Regional integration and the dualism of economic and social policy: The dilemma for foreign direct investment and trade over occupational health and safety : a policy re-alignment for the Southern African Development Community [SADC]

Nkowani, ZP

Abstract

The central thesis of the study is that social and economic policy are two sides of the same coin and that at the heart of any functional regional integration is the recognition of this dualism. The study takes a critical look at the debate vis-a-vis, trade, investment and labour and its implication for occupational health and safety standards for developing countries. Regional integration among developing countries is part of a wider strategy to promote equitable growth and not an end in itself. The thesis contends that effective regional integration for SADC will increase competition, reduce private transaction costs, and enable firms to exploit economies of scale, encourage inward foreign direct investment and facilitate macroeconomic policy coordination. Through out the thesis the author maintains that regional groupings must be open towards the world market in the sense of keeping tariffs at a level that does not encourage trade diversion. They should not attempt a form of regional autarky that has led to past failures. Open regionalism complements unilateral liberalisation. Without regional coherence, unilateral liberalisation may imply negative spill-over effects. A regionally coherent liberalisation strategy will cushion the shocks of adjustment to a global economy. The high adjustment cost of unilateral liberalisation has been a cause of policy reversal in the region in the past. The discussion is set against a background of possible tensions between social and economic policy and priorities and attempts to indicate that in real terms there is no conflict rather only complimentarity exists. It submits that, it is the understanding of this relationship that is often wanting. The study is set in the Southern African Development Community (SADC). It traces SADC's social and economic policy in historical context in an attempt to diagnose the problem. Although the findings and conclusion of the study may not be representative of developing countries generally and geographically specific, they do illuminate some of the regulatory dilemmas developing countries face in their endeavours to dock themselves to the global economy and the task of complying with norms and standards obtaining therein. The thesis proposes a policy formula that recognises the dualism of social and economic policy in SADC's integration programme. This is premised on the assertion that economic gains of integration are likely to be wiped out by adverse social effects of economic integration if the social considerations are subordinated to the economic concerns for integration. A holistic approach to regulation, promotion and reconciliation of potentially completing social and economic priorities is proposed involving civil society and social partners (state, employers and employees). Background Globalisation of the world trading system and economic order is revolutionizing and redefining traditional legal borders and has raised the need for sector specific legislation to respond to specific complexities in particular areas, while on the whole the dynamic nature of modern economic activities give way to a need for an evolutionary regulatory system that could swiftly respond to changes in the world of work. It can not be disputed that general labour law could in a majority of cases be unsuitable to the day to day occupational health and safety problems. The same could be said of the health and safety law in general, vis-d-vis, sector specific health and safety issues. This is not to suggest that government should legislate for everything, as that would be an impossible task. However as a starting point, there is need for a framework legislation that would give guidance and leadership in as far as health and safety management is concerned. The process of globaliation 11 has brought another dimension to the problem. There is a global dimension which demands a global or a multifaceted approach to regulation of occupational health and safety standards involving government and its social partners. Unfortunately in most cases the law has not kept pace with socioeconomic changes. In such a scenario, in pursuit of corporate profit and foreign direct investment, worker welfare sufferes and unscrupulous businessmen exploit state systems while governments do little towards the welfare of the workforce. Multinational corporations with sophisticated networks working in developing countries and transitional economies have at times managed to escape effective regulation with adverse consequences for the workforce, the environment and the public in general. As the opposition to linkage rages on, the quest for effective management of health and safety standards remains a contentious issue. What role can the economics of occupational health and safety standards and practices play in SADC's regional integration and how can economic forces can be brought to bear on the social regulation of the market? Can SADC as a regional bloc press on with a social and economic programme that makes it attractive as an investment destination whilst minimizing adverse social effects of the process? In view of the complex nature of the issues involved, the sheer scale of financial and human capital required and the supranational nature of the problem, a supranational approach to the problem is ideal. This thesis advocates the dualism of social and economic policy and its interplay in regional integration. The thesis finds that the problem in the past has been a policy misconception. There was a misplaced hope. that economic progress would naturally translate into social progress. In this formula social policy was to evolve as a by-product ot economic policy, which has proved to be wrong. The study argues that social and economic policies are two sides of the same coin. It displaces the World Trade Organisation's argument or reluctance to link labour with trade and investment. The central argument is that the international trading community can not only be interested in 'products' and ignore the 'production process'. The author uses SADC as a microcosm of the global political economy and places the discussion in that context.

Citation

Nkowani, Z. Regional integration and the dualism of economic and social policy: The dilemma for foreign direct investment and trade over occupational health and safety : a policy re-alignment for the Southern African Development Community [SADC]. (Thesis). Salford : University of Salford

• Thesis Type: Thesis
• Deposit Date: Oct 3, 2012
• Additional Information: Additional Information : Vol.2
• Award Date: Jan 1, 2005