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SADC Performance

Posted On Thursday, 21 June 2001 03:01 Published by eProp Commercial Property News
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Too much of the economic debate is conducted in a statistical vacuum.

Tony Hawkins"As long as the reality is unknown - because the data is not being put together in a logical and coherent manner - the gap between perception and reality will remain, if not widen."

Tony Hawkins is professor of economics at the University of Zimbabwe

Too much of the debate over "perceptions and reality" in Durban at this month's World Economic Forum summit, and again last week in London, is conducted in a statistical vacuum. Certainly, this applies to such sweeping assertions, heard in Durban, as "the Southern African Development Community (SADC) region is moving forward". In what sense and at what pace? What do the numbers show?

The table seeks to put such assertions into perspective. The sources are all reputable international agencies - the International Monetary Fund, World Bank, UN Development Programme, World Trade Organisation and so on.

Such data is available for most SADC states, yet nowhere is it put together into a single, coherent publication. In the absence of such data, the debate on where SADC is heading and how fast is conducted in a vacuum. As long as the reality is unknown, the gap between perception and reality will remain, if not widen.

The table makes sobering reading. With few exceptions, the indicators show the SADC losing ground. Certainly that's true of the region's share in global GDP, exports, inward foreign direct investment and, disturbingly, its human development index (HDI). Regional decline in the HDI is driven primarily by HIV/Aids, which is reducing life expectancy .

The quality of the data is problematic, but the underlying trend is disconcerting. The decline in regional GDP in current dollars largely reflects currency depreciation, but the growth rate during the Nineties in constant US dollars was less than 2% and about one percentage point below the rate of population growth. Over the 20 years from 1980, the SADC's real GDP grew 1,6% annually .

More encouraging is, since 1995, economic growth has accelerated to an average 2,7%/year, keeping up with population growth.

Regional averages distort individual performance. Growth trends since 1990 show four groups. Three countries were above-average, Botswana, Mozambique and Mauritius, with growth of between 5% and 6% annually (at constant prices in national currencies). A second group of moderate performers - Lesotho, Malawi, Namibia, Swaziland and Tanzania - grew at 3%-4%/year. Laggards, including the Seychelles, SA and Zimbabwe, had static or falling per capita incomes with growth of less than 3%. In the remaining three SADC states, Zambia, Angola and Congo (Kinshasa), GDP declined.

Growth numbers paint only a partial picture. Other macro-economic indicators - budget deficits as a percentage of GDP and the current account of the balance of payments - show big improvement over the period, but the growth, poverty, HDI and trade figures are disappointing.

Particularly worrisome from the viewpoint of long-term political stability are income distribution figures. Several SADC states have high Gini coefficients (the higher the Gini, the more inequitable the pattern of income distribution). Namibia (0,707) has the highest Gini among 110 countries listed in a recent World Bank research paper Other SADC countries with high Gini coefficients include Swaziland (0,580), SA (0,577), Lesotho (0,565) and Zambia (0,513).

It is not difficult to pick holes in the numbers, but it is impossible to use "inaccurate perceptions" to dispel the overall impression created by the economic data. The critical mass of data is, or ought to be, persuasive.

The message is simple. Get the performance right and the perceptions will follow.

Last modified on Thursday, 17 April 2014 09:59

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