ASEAN/SAARC Integration Gospel, according to The Economist

You have got to give it to the Economist. Once it propounds theories on regional integration, people are bound to listen. It hasn't been in this business of writing and influencing for almost two centuries for nothing. But that has got to change.

On issues of regional integration, people are getting smart, and being more discerning. Old attitudes that seek to see the EU as the precursor of regional integration everywhere, or those that seek to perpetuate the idea that it is because of countries against each other that cause the fragmentation of regional block are not quite fading into insignificance, but fading...somewhere!

Whilst there is some truth to these ideas, it's always important to look beneath the surface.

The Economist sadly, in its latest article looking at ASEAN, fails to do so. In my view, any generalist on regional integration could have come up with the view.

It starts off by saying all that we know: "The European Union has plenty of critics".

By gum, surely a secondary school leaver could have come up with that!

Then it goes on:

"For Asian leaders who seek greater regional integration across the continent, however, the EU surely provides at least a distant goal, if not a model. But time spent in Brussels talking to officials at the European Commission about the EU’s relations with Asia highlights the gap between the EU and its nearest Asian equivalents"

Let me not begin to presume that I am cognisant of the discussions that transpired between EU officials, but I can say authoritatively that this post goes to fly in the face of the Economist magazine's claim. In that article, EU officials from the 28th session of the Inter-Parliamentary ASEAN Assembly were claiming that ASEAN's model was a commendable one. They went on:

"We have good relations and strong economic links. The EU is a large investor and we create a lot of trade in Asean and vice-versa."

2. "Apart from having a common economic interest, our regional cooperation is the most advanced and successful in the world,"

3. "Until last year AIPA was still called the Parliamentary Organisation. It stresses parliamentary influence in Asean just like the European parliament"

Clearly, saying that there is work to be done does not discount the commendable nature of the organisation that is ASEAN, but in my view, the Economist should not go away making readers feel that ASEAN is clamoring to be like the EU--otherwise the ASEAN Charter would not have been passed!

Still, it is interesting to note that the article talks about war having been fought among the current 27-member-strong EU several decades ago, so why does it feel that if there are issues between India and Pakistan in SAARC over Kashmir, the two countries cannot sort it out? It writes:

In comparison, the two big Asian integrative ventures—the Association of South-East Asian Nations (ASEAN) and the South Asian Association for Regional Co-operation (SAARC)—are puny striplings.

ASEAN has at least achieved the first aim. Formed in 1967, just after a period of “confrontation”, just short of war, between Indonesia and Malaysia, it has made armed conflict between its members (now ten of them) seem very unlikely.

SAARC is not even there yet. It is riven by bloody internal conflicts in Afghanistan and Sri Lanka, and a dormant but unresolved dispute over Kashmir between India and Pakistan that has sparked three wars in the past. A regional conflagration, sadly, cannot be ruled out.

In Brussels, SAARC hardly gets a mention. This is not just because its contribution to regional integration is so inchoate. It is also because, within South Asia, India physically, politically and economically dwarfs its neighbours.

This reference to India/Pakistan is a development that needs must be talked about in discussions over any SAARC integration, but I would have assumed the esteemed magazine to have elaborated a bit more than the sentiment that things can turn into a "regional conflagration."

It is fair to say that integration in SAARC is slow and, well, very slow, but it is important to put things into perspective. SAARC and the EU are far from comparable. EU and ASEAN, yes, but SAARC and EU, no!

I like the fact that the Economist has woven a news story of the EU wanting an FTA with India and ASEAN around this piece, but it has done some selective interpretation of the story, in my view, to underscore how formidably efficient the EU is--and, frankly, that's not on.

Sure, the EU had problems with Burma, but let's face it, ASEAN has not kicked that country out. The ASEAN Charter is a reality and Burma does not look to be going anywhere!

It is true that the Charter might have issues on voting; and the beefing up of the Secretariat, inter alia (note that ECOWAS without a charter transformed into a Commission so as to become more "efficient"), but it is not as if ASEAN will do it today is it?

Even the much-maligned African Union has moved away from the doctrine of non-interference, albeit slowly. ASEAN will go that way some day.

In my view, it's all about shades of gray.

It is important to talk about SAARC and how it can be helped, but the EU, I suspect, knows that it because it has preferential relations with the India (a rather dominant figure within SAARC), the organisation can probably go fish.

I suspect further that any greater proactiveness by India within SAARC might go to ruffle the EU's growing feathers.

The Unbearable Lightness of Blogging

Oh the tomes! The tomes I have written in my head, and in my heart. Not to forget on paper, as well!;-)

 

Regrettably, the proverbial refrain of work has hit -- truly, madly, and deeply. And rather intensely.

 

As such, blogging has been light, and promises to be for the next w eek or so. Please bear with me.

 

I am still around!

 

Enjoy the weekend,

 

Keep safe. Keep cool.

Expansion, ECOBANK-Style

For a bank whose genesis is West African, it strikes as rather odd that a bank with the pedigree of ECOBANK would now only in 2008 be opening in the West African country of Gambia.

The news that it has joined the ranks of ECOWAS countres in which ECOBANK operates is great news. ECOBANK now covers all of the ECOWAS countries, reminding us first of its West African roots and, secondly, underscoring the importance of the its expansion into the eponymous role of a "Pan-African Bank".

One of ECOBANK's major tactics is in the acquisition of percentages of the banks in which it now operates. Speaking of which, let us remind ourselves that ECOBANK continues to expand --as exemplified by Ecobank's acquisition of 75% of no less than the East African Building Society Building.

The script runs that ECOBANK has a comparative advantage in mortgage financing, therefore this takeover is both useful in expanding respective portfolios and consolidatiung expertise.

