THE BLACK EXPERIENCE BETWEEN THE GLOBAL WAR AND UNIVERSAL PEACE

THE BLACK EXPERIENCE BETWEEN GLOBAL WAR AND UNIVERSAL PEACE:

FROM ENSLAVEMENT TO ENLISTMENT

By Ali A. Mazrui, Director, Institute of Global Cultural Studies and Albert Schweitzer Professor in the Humanities

Binghamton University

State University of New York at Binghamton, New York, USA

Andrew D. White Professor-at-Large Emeritus

and Senior Scholar In Africana Studies

Cornell University, Ithaca, New York, USA

A RACIAL PARADIGM OF WORLD ORDER: THE ARGUMENT

When is the story-teller part of the story? This paper has been based on African elite views of world order and world security. The author is himself a member of the African intellectual and media elites. Can this story-teller disentangle himself from the story? This author has not too sharply separated the participant from the observer.

Partly because African history and the Black experience were profoundly affected by racism and imperialism, African perspectives on the world system are influenced by a fear of imperialism and a profound suspicion of racism. The paper has tried to indicate how this has given rise to a race-centric worldview and a racial paradigm of world order.

In the African experience, as in the Irish experience, the past is part and parcel of the present. The day-before-yesterday is part of today.

Samuel Huntington is wrong that the clash of civilizations is something to be confronted after the end of the Cold War. The Western world has made sure there have been clashes of civilizations for the last four hundred years — inspired by Western racism.

We have identified the following waves:

The FIRST wave of racio-cultural confrontation was the peopling of the Americas in a manner which involved large scale decimation of native American populations. This was the genocidal phase of history.

Should we characterize the trans Atlantic slave trade as the SECOND wave of racio-cultural confrontation? — resulting in the enslavement phase and export of millions of Africans to the so-called new world.

For many Africans this horrendous past lives on in the present. This history has been an impediment to Black military and upward social mobility.

The THIRD wave of racio-cultural confrontation was Europe’s colonization of much of the rest of the world — Asia, Africa, Latin America and the islands on the sea. The era of the West triumphant. This was the imperial phase.

The colonial past is central to the post-colonial present: Once again history is impediment to economic and military security.

FOURTH wave of racio-cultural confrontation is the present one of military discrimination and economic stratification. This is the hegemonic phase.

White countries may have nuclear weapons but darker races should be denied. Israel may have weapons of mass destruction, but Muslims in the Middle East may not. The United States may use chemical weapons against Vietnam and use nuclear weapons against Japan in World War I, but Middle Eastern countries may not develop either weapons.

The greatest economic victims of the new racial cold war are Black people; greatest military victims are Muslims. More than 500,000 have been killed by westerners since 1980. These had happened before the Iraq War of George W. Bush.

Curiously enough the two world wars of the twentieth century were initially intra-civilizational — starting as European civil wars. But they coincided with a period of history when Europe was calling the tune in most of the rest of the world.

In reality two factors turned European civil wars into world wars — the involvement of European empires and the cooptation of the United States. But for Africa World War II was also a positive development. It weakened the European powers, stimulated anti-colonialism and set the stage for genuine decolonization and independence. For Africa World War II was, on balance, a liberating experience — terrible as it was for Europe and parts of Asia.

The Cold War was also a liberating and trans-racializing experience. White Russians were supporting Black liberation movements against White minority governments in southern Africa.

Karl Marx and V. I. Lenin — two White men — were the icons of millions of people of colour. Oppression and liberation were deemed to be race-neutral. The liberation of Portuguese Africa and southern Africa might have been delayed for a generation if there had been no armed struggle.

And armed struggle was made possible by an alliance between Black nationalist fighters and white socialist governments who provided Africans with arms. 4

The Chinese were also major allies of Black liberation fighters in Southern Africa. Once again the Cold War was a trans-racializing experience.

The end of the Cold War has threatened those trans-racializing tendencies. Russia is now too weak to be a major player in North-South relations. Western moral commitment to Africa has drastically slackened.

Racism has increased in Western Europe and has emerged in Eastern and central Europe. Affirmative action and other civil rights gains are under threat in the United States. The shadow of global apartheid hangs over the world system with a structure of it in the form of a racial pyramid — White-ruled countries at the top, east Asian countries next, South East Asian next, South Asia and Arabs after that black people have been pushed to the bottom.

