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SARP:WHERE ARE WE AND

WHERE ARE WE GOING?

OVERVIEW:

The Southern Afncan Development CoordmatIOn Conference (SADCC) was formed m1980 to support mdependence for ZImbabwe and NamIbIa and the abolItIOn of apartheIdm South Afnca South Afnca's economIC dommance was also a factor as the countnes mthe regIOn WIshed to protect themselves from the effects of sanctIOns on South Afnca andthe potentIal of South Afnca to exert economIC pressures on Its neIghbors through controlof major transport routes At Its mItIatIOn, SADCC mcluded the mne countnes of Angola,Botswana, Lesotho, MalaWI, MozambIque, SwazIland, Tanzama, ZambIa, and ZImbabweNamIbIa became a member followmg Its mdependence.

SADCC has proved to be an effectIve mechamsm for obtammg donor assIstance. A.I.DestablIshed the Southern Afnca RegIOnal Program (SARP) m 1981 m a desIre to work wIththe regIOn as a whole m shoWIng U S dIsapproval of apartheId and support for theSADCC countnes m theIr quest to decrease theIr economIC dependence on South AfncaOver the years, SARP has provIded over $350 mIllIon, concentratmg pnmanly ontransportatIOn Smce the begmmng, thIS assIstance has been coordmated through SADCC

Recent changes m the regIOn are affectmg SADCC's ongmal mandate As a consequence,we need to re-examme the U S role both m the regIOn and wIth SADCC, mcludmgexammmg SADCC's pOSSIble and probable future.

Smce SARP was desIgned to support SADCC and ItS efforts, the future of SARP ISmextncably combmed WIth that of SADCC In recogmtIOn of the Impendmg changes m theregIOn and need for SADCC and SARP to respond to those changes, USAID/HararecommISSIOned W Haven North to study southern Afnca regIOnal Issues, assess andevaluate the roles of SADCC, SARP, and other orgamzatIOns, and offer mSIghts on the roleof SADCC and SARP m the changmg southern Mnca envIronment (see attachment A).

ThIS paper presents background mformatIOn on SARP and SADCC and mtroduces Issuesfor dIscussIOn and resolutIOn as we move to development of a U S posItIOn on SADCCThe fIrst sectIOn proVIdes background on SADCC and SARP and on SADCC'saccomplIshments; the second sectIon addresses recent changes m South Mnca, m SADCCcountnes, and m SADCC Itself, the thIrd sectIOn deals WIth the role of major donors toSADCC, and the fourth wIth the current posItIOn of STATE/AF (see attachments BandC) Fmally, SectIOn V dIscusses Issues affectmg U S mvolvement m the regIOn.

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I. HISTORICAL BACKGROUND:

A. SADCC

Although talk of coordmatIOn and mutual mterests began m the early 1970s, SADCC wasnot offICIally establIshed untIl 1980 at a meetmg m Lusaka, ZambIa of the heads of stateof Angola, Botswana, Lesotho, MalaWI, MozambIque, SwazIland, Tanzama, ZambIa, andZImbabwe. The pnmary and mItIal motIvatIOn was polItIcal, namely, cooperatIOn of the"Front Lme States" of Angola, Botswana, MozambIque, Tanzama, and ZambIa, msupport of mdependence for ZImbabwe and NamIbIa and the abolItIOn of apartheId mSouth Afnca. These countnes also wanted to reduce theIr economIC dependence on theRepublIc of South Afnca, WhICh dommated the regIOn m physIcal and fmancIaI wealthWhen ZImbabwe gamed mdependence m 1980, emphasIs shIfted from support formdependence to the polItIcal Issues surroundmg apartheId and NamIbIa and theeconomIC posItIOn of the mdependent states VIS-a-VIS South Afnca NamIbIa has alsosmce gamed mdependence and Jomed SADCC, brmgmg the number of countnes to ten

The mne SADCC Heads of Government Issued a Jomt declaratIOn m Lusaka on Apnl 1,1980 that formed the basIs for SADCC and posIted four pnncIpal obJectIves.

reductIOn m economIC dependence, especIally, but not solely, on SouthAfnca;

establIshment of mItIal stages of a genume and eqUItable regIonalmtegratIOn;

mobIlIzatIOn of resources to promote the ImplementatIOn of natIOnal,mterstate and regIOnal polIcIes; and

mternatIOnal cooperatIOn WIthm the framework of SADCC's strategy foreconomIC lIberatIOn.