Rememeber when ECOBANK opened a branch in Rwanda? I wondered whether this was carte blanche for the group's entry into East Africa? Well, it's a foregone conclusion now!!

This is the Way Regional Governance Should be Done

In my first Reflections on Regional Integration last year, I mentioned the importance of UN regional commissions playing a greater role in so-called regional governance--whatever form it may be expressed in. In my view, it is about the beginning of a harmonisation process between the regional organisations and the UN, which is so badly-needed.

It is therefore great stuff to read that the West African sub-regional grouping of ECOWAS is seeking to collaborate with the UN's regional commission on Africa, that is better known as UNECA.

Tongues have wagged between the head of these two organisations--Chambas and A Janneh, and it has become clear that they have

reiterated their determination to strengthen the existing partnership between their organisations, with the objective of consolidating the Regional Economic Communities (RECs) as the building bloc for Africa's integration.

We hear so much about the RECS and the RIAs, which are interchangeable terms to describe the regional groupings in their personality as economic entities, that if we are not carefu, we run the risk of being caughtnapping if we don't synergise. And when I talk about "we", I am referring to both citizens and policy-makers.

In my view, any arrangement of this sort that deflects attention away from the work of the UN should revise its note on the work that it does.

While talk is cheap, it is also an expensive enbdeavour for regional organisations to ignore the UN's regional commissions in the pursuit of what often looks like narrow-focused economic ones, which do not necessarily add value to the policies of the region.

That the ECA is intent on supporting ECOWAS towards the realisation nof a Strategic Vision adopted by ECOWAS Heads of State is a good start towards fostering a progressive look at regional integration--the way it should be done!

Communicating the ASEAN Message

"I think many journalists are not aware of the impacts of ASEAN's many achievement on us. It seems that if it is not a corruption case then they will not publish it. We realize that we have to change this" -- Dian, Foreign Ministry's director general for ASEAN affairs

Haven't we been here before?

Communicating the ASEAN message graced this blog, when I first started writing it in this way back in April 2007. Then, it was the Malaysian ASEAN Youth/Sports Minister who was encouraging the youth to face up to both global and regional challenges by learning about ASEAN.

Now, like a boon to the minister, we read that most youngsters are actually in tune with what ASEAN is doing:

It found students from Laos, Cambodia and Vietnam were most likely to identify themselves with the ASEAN, with 96 percent, 93 percent and 92 percent respectively.

Cambodia, Myanmar, Laos and Vietnam are the newest members of ASEAN, having joined the 10-nation grouping in the 1990s.

They are often referred to as the newest four, or CMLV, and their development lacks behind the other six member countries.

Students in Singapore had the weakest affinity toward the grouping, with some 49 percent saying they were citizens of the grouping.

Even if these are the latecomers expressing this opinion, it cannot hurt for ASEAN to know that they might be getting something right.

Furthermore, it was not that they were only in tune with what the regional grouping was doing but that they also identified themselves as citizens of ASEAN.

In my view, this is a great start, and very welcome news to the South East Asia grouping, especially in the light of the establishment of its Charter last year.

Work to be done
In the meantime, much needs to be done by the media--the purveyors of information, and often the putative gatekeepers to society--to showcase the works of ASEAN. This, at least, was what Indonesia was saying.

Superficially speaking, blame can be apportioned to the media for failing to write about ASEAN. Truth be told, if there is little interest in the first place, how can you expect editors to consider writing about it. Therein lies the paradox of reconciling a responsibility to encourage citizens to feel more in tune to the regional grouping, and highlighting what it means for them, with reporting actual news about the organisation--even if it is considered bad.

On communicating regional integration to citizens, there are hardly any black-and-white areas: these agreements are realities--whether we like it or not, and so it becomes incumbent on all and sundry in the media to do its level best to understand the issues inherent in them, and if it is not happening, use the media itself to question why it is not happening.

Surely, that can only be a small step to obtaining that critical and progressive view of regional integration?

Back to the (Regional) Grind: A Tale of Two Cities

To say that both the secular and non-secular world enjoyed a turbulent transition to the New Year is to seriously understate things.

I was locked up at home--gardening and listening to the BBC World Service (as I am wont to do during the weekend) when the News Hour anchor at the time--Dan Damon--interrupted regular programming to announce that there were reports coming in about the leader of the Pakistan's People Party--Benazir Bhutto--having been injured--possibly killed--in what was supposed to be a rally.

Minutes turned into hours, and over the next few days, the BBC started talking about her having been assassinated. Whilst evidently thinking of the implications for Pakistan and the lacuna of the democratic dispensations associated with the presumed assassination, I could not help but reflect over what it might mean for the role of Pakistan in no less than...SAARC.

SAARC had celebrated--or not--22 years of its existence some 20 days earlier on 8th of December, and I believed it ominous that the two countries of India and Pakistan that could make a difference in what looks like a moribund regional grouping (insofar as engaging other members to revitalize the organisation) would have one key member bedevilled by an internal crisis so profound and tortuous that the regional solution would be the last thing on its mind.

For all the analyses proferred by various pundits and whatnot, I was disappointed to not have heard mention being made of the regional implications of the violence. I would have loved to have heard SAARC issuing a statement condemning the violence. None came--and none has come.

Idem with Kenya, where, at the time of writing, AU chairman -- Ghana's John Kufuor -- is en route to try and broker peace between Odinga, leader of the ODM, and Kibaki--incumbent and "newly"-elected leader of Kenya since two Sundays ago (30 December).

It would have been equally great to have had the East African Community (EAC) condemn the violence, and also issue a statement to that effect. Neither came--and it hasn't come either.

