides the raw materials for manufacturing (cotton, timber, leather, minerals, etc)

4. Exports are important mainly because they provide foreign exchange with which to buy imports

• export-oriented strategy is dangerous
• The strategy should be domestic demand led in which the needs of the people are satisfied primarily through the use of local resources, and by adding value to them

5. We must protect our domestic market through

• tariffs, quotas, and subsidies, if necessary
• No country in the world has developed without protection of local industries and agriculture.

6. Industry should offer to put agriculture on the ground first. Agriculture would then supply the necessary inputs to industry. Industry and agriculture must go hand in hand

7. Industry must act in unison with mining interests

• Individualism leads to greed and “get rich quick” speculative (as opposed to productive) enterprises
• This has been the major reason why the indigenisation strategy has so far not taken off in Zimbabwe

8. Once the domestic market is secure:

• the country must open up negotiations for the larger regional market (SADC, COMESA).
• These in the long run would be more reliable than global export markets.
• Overlapping membership (difficult to implement a common external tariff therefore means these will have to be harmonised
• Not only free movement of goods but people as well
• Government must be persuaded to reverse some of the hasty liberalisation measures that were taken in the decade following ESAP