In the Lusaka DeclaratIOn, the ongmal nme SADCC countnes also IdentIfIed specIfIcsectors for economIC cooperatIOn for each country, emphasIzmg transport andcommUnICatIOns conSIdered cntIcal to reducmg dependence on South Afnca SectorresponSIbIlItIes are as follows

AngolaBotswana

energy,agncultural research {Southern Afnca Center for theCoordmatIOn of Agncultural Research (SACCAR)},

Lesotho

MalaWIMozambIqueSwazIlandTanzamaZambIaZImbabwe

B. Donor Commumty

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lIvestock productIOn and ammal dIsease control;soIl and water conservatIOn and land utIlIzatIOn, andtounsm;fIshenes, WIldlIfe, and forestry;transport and commumcatIOnsmanpower;Industry and trade,mInIng, andfood secunty.

The Lusaka DeclaratIOn InvIted the InternatIOnal commumty to cooperate InImplementmg specIfIC programs and proposed an annual conference to reVIew results,evaluate performance, IdentIfy strengths and weaknesses, and agree on future plans ThISformed the baSIS of a Programme of ActIOn for SADCC, IdentIfyIng pnontIes and therelevant tIme frames for ImplementatIOn of actIOns. It also brought the donors as agroup mto closer cooperatIOn WIth SADCC.

SInce SADCC's foundIng In 1980, It has held annual ConsultatIve Conferences wherebIlateral donors and mternatIOnal agenCIes (cooperatIng partners) mdIcate theIrcommItment to SADCC's Programme of ActIOn These conferences proVIde a forum fordISCUSSIng sectoral programs and Issues and for presentIng progress reports and proposedfuture plans As many as 31 bIlaterals and 18 InternatIOnal agenCIes attend theconferences, nonetheless, almost 90% of all aSSIstance to SADCC member countnes andfor the SADCC Programme of ActIOn comes from 11 bIlateral and three multIlateralagenCIes The largest total commItments have gone to the poorest countnes, speCIfIcally,MozambIque, MalaWI, Tanzama, and ZambIa SADCC's greatest success has beengarnermg donor resources and promotIng sector cooperatIOn

Most donors proVIde support by sector, WIth the overwhelmIng majorIty of total donorfundIng (from 1981 to July 1987) gOIng to the transport sector (72% of total fundIng or$16 mIllIon) Twelve percent of total fInanCIng In that perIod ($253 mIllIon) went toIndustry and trade Human resource development receIved $60 mIllIon and mInIng, $25mIllIon

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C SARP

A.I.D. establIshed the Southern Afncan RegIOnal Program (SARP) In 1981 to supportthe SADCC countnes' quest to decrease theIr dependence on South Afnca and to showU.S. dIsapproval of apartheId A separate SARP MISSIOn was created In Harare and theSARP program was developed JOIntly by A I D and SADCC, WIth ImplementatIOn ofactIVItIes coordInated WIth SADCC Begmmng In 1986, Congress earmarked funds forSADCC actIVItIes, shOWIng strong support for the SADCC countnes and oppOSItIon toSouth Afnca's system of apartheId In 1991, the CongreSSIOnal earmark was changed toa target.

In the ten years from 1981 through 1990, A I D proVIded $261 mIllIon to supportSADCC's Programme of ActIOn Of thIS, 70% went to the transport sector, 26% to foodsecunty and natural resources management sectors In FY 1991, total aId to SARP was$50 mIllIon, WIth transportatIOn receIVmg 95%, and program development and support5%. Although program fundmg overall has gone overwhelmIngly to the transport sector,fundIng by sector has vaned from year to year (see Table IB) In FY 1992, 73% ISexpected to go for transport, WIth pnvate sector development reCeIVIng 13%, agncultureand natural resource management 7%, and program development and evaluatIOn, 7%

From 1981 through 1990, dISaggregated by country, funds have gone pnmanly toMozambIque (23%), ZImbabwe (22%), Tanzama (17%), ZambIa (15%), and MalawI(11%) In 1990, however, ZImbabwe receIved 60% of the program's fundIng,MozambIque, 22%, and ZambIa, 14% (see Table lA).

