The significance of regional integration as a component of the diplomatic strategy of small island developing states : the case of Seychelles

Abstract

In September 2014 the Small Islands Developing States (SIDS) of the world met in Apia, Samoa to chart a new development pathway that takes into consideration their specificities and vulnerabilities. This family of island nations has been for many years at the forefront of key global discussions to make the international community aware of the challenges facing them such as global shocks, climate change, limited land space and capital and human resources shortages which impose severe challenges on their economic and social development. Seychelles, located 1,800 km east of the East African coast, is geographically isolated, its population of under a 100,000 inhabitants has limited production and is continuously experiencing trade imbalances. Low production capacities and weak manufacturing industries have turned Seychelles into a net importer and this has exerted additional pressures on the already limited foreign exchanges reserve. Being a small open economy, Seychelles is a price taker in the global market and is subjected to most, if not all, of the disruptions that occasionally occur. It was therefore imperative for Seychelles to strategize on how to get out of that economically unhealthy situation. In the mid of the 1990s, the government set out to explore favorable trade agreements being undertaken by Regional Economic Communities (RECs) in the region. It was found that regional integration could address key problems. The expectations included cheaper imports from the region and securing the necessary raw materials to boost local production with the aim of further increasing exports back to the region. As a result, Seychelles made regional integration an important foreign policy objective and joined the Common Market for Eastern and Southern Africa (COMESA), an organization which has as its main objective the enhancement of economic prosperity through regional integration. By that time Seychelles was already a member of the Indian Ocean Commission (IOC). A regional organization composed exclusively of islands and a key advocate for the specificities and vulnerabilities of SIDS. The objectives and programmes of the IOC were however not addressing the immediate needs of Seychelles since there was an absence of trade agreements among its member states and for Seychelles the focus is on Free Trade Area (FTA). Being a fully-fledged member of a REC such as COMESA entails being party to a number of binding agreements, which provide the legal framework for cooperation in various areas. When signed and ratified these agreements are mechanisms for locking countries into one size fits all approaches to development. As a result of being geographically detached from mainland Africa and lacking in adequate infrastructure development proper trade in goods suffered. One of the main challenges for Seychelles remains the fact that COMESA programmes are geared towards the achievement of a customs union . Theoretically, the two most important characteristics of a customs union are: the total or partial elimination of barriers between the members and the application of a Common External Tariff (CET). To date, 87% of Seychelles tariff lines are currently at zero and below COMESA s CET. Being a member of a customs union entails an increase in the price of goods and services and has a negative impact on the economy whilst also being an unpopular political move nationally. Hence the status quo is problematic and a re-thinking is required. As it stands, there is no national strategy for regional integration in Seychelles and the following questions need to be considered: ? Are the commitments that Seychelles is making in COMESA aligned to its national policies? ? With the absence of a regional integration strategy and a National Development Plan (NDP), how does such a small country, prone to international shocks, ensure that its foreign policy address its needs? Is COMESA still the right REC for Seychelles? With these three key questions we need to re-examine the significance of regional integration for Seychelles. It is imperative to ensure that regional integration is properly managed in order for it to contribute to the national goals. This calls for the right policies to facilitate the domestication of regional integration into national planning.