And yet the solution preferred by Africa is not "leave us alone." The solution has three parts.

To avoid further imperialism from outside, Africa would police itself more efficiently. A system of

Pax Africana needs to be developed — stronger African states coming to the rescue of weaker ones. This is partly RACIAL SOVEREIGNTY as a principle.

So the issue of military security, the preferred option is regional self-reliance. ECOMOG in Liberia — "Bay of Pigs" in Rwanda — Pan African sanctions against atrocities in Sierra Leone and Liberia. 

On the issue of economic security, Africa has to sell its minerals and its agricultural products. It does not want to opt out of the world economy. It simply wants a fairer basis for global economic interchange and pricing system.

If a motto was needed for this strategy it would be "Military Regionalism and Economic Globalism." On the whole, regions should solve their own military problems at the regional level. But in economics, the scale has become global.

On the issue of racial rehabilitation, Africa demands compensation for hundreds of years of enslavement, exploitation and racial degradation.

—Jews got compensated for the Holocaust

—Japanese-American internees in World War II got compensated by the USA.

—Kuwait got compensated by Iraq for Iraqi aggression.

—Steps towards making it up t the Aborigenese of Australia are beginning to be taken

I and eleven others were sworn before African presidents as a Group of Eminent Persons on Reparation. But what kind of reparations? The options include the following:

—

Capital Transfer (like the Marshall Plan)

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Skill Transfer (to transform the educational and skill capacities of the Black people)

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Power-sharing, giving Africa access to such citadels as the veto or permanent membership of the Security Council and weighted membership on governing bodies of World Bank and IMF.

In the military field regional self-reliance should be consolidated as much as possible. In the economic field, equitable global interdependence in trade, investment and, where appropriate, foreign aid would be promoted.

In the racial field there would be a long drawn out struggle to bring the western conscience to the level when it can one day accept the principle of compensation for the awful damage to Black people — a damage which is here and now, and not simply a page in history.

The past is now — and it casts a shadow on perspectives of world security and on the search for enduring solutions.

APPENDIX

WORLD WAR AND CONTRASTING CONSEQUENCES

Intra-Civilizational Conflicts in the Northern hemisphere can have positive consequences for the Southern hemisphere.

The pessimist

"When two elephants fight it is the grass which suffers"

"When two elephants make love, it is still the grass which suffers."

The optimist

"When two elephants make love, they are too busy to eat the grass."

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WORLD WAR II: CONTRASTING CONSEQUENCES Destructive for Europe

Liberating for Africa and much of Asia

German expansionism Destruction of principles of sovereignty (Austria, Czechoslovakia, Poland, Belgium, etc.). Occupation and humiliation of France Destruction of major European cities by aerial bombardments Death of many millions of Europeans as war casualties Nazi war crimes and crimes against humanity with special reference to the death camps for Jews, Gypsies and other condemned minorities.

Liberating for Africa and much of Asia Weakened the might of the imperial powers France and Belgium were humiliated as imperial powers The war undermined the mystique of the invincibility of the white man — sometimes by cutting him down from demi-God to fellow human The war internationalized the horizons of the colonized peoples as they tried to follow war news blow by blow The Africans who fought in the war came back home with new attitudes against being colonized. The rhetoric of the war was for "Freedom." Well, what about freedom for the colonies? The war diminished Europe in world politics and gave birth to two anti-imperial superpowers. The USA and the USSR. The war gave birth to the UN

EAC ECONOMIC PROBLEMS - WHICH WAY FOR THE INTEGRATION PROCESS?

EAST AFRICA’S ECONOMIC PROBLEMS: - A BIG CHALLENGE FOR THE INTEGRATION PROCESS

By Sarah Bireete

Introduction

The East African Community (EAC) is an intergovernmental organization comprising five countries in East Africa: Burundi, Kenya, Rwanda, Tanzania and Uganda. Pierre Nkurunziza, the President of the Republic of Burundi, is the EAC's current Chairman. The organization was originally founded in 1967, collapsed in 1977, and was officially revived on July 7, 2000.  In 2008, after negotiations with the Southern Africa Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), the EAC agreed to an expanded free trade area including the member states of all three. The EAC is an integral part of the African Economic Community.