D. SADCC's Accomplishments

SADCC has been extremely effectIve In mObIlIZIng donor aSSIstance -- over $3 5 bIllIon todate -- and In targetIng the aSSIstance to pnonty sectors SADCC countnes havecooperated In agncultural research, transportatIOn, food secunty, and natural resourcemanagement SADCC's success IS partIcularly noteworthy gIVen the hostIle InternatIOnaleconomIC enVIronment and the destabIlIZIng effect of the apartheId regIme m SouthernAfnca SADCC's greatest success has been forgmg a regIOnal identIty and a sense of acommon destmy among the ten member states.

SADCC, however, has had a lImIted Impact on changmg the structure of productIOn andadvancmg effICIent mtra-regIOnal trade and economIC lInkages The level of economICIntegratIOn eXIstIng at thIS tIme IS stIll extremely modest WhIle successful In mobIlIzmgdonor resources, SADCC has not had the same success m mobIlIzmg the regIOn's own

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resources and has not been the means of economIC transformatIOn ImtIally envlSlonedSADCC has also been the seat of squabbles rather than of cooperatIOn, as eVIdencedfollowmg NamIbIa's entrance mto the orgamzatIOn WhIle NamIbIa should have sectorresponSIbIlItIes as each of the countnes have, SADCC has been unable to alter thedlstnbutIOn of sectors to assIgn NamIbIa specIfIc responsIbIlItIes. Any sector assIgned toNamIbIa would mvolve "loss" of a sector for another country.

II. CHANGING ENVIRONMENT:

A. Environment Relationship Between South Africa and SADCC States

In March, 1992, a referendum was held m South Mnca on whether to contmuenegotIatIOns for a new form of government WIth 68% of the populatIon favormgcontmuatIOn of negotIatIOns, It appears that whIte and black South Mncans alIke want tomove toward a multI-party, representatIve government GIven the possIbIlIty that a multI­party, representatIve mtenm government could come to power thIS calendar year, manycountnes are exammmg the ratIOnale for contmumg wIth the restnctIOns put m place toprotest apartheId and a number have now removed restnctIOns to normal economICrelatIOnshIps wIth South Mnca

South Mncan busmesses are aggressIvely developmg market and mvestmentopportumtIes globally and m neIghbonng countnes. South Mnca's trade WIth otherMncan countnes mcreased by 40% m 1989 and agam by 25% m 1990. South AfrIca'sGDP IS 75% of the total GDP m the regIOn, WhICh IS ten tImes larger than Angola's and16 tImes the GDP of ZImbabwe SADCC countnes use about half theIr foreIgnexchange for Imports from South Mnca. South Mnca accounts for 88% of the electncItym the regIOn supplymg power to SIX of the nelghbonng countnes, ItS raIlways and portstransported 75% of neIghbors' Imports and half theIr exports m 1986/87 To Ignore sucha gIant WIthout the Issue of apartheId IS ImpoSSIble

B. SADCC Countnes

WhIle South Afnca IS consIdenng adoptIOn of a non-racIal constItutIOn, the ten SADCCcountnes are confrontmg new domestIc polItIcal and economIC CIrcumstances wIthm theIrcountnes. NamIbIa and ZambIa have had successful multI-party electIOns The peaceand electoral process are proceedmg well m Angola and negotIatIOns contmue mMozambIque to end the CIVIl conflIct Lesotho, MalaWI, MozambIque, Tanzama, ZambIa,and ZImbabwe have structural adjustment programs, promotmg market-onentedeconomIC reform and pOSItIve growth rates whIch exceed populatIOn rates. Overall, there

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IS a groWIng commonalIty m the regIon on the phIlosophy of economIC development andof polIcIes favonng cooperatIOn.

WhIle common problems and mterests mandate cooperatIOn between the SADCCcountnes, umque natIOnal Issues mhIbIt the move toward a VIable long run economy. InMozambIque, over two-thIrds of the populatIOn lIves m absolute poverty, mcludmg theover three mIllIon refugees now outsIde the country or dIsplaced wIthm It. Half thepopulatIOn depends on donor food aId for SUrVIval. The country faces a maSSIverehabIlItatIOn task. Over 60% of the populatIOn IS IllIterate; communIcatIons are poor.Angola has simIlar needs for rehabIlItatIon, though prospects for mvestment and growthare better. FIghtmg has dIsrupted the major economIC actIVItIes of manufacturmg,agnculture, and mInmg. Peace, however, WIll allow the country to use ItS $2 9 bIllIon ofexport earnIngs for more productIve uses