What to me the absence of these statements speaks to is less an appreciation for the regional and more of a relatively myopic view of the conflict, and possible solutions to resolving it. Do we only turn to the regional when it's on trade? Kenya is a de facto regional leader. Look at the role it played last year in resolving conflict through the conduits of IGAD and EAC.

Does it mean that when the hegemon is under fire, the smaller members should not rally round? Where was Uganda; Tanzania; Rwanda and Burundi to say "let's go the regional way!". That the African Union (AU) was both approached and initially rejected, only to give way for their eventual intervention, in the inchoate post-election violence speaks volumes. In my view, though, the volume ought to be loudest at the regional level.

If there is to be any level of seriousness ascribed to regional integration in 2008, then here's to a greater accentuation both by smaller and bigger states within regions -- along with citizens raising the bar on the regional solution for every type of injustice being perpetrated anywhere.

My the good winds of fate blow your way in 2008!

Warm regards...

Merry christmas to u all!

Just being back
from institutional
retreat in elmina
beach resort,
central region of
ghana, i seriously
doubt that as i
happily surf the
'net on my
motorola z6, i can
provide coherent
blog entries!
While i allow
self-indulgence
2wards christmas
festivities, allow
me 2 wish all u
regular n non-
regular readers a
stupendous
christmas period,
full of peace n
love...

Bank of the South is Here, But Can Africa Bank on the Latin American Way of Regional Integration?

The new multilateral institution is considered as an alternative to the International Monetary Fund and the World Bank and seeks to satisfy development credits demand.

Seriously, it's more than an alternative; it's also yet another expression of Venezuela and its associate MERCOSUR members of their dissatisfaction with the prevalent neoliberal system.

I've written about this Bank of the South before and I explained that the Latin Americans had something that Africans certainly didn't. Beyond blood running through their veins, it's about a radicalism and conviction so unprecedented and emanating that any of their opponents feel it viscerally that these are people not to be toyed with.

If not, how is it that despite the articulations of Venezuela against the mighty US, Venezuela has -- along with Brazil; Argentina; Bolivia; Ecuador and Paraguay -- establish this Bank of the South [I notice no Uruguay!!]. Yet, Africans have allowed themselves to be fragmented on the so-called Economic Partnership Agreements?

The fallout of the signing of a so-called EPA-lite by the East African Community and SADC (without South Africa and Namibia) just leaves one speechless--not to mention a little bit less for wear the arduous efforts of civil society -- both in the North and the South.

That said, it's important to press on to stop the discussions between the bullying EU and the other regions.

In my view, the Bank of the South initiative, a formidable alternative indeed to the Breton Woods institutions of the World Bank and IMF in the sense that "each member country would have a single vote, irrespective of size and financial contribution" (from:http://www.nationnews.com/290175804330225.php) brings into sharp relief the necessity for greater collaboration between MERCOSUR in general/Latin America specifically and other AU regionalisms to learn lessons on how they were able to resist the Free Trade Area of the Pacific in 2005, yet AU/ACP countries allowed fragmentation by the EU.

While this issue of the Bank of the South, in my view, is one of the most progressive developments in global regional integration to date--bar the ASEAN charter-- Africans ought to contemporaneously reflect on whether there is that much of a difference between the EU and the US, for them to have allowed the EU--former colonisers at that--to hoodwink many of them into an interim agreement that will most likely destroy attempts at regional integration.

ASEAN Apathy Bites the Dust with ASEAN Charter?

"ASEAN, as an inter-governmental organization, is hereby conferred legal personality," says the Charter.

According to the Blueprint, the AEC builds on four pillars: a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy

"When it (the Charter) comes into force, it has the potential to transform ASEAN from a loose grouping of countries into a more cohesive, more effective and a more rules-based organization,"

Even at a time when the South East asian regionalisms attitude towards erring members (viz: Pakistan in SAARC, and Myanmar in ASEAN) could be described as this side short of soporific, I have to confess that I am rather excited by the prospect of an ASEAN Charter. Excited, because it signals the beginning of what can be in the critical and progressive discussion on regional integration. What can be as in what is possible, where others might have failed.

I've intoned time and again how the Europeans rejected the constitution back in 2004, yet ASEAN leaders have managed to chalk, and pass it. As to whether it will translate to the citizens is a moot point.

Whatever the case will be, I believe history will look favourably on the 10-member regional organisation that has a population of 500 million [ECOWAS has 250-300 million, and is fifteen members] for having bitten the bullet to pass the Charter.

Highlights of the Charter include a compulsion by members:

to democracy and protection of human rights, the charter also mandates the establishment of a human rights body in the region and aims to turn the region into an European Union-style market.
http://in.news.yahoo.com/071120/43/6nguj.html

Though I am wont to criticise the EU-one-size-fits-all that many regionalisms touch on at least once in their life, I am avoiding that here, because I think it's time to accentuate the positive step ASEAN has taken.

Let's remember that 4the organisation turned forty only in August this year. It didn't wait for its Jubilee before doing something constructive for its region!


Above all, and in all seriousness, ASEAN wants to use the Charter to facilitate an Asian Economic Community by 2015. Well, deadlines are great. (Isn't the world supposed to eradicate poverty by half by 2015?) What matters is that there is a framework, a structure that can be carried forward by posterity. ASEAN now has legal personality--and that certainly, four decades after it was established, can only be congratulated.

In many respects, however, I can understand why the celebrations over the charter eclipsed the UN envoy to Burma Ibrahim Gambari's visit in a way that made the meeting abortive. Put simply, the meeting didn't happen.