The East African Community is a potential precursor to the establishment of the East African Federation, a proposed federation of its five members into a single state. In 2010, the EAC launched its own common market for goods, labour and capital within the region, with the goal of a common currency by 2012 and full political federation in 2015.

Quick Fact sheet

1.   Comprises the Republics of Burundi, Kenya, Rwanda, Uganda and the United Republic of Tanzania

2.   Combined population of approximately 132 million

3.   Total combined area of 2.01 million sq km

4.   Total GDP of 50 billion Dollars

History of East Africa’s Regional Integration

1900 Mombasa established as a Customs collection centre for Uganda.

1905 Currency Board set up to issue currency for Kenya and Uganda

1917   Customs Union established between Kenya and Uganda – Tanganyika joined in 1922

1948   High Commission established

1961   Common Services Organisation established (East African Posts and Telecommunications, East African Railways & Harbours, East African Airways, East African Air Aviation Services, East African Development Bank

1967   The treaty establishing the community Signed

1977   The then community collapsed

1984   Mediation agreement signed for division of assets and liabilities

Why did the Community Collapse?

1.   Different political ideologies pursued by individual partner states as follows: Kenya was capitalist, Tanzania socialist while Uganda was mixed.

2.   Influence of the American-Russian Cold War period

3.   Disagreements on the sharing of benefits from jointly owned common services organizations and lack of policy to redress the situation

4.   Low private sector and civil society involvement in the running of the then Community

5.   Greed and short-sightedness on the part of some influential political leaders in EAC

6.   Foreign influence for Economic reasons

7.   Lack of uniformity in governance instruments Democracy  and Democratization processes (Dictatorships, military coups, Civil Strife, Human rights abuses)

8.   Lack of mechanism to address corruption, non-respect for Rule of Law, impunity, government’s high handedness

Impact of the Collapse

1.   Loss of jobs

2.   Loss of Common Services

3.   Loss of Free Movement of persons, goods and services

4.   Negative Nationalism created

5.   Unhealthy and wasteful competition flourished

6.   Political destabilization by one another created more tension

7.   Suspicion and Mistrust among member states

Safeguards against another collapse

1.   SAFEGUARDS IN THE EAC TREATY :

          Drawing lessons from the experience of the erstwhile EAC, the Treaty Provides for:   

1.   A gradual approach to the Regional Integration Process

             1^st Phase        -       Customs Union (Entry Point)                      

               2^nd Phase      -       Common Market

             3^rd Phase        -       Monetary Union

               4^th Phase       -       Political Federation

2.   De-concentration of Power from the Summit through a bottom-up decision making process

3.   People Centered and Private Sector Driven integration.

4.   Involvement of Civil Society as key stake holders

5.   Withdrawal Procedures Made more Stringent

6.   Consensus as a confidence building tool

The need for Integration

1.   African states continue to be marginal players in the global world.

2.   This is due to the small and economically unviable states which produce what they do not largely consume and consume what they do not produce.

3.   Africa is a large continent with a lot of natural resources but lacking in ability to optimally exploit the resources because of under development, human and financial resource.

4.   Small sovereign states have small internal markets and less negotiating capacity in the international arena

5.   Infrastructural development remains a big challenge because of inadequate finances and absence of plans to connect Africa beyond National boarders

6.   Without proper infrastructure even Private Sector cannot develop because it lacks the required huge financial resources to invest in infrastructure

7.   Regional integration is therefore, a necessity in order to create large, more viable, stable and economically sensible blocs to save the African people from poverty, disease and perennial conflicts.

8.   In addition, the reality around us is that deeper regional integration has become necessary for sustained economic survival the world over

The benefits of the Integration

A. Economic Benefits

1.   Economies of scale in the exploitation of development opportunities

2.   Better management of shared resources e.g. Lake Victoria,  Mt. Kilimanjaro and Mt. Elgon

3.   Marketing EAC as a single tourist destination

4.   Free movement of people, goods and labour would spur economic growth and well being of the region’s citizenry.

5.   By pooling resources together there will be the benefits of comparative advantage, economies of scale and efficient use of public resources.

6.   Avoid duplication of costs borne by individual states for the same services.

7.   Compete favourably in the global trade arena.

8.   With a large population and more varied resources, more serious local and international investors will be attracted to the region because of bigger internal markets.