Even countnes not expenencIng CIVIl unrest and poverty are grapplmg WIth unIquedIffIcultIes. ZImbabwe has adopted reform measures and IS domg well economIcallyHowever, as South Afnca's largest tradmg partner m Afnca, ZImbabwe IS concerned thatItS mdustry WIll not be competItIve WIth South Afnca's and that profeSSIOnal manpowerWIll mIgrate to South Afnca for hIgher wages, Just as the country IS undergomg structuraladjustment. Botswana must lessen ItS dependence on mcome from dIamond resourcesand WIll need to conSIder dIversIfIcatIOn of ItS economy It also no longer has the onlymultI-party democratIc system m the regIOn

The easmg of CIVIl stnfe, successful multI-party electIons, market-onented structuraladjustments WIth Improved economIC growth, and the rapId movements of South Afncanbusmesses mto the regIOn gIVes nse to a new set of Issues. These Issues had not surfacedpreVIously gIVen the dIctates of polItIcal OppOSItIon to South Afnca's apartheId Idealogyand ItS polIcy of destabIlIzatIOn The Issues are forcmg re-defInItIOn of the roles andfunctIOns of regIOnal organIZatIOns The IndIVIdual struggles have also resulted m manycountnes negotIatmg separate trade and Investment deals WIth South Afnca, rather thanworkmg toward regIOnal IntegratIon

C. South Afnca and SADCC

South Afnca's role IS VIewed very dIfferently by South Afnca and by the SADCCcountrIes. Many m southern AfrIca belIeve South Afnca's wealth and SIze WIll lead manym SADCC to assume South AfrIca can take a lead role m reJuvenatmg the regIOn,supplymg other countnes WIth tramed human and physIcal resources. However, SouthAfnca's own development problems may make thIS ImpossIble

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DespIte overall wealth and a per capIta GDP hIgher than the rest of the area, SouthMnca IS movmg to maJonty rule WIth an educatIOnal system that has Ignored the vastmaJonty of persons, resultmg m a populatIOn that IS IllIterate and unable to undertakeskIlled Jobs There IS a vast mcome dIfferentIal between whItes and blacks: $10,836 perannum for whItes and $1,059 for blacks ApartheId, sanctIOns, and general condItIonshave resulted m a rate of mflatIOn exceedmg 13% per annum durmg the 1980s; foreIgnexchange reserves declmed as dId personal savmgs ratIos; and unemployment grewSouth Mnca IS also mcreasmgly dependent on other countnes m the area for resourcessuch as water and low cost power.

The South Mncan government belIeves ItS resources wIll be needed to developeducatIOn, address poverty, and support mvestments reqUIred to achIeve a hIgher growthrate 'thus, there wIll be few resources aVaIlable to address needs of other countnes.

D. SADCC's Changing Role

SADCC's focus has evolved from the days when the pnncIpal ObjectIve was polItIcalmdependence for all ten countnes and a measure of protectIOn from South Mnca'secononuc and polItIcal "oppressIOn" EconomIc development of the regIOn has nowbecome of major sIgmfIcance Indeed, the theme of the 1992 SADCC Conference was"Towards EconomIc Independence" The countnes propose to focus on regIOnaleconomIC mtegratIOn, to become a formal regIOnal orgamzatIOn VIa treaty arrangements;to establIsh new relatIOnshIps m a the PreferentIal Trade AsSOCIatIOn (PTA), and tomtegrate South Mnca mto SADCC

Unfortunately, nothmg has been done thus far to mtegrate South Mnca mto SADCC.WhIle South Mnca's role m the regIOn and m SADCC has not been determmed, SADCCrecogmzes that ItS past relatIOnshIp WIth South AfrIca WIll have to change and thatSADCC, therefore, must change also As a result, SADCC IS now actIvely dIscussmgregIOnal mtegratIOn.

WIth the Impendmg end of apartheId and the pOSSIbIlIty of a black-controlled state mSouth Afnca, much of the mItIal polItIcal Impetus for SADCC IS gone Gone also IS theVIew that South Afnca could or should be Isolated polItIcally or economIcally SADCCcan remam an orgamzatIOn of ten states, essentIally Ignonng South Afnca's role andstrength, focusmg on the economIC and other needs of the ten SADCC countnes or Itcan recogmze South Mnca's dommance and ItS Importance to the regIOn economIcally

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III. OTHER DONORS

Donors meet WIth SADCC at an annual ConsultatIve Conference, WhICh generallyproVIdes a forum for dlscussmg sectoral programs and Issues. Donor representatIves alsomeet on a sectoral level where mformal dISCUSSIOns take place among donors who areactIve In the same or sImIlar project actIVItIes Donor offIces m the area, however, varyWIdely In knowledge of and responsIbIlIty for theIr respectIve SADCC programs. There ISno overall coordInatIng donor body eXerCISIng a leadershIp role In the regIOn and noestablIshed forum for regular shanng of donor expenences In regIOnal development on abroad basIs. ThIS can pose a problem for regIOnal IntegratIOn.