I surmise that not that ASEAN was denying that Myanmar is a nettlesome issue, but that to have brought the UN envoy would have been undermining the cohesion ASEAN tried so hard to fight for in taking more than two years to draft this lofty charter.

I have always been in favour of UN envoys--and it's not going to change anytime soon--but, again, I've seen a similar thing in West Africa with Cote d'ivoire when it launched its coup in September 2002.

ECOWAS also decided not to expel it, but brought pressure to bear through the collective voice of ECOWAS to bring normality to the country through...talk.

For all the necessary noise that the US is making by saying (through Susan Schwab, US trade representative) that ASEAN's relationship with Myanmar cannot be "business as usual", it makes sense that ASEAN is not going to break its party anytime soon! Let it cry when it wants to--but certainly not now that there has been a significant, critical and progressive development in ASEAN's regional integration.


quotations taken from the following links:
http://news.xinhuanet.com/english/2007-11/20/content_7115277.htm
http://news.xinhuanet.com/english/2007-11/20/content_7114354.htm
http://news.xinhuanet.com/english/2007-11/20/content_7115085.htm

SAARC's Existential Angst (1)

At a time when the SAARC region is in the news thanks to one of its key members, Pakistan, it beggars belief that there has been little effort by the regional organisation, that will be celebrating its 22nd anniversary in December, on the issue of regional security .

And I should know.

I come from a region where regional security has been put on a pedestal on account of the internecine conflicts that engulfed the region in the 1990s. Despite the hegemon of Nigeria, the oil-rich country rarely ever became an obstruction in the development of peace in the ECOWAS region. Nigeria was instrumental in providing significant financial capital towards ECOMOG--the peacekeeping wing of ECOWAS. In 2007, ECOWAS has transformed from a Secretariat to a Commission with commissioners leading on the major issues pertinent to the region. Bottom line? ECOWAS, for all its problems and challenges, has moved on. That is not to say that things cannot be done better, and mindsets changed. For what it's worth we see developments.

Very little changed can be said for SAARC.

Not to deny SAARC having golf tournaments, but I find it ludicrous that a regional organisation with the size that SAARC has (seven members, excluding Afghanistan which joined recently) cannot get its regional organisation going!

Contrast this with the East African Community, which collapsed in 1977, but re-invigorated itself in 1993. Today, Rwanda and Burundi are members, making the organisation 5-member strong. Yet it's going strong. ECOWAS has 15--and look at the regional structures it has: a Parliament; a Community Court; and a strong regional security initiative.

SAARC is nowhere near.

I was encouraged, however, last week to read that Pakistan is going to host SAARC Police Chiefs meeting in February. I thought that here was encouraging news that SAARC was finally getting serious. I had the visceral feeling that the meeting was too closely associated with teh War on Terror, especially as Pakistan's role in that war was cited.

I wondered whether it would make headline news next year when Pakistan hosts the Third Meeting on Home Ministers, because it is a putative ally of the Bush administration, or would it be consigned to the proverbial dustbin of "irrelevant" news?

On the positive note, it was good to see that the SAARC Home Ministers are interested in establishing an electronic network of police authorities of SAARC countries.



It's certainly something that here, in the ECOWAS region, given the spate of gun-related crimes, we could do with! When the West Africa Police Chiefs Committee met a few weeks ago, I do not re-call hearing anything concrete like this SAARC proposal.

However, what was said by Ghana’s Minister of Interior Nana Obiri Boahen, was this:

I am also honoured to be part of this historic occasion when the Police Gendarmerie from our sister Francophone countries are joining their counterparts to discuss issues of mutual and common interest.

I am told that the ECOWAS Commission is expanding its Political Peacekeeping and Security Department to include a police unit that will take care of police issues within the ECOWAS community.

This laudable idea has been on the commission’s agenda for quite some time now and I am particularly happy that the idea is being implemented.

from:http://www.interpol.int/Public/ICPO/speeches/WapccoIntMinister20071003.asp

In my view, such lacuna go to underscore complementarities that I have talked about before being factored in any critical and progressive discussion on regional integration.

Fwd: UNITED NATIONS COMMITS TO DELIVER AS ONE AT THE REGIONAL LEVEL

I am particularly encouraged by this release from the UN's African regional commission UNECA (http://www.uneca.org). I think it marks an important step towards a degree of proactiveness and "joint-up thinking" that has been sorely lacking between the regional commissions and the UN system on development.

 

A pet personal theme of mine has always been using regional commissions to set standards on how regional integration can work--it does not have to be a pipe dream; it is certainly an attainable goal if, as always, there is sufficient commitment!

 

At a time that the UN is celebrating its 62 years, this is certainly welcome news!

---------- Forwarded message ----------
From: ATameru@uneca.org <ATameru@uneca.org>
Date: 25 Oct 2007 07:32
Subject: UNITED NATIONS COMMITS TO DELIVER AS ONE AT THE REGIONAL LEVEL
To: ATameru@uneca.org


Press Release

 

UNITED NATIONS COMMITS TO DELIVER AS ONE AT THE REGIONAL LEVEL

New York, 24 October 2007 – Reaffirming their commitment to work together to enhance the impact of United Nations development activities, the United Nations Regional Commissions and the United Nations Development Programme (UNDP) today signed a Cooperation Framework at UNDP Headquarters in New York.

The Cooperation Framework is intended to build on the complementarities between the work of the Regional Commissions and UNDP.  The Regional Commissions and UNDP have agreed to collaborate, coordinate and complement each other in assisting Member States achieve the Millennium Development Goals and other internationally agreed development goals.  They also commit to sharing knowledge on policy development issues, programmes, and emerging priorities to support sustainable human development; and to address issues likely to benefit from regional or multi-country involvement.   Using their comparative strengths, the Regional Commissions and UNDP will work together  to encourage organizational effectiveness at the global and regional level and also, where relevant, at the national and local levels.  Joint collaboration is expected to focus on a number of areas, including human resources development; country-level planning processes; follow-up to United Nations Summits and international conferences; regional coordination; knowledge management; regional and inter-regional technical cooperation; advisory services at the country level; and joint products and initiatives at the regional and global levels.