9.   The combined revenue base of the five EAC partner states would be better utilized in a more cost effective way.

B. Social and political benefits

1.   Cost effective political administration

2.   Good governance, democracy and political stability

3.   Enhanced democratic space, devoid of nepotism, ethnicity and negative tribalism

4.   More viable and cost effective infrastructure projects e.g. East African Power Master Plan, East African Road Network, East African Railways etc.

5.   Conservation of the region’s cultural heritage

6.   Use of a common language (Kiswahili)

7.   Mutual Trust and Political Good will

8.   Peaceful co-existence and good neighborliness

9.   More political stability in the region

10.       Peaceful settlement of disputes

11.       Good governance

The Stages of EAC Integration Process

Article 5 (2) of the Treaty for the Establishment of the East African Community states that:-

The Partner States undertake to establish among themselves and in accordance with the provisions of the Treaty, a Customs Union, a Common Market, subsequently a Monetary Union and ultimately a Political Federation.

n  Customs Union: When two or more countries remove tariffs and other barriers on the movement of goods originated from among member states

Importance of the customs union

The key aspects of the customs union include: a Common External Tariff (CET) on imports from third countries; duty-free trade between the member states; and common customs procedures.

Different rates are applied for raw materials (0%), intermediate products (10%) and finished goods (25%), the latter percentage is fixed as the maximum. This represents a significance decrease from what was previously the maximum in Kenya (35%), Tanzania (40%) and Uganda (15%). However, this customs union is not yet fully implemented, because there is a significant list of exclusions to the Common External Tariff and tariff-free movement of goods and services. Technical work is also needed to harmonise and modernize the customs procedures in the EAC's major ports of entry.

The expected revenue benefits are understood to be minimal by many analysts, based on comparative-static simulation exercises demonstrating the one-off impacts of the immediate introduction of the CU's full tariff package. The findings suggest an increase in intraregional trade that is largely the result of trade diversion, not trade creation, with some aggregate welfare benefits in Kenya and Tanzania but welfare losses in Uganda. From a trade-integration perspective, the EAC may not be the best chosen unit, because the current trade between the three countries is small compared to their external trade, and the EAC's 105 million citizens do not represent a large market in global terms, given the very low average incomes.

The main goals of the East African Community Customs Union are:

1.    Liberalizing intra-regional trade in goods on the basis of mutual beneficial trade arrangements among the Partner States.

2.    Promoting efficiency in production.

3.    Enhancing domestic, cross border trade and foreign investment.

4.    Promoting economic development and diversification as well as industrialization.

5.    Liberalizing intra-regional trade in goods on the basis of mutually beneficial trade arrangements among the Partner States.

6.    Promoting efficiency in production.

7.    Enhancing domestic, cross border trade and foreign investment.

8.    Promoting economic development and diversification as well as industrialization.

Why the Customs Union

1.       Over the past 7 years, all 5 EAC economies implemented a total of 62 regulatory reforms improving the business environment for local entrepreneurs.

2.       Burundi was among the most active economies in the world implementing regulatory reforms across several areas in 2010/11. Burundi implemented policy changes in 4 areas measured by Doing Business: dealing with construction permits, paying taxes, protecting investors and resolving insolvency.

3.       Rwanda made the greatest progress in improving its business environment between 2005 and 2011, followed by Burundi. Rwanda was also the second economy globally to advance in closing the gap to the frontier.

4.       Sharing good practices could bring East Africa closer to global top performers.

5.       New data show the importance of access to regulatory information. The rise in e-government initiatives in the region and around the world provides an opportunity to increase access to information and transparency. Examples

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6.       Worldwide, 125 economies implemented 245 reforms making it easier to do business in 2010/11. In the EAC, all 5 economies implemented a combined 10 regulatory reforms in 2010/11 making it easier to do business — 4 were carried out in Burundi, 3 in Rwanda and 1 in each of Kenya, Tanzania and Uganda.

7.       Burundi jumped 8 places in the ranking in the ease of doing business in 2010/11 thanks to improvements in 4 areas as measured by Doing Business 2012: dealing with construction permits, paying taxes, protecting investors and resolving insolvency.

8.       Rwanda, the top performer in the region, made the most progress over the past six years. Worldwide, it made the second-most progress. Over that period, Rwanda implemented 22 regulatory reforms, making it easier to do business. The economy, among others, has undertaken ambitious land and judicial reforms, introduced new corporate, insolvency, civil procedure, and secured transactions laws.