A large number of donor countnes and orgamzatIOns have worked actIvely WIth SADCC.Just as the U S has focused on speCIfIC sectors and countnes, so have the other donors,both bIlateral and multIlateral

The major bIlateral donors In the transportatIon sector are the US., Norway, Sweden,Denmark, Germany, Canada, France, Portugal, Italy, and the UK. Of the multIlateralorgamzatIOns, the major contnbutors were the EEC, IDA, and AFDF

In Industry and trade, most of the aSSIstance comes from large, rehabIlItatIOn projects, forexample, a SwedIsh-supported pulp and paper mIll In Tanzama ($187) mIllIon; a SwedIsh­supported pestICIdes plant In Tanzama ($18) mIllIon and an ItalIan/NORAD-fundedrehabIlItatIOn of cement works m MozambIque

In agnculture, the U S. has taken the lead In donor-supported research and extenSIOn,WIth support from Canada, Germany, the UK and Norway. Donors Involved m SADCCregIOnal food secunty are Canada, Denmark, AustralIa, and Ireland MultIlateralsworkIng In the sector are the EEC and UNDP.

Energy sector InItIatIves have been supported by CanadIan, SwedIsh, NorwegIan, FInmsh,ItalIan, Dutch, Portuguese, and BraZIlIan bIlateral aSSIstance programs, the largest IS a$38 mIllIon CanadIan-funded project

The prInCIpal donors m human resource development are the US, UK, NORAD,Germany, and Ireland The Netherlands, France, EEe and UNIDO prOVIde theprInCIpal share of fundmg for mmmg.

Attachment D gIves a breakdown of donor fundIng by sector through July 1987

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IV. DEPARTMENT OF STATE (AF/S) POSITION

The Southern Afnca OffIce of the Department of State (AF/S) recently sent a cable toIts posts. The cable proVIdes a basIs for dISCUSSIOn on the future of SADCC (seeattachment C) AFIS IS cntIcal of SADCC for havmg made no senous moves towardregIOnal mtegratIOn durmg the past several years AF/S IS also cntIcal of SADCC'sfaIlure to plan for the mtegratIOn of South Afnca m SADCC and of SADCC's mabIlIty toproVIde regIOnally-coordmated aSSIstance for the drought. The changmg polItIcal rolebespeaks a reductIOn m, or end to, donor fmancmg of the regIOn and reqUIres thatSADCC reform ItS mISSIOn and move toward regIOnal mtegratIOn.

WIth apartheId dymg, polItIcal support for SADCC no longer demonstrates OpposItIOn toapartheId and support for those who were among the most ImmedIately affected bySouth Afnca's polItIcal and economIC dommatIOn The US deCISIOn to 11ft all remammgbarners to mvestment and trade WIth South Afnca IS lIkely to come wlthm a matter ofmonths Many other countnes have already removed all or most of theIr restnctIOns onnormal economIC relatIOns WIth South Afnca It strams reason to aId SADCC foroutdated polItIcal reasons as mvestments flow to a post-apartheId South Afnca.

In the long run, economIC mtegratIOn that leads to a productIve, wealthy, stable regIOnwould confer Immense benefIts to all countnes m the regIOn U S contnbutIOns,however, WIll be relatIvely mmor compared to what Afncan natIOns can and must do toachIeve the long-term benefIts of regIOnal mtegratIOns Clearly, there are certam stepsSADCC (or PTA) member states could take for mutual and ImmedIate gam, espeCIally mthe areas of trade and mvestment polICIes (repatnatIOn of profIts, currency convertIbIlItyand controls) It IS not clear that a SADCC-lIke structure IS necessary to take these steps-- aSIde from bolstermg mutual confIdence as the countnes lIberalIze mvestment andtrade regImes.