Upon the signing of the new agreement, Mr. Abdoulie Janneh, Under-Secretary-General and Executive Secretary of the Economic Commission for Africa, and current Coordinator of the Regional Commissions, stressed that the implementation of the Cooperation Framework, through channeling the comparative strengths and capacities of the Regional Commissions and UNDP, should result in more effective and efficient support and service delivery to the developing countries in the various regions and to UN country development work. This should also foster more coherence in UN development work at the country, regional and global levels.      

Mr. Kemal Derviş, UNDP Administrator and Chair of the Untied Nations Development Group, emphasized that strong partnerships are critical to the provision of quality development services and expressed confidence that the new Cooperation Framework will mark a new stage in this partnership for results. He also pledged UNDP's continuing support to building a more responsive and effective Untied Nations at the country and regional levels.

Prospects for an AU govt: ISS Paper Review

Prospects for an AU govt: ISS Paper Review

18 July, 2007

By E.K.Bensah II

 

Even at the best of times, regional integration is slow and protracted, and at the very worst, a problematic enterprise. Key institutions like the UN’s Economic Commission for Africa maintain that a combination of lack of ratification of protocols, coupled with the overlapping membership are some of the primordial reasons why regional integration in Africa is as encumbered as it is. To this end, a united African Union government would offer a new way of Africa doing things its own way, and what better place to discuss an AU government than in the very country that spawned one of the greatest Pan-Africanists that ever lived—Dr.Kwame Nkrumah;l even better was the fact that this discussion would take place at the Ninth Summit of the African Union, held in July.

 

It is against this backdrop that the South-African based Institute for Security Studies would launch seven papers in Accra, looking at different facets of regional integration. Given the wide scope of issues flowing from any conception of an AU government, it was important to focus on some of the challenges that might give vent to the detractors of a union government. Some of these challenges were elaborated on by one of ISS”s academics.

 

To say that Dr.Mzukisi Qobo, a research associate at the South African Institute of International Affairs, is against union government is, in fact, to do a disservice to the man, for he is not so much against any conception of union government as he is against one that fails to take into account a market-based approach. Operating from the principle that the current rhetoric is “decidedly state-centric and obsessed with anti-imperialism”, his take is explicit: a greater involvement of non-state actors, as well as “a normative convergence on the issues of democratization and promotion of human rights.”

 

While noone has denied the utility of democratic dispensations at the domestic level facilitating an enabling environment conducive to economic growth, it would seem that this is not the end-all and be-all. The use of non-state actors—often a codeword for the private sector—may be palatable, only insofar as it feeds into the ideal of a regional integration project that is people-centred. Without the people element, the conception of an AU government predicated merely on the development of the economy would seem myopic in the extreme.

 

That said, the author outlines four main challenges associated with regional integration in a manner that reflects his attachment to the neo-classical paradigm based on export-orientation.

 

In his view, the biggest challenge to regional integration in the context of prospects towards a United States of Africa is to do with Africa’s view of globalization. He maintains that African countries are not enjoying the benefits of globalization, because they have been so imbued by the anachronistic ideas of a Pan-Africanism that is impractical. Her writes: “the Pan-Africanist ideology is slowly becoming eclipsed by pragmatism. Notions such as Ujaama or African socialism coined by Julius Nyerere are gradually losing their popular appeal, as various countries start to favour market-based approaches”. Alarmingly, without citing who these leaders are, the author maintains there are “an emerging group of African reformers…increasingly realizing that history’s inexorable evolution is not to the socialist nirvana of autarchy and self-reliance but to a market-based economy and global interdependence.”

 

Secondly, Qobo argues that African countries mismanaged their economies after colonialism, which inevitably led to corruption. It is interesting to note that he makes little mention of the impact of the deleterious effects of IFI-imposed policies of the World Bank and IMF, and the extent to which they played adverse effects on the countries of African economies.

 

He even goes on to make the spurious argument that despite the World Bank “channeling massive financial resources towards the improvement of the infrastructure is[sic] areas of water and roads, public financial systems and local economic governance in various countries”,  African economies had failed to create a more enabling environment for business. Let’s remember that for Qobo, a sound environment conducive to “bold” economic reforms spell success in African regional integration.

 

He cites as a third major challenge the absence of a Central Bank for Africa, which has caused chaos in Africa’s financial system: “the advantage of an independent Central Bank is transparency, predictability, and accountability in monetary policy. This lends”, he writes, “credibility to the economy and insulates monetary policy, especially interest rates, from being manipulated by politicians for short-term gains.”

 

This point, whilst credible, is utopian, for the current practice where money from donors is tied to aid comprehensively inhibits any control that African countries might have on regulating their finances. That the Bretton Woods institutions enjoy a great stranglehold and say in the capital account of AU countries is sufficient to render an idea like this null and void. The impression, regrettably, one gets from reading this is that the author appears out of touch of the practical obstacles that remain from the current relationship with our donors.

 

A fourth point that he makes that lends greater credence with some of the key challenges is the issue of debt servicing, and the extent to which it cripples AU countries’ economies: “Africa is also a continent that is adversely affected by soaring foreign debt and is highly dependent on flows of overseas development assistance—most of which is re-channeled [by way of consultants] and multilateral credit institutions to service debt.”