9.       In the past 6 years, economies in the EAC implemented 11 trade facilitation reforms in areas such as the electronic submission of documents, risk management systems for inspections and joint border cooperation.

10.   Regulatory reforms — such as the consolidation of different registration processes into 1 single point in Rwanda and Kenya — simplified the registration process in the EAC region. To start a business in the EAC now requires an average of 10 procedures and costs an average of 55% of income per capita — compared to 12 procedures and a cost of 140% of income per capita 7 years ago, in 2005.

Challenges of the Customs Union

While the Customs union will generate major benefits, it will also bring about greater competition among domestic firms. In the short run, the firms that stand to gain most are those that are already competitive. It is with this consideration that the principle of asymmetry was adopted in the phasing out of internal tariffs, in order to provide firms located in Uganda and Tanzania with an adjustment period of five years. Nevertheless, such firms may in the medium term overcome lack of competitiveness, through: additional investment in newer production technologies; specialization in activities where they have a competitive advantage; re-training of human resources; and forming strategic alliances with their competitors. Another implication of the customs union is that it will minimize discretionary powers earlier enjoyed by partner states, and which sometimes had created uneven playing ground for firms. Such powers, in particular, relate to granting of exemptions from customs duties. The partner states have undertaken harmonization of their exemption regimes which shall be administered regionally. In some cases, this has been viewed negatively as reduction of national sovereignty. In view of the current global trend where trade negotiations are increasingly being carried out under regional blocs, formation of a customs union in East Africa is not a matter of choice but a necessity. It would be difficult for partner states to negotiate a Free Trade Area (FTA) with other regional blocs unless they have liberalized trade among themselves. Due to the multiple memberships of the partner states in other regional organizations, the EAC Customs union could enter into a FTA with other trading blocs, or in the extreme circumstance, merge with them to make a larger trading bloc. It is worth noting that countries which are on their own have strong competitive economies such as Germany, France and UK are strong supporters of EU, which is still expanding, taking on board former less developed countries of eastern and central Europe. The USA together with Canada and Mexico have come together under NAFTA, and want to expand taking on board countries of central and Latin America. In Asia, the countries of south East Asia are revolving around Japan. Therefore, it will be difficult for small countries such as those of Africa to negotiate with such giants on their own. The process of regional integration as stipulated in the Treaty for the Establishment of the East Africa Community aims at creating opportunities for the East African people. However, it will be difficult for the East African to realize such opportunities without deepening economic integration through operationalising the Customs Union. This is a necessary step towards translating provisions of the Treaty into economic opportunities for the East Africans.

n  Common Market: When two or more states come together to trade as a block thereby creating a bigger consumer base for their products and services

On 1 July 2010 Kenyan President Mwai Kibaki officially launched the East African Common Market Protocol; an expansion of the bloc's existing customs union that entered into effect in 2005.The protocol will lead to the free movement of labour, capital, goods and services within the EAC.

Member states have to change their national laws to allow the full implementation of some aspects of the Common Market such as immigration and customs. This has not happened. This legislation may take up to five years for each of the countries to enact fully but official recognition of the common market took place on 1 July.

Kenya expected that its citizens will begin to enjoy freedom of movement in the EAC within two months.  Kenya, Rwanda and Burundi had already agreed to waive work permit fees for EAC citizens. Also the EAC single tourist visa has not been implemented.

The Common Market was seen as a step towards implementation of the common currency by 2012 and full political federation in 2015. Kenyan businesses complain that the benefits of the Common Market only exist on paper to-date, and that all the work remains to be done. Arbitrary rules and delays continue to make trade between Kenya and Tanzania expensive and difficult.

The free movement of people in the EAC was set to improve with the introduction of "third generation" ID cards. These cards were supposed to identify the holder as a dual citizen of their home country and of "East Africa". Third generation cards are already in use in Rwanda and or Kenya but I have not heard of them in Uganda.

There is supposed to be mutual recognition and accreditation of higher education institutions as a way of harmonizing the social security benefits across the EAC.

Objectives of the EAC Common Market

The objectives of establishing a Common Market are to:-

1.   Accelerate economic growth and development through the attainment of free movement of goods, labour, services, capital, persons, and right of establishment and residence;

2.   Strengthen, coordinate  and regulate the economic and trade relations among Partner States in order to promote their accelerated harmonious and balanced development;

3.   Sustain expansion and integration of economic activities, the benefit of which shall be equitably distributed.

4.   Promote common understanding and cooperation among the people of EA for their economic, social, cultural and technological advancement.