WhIle calls for eqUItable dlstnbutIOn of wealth contradIct accepted notIOns on freemarket regIOnal mtegratIOn, they do not necessanly mvalIdate the longer term goals ofeconomIC mtegratIOn founded on free market polICIes Donor attentIOn to mInImUmmfrastructure, health, and SOCIal needs could proVIde a polItIcal "safety net" for natIOnalgovernments wlllmg to accept the medIUm-term dIslocatIOns aSSOCIated WIth adoptmg freemarket relatIOns WIth a dIsproportIOnately wealthy neIghbor

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SADCC has served as a vehIcle for foreIgn assIstance, but ItS achIevements are notdemonstrably greater than what could have been won through normal bI- and multIlateralIntercourse. Whether SADCC becomes what It could most usefully be, to the U.S. andto Afnca, Will not be decIded by SARP money NatIOns In the regIOn must recreate anorgamzatIOn that earns both theIr confIdence and theIr support In pursUIt of economICIntegratIOn. FInancial aSSIstance to SADCC should be proportIOnal to the commItmentthe orgamzatIOn elICIts from ItS members At thIS time, that commItment appears verylImIted.

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V. ISSUES:

South Afnca, the mdlvldual SADCC countnes, and SADCC are gomg through a penodof dramatIc change To remam VIable and relevant, SARP must adapt Its focus anddIrectIOn as the rest of the regIOn changes. Although reonentmg the program IS a tIme­consummg process, It proVIdes an opportumty to re-examme US objectIves and todevelop an orgamzatIOn whIch meets new U S objectIves as well as those of the regIOn.The polIcIes and dommance of a whIte-ruled South Afnca have greatly decreased mImportance. EconomIc development m the regIOn, mcludmg South Africa, IS toomterdependent for anyone country to proceed m IsolatIOn of the others ThISmterdependence makes a regIOnal approach attractIve and offers scope for assistmg thearea

WhIle SIX Issues are IdentIfIed and bnefly dIscussed below, the lIst IS not comprehensIve.PossIble or recommended posItIOns are not provIded, smce the purpose of thIS paper ISto stImulate dIscussIOn of these and related questIons No specIfIc deCIsIOns are expectedat thIS tIme

1. What is the role for SADCC in the future?

SADCC was formed m OpposItIOn to a whIte-ruled South Afnca that IS undergomgsIgmflcant changes. Thus, SADCC's polItIcal purpose IS no longer valId As an economICorgamzatIOn, SADCC has been successful m mobIlIzmg donor funds and coordmatmgtransportatIOn and other actIvItIes; It has not been successful at garnermg the regIOn'sown resources It has also not been successful m promotmg regIOnal mtegratIOn, one ofItS major ObjectIves SADCC may not be the appropnate orgamzatIOn for thIS or maynot be capable of focusmg on polItIcal motIvatIOns and economIC mtegratIOnsImultaneously, fmdmg It possIble only to work at regIOnal cooperation. SADCC can be amechamsm for regIOnal collaboratIOn regIOnal mtegratIOn, a monetary area, a free tradezone, or whatever

In the past SIX months, the motIves for regIOnal mtegratIOn have mcreased, polItIcal fearsand problems have decreased, and SADCC has worked hard to re-defme Itself as anorgamzatIOn promotmg regIOnal mtegratIOn As eVIdenced m Europe, however, regIOnalmtegratIOn IS a long-term process Many past attempts at mtegratIOn on the Afncancontment have faIled, e g , the PreferentIal Trade AsSOCIatIOn for Eastern and SouthernAfncan States (PTA) For SADCC, an acceptable form of regIOnal mtegratIOn WIll beeven harder to accomplIsh smce eqUIty IS a strong consIderatIOn SADCC IS alsomterested m promotmg eqUIty m the regIOn

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2. Does/can the U.S. support are-oriented SADCC stressing regional integration(and equity)?

Although our polItIcal objectIves m the regIon have changed, our polItICal mterests msouthern Afnca remam. Furthermore, we contmue to have a strong mterest mpromotmg market-onented economIC development and democratIC governance. Someform of economIC mtegratIOn IS Important to the regIOn and we may have strongermfluence m developing polIcy through regIOnal, rather than sImply bIlateral, programs.

If "eqUIty" ImplIes a system of pncmg SubsIdIes or other dIstortIOns WIth market systems,WIthm a country or between countnes, U S support mIght be dIffIcult. If the countnesenVISIOn a type of "safety net" to ensure no one falls through the cracks as developmentproceeds, there are many ways the U.S. could help such a program.