 

These four main points in the paper are further underscored by an attempt at alternatives, with the first being a regional integration that runs in the vein of the European Union, where membership is incremental, and with “the criteria for membership includ[ing] democratic indicators, fiscal prudence and monetary policy variables.”

 

Put simply, fiscal prudence is about rolling back the state by spending less on provision of social services, and much more of this kind of ideology finds expression in much of his paper. He writes, for example, about the need for “bold” and “far-reaching” economic reforms. In fact, he makes no secret that, in his view, this is the way for Africa and its regional integration. To him, such measures, taken at the domestic level, would set a precedent at the regional one.

 

In other words, a more liberalized domestic economy should translate into a regionally-liberalized space, where there is a greater focus on export-orientation and market-based approaches. He goes so far as to argue that even if a regional mechanism is to “have credibility, larger countries or groups within the integrating regions need to play a more active and influential leadership role.” These “larger groups” he talks about are reminiscent of the role of hegemons within the existing regional groupings (South Africa, Nigeria, to name but two). Regrettably, he fails to expound on this point beyond saying that the hegemons facilitating a climate conducive to investment.

 

What he does do, however, is give a score card of some of the existing regional integration initiatives which he considers “promising”: SADC, CEMAC; COMESA; EAC; and ECOWAS. Analysed through the filter of the extent to which they have pursued “comprehensive trade liberalization and facilitation measures”, his result is as evident as it is emphatic: “despite these successes, it should be stressed these RECS still have a long way to go to achieve the objectives of the A[frican] E[conomic] C[ommunity].”

 

However, he raises another point that seems as ridiculous as it is spurious. In his view, one of the areas of “notable success” is the establishment of the Pan-African Parliament in March 2004. He maintains: “this has a value for enlarging the space for dialogue and ensuring factors beyond the executive arms of government participate in shaping continental development and influencing processes of regional integration and cooperation.” For a so-called Pan-African law-making body that enjoys an administrative status over an executive one three years after its inception, this argument is risible in the extreme.

 

Conclusion

Throughout the paper, Qobo gives in many times to the apparently alluring appeal of the leitmotiv of corruption and mismanagement to explain away some of the challenges facing African countries on the rocky road towards the magnificent vision of an African Union government. This line of thinking, however, is one drop short of myopic because it fails to fully acknowledge the nebulous and nefarious prescriptive policies of what the Monde Diplomatique newspaper called in 2002 as the “other axis of evil”: the Bretton Woods Institutions, and the WTO.

 

Although Qobo, at some point, refers to regulation, he is far too late in the game of advocating market-based reforms that we leave the article in visceral repulsion at this over-the-top suggestion of bold economic reforms setting a precedent for the regional.

 

ENDs

 

This is an uneditted version of a review that appeared in TWN-Africa’s African Agenda (vol10.3)

UNCTAD discusses regional FTAs etc

TWN Info Service on WTO and Trade Issues

11 October 2007

Third World Network

www.twnside.org.sg

 

 

UNCTAD Board debates regional cooperation and development

Published by SUNS #6337 dated 4 October 2007

 

 

By Kanaga Raja, Geneva, 3 Oct 2007

 

The Trade and Development Board of the UN Conference on Trade and Development (UNCTAD) on Wednesday held a discussion on the agenda item of interdependence and global economic issues from a trade and development perspective, focussing on regional cooperation and development.

 

The focal point for these discussions was UNCTAD's flagship publication, the Trade and Development Report 2007 (TDR), whose theme this year was on regional cooperation and development (See SUNS #6319 dated 10 September 2007).

 

The Trade and Development Board of UNCTAD is currently holding its fifty-fourth session from 1-11 October.

 

In introducing the TDR at the session, UNCTAD Secretary-General Dr Supachai Panitchpakdi said that UNCTAD had published a highly illuminating report that emphasized an analysis of the proliferation of regional integration worldwide.

 

Supachai also noted that regional integration does not have to encompass trade alone. After the Asian financial crisis, there was financial cooperation in the region to pool reserves, he said, pointing, for example, to the "Chiang Mai" initiative.

 

Heiner Flassbeck, Director of UNCTAD's Division on Globalization and Development Strategies, presented the main findings of the report as well as an overall outlook of the global economic situation.

 

He noted that surplus countries are seeing their currencies depreciate while deficit countries are seeing an appreciation of their currencies. This could be a dangerous development, he said, and asked whether the international adjustment mechanism is working.

 

Flassbeck also pointed to the issue of destabilizing speculation, in that floating exchange rates, induced by interest rate differentials, frequently move in the wrong direction - leading to "false pricing" in the international product markets. Carry trade is also a source of imbalance for some economies.

 

He stressed that regional cooperation in the financial field is one way of getting out of these problems. "We need to look in a coherent way to reap the benefits of globalization, and regional cooperation is one extremely important ingredient."

 

Honduras, on behalf of the Group of 77 and China, said that the TDR this year is focussed on a key development strategy called regional cooperation. The report provides rich analysis and comparative experiences that are useful and needed by academics and trade negotiators to study and take decisions on regionalism and regionalization.

 

Cooperation and regional integration is not a new phenomenon, it said. It is a core element of the development strategies for developing countries. The report says that South-South regionalism includes substantially the provision of regional public goods and the re-configuration and merger of political space in one economical regional space to benefit all members of the group, the G77 added.

 

The nature and implementation of regionalism is one thing and the impact on developing countries is another. What is required is permanent monitoring and assessment.

 

The analysis of regional South-South trade agreements shows the importance of placing more attention on the way to manage and solve potential imbalances in trade distribution and the economic benefits among members with different levels of development.

 

The G77 highlighted that a single instrument for South-South regionalism is the GSTP among developing countries.