The freedoms and rights under Common Market

In accordance with the provisions of Articles 76 and 104 of the Treaty, the EAC- CM provides for: -

Free movement of goods; Free movement of persons; Free movement of labour; Right of establishment;  Right of residence; Free movement of services; and Free movement of capital; Common Market Protocol singed 20^th November, 2009 Ratification by Partner States; To enter into force by 1^st July, 2010; Study on Institutional Structure; Amendments of Laws and the Treaty.

n  Monetary Union

Monetary Union: When two or more states agree on a single currency for their daily transactions within the Common Market. The scheduled activities include:

1.   Monetary Union to be in place 2012

2.   Meetings of Governors of Central Banks

3.   Harmonization of Macro-Economic and taxation policies

4.   Harmonization of Common Market Development

5.   Budget of the Three countries read same day

6.   All discussions now under a co-operation arrangement, based on goodwill

7.   Need for a binding instrument

8.   EAC Consultants from European Central Bank to advise on East African Monetary Union

Challenges to EAC Monetary Union

The major challenges facing all the five central banks in EAC are high interest rate spreads and budget deficits. Other challenges are high domestic debt and relatively high levels of non-performing loans.

All these ingredients are part of a set of macroeconomic and economic policies that should be in place before a monetary union can be realized. In August last year, the heads of state decided to fast track the establishment of the monetary union to 2012 as opposed to 2015 as had earlier been agreed.

Bank of Uganda governor, Mr. Emmanuel Tumusiime Mutebile warned in an earlier meeting that meaningful monetary and financial integration could only be achieved only with a sustainable convergence of economic fundamentals, particularly price stability and sound fiscal, monetary and structural policies. Before the decision to bring the implementation of a monetary union was brought forward to 2012 from 2015, in stage one (2007-2010) governors had agreed to an overall budget deficit to GDP ratio (excluding grants) of not more than 6.0% and an overall budget deficit to GDP ratio (including grants) of not more than 3.0% and that annual average inflation rate not exceeding 5%.

Members had also agreed to the achievement and maintenance of stable real exchange rates, achievement and maintenance of market based interest rates, achievement of sustainable real GDP growth rate of not less than 7.0% and national savings to GDP ratio of not less than 20%.

In stage two (2011-2014), the criteria looked at an overall budget deficit not exceeding 5% and overall budget deficit to GDP ratio not exceeding 2%, annual average inflation rate of not more than 5%.

Others are maintenance of market based interest rates, a high a sustainable rate of real GDP growth of not less than 7%, sustained pursuit of debt sustainability and domestic savings to GDP ratio of at least 20%.

Stage three (2015) was initially meant to be the year when a single East African currency would be introduced and circulated.

The challenges are the turbulence in the international financial markets that arose out of the collapse of the US subprime mortgage market and world oil and commodities prices that have sky rocketed. Others are China and India along with other strong emerging markets that have gained prominence in the global economy and inflationary pressures that pose a major risk to macroeconomic stability. There is need for the efficiency of the financial sector in the region, the status of the national payments systems and legal and regulatory frameworks particularly with regard to the banking, micro-finance sub-sectors, information technology including emerging issues of electronic banking and its impact on monetary policy, and the building of requisite technical capacity to facilitate effective implementation.

Emerging business trends

Business leaders are far more positive than economists about the benefits of EAC integration, its customs union as a step in the process, as well as the wider integration under COMESA. The larger economic players perceive long-term benefits in a progressively expanding regional market. Pattern of regional development are already emerging, including:

Kenyan firms have successfully aligned to the lower protection afforded by the EAC CET and fears that firms would not adjust to a 25% maximum CET, or would relocate to Tanzania or Uganda have not been realized;

An intraregional division of labour is developing that results in basic import-processing relocating to the coast to supply the hinterland. The final stages of import-processing (especially those bulky finished goods that involve high transportation costs) and natural-resource based activities, are moving up-country and up-region, either within value chains of large companies or different segments located by firms in different countries;

Trade in goods and services has already increased as service provision to Kenyans and Tanzanians is already important for Uganda (in education and in health). Kenya exports financial services, for example via the Kenya Commercial Bank and purchase and upgrading of local operators in Tanzania, Uganda and Sudan. Uganda hopes integration will help support its tourism potential through integration with established regional circuits;

There are signs a business culture oriented to making profits through economics of scale and not on protectionism.

