3.1 The Concept Regional Integration
3.1.3 New Regionalism
The regionalism discussed above refers to those state-led projects of cooperation that emerge as a result of intergovernmental dialogues and treaties (Higgott, 2013:87). From the end of the Second World War in the 1930s to the period after the end of the Cold War the state has been the dominate player in the determination of the features of regional integration. Over this period, different factors have been driving states as they entered regional arrangements. These include
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military security and desire for economic development. A significant increase in economically motivated regionalism has occurred since the 1980s.
Post war decades pursued the development discourse informed by the need for developing countries to gain a more equal share of the benefits of international economic interaction.
Development theory in the 1950s and 1960s was premised on the need for an activist state, an activism demanded not only by the requirements of domestic resource mobilisation but also by structural impediments to growth which the international capitalist economy imposed on developing countries and which only interventionist and protectionist policies could overcome.
This was an approach to regionalism which was inclined towards imports substitution (ISI). As import substitution lost steam in the 1960s so did the appeal of regionalism.
The counter-revolution in economic thinking and the rise of neo-liberalism changed the nature of development discourse dramatically by the 1980s. The case of the state activism and protectionist policies, such as the African economic ethic of indigenisation, come under sustained assault in many countries led by core industrial countries. This change at the ideological level was reinforced by the increased awareness of the differences in development outcomes. The benefits of import substitution together with its challenges of declining growth appeared to contrast strongly with the rapid export-led growth especially for countries located in East Asia. These developments in Asia were evidence of the arguments by the new dominant paradigm against structural impediments associated with import substitution and favouring rapid export-led growth. This required a new approach to domestic policy choices rather than changing the international trading system. These developments led to some new thinking in the form of a new regionalism.
Unlike the 1930s, the present manoeuvres have been to facilitate and secure their members’
participation in the world economy rather than their withdrawal from it. Inward looking nationalistic policies such as indigenisation would contradict the new regionalism. Different from what happened in the 1950s and 1960s, the regionalism initiatives of developing countries are part of a strategy to liberalise and open up their economies to implement export and foreign investment-led strategies rather than import substitution policies. The forces that drove regionalism at the end of the twentieth century in the1980s and 1990s were radically different
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from the previous waves. Regionalism of the 1980s and 1990s should therefore be distinguished from the previous rounds both by its content and its motives. In developing countries, the central issue has been the movement towards adopting neo-liberalism and away from import substitution that was the focus of the 1950s and 1960s. Regionalism has been used in the two periods but with the intention to serve different purposes: it would appear regionalism can be applied in a flexible way to deliver different development objectives. The concept regionalism has been associated with a variety of development strategies while the new regionalism is a combination of regionalism with adoption of neo-liberal development strategies (Bowles, 2002:6). Some states just join regional arrangements to enhance independence from the global economy as they once did; many developing states now see regionalism as a measure to ensure continued participation in the global economy.
The defining factor of ‘new’ regionalism is seen by the rejection of the ‘old’ regionalism in both practice and theory. The increase in the number of regional integrations and the higher levels of participation by states is a key indicator of ‘new’ regionalism. Most countries are members of at least more than one regional arrangement and very few do not belong to any regional grouping.
The effect has been an increase in the desire to export by countries and the promotion of export strategies through a variety of domestic neo-liberal economic policies.
In the new approach to regionalism there is the understanding that the state is only but one of the many players and agents of regional integration. The change from the state centric regionalism defines the new regionalism. In this regard, new players in a complex mix of state parties, multinational groupings, non-state actors such as multinational corporations, new civil society organisations as well as non-governmental organisations (NGO) all influence and shape the outcomes of the region. The new wave of regionalism is characterised by the response of nations to globalisation as shown in the desire of nations, both weak and strong, to participate in global economics (Higgott, 2013:88).
There is a growing understanding that new regionalism is about processes of regional integration which driven by markets, private sector trade and inflows of investment influenced by policies and decisions of companies rather than the predetermined plans of national or local governments (Higgott, 2013).
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New regionalism is about the role of the regional factor in global transformation from the mid- 1980s under the assumption that this regional wave was ‘new’. It differed from the old in a number of ways:
a) It took shape in a multi-polar world order.
b) It was a more voluntary process from within the emerging regions.
c) It was often described as ‘open’ and thus comprehensive, multidimensional societal process and it formed part of a global structural transformation, or globalisation, which also a variety of non-state actors were operating at several levels of the global system (Hettne, 2007:25).
The new regionalism goes beyond free trade arrangements to include other economic as well as political security, social and cultural issues (Hettne, 2007:28). There is an interaction of the national system, regional agreements and the global dimension – this may well lead to the establishment of a system of governance of the global system which may provide some form of international order. There is a top down and a bottom-up approach in the interaction of nations, regions and the global system (Padoan, 2013:37).
The new regionalism thinking advocates for the free market global economy based on global neo-liberal capitalist practices which weaken the state’s role in the determination of economic fundamentals. This new approach appears to be countering the nationalist development policies such as indigenisation which focus on the development of capacity by the poor black people.
New regionalism would not promote the reduction of poverty among the poor black people who were marginalised from participating and benefitting from their economies. The consequences would lead to further marginalisation of the poor as they become more vulnerable to global competition. From utilitarianism in ethics the consequences would not benefit the majority poor people because they will not be able to compete and survive in the highly competitive global capitalist market. For the SADC, rethinking the way to come up with a more effective regional integration that addresses poverty challenges for most indigenous people means they have to find an effective way of dealing with the new regionalism.
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3.2 Earlier Forms of Regionalism and the Development of Regional Integration in