Regional integration in SADC: the role of BRICS countries

Hazar, Cenk

Regional integration in SADC: the role of BRICS countries

Master Thesis

2022

Abstract

The purpose of this study is to examine the influence of bilateral BRICS-SADC trade connections on SADC's regional economic integration. The issues that were explored included among others whether or not the SADC countries' trade relations with BRICS countries contribute to SADC's goal of promoting deeper regional economic integration. The impact of the trade relations with BRICS countries on the development of intra-SADC trade has been analysed, as development of intra-trade is one of the most important factors that can ensure economic integration of SADC region. This research applied the dependency theory in order to articulate what type of trade relationship exists between SADC and BRICS countries. This research was a desktop study that relied on existing secondary data gathered by the United Nations Comtrade. In order to engage with the issues of trade relations, the study explored how exported and imported goods between member countries are dealt with. The research therefore has analysed trading operations between BRICS nations and SADC countries through using data from the United Nations Comtrade database. The United Nations Comtrade database has been used as the principal source in analysing trading operations between BRICS and SADC states. Statistics of commerce within SADC countries as well as outwardly with BRICS are based on taking SADC countries as the reporting countries in the UN Comtrade trade statistics. While BRICS operations are expected to contribute to the growth of African countries, there appears to be substantial concerns about BRICS countries, particularly China, influence expanding in SADC region with several studies claiming that establishing economic contacts – particularly with China, has led to de-industrialisation in SADC. The region appears to be sliding more into large-scale reliance on resource exports thus creating deeper dependence on raw material or primary product exports. This study expounded the core argument that trade relations of SADC countries with those of the BRICS may actually be hindering the development of intra-SADC trade and ultimately SADC economic integration progress. This research found that BRICS countries' trade relations with SADC countries are not compatible with the specified targets for SADC regional economic integration. While Russia and Brazil are BRICS countries with low trade volumes within SADC region, China has the largest portion of bilateral trade with SADC region. This investigation also found that it is highly possible that trade with China and India has a negative impact on the domestic economic development of SADC countries especially their infant industries since it curbs the domestic industries' opportunities to achieve the expected benefits in the integration process. Another outcome of the analysis is that SADC intra-trade rate, which is already limited, remains extremely low if South Africa is excluded from intratrade statistics – pointing out that South Africa dominates trade within SADC region.