Fostering a resilient regional economy in the SADC through regional integration

Abstract

AbstractResilience in regional economic growth in the Southern African Development Community (SADC) can potentially be increased through the implementation of a regional policy which emphasizes regional integration. This will include the removal of tariff and non‐tariff based barriers to trade through trade liberalization and designing more efficient spatial linkages that facilitate increased intra‐regional trade. However, resilience in the region's economic growth is hindered by sluggish implementation of regional trade liberalization and spatial integration policies, as tariff and non‐tariff barriers to trade remain. The aim of the paper is to evaluate regional integration in fostering resilience in economic growth through its enhancement of economic interaction between member states, as well as facilitating increased spatial connectivity and the efficient movement of intra‐regional trade. In this paper, case studies of regional integration models as applied in eight developing country regional trading blocs, including the SADC, are used to determine the effect of intra‐regional trade on the resilience of economic growth in the face of an external economic crisis, namely the 2008 Global Financial Crisis and subsequent recession. Results of the above analysis indicate that intra‐regional trade through regional integration accelerates a region's recovery of its pre‐shock growth path. Despite considerable intra‐regional trade, the recovery of the SADC is hindered by the sluggish post‐shock growth of South Africa, its dominant economy. Based on the findings, it is recommended that intra‐regional trade be strengthened between SADC member states through increased economic integration, trade facilitation through development corridors, and capacitating dynamic regional institutions to oversee economic resilience strategies based on adjustment and adaptation.