 

As to North-South FTAs, the G77 said that the analysis in the report on this issue is especially interesting. The report said that it is necessary for careful assessment of the costs and benefits by developing countries before signing these agreements. The challenge is to maximize the potential benefits of the agreements and minimize the possible costs.

 

The G77 also highlighted what it considered key parts in the North-South FTAs that could help guarantee benefits to developing countries. It said that Special and Differential Treatment has to be explicit and correctly provided in terms of long periods of transition and product coverage.

 

Less-than-full-reciprocity in tariff cuts has to be slow and gradual. The treatment has to be also incorporated under the WTO rules in the regional FTAs, so that the North-South agreements with due flexibility for developing countries could be WTO-compatible.

 

Honduras also said that the Doha Round provides the opportunity to rewrite special and differential treatment in Article XXIV of the GATT. It added that the rules of origin have to be flexible. There has to be a strong development dimension in every effort towards more deep integration. Deeper integration should be gradually pursued and only when developing countries are ready, said Honduras.

 

The Philippines, on behalf of the Asian Group, aligned itself with the statement of the G77. The Asian Group believed that this year's TDR is timely, as it offers a clear picture of the world economy and contains pragmatic policy options which we in the international community should give full consideration. This is especially relevant as we embark on our formal preparatory process for UNCTAD XII.

 

The Asian Group noted that the TDR points to some encouraging economic trends in Asia. Accelerated economic growth allowed East and South Asia to more than double their per capita GDP in only 14 years. The performance of East and South Asia was almost exclusively responsible for the overall reduction in global inequality and progress towards the achievements of the MDG goals.

 

The Group said that the TDR points out that although the overall world economic situation is more favourable for developing countries than at any time since the early 1970s, large external shocks originating in developed countries could have serious effects on Asia. The TDR therefore points to the importance of fostering a more stable global environment as well as the need to further advance initiatives that will lead to greater global economic stability.

 

As the TDR points out, said the Philippines, these imperatives are being addressed in Asia through several regional initiatives including through regional integration. It should be noted, however, that regional integration itself is not a guarantee for successful development.

 

Thus, there is a need to focus on regional integration efforts which are part of a broader development strategy aimed at faster domestic capital accumulation and technological progress in the most promising industrial and service sectors of each country.

 

Regionalism can then be a viable development path, even if at times, it might require a transfer of national policy space towards a regional policy space, allowing sufficient flexibility and greater coherence at the regional level.

 

A clear example of this transfer of policy space is when regional coordination preserves the policy space needed to effectively manage FDI, especially when un-coordinated national policies aimed at attracting FDI lead to a race to the bottom as governments cut regulations and offer generous tax incentives.

 

The Asian Group said that regional cooperation should therefore also include coordinated and joint action in policy areas that strengthen the potential for growth and structural change in developing countries, including macroeconomic, financial, infrastructure and industrial policies.

 

In this regard, economic cooperation among developing countries, including at the regional level, to improve transport facilities, provide commercial information, and which pool efforts in areas such as energy, water supply, research and development, and knowledge generation, can be crucial for the success of development strategies.

 

The Asian Group said that given that developing countries today have less options for public policies in support of development and structural change than the more advanced economies at similar stages of development, it may indeed be useful to explore how regional cooperation can widen national policy space by enabling individual countries to undertake bolder projects for development.

 

Like the previous year's TDR, this year's report is a very useful exercise in presenting options of operationalizing policy space, thus responding to UNCTAD's mandate on policy space stemming from the Sao Paulo Consensus and the world summit.

 

In this regard, said the Philippines, the Asian experience of pursuing development through an eclectic mix of policy instruments, rather than a focussed approach based on prevailing orthodoxy, has delivered positive results.

 

Indeed, those countries which best weathered the Asian financial crisis were those which pursued pragmatic and effective policies based on their own unique needs and circumstances, rather than those which adhered more closely with the orthodox policy prescriptions.

 

The Philippines said that Asia's broader experience in applying diverse policy instruments in response to unique situations and circumstances is reflective of the region's pragmatism and its willingness to address challenges with the most effective tools available.

 

A specific example is in the area of addressing the need for greater systemic stability in order to prevent a recurrence of the Asian financial crisis. In the absence of an effective international mechanism to address global imbalances, some Asian countries have recognized that regional cooperation can be effective in providing some security against abrupt corrections of exchange rates and volatility in financial markets.

 

In particular, said the Asian Group, regional cooperation may help developing countries deal with shortcomings in the international financial system in three areas: provision of regional payment facilities and short-term balance-of-payments financing; provision of long-term development finance; and protection against exchange rate volatility and currency misalignments that can distort trade flows and undermine fruitful trade relations.

 

Of particular interest in this regard are regional initiatives which seek to promote greater financial and monetary stability especially in the aftermath of the Asian financial crisis, the Asian Group said, pointing to initiatives such as the Chiang Mai initiative, which is geared towards both crisis management and prevention.

 

This initiative involves not only ASEAN countries but also China, Japan and Korea, underling that there are often interests common to developed and developing countries and that effective cooperation is possible in filling important gaps in the global economic architecture.

 

Brazil, on behalf of GRULAC, supported the statement of the G77 and considered that the TDR is an important contribution to the discussion of regional cooperation and development.

 

Portugal, speaking on behalf of the EU, welcomed the TDR as a strategic element to the debate on regional cooperation and development. Wide in scope, said the EU, the report represents a positive contribution to the discussion on this issue, even if the EU did not fully share its analysis.

 

The purpose is to evaluate, from a trade and development perspective, regionalism as a political option for developing countries and economies in transition. It addresses, also, the relations between globalization, regionalism and development and the implications, for those countries, of North-South free trade agreements or regional trade agreements.

