Addis Ababa — Plenary Session 2: History and Prospects for Regional Integration

By Vincent Nwanma, Official ADF III Rapporteur

A major requirement for success of Africa's regional integration is provision for free movement of people across borders, a former Executive Secretary of the UN Economic Commission for Africa observed here Tuesday.

"Nothing will do Africa a greater good than having a passport that every African can have access to," Prof. Adebayo Adedeji said during question and answer segment of the second session of the ongoing Africa Development Forum. He stressed that free movement of people must be one of the first issues to be addressed by the proposed Africa Union.

Adedeji had earlier delivered a paper on "The History and Perspectives for Regional Integration in Africa," in ADFIII plenary session 2 chaired by Prof. Abdoulaye Bathily, Vice-President of the National Assembly of Senegal.

Bathily said that the history of regional integration in Africa is a rich one - both from the point of view of ideas and practical experience. He also said there were important lessons to be drawn from this experience for current initiatives on integration. He also noted that the session was important because it provided an opportunity for a critical review of previous efforts at regional integration and the lessons that could be drawn from such experiences in articulating a vision for Africa's integration in the future.

Successful economic integration in Africa will also require a concomitant political integration, Adedeji said, stressing that the latter is a precondition for the former. "To pursue economic integration successfully, it must go hand-in-hand with shared political values and visions," he said.

Adedeji noted that "excessively economistic approach" to integration was one of the reasons for Africa's failure to integrate. While African countries were attempting to achieve economic integration, he noted, some of them were at each others' throat, a situation that was clearly averse to a meaningful integration. "How can you disagree politically and cooperate economically?" he asked.

Adedeji observed that a 'new regionalism' that consists of political, economic, security, and coherence components needs to be placed in the context of globalization. "It will be to our eternal disgrace if the African Union becomes another African failure," he said.

Other 'fundamental' reasons for Africa's failure to achieve integration, according to Adedeji, included the failure of all African countries to achieve significant structural economic transformation, and lack of a capacity to generate momentum for development and withstand external shocks.

Other reasons, he noted, were absence of regional shared political vision, values and stability, lack of a people-centered integration process, over concentration on the choice and structure of institutions instead of focusing on the substantive issues, and proliferation of institutions with overlapping mandates and tasks.

Adedeji said Africa's balance sheet therefore "demonstrates many problems," including lack of political will, lack of sanctions against non-performers, and overlapping memberships. Others are over-reliance of governments on tariff revenues, inequitable sharing of costs and benefits of integration, unrealistic timetable, the practice by member states of signing protocols and not implementing them, and low private sector and civil society participation.

He traced the impulse for integration back to the 18th century, covering the 1900 foundation of the Pan African Congress and its historic 1945 Manchester meeting, and culminating in the 1977 Lagos Plan of Action and subsequent events. Despite long history of efforts at integration, commitment by African countries to the move has been less than enthusiastic. The LPA and the Abuja Treaty establishing the African Economic Community, he noted, "have been respected more in the breach than the observance," even though they reflect the true spirit of pan-Africanism.

Adedeji identified five phases in Africa's economic and political integration. The first was the historic struggle for pan-Africanism, led by African leaders and Africans in the diaspora, and also colonial administrators, who established colonial federations in west, central and eastern Africa.

The 1960s represented a second phase, in which numerous intersectoral multilateral organisations were set up mostly at sub-regional levels. But these were too sweet to last, Adedeji noted, and by the mid 1970s, regional integration hit its nadir. One of the casualties of that era was the East African Community that was dismantled.

The third stage was the period 1975-83, during which a number of breakthroughs led to the establishment of sub-regional entities. The ECA played a key role in the establishment of sub-regional blocs, Adedeji said. He observed however that the new institutions were superimposed on existing organisations, thus "duplicating their functions and not rationalising them." As a result, by the end of this period most African countries belonged to multiple entities.

Fourthly, in the 1980s and 90s there was an attempt to reassert the ideals of pan-Africanism through pragmatic regional cooperation. The LPA with its long-term and complex plan for creating an African Economic Community represented this. Africa is now entering a fifth stage of integration, with the Constitutive Act of the African Union, he noted.

The discussant of Adedeji's paper, Mr Nuwe Amanya-Mushega, Secretary General, East African Community, wondered what would have happened if the East African Community had survived? He argued that it would perhaps have expanded to include neighbouring countries, and would have been able to withstand political shocks including the collapse of Somalia and the genocide in Rwanda.

He contrasted the free movement of fish in Lake Victoria between the waters of the three countries that border the lake with the difficulties facing the citizens of the three countries moving across the common borders. He concluded that Africa's survival lay in creation of big political entities, which he said could best assure the protection of citizens' interests.

In addition, he said, the ordinary people of the three countries, especially those living near the borders, were freely moving across borders and engaging in regional entrepreneurial activities, in contrast to the problems encountered by those engaging in formal business activities.

"What sovereignty is there to defend when you cannot feed our people?" Amanya-Mushega asked. He argued that Africa's survival lay in creation of big political entities, which he said could best assure the protection of citizens' interests. Small countries, he said, had surrendered their sovereignty and have no control over their economic policies, but if Africa unites then it can become strong. Otherwise the countries will stagnate together, he warned.

Hassan Sunmonu, a representative of the trade unions, underlined the importance of popular participation. Also, a representative of Morocco underlined the significance of the Arab Maghreb Union, a point subsequently picked up by Prof Adedeji who mentioned that the Union was indeed one of the four regional blocs envisaged in the LPA.