3. Given changes in the region and in our political interests, what should be thefuture focus of SARP?

A regIOnal orgamzatIOn can help promote U.S alms by fostermg peace and democracyand by proVIdmg a framework for market-onented economIC prmciples RegIOnalmtegratIon m the area could promote trade and permIt entry of US busmess mto theregIOn A regIOnal approach may permIt greater humamtanan emphasIs throughpressure by member states.

The US can promote SADCC as an organ of regIOnal mtegratIOn or some othereconomIC bondmg Other optIOns eXIst, however We can support dIfferent geographICgroupmgs, e g., a "SADCC" mcludmg Madagascar or a group With a functIOnal purpose,e.g., a preferentIal trade area

4. What is the role of South Africa in a regional group?

Now that apartheid IS endmg, South Afnca can no longer be excluded from a regIOnalgroup on polItical grounds GIVen South AfrIca's Size and polItIcal and economICmfluence, however, the fear other natIOns have of bemg dommated IS understandable.ProvIdmg eqUIty among member states could also be dIffIcult WhIle South Afnca couldbe excluded from an economIC orgamzatIOn, Its mfluence cannot be Ignored. Manycountnes are presently dependent on South Afnca for transport, energy and trade.

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GIVen South AfrIca's economIC and polItIcal strength, It could be dIffIcult for anysouthern AfrIcan organIZatIOn to be VIable Without South Afnca

GIVen lImIted AID resources and South Afnca's relatively hIgh mcome level, the U.S.mIght prefer lImltmg economIC aSSIstance to bIlateral programs to needy countnes m theregIOn, whereby South AfrIca would not qualIfy. ThIS, however, would not preclude an"equal" role for South Afnca m a group receIVIng U.S. aSSIstance It IS pOSSIble tosupport South Afnca as part of a geographIc or economIC group receIVIng aSSIstance,Without gIVIng fundmg to South AfrIca dIrectly For example, SARP fundmg has notgone to all countnes m SADCC.

S. Does U.S. regional assistance need to be channelled through a particularorganization like SADCC or can we help a region through bilateral programs or aregional program untied to a local counterpart?

It IS eaSIer to verIfy that a program IS asslstmg a regIOn If the reCIpIent m some wayrepresents the regIOn rather than entItles wlthm It. The SARP program, however, hastargeted aSSIstance to speCIfIC countrIes wlthm the SADCC regIOn, as have the programsof other donors. Thus far, donors have aSSIsted prImarIly the poorest countnes, subjectto polItical constramts on provldmg aid to certam countnes, e g ,Angola. GlvmgaSSIstance to the area as a regIOn mIght not be extremely dIffICUlt m the absence of aSADCC-lIke organIZatIOn. However, It would be more dIffIcult to promote a sense of aregIOn and to encourage regIOnal cooperatIOn when aSSIstance IS proVIded bIlaterally,rather than through a regIOnal organIZatIOn When U.S. aid goes to only select membersof the regIOn, a regIOnal outlook may seem lIke a myth and regIOnal coordmatIOn may beImpOSSIble

6. If we are modifying SARP, at what point do we approach the Hill?

Congress has proVIded a target fundmg level for SADCC, to be Implemented throughSARP At present, we are reqUIred to Implement the SARP program m accordance Withthe ObjectIves of SADCC and all actIVItIes must be mcluded m the SADCC lIst ofapproved projects Last Fall, we dIscussed approachmg the HIll to suggest altenng ourapproach to SARPjSADCC GIVen the changes developmg m South AfrIca at that time,It was deCIded the Issue should be raised WIth Congress at a later tIme Our majorobjective m supportmg SADCC was polItical, however, and the polItIcal scene haschanged

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If we mollify our approach to SADCC and the SARP program, the proposed changesshould be dIscussed early on WIth the HIll, pnor to Implementmg any changes ThequestIOn remams, however, of the tImmg and venue for such dIscussIOns. Should wedevelop specIfIc proposals at thIS tIme or dISCUSS dIfferent optIOns WIth the HIll beforeformulating any proposals? Who IS the appropnate audIence on the HIll for suchdIScussions, e.g., selected members of the Senate/House or specIfIc staffers?

SARP\DOCS\WHITHER SRP,AFR/SA MSCOVILL,5/27/92,rev 6/3/92