Poverty reduction challenges

East African economies have large informal sectors, unintegrated with the formal economy and large business. The concerns of large-scale manufacturing and agro-processing concerns are not broadly shared by the bulk of available labour. Research suggests the promised investments on the conditions of life of the region's overwhelmingly rural poor will be slight, with the significant exception of agro-industrial firms with out-grower schemes or that otherwise contribute to the coordination of smallholder production and trade.

It is informal trade across borders that is most often important to rural livelihoods and a customs union is unlikely to significantly impact the barriers that this faces and taxes are still being fixed separately by countries. However, the introduction of one-stop border posts being introduced and the reduction in tariff barriers are coming down progressively. The establishment of a common market will create both winners (numerous food producers and consumers on both sides of all borders) and losers (smugglers and the customs, police and local government officers who currently benefit from bribery at and around the borders) in the border areas. More substantial impact could be attained by a new generation of investments in world-market production based on the region's comparative advantages in natural resources (especially mining and agriculture) and the new tariff structure creates marginally better conditions for world-market exporters, by cheapening inputs and by reducing upward pressures on the exchange rate.

Political Federation

Political Federation: When two or more states come together to form a super-state under a single political authority. In such an arrangement, federating states cede their sovereignty and some of their powers to the super-state. Some known examples of federal states are: USA, Russia, Nigeria, South Africa, United Kingdom, United Republic of Tanzania and the Federal Republic of Germany

Justification for the Political Federation

1.   The need for a central authority to coordinate and implement decisions made by various organs by the East African Community and to ensure that they are implemented efficiently and effectively.

2.   The Political Federation will enhance the consolidation of what has so far been achieved the integration process

3.   The Political federation will be used as a mechanism for channeling the benefits of economic integration more equitably among the Partner States.

4.   Political Integration quickens economic integration because it is easier to coordinate one planning unit than several sovereign ones.

5.   A central political authority will generate savings through consolidating rather than duplication of efforts.

6.   There will be higher revenues from the bigger unit. The higher revenues will be more equitably accessible to all citizens under a Political Federation.

7.   A Political federation will enable the people of East Africa to harness diversity for a common goal and re-unite erstwhile cross border communities

8.   The Political Federation will minimize the occurrence of conflicts in the region as well as enhance and legitimize the participation of Partner States in conflict management in the region whenever they occur.

9.   The Political Federation will promote better management and utilization of shared natural resources, better environmental management and the promotion of tourism and investment.

10.       The Political federation will represent EAC as a bigger unit in the global economic arena with a united and stronger voice.

Challenges

The EAC integration process is largely a government/civil servants job contrary to being people centered, private sector led as provided for in the Treaty; there is Insufficient information dissemination; there are no tangible benefits to the citizens; economic disparity between the member states; disparity in education and skills / entrepreneurship; peace and Security, cross boarder issues, case in point is failure to resolve the migingo crisis (Uganda/Kenya territorial disputes over L. Victoria Island; land issues vis a vis population ratios and right of establishment; power distribution at various levels – are the member states ready to surrender their sovereignty powers in favor of integration process?; and governance issues – there are no clear governance benchmarks in the region.

Recommendations:

1.   There is urgent need to rethink the EAC institutional structure. EAC needs to have an organ that will act in a similar manner to an executive but in cooperation with the Council. This will be an equivalent of the European Commission; with both policy and legislative initiative[1].

2.   The EAC Treaty declares a people-centered and market driven integration[2] process with a pivotal role for the private sector. However, the actual functioning of the EAC process is like a government project dominated by civil servants. The EAC peoples are completely locked out of the EAC integration process and must change. There is need for an urgent bottom up approach to the whole integration process and not the other way round.

3.   The citizens of the five EAC member states must be prepared to partake on the greater share of integration benefits as well as a comparable share of liabilities for a deeper integration to take place.

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[1] This is one of the recommendations in the Report on the Establishment of the EAC Common Market by M.A Consulting group in 2007

[2] Article 7 1 (a) EAC Treaty