A different drum

SOUTHERN Africa, long known as an area characterised by war, revolution and oppression, is beginning to escape its past and emerge as a region with attractions to foreign investors.

As the recent World Economic Forum conference, held in Harare, Zimbabwe, made clear, the 12 member states of the Southern African Development Community (SADC) have moved away from socialism and embraced capitalism.

The pace differs but the movement is in one direction only. Where the cry used to be for state control of the economy, the commitment now is to a market driven economy and wealth creation.

The importance attached to in vestment was manifest by the presence at the conference of no less than four heads of state: Presidents Nelson Mandela of South Africa, Robert Mugabe of Zimbabwe, Frederick Chiluba of Zambia and Ketumile Masire of Botswana, all of whom were intent on persuading the 600 businessmen at the conference to invest in their countries.

The change in economic thinking within the region is symbolised by Mr Mandela: where he once called for the nationalisation of South Africa's banks, mines and "monopoly industries", he now declares that privatisation is the fundamental policy of his ruling African National Congress. Mr Chiluba runs a close second: a former trade union control in Zambia, a move which Mr leader, he has abolished exchange control in Zambia, a move which Mr Mandela's ANC led government is still edging towards.

Positive developments in the region were emphasised by South African Finance Minister Mr Trevor Manuel during one of the plenary sessions. Six of the 12 member states of SADC succeeded in reducing the rate of inflation in their countries last year to single digits, while all but two - Zimbabwe and Swaziland - fulfilled pledges to cut their budget deficits to less than 6 per cent of GDP, Mr Manuel told a plenary session.

Later, in a discussion with The Irish Times, Mr Manuel added another positive perspective: while many of the changes were introduced five years ago, on average it takes about seven years for them to impact significantly, meaning that more positive developments will become evident within two years.

Mr Manuel listed further changes in the region: reduction of the role of the state in the economy (a process which has already led to protest in some quarters in Southern Africa that the pendulum has swung too far), strengthening of the independence of Reserve Banks, and relaxation of foreign exchange control.

The mood of the conference was manifest in a decision, backed by the Trade Ministers of South Africa and Zimbabwe, Mr Alec Erwin and Mr Nathan Shamuyarira, as well as President Masire, to establish free trade within SADC by the year 2005.

Another pointer was the response of Deputy President Mr Thabo Mbeki to the question of whether SADC would ever become a political federation.

Mr Mbeki, speaking extemporaneously and choosing his words carefully, did not eliminate the possibility of the road to free trade leading, as in Europe, to greater integration at all levels, including political. His response came after several speakers had stressed the importance of regional cooperation between SADC member states.

Mr Mbeki articulated another common theme: the frequent link between political and economic freedom, between multiparty states and market economies. South African intervention in the region, whether it be in the tiny kingdom of Swaziland or in the huge territory of Zaire, was motivated by a commitment to advance democracy, he said.

A monograph on Zimbabwe, prepared specially for the conference, sums up these points succinctly: "The SADC region has in recent years witnessed a remarkable graduation from political turmoil towards multiparty democracy and improved governance. At the same time economic reform and structural adjustment policies are producing a gradual convergence of economic policy.

But as Mr David Robins of the Union Bank of Switzerland noted, southern Africa still has a long way to go in the battle for foreign investment. He cited figures to prove his point: in 1995 SADC countries attracted an average of $90 million each (£59.6 million), compared to the $2.5 billion poured into faraway New Zealand and the $7 billion invested in the citystate of Singapore.

His overall diagnosis of the problem was that southern Africa was moving in the right direction but not fast enough. In an indirect but clear reference to the high crime rate in South Africa, he emphasised the importance of removing the "threat of indiscriminate violence," warning that its capacity to repel would be investors should not be dismissed lightly.

But, on a more positive note, many businessmen left the conference with a new image of southern Africa as a region of opportunity for investors. They knew that governments in the region were anxious to welcome them as partners in the process of creating wealth rather than resent their presence as neocolonialists trying to slip surreptitiously in through the back entrance having been kicked out of the front door.