Plenary Session 3: Assessing Economic Integration in Africa: Launching the ARIA

By Carolyn Knapp, Official ADF III Rapporteur

Mr. Yousif Suliman, Director of RCID at ECA presented an overview of the Annual Report on Integration in Africa (ARIA), a flagship publication of ECA, to assess the progress being made annually on regional integration. The overview is available at www.uneca.org/dfiii.

Mr. A. Gelb, Chief Economist of the Africa Region at the World Bank, who served as the discussant suggested that the beneficiaries and losers, and ways in which to address the potentially large-scale inequities that may result in regional integration, must be resolved before addressing infrastructure and investment issues. He added the World Bank's public-private partnerships have been extremely useful in policy analysis and can compliment ECA's monitoring and analysis process in preparing the ARIA. Mr. Gelb also stressed that it is essential to incorporate the experiences of those on the ground, who live and work between regions, while designing indicators.

The half-hour discussion that ensued provided Mr. Suliman with the opportunity to clarify that the ARIA document's scope and approaches will contain multi-sectoral analyses apart from macroeconomic indicators, to include human development and labor market integration indicators. He emphasized that the ARIA is only one of ECA's planned flagship publications. Two other comprehensive publications will be issued on governance and gender and development.

In closing, Mr. K.Y. Amoako underscored the two year's of work that have gone into the ambitious design of the first ARIA and assured participants that it was his full intention to use the next few days to receive concrete suggestions to be incorporated into the process. He stressed, too, that the ECA fully believes in the role of capable states. Lastly, he recognized the importance of further discussing NEPAD and pledged to create more space for that dialogue during the week.

Plenary Session 4: Integration in Other Regions: Lessons for the African Union

By Andrew Allimadi, Official ADF III Rapporteur

In introducing the topic, the chairman urged participants to focus on key questions such as the following: What is the precondition for successful integration? Does integration require a dominant economy to drive the process forward? What are the costs and benefits of integration? How would integration address the fears of smaller countries? What mechanisms are needed to address the fears of smaller countries? What stresses would integration impose on governments, and how could governments address them?

Focusing on the questions, the first presenter, Walter Kennes of European Commission, said:

* The fundamental objective which inspired the EU was the need to establish peace and security in Europe and to achieve economic growth. It was therefore not too dissimilar to the African Union project today.

* Kennes charted the historical evolution of the union, from the Marshall Plan in 1948, the European Coal and Steal Corporation in 1951, to the present day European Union. The goals were initially modest, and a full Customs Union was achieved by 1968.

* The Single Market Act of 1992, which led to the free movement of people and liberalization of the service sector, was a major breakthrough.

* The European institutional structure was designed to balance the needs of large and smaller states. While the European Commission looked after the interest of Europe as a whole, the European Council dealt with the interest of member states.

* An important principle governing decision making in the EU is the notion of subsidiarity, which ensures that EU decisions are taken at the level at which it is most effective. The ruling of the European Court of Justice supersedes national legislation.

* All prospective members of the Union must agree to implement the entire package already agreed by existing members, and it is usually not possible to belong to another grouping at the same time as the EU. The preconditions for membership include human rights and good governance.

* The polarization effect of integration, which leads some countries to benefit more than others at the beginning, is usually temporary and the benefits of integration over time leads to equalization for all.

* Europe is currently grappling with divergent views on the pace of integration (too slow for some, too fast for others) and a convention has been established as a result of the Nice treaty of 2002 to review the future shape of the Union.

The second presenter, Mr. Robert J. Berg, examined integration in Latin America and noted that while there were many "false starts", integration was now taking shape on the sub-continent. He said the lessons suggest that:

*Integration is not an end in itself, but a process to support economic growth strategies, greater social equality and democratization.

* Sustained political vision and regional statesmanship is an essential element.

* Integration works better as part of an overall strategy of structural reform and liberalization.

* A healthy and strong multilateral system, like a fully functioning WTO for example, supports integration and vice versa.

* An institutional framework should be designed to fit the actual program it is promoting, rather than fulfill big wishes.

* Regional integration and structural reforms have instilled greater confidence in member-countries to move into broader areas of integration.

* An integration initiative is easier to launch than to sustain.

* Integration must be grounded in regional and multilateral law, thereby avoiding ad hoc decision-making.

* Automatic and universal liberalization works better.

* Monitoring, such as ECA's draft Annual Report on Integration in Africa (ARIA) is an important component of integration.

The discussant, Professor Ali El-Agraa, said that although the African Union will embrace 800 million people, the total GDP of the whole continent would be smaller than that of France. He said one of the problems the AU would face is the fact that most of its economic activity will be concentrated in certain areas of the continent. Structures will therefore need to be established to deal with this problem. He said that Europe solved the problem through structural funds, which come under four main headings:

1. Regional Development

2. Social Cohesion

3. Agriculture

4. Fisheries

These funds make up about one third of the European Commission's total spending, which amounts to about 300bn euros, or less than 2% of European GDP. The various structural funds cover areas inhabited by about 51% of Europe's population.

Prof Agraa said Africa would have to deal with the challenge of similar disparity in activity, which, he said, market forces alone cannot solve.

During the floor discussion that followed, the question of financing an AU version of the EU's social funds was also addressed, with many participants worrying that it would prove too expensive for Africa. Professor El-Agraa said it is imperative for AU to attract foreign investment, which is the only way to bring about cohesion. In order to attract this investment, it is important to establish strong institutions, which will command investor's confidence. [ADF3]