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| Frank Flatters: News |
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I continue to work as a mentor to economic policy analysts in South Africa's National Treasury. I gave a presentation on fiscal challenges of regional integration at an IMF/African Tax Administration Forum conference on revenue mobilization in sub-Saharan Africa, and completed a report for SADC on rules of origin in textiles and garments. As part of the wrap-up of one phase of the Southern Africa Trade Hub project I did a report on challenges facing SADC regional integration. This became the basis for a keynote presentation at the launch of the new Trade Hub. With Hub support Robert Kirk and I did a study on trade policy options for the government of Swaziland, and I made a presentation to SADC officials and investors on attracting investment to improve competitiveness. In earlier work I did a study of lessons arising from the failed Ramatex textile investment in Namibia and a report on the dangers of the "commercial availability" clause that was added to AGOA rules of origin for garments. Fortunately for the poor countries that have been AGOA's greatest beneficiaries, Congress decided to withdraw the clause. With DNA Economics I gave training on trade policy analysis for South Africa's International Trade Administration Commission, ITAC. Matthew Stern and I gave a critique of South Africa's trade and industrial policy based on an earlier monograph. With DNA colleagues I did a paper on trade and trade policy scenarios for the South African Presidency, and a report on strategic options in implementing a SADC customs union. I helped conduct a 3-day leadership and development workshop for the Prime Minister, Cabinet and Permanent Secretaries of Mozambique (see background paper). This followed a week-long trade and industrial policy training course I gave to the Minister of Trade and Industry and his senior officials. Other work includes an assessment of World Bank trade policy work in Indonesia since the mid-1980s, a report for SA National Treasury on the SACU revenue sharing formula, a paper and presentation on the economics of South Africa's Motor Industry Development Program (MIDP) and a case study of the motor industry for a trade and poverty project. For more on the issues and discussions related to the MIDP see Features. After more than two years my DNA colleague, Matthew Stern and I decided to take a break from our monthly economic policy commentary, Geekonomics, in South Africa's Business Day. We will not be surprised if many of the discussions remain topical for some time to come. See for yourself by following the links to articles below. Here are some links to old Geekonomics columns and to further information on some of my projects and activities. |
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 SADC Rules of Origin |
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South Africa's Motor Industry Development Program (MIDP) is widely regarded as a major success of post-apartheid industrial policy. This is seen by the rapid growth of motor industry investment and exports. My research questions this view. See The Economics of MIDP and the South African Motor Industry presented at a TIPS/Nedlac seminar in Johannesburg in November 2005, Trade and Poverty in SA: Motor Industry Case Study and the September 2006 issue of Geekonomics. Recent performance is due to large subsidies given by the MIDP, often several multiples of the amounts invested. It is not surprising that investors have rushed in. Some updates of my earlier analysis, and preliminary work on the new APDP are summarized in some recent presentation notes. The economic costs are high and are borne by South African consumers. Up-market buyers pay significantly more than necessary for imported vehicles (the markup over world price is the subsidy given to exporters by duty reduction privileges). Low-end consumers pay in high prices, outdated models and high transport costs. Employment impacts are small and maybe even negative, especially for the poor. See much more on this issue in Features. |
Rules of origin are necessary but are also an inherent and dangerous flaw in preferential trade liberalization. Experience is beginning to show that they can undermine many of the benefits of trade preferences, especially for low income countries. This is illustrated by my work on the Southern Africa Development Community (SADC). See SADC Rules of Origin: Undermining Regional Free Trade, Rent-Seeking in Regional Trade Liberalization, Rules of Origin: Some Lessons from SADC and related papers on my Writings page. I have given presentations of this work to policy forums at TIPS and Tralac in South Africa, as well as in Mauritius, Mozambique and Namibia. The Commonwealth Secretariat, Inter-American Development Bank and DFID have also commissioned papers and further investigations. My most recent contribution was a report on reform of rules of origin as part of the Mid-Term Review of the SADC Trade Protocol. This research has generated lively and sometimes productive debate. There appears to be growing recognition of the costs of restrictive rules of origin and the dangers of preferential trade liberalization. |
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Regionalism and Multilateralism in Africa
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Mozambique is attempting to integrate trade into the mainstream of regulatory reform for economic growth and poverty reduction. I have been involved in consultations with private stakeholders and public policy makers on development of a national trade policy strategy and responses to a number of trade policy issues, including whether to join SACU. A background paper and a recent presentation outline some of the key issues under consideration. A comprehensive new trade and investment strategy can make major contributions to Mozambican economic development. All the important policy decisions will be made in Mozambique,not through negotiations in Brussels, Doha, Geneva, Washington or Gaborone. |
Following decades of failure to participate effectively in the global economy, there is a growing belief that regional cooperation among African countries might be a useful strategy both in its own right and as a tool to increase their ability to compete globally. The UN Economic Commission for Africa (ECA) has undertaken a major project to monitor and assess regional cooperation strategies in Africa (ARIA). Towards the end of the initial exercise it was realized that the project would benefit from an assessment of the links between regional and multilateral strategies. A paper written in response to this need discusses the possible benefits and limitations of regional approaches. See Africa and the Global Economy: Multilateral and Regional Approaches to Integration, a report commissioned by the World Bank for the ECA. |
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| ff@frankflatters.com | |