Assessing the prospects of the New East African Community

Gurumo, Shabani Rajab (2005-12)

Thesis (MBA)--Stellenbosch University, 2005.

Thesis

ENGLISH ABSTRACT: The three East African countries of Kenya, Tanzania and Uganda have a long history of economic co-operation, which at one time amounted close to political integration. Their present co-operation arrangement is known as the East African Community (the new East African Community), but is one that remains susceptible to failure if conscious and purposeful steps are not timely adopted to facilitate their integration. A number of reasons have been attributed to the failure and eventual demise of the old East African Community. These reasons include, the unequal distribution of gains and costs amongst the partner states, perceptions and impressions on reaching conclusions about the distribution of those gains and costs, the heavy internal and external debt burdens that the three countries experienced in different degrees, differing political ideologies amongst the political leaderships of the three countries, unwillingness to cede government authority to the Community, and the absence of sufficient possibilities for cost reduction shifts in the industrial sector amongst the three countries. The above meant that there was little chance for potential economies of scale. While the recognition of the value of past experiences forms an important aspect of a future strategy for the Community, prevailing and anticipated circumstances are more relevant. This study project seeks to establish the chances for the success or failure of the new East African Community by means of an analysis of the historical passage of East African co-operation, in particular the former official arrangement of 1967-1977 and scrutiny of the system underlying the present arrangement. The differences and similarities of the two systems are then extrapolated and the likely effects that those differences and similarities will impart upon the new East African Community are investigated. Finally, the ways and means identified as a possible easing of the shortcomings are advanced as recommendations. One outstanding development in the existence of the new East African Community so far has been the pursuance to establish an East African Federation in the shortest possible timeframe. In the new East African Community's formative treaty the objective of achieving a political federation is declared to be the ultimate objective. It would appear that the concept of "shortest possible time" was partly interpreted by those mandated to explore the possibilities as relating to the timeframe during which the existing political leadership would still be functioning. The study has, however, concluded that the fast tracking of the political federation is one of the possible serious threats to the sustainability and longevity of the new East African Community. Likewise, membership of other regional integration arrangements by the partner states of the Community - without a concrete formally agreed common mechanism to deal with the ensuing conflicts of interest - is considered to be a weakness. The study recommends a number of preconditions necessary for the smooth transition to a political federation that would not compromise the positive prospects of the Community.

AFRIKAANSE OPSOMMING: Die drie Oos-Afrikalande Kenia, Tanzanië en Uganda het 'n lang geskiedenis van ekonomiese samewerking wat op 'n stadium feitlik op politieke integrasie neergekom het. Hulle huidige integrasiereëling staan as die Oos- Afrikagemeenskap (die Gemeenskap) bekend, maar dit bly vatbaar vir mislukking indien bewuste en doelgerigte stappe nie betyds gedoen word om hulle integrasie te bevorder nie. 'n Aantal redes is aangevoer vir die mislukking en uiteindelike verval van die ou Oos-Afrikagemeenskap. Hierdie redes sluit onder andere in die oneweredige verspreiding van winste en kostes tussen die vennootskapslande, persepsies en indrukke oor besluite rakende die verdeling van genoemde winste en kostes, die kwaai binne- en buitelandse skuldlaste wat die drie lande in wisselende mate ervaar het, verskillende politieke ideologieë tussen die politieke leierskappe van die drie lande, 'n onwilligheid om regeringsgesag na die Gemeenskap oor te dra en die afwesigheid van genoegsame moontlikhede vir kosteverminderingstappe in d ie nywerheidsektor tussen die drie lande. Die bovermelde het beteken dat daar min geleentheid vir potensiële groot ekonomieë was. Alhoewel die erkenning van die waarde van ervarings uit die verlede 'n belangrike aspek van 'n toekomstige strategie vir die Gemeenskap uitmaak, is heersende en verwagte omstandighede meer relevant. Hierdie studieprojek poog om by wyse van 'n analise van die historiese verloop van samewerking in Oos- Afrika en in die besonder van die vorige amptelike reëling tussen 1967 tot 1977 en 'n ondersoek van die stelsel wat die huidige reëling onderlê, vas te stel wat die kanse is op die sukses of mislukking van die nuwe Oos-Afrikagemeenskap. Die verskille en ooreenkomste tussen die twee stelsels word dan geëkstrapoleer en die verwagte gevolge wat daardie verskille en ooreenkomste op die nuwe Oos-Afrikagemeenskap gaan uitoefen, word ondersoek. Laastens word die middele wat geïdentifiseer is as 'n moontlike verligting van die tekortkominge, as aanbevelings voorgehou. Een van die opvallende ontwikkelings in die nuwe Oos-Afrikagemeenskap is die nastrewing van die doel om 'n Oos-Afrikafederasie binne die kortste moontlike tyd tot stand te bring. In die Gemeenskap se stigtingsooreenkoms is gekonstateer dat die uiteindelike doelwit die bereiking van 'n politieke federasie is. Dit wil voorkom asof die konsep "die kortste moontlike tyd" gedeeltelik só geïnterpreteer is dat dit na die tydsraamwerk verwys waartydens die huidige politieke leierskap steeds die leisels sou hou. Die studie het egter tot die gevolgtrekking gekom dat die vinnige pas vir die totstandkoming van die politieke federasie een van die moontlike ernstige bedreigings vir die volhoubaarheid en langdurige voortbestaan van die nuwe Oos-Afrikagemeenskap is. Op soortgelyke wyse word lidstate van die Gemeenskap se lidmaatskap van ander streeksreëlings - sonder die bestaan van 'n konkrete formeelooreengekome gesamentlike meganisme om aandag te skenk aan voortspruitende belangekonflikte - as 'n swakheid beskou. Die studie beveel 'n aantal voorwaardes aan wat noodsaaklik is vir die gladde oorgang na 'n politieke federasie wat nie die positiewe vooruitsigte van die Gemeenskap in die gedrang sal bring nie.

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