Economic meltdown threatens regional integration

GABORONE - Members of the Southern African Development Community (SADC) fear the continued free-fall of Zimbabwe's economy could scuttle an ambitious regional plan to attain macroeconomic convergence in the coming two years.
Sources close to the regional grouping told ZimOnline that the continued

slide in Zimbabwe’s economic performance has become topical among technocrats at the SADC Secretariat, who fear it could derail the region’s plans to establish a Customs Union by 2012 and a Common Market by 2015.
“There is mounting concern that the idea of having a Customs Union by 2012 could end up being another pipe dream as long as there is no real commitment on the part of Zimbabwe and the region’s political leadership to resolve the problems in that country,” said one senior official who requested anonymity for professional reasons.
The sources said SADC’s political leaders had to take decisive action to ensure Zimbabwe adhered to macroeconomic management best practices so that it does not stall the ambitious regional project.
Under the project, SADC plans to establish a Free Trade Area by 2008, before becoming a Customs Union in 2010 and a Common Market in 2015.
The region will have to introduce a common currency before becoming a Customs Union and the member states will have to have single digit inflation by 2008. The target is to have annualised inflation dropping to five percent in all countries by 2012, before stabilising at three percent in 2018.
“As things stand right now, it will be a miracle to have Zimbabwe reducing its inflation to single digits in the next two years. Something drastic has to happen before we can dream of real macroeconomic convergence in the region,” said the official. – ZimOnline

Post published in: Economy

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