Globalisation cannot be halted: Botswana President

“A pessimist sees danger in every opportunity whereas an optimist sees opportunity in every apparent danger,”said Botswana President Festus G. Mogae. Botswana’s leader is a keen optimist when it comes to Regional Trading Blocs (RTBs) and believes they can be a significant factor in realising sustainable development and increased trade in developing countries given the globalisation phenomenon. He was speaking at the Central Bank auditorium last week. Like the inevitable approach of the hot summer which must follow the winter, says Mogae, globalisation cannot be halted. It is likely to have a telling impact on human development in the coming years, he says. Improvement of Third World living standards is contingent upon the management of its effects, one avenue being through the favourable influence of RTBs. Although some detractors predict negative effects of globalisation like exploitation, marginalisation of the poor globally and increased underdevelopment, Mogae is more optimistic. He feels that given access to technology, poverty can be reduced and new trade and investment opportunities could arise for all countries.Bereft of proper management, however, “suffering and division will grow” and the world will be negatively affected overall. For both Botswana and TT, predicts Mogae, “the greatest opportunities of globalisation will come from international trade” which also creates jobs and reduces poverty. Mogae likened Botswana to TT, saying that both small economies face similar challenges and are comitted to regional collaboration.

Both countries are dependent upon non-renewable natural resources, Botswana’s diamonds being 84% of its total exports and TT’s petroleum and gas being 63% of our total exports. Also the GDPs of both countries thrive on trade, exports and imports, accounting for 85% of Botswana’s GDP and 87.7% of TT’s GDP in 2001. As a result, small economies like these are at the mercy of fluctuations in the prices of imports and exports which affect economic performance significantly, he said. Also, due to small populations and limited domestic markets, unit costs tend to be higher, in this way negatively impacting upon international competitiveness. Mogae notes that RTBs are responsible for regional trade agreements which are catalysts in the process of world trade liberalisation. It is estimated that more than one-third of the world’s trade takes place within such agreements, this figure jumping to 59% if OPEC is included. The Southern African Development Community (SADC), says Mogae, is one of the institutions targeting trade liberalisation with a view to promoting fair, mutually equitable, beneficial terms. “It seeks to eliminate tariff and non-tariff barriers and improve the climate for domestic, cross-border and foreign investments to facilitate economic diversification,” he said, with the ultimate aim being to establish a complete SADC free trade area by 2012.

Mogae also emphasises regional integration which, he says, is becoming more outward looking and more committed. Increasingly integration is taking the form of “investments, intellectual property, labour mobility and the free flow of goods and services.” The heightened opportunities derived from combining markets through RTBs also enable small economies to overcome the disadvantages of smallness. Moreover, many RTBs cultivate partnerships between high-income industrialised countries and developing states. Mogae emphasises that “through regional integration agreements small states can achieve political and non-economic objectives including national and regional security and the enhancement of bargaining power.” SADC and Caricom, good examples of regional solidarity, facilitate the important goal of articulating the concerns of small economies to the international community, he says. Further, he advises that small countries should increase their representation in the WTO in Geneva and regions should maximise limited resources by sharing representation for issues on which they hold a common position. RTBs, he says, must harness “our collective power to ensure that non-tariff barriers do not hinder exportation by developing countries into the market of industrialised countries.” Indeed, he notes, developing nations entering into agreements without bargaining power or proper negotiations could exacerbate existing inequity. For small states to be effectively integrated into the global economy, says Mogae, there is need to address issues such as erosion of trade preferences and the strict enforcement of WTO regulations on subsidies. Also, it must be recognised, he says, that the vulnerability of small states to natural disaster, HIV/AIDS and fluctuations in world market prices and exchange rates warrants international attention.