By Honest Ngowi
Posted Saturday, October 26 2013 at 12:44
Posted Saturday, October 26 2013 at 12:44
In Summary
There is no doubt that the isolation will
affect the current and possibly the future state of regional integration
in the EAC bloc and beyond.
The potential and actual roles of various types
and levels of regional integration in economic development are
well-acknowledged across the globe. Tanzania is a member of some
regional groupings, the major of which are the East African Community
(EAC) and the Southern Africa Development Cooperation (Sadc). Mainly in
the second half of 2013, there have been feelings that Tanzania was
being isolated by the ‘coalition of the willing’ that is made up of
Kenya, Uganda and Rwanda in different EAC projects. This article
discusses selected issues in the isolation and possible economic
implications for Tanzania.
On the isolation
To understand whether the isolation will have
economic implications for Tanzania, it is important to understand
possible causes and the nature of the isolation. Broadly and reading
between the lines, one gets the impression that Tanzania was being
isolated because of a number of issues. These include its arguably slow
speed, dragging of the feet, not committing to attend meetings, land as
an integration issue, Tanzania’s contribution of military personnel to
fight the M23 rebels in Democratic Republic of Congo (DRC), Obama visit
to Tanzania and the sour Rwanda-Tanzania relationship. Contrary to the
“coalition of the willing”, Tanzania is seen as the ‘unwilling partner’.
Since these are allegations, in-depth research in each of these would
add much value.
Is the isolation justified?
Naturally, Tanzania has its version of the story
on the isolation. Whereas the “coalition of the willing” sees Tanzania
as an ‘unwilling partner’, the country sees itself as moving cautiously,
slowly, but surely. It does not see the need to unnecessarily
fast-track some stages of the integration process, including the
Monetary Union and Political Federation. Whereas the need is to be
careful, one may correctly request for big and fast results now in the
integration process.
Whereas the fast-tracking of some integration
processes may be understood, it is not accepted if it is not
people-centred and if the core, preliminary and basic prerequisites are
not in place.
Key drivers of integration and its eventual
fast-tracking should be the people and not the leaders. Fast-tracking is
also unaccepted if it contravenes the EAC Treaty and various protocols.
However, whereas it is important to prepare for further and deeper
integration, it is important for Partner States, including Tanzania to
understand that there is no time in which all Partners will be 100 per
cent ready to move ahead. Very fortunately, integration is a process not
an event.
General implications
There is no doubt that the isolation will affect
the current and possibly the future state of regional integration in the
EAC bloc and beyond. Further integration will most likely be delayed.
Reports have it that several crucial meetings for further integration
have been postponed or cancelled altogether. They include meetings on
the Monetary Union, Political Federation, Legal Matters and Economic
Partnership Agreement (EPA). The implications are that the planned
milestones for various key integration stages may not be reached on
time.
Economic implications
Since the potential and actual benefits of
regional cooperation are well acknowledged, if the isolation slows or
‘kills’ the current and future integration in EAC, there will be a
number of negative economic implications. Depending on the level of
regional integration, Partner States and more importantly their people,
stand to benefit from the removal of tariffs for goods and services
produced within the bloc.
They also stand to benefit from potential regional
market which, inter alia, attract market-seeking Foreign Direct
Investments (FDIs). Partly due to the huge regional market and partly
due to common external tariffs, market-seeking FDIs find it more
efficient to enter regional blocs through investments rather than
through at-arm’s length strategies like exporting or franchising. These
investments in turn, have many direct and indirect potential benefits to
host countries. The regional integration, especially the common market
stage that the EAC has reached, allows free movements of labour, capital
and people. All these are potentially good for well and strategically
positioned economies. Therefore, if Tanzania becomes isolated from the
EAC, it may lose these potential benefits.
The way forward
It is important to consider that Tanzania, as is
the case for the other EAC Partner States, has invested heavily over the
years in the EAC integration. It has incurred a colossal amount of
taxpayers’ money in the EAC. It would be very unfortunate for this poor
country to let go and kiss goodbye all these investment costs.
Therefore, it should not seek ‘divorce’ from the EAC, but find ways in
which normalcy can be brought back noting, however, that no deal can be
better than a bad deal.
SOURCE: THE CITIZEN
SOURCE: THE CITIZEN