 

The EU said that it remains committed to the multilateral trading system as a priority to guarantee benefits for all economies, in particular the LDCs. However, in parallel to the multilateral approach, said the EU, we believe that we cannot disregard the regional context and therefore disagree with the report's judgment that North-South bilateral or regional trade agreements "threaten the coherence of multilateral trading system".

 

We cannot accept either that "new regionalism denotes a departure from multilateralism," said the EU. The multilateral system provides common rules allowing all countries to participate in international trade according to the same principles and using their natural competitive advantages to generate economic growth.

 

The multilateral system, while being a powerful tool to fight poverty and promote cooperation between all main international actors and the developing and least developed economies, also constitutes a privileged forum to debate ideas and to find common approaches, thus providing a wider understanding of the world's economic problems and goals.

 

Nevertheless, said the EU, strengthening regional trade agreements (RTAs) is a complementary approach that must not be neglected and that represents a new trend amongst the main trade partners. One does not contradict the other, the EU said, adding that we need to pursue new opportunities, sharpening our efforts to open markets and tackle trade distortions both within the multilateral system and through bilateral and regional initiatives.

 

The EU said that RTAs also provide the basis for much more far-reaching trade liberalization (regulatory initiatives and elimination of non-tariff barriers to trade) than have so far been possible within the WTO. In this context, we must ensure that regulatory aspects of regionalism are based on clear and fair rules boosting sustainable development for all countries.

 

The EU supported the findings of the report that regional cooperation among developing countries has the potential to support national development strategies and that there appears to be an untapped potential for closer regional integration among developing countries. The EU also believed that North-South agreements do not threaten multilateral rules, but complement them.

 

Iran said that this year's TDR provides a good analysis of the outcome of regional agreements. This analysis indicates that the so-called neo-regionalism, in the form of South-North agreements which are primarily bilateral free trade agreements based on the principle of "reciprocity", mostly place the developing countries in situations that compared to the limitations imposed on them as to the implementation of national development policies, creation of opportunities necessary for the adjustment of their industrial production structure, the benefits accruing to them from deep liberalization and expanded trade, are generally not so much effective or useful.

 

Iran said that developing countries are increasingly participating in RTAs with developed countries for better market access and higher FDI flows and transfer of technology. But the main problem they have in North-South agreements is the insufficient attention to development needs, development level, and limited capacities in these countries. Ignoring these facts, developed countries keep raising their expectations.

 

Iran noted that RTAs may provide the partners from developing countries with considerable new trading opportunities or may also attract more FDI.

 

But there can also be disadvantages for them, because RTAs usually demand deeper liberalization of trade in goods and services, liberalization of foreign investment and government procurement, new rules on certain aspects of competition policy, stricter rules on intellectual property rights, and the incorporation of labour and environmental standards, while measures that can most benefit developing countries such as removing agricultural subsidies by developed countries are left out.

 

North-South RTAs could have positive effects on developing countries depending on the structure of these arrangements, the level of existing protection, and the formulation of rules. Improved market entry conditions including simplified rules of origin, mutual recognition of standards and trade facilitation measures would also be particularly beneficial to developing countries, said Iran.

 

Also there is a need for these arrangements to take into account the interest of developing countries in the form of special and differential treatment in commitments and disciplines, said Iran, adding that UNCTAD has an important role to play in assisting developing countries to deal with the interface between multilateralism and regionalism.

 

A representative of Third World Network congratulated UNCTAD for the TDR on regional cooperation and development, which it said is a very pertinent issue. The theme of regional cooperation should be a building block towards international cooperation. The best way towards this building block is to have South-South cooperation. This is important because countries at similar stages of development can help each other by expanding their markets.

 

Two very interesting and comprehensive sections in the report are that which relate to North-South trade agreements and South-South agreements, said TWN, adding that it was disappointed by the criticisms made to the report in relation to North-South FTAs and was surprised at statements that say that such FTAs are coherent with the WTO agreements.

 

The section on North-South agreements accurately portrays the dilemmas that developing countries face. Most North-South FTAs on balance give rise to more costs than benefits. The apparent aim of developing countries is to expand their trade and employment through these agreements.

 

However, said TWN, in reality, we face more problems. In the area of trade, because of the reciprocal nature of the FTAs, developing countries have to bring down their tariffs mostly to zero for agriculture and industrial products. This has caused very significant dislocation of farms, local firms and jobs.

 

At the same time, increase in exports for most developing countries is limited due to continued agriculture subsidies in the North, which are not addressed in the FTAs, and due to limited supply capacity.

 

Whilst gains are limited in trade and in most cases are negative, said TWN, developing countries lose out in their loss of policy space. In particular, they have to agree to take on obligations in relation to the Singapore issues which have been rejected in the WTO, as for example, the investment chapter with its pre-establishment rights and in some cases, investor-to-state dispute settlement and free transfer of funds. This has a tendency to crowd out local industry as well as set conditions for financial instability.

 

TWN said that the procurement chapter erodes the policy space of developing countries to use government expenditure as a tool for boosting economic and social development. The interpretation of competition inhibits the role of government to assist local companies. On IPRs, many of the flexibilities permitted by the TRIPS agreement are severely eroded. All these are erosion to policy space and poses a serious development threat.

 

TWN thanked UNCTAD for highlighting these problems in the report which it said is useful for raising awareness of civil society in the South. It was also of the view that the chapters on regional cooperation in the South and financial cooperation provide excellent material to foster South-South cooperation in trade and finance areas.

 

It called for UNCTAD to develop its role in advancing these discussions through seminars and further studies.