January 11, 2010
From very large Asian countries to relatively small East African nations, the European economic integration model has followers on every continent. Late last year Kenya, Tanzania, Uganda, Burundi and Rwanda have signed the birth certificate for the newest – and smallest – trade bloc, the East African Community.
Back in 1999, the leaders of Tanzania, Kenya and Uganda decided to revive the short-lived union established in 1967. As the European Union model has proved, economic liberals and socialists could successfully work together towards removing tariff barriers and other less obvious obstacles to the free movement of people, goods and services across vast areas. Indeed, it was a committed French socialist and former boss of the European Commission Mr. Jacques Delors who pushed hardest for the removal of the last remaining barriers to trade and employment within the Union during the 1980’s.
The nucleus of the East African Community (Tanzania, Kenya and Uganda) “covers an area of 1.8 million square kilometres with a combined population of about 80 million and has a vast potential in mineral, water, energy, forestry and wildlife resources. It also has agricultural, livestock, industry and tourism development. Its people have a common history, language (Kiswahili), culture and infrastructure”. (source: Africa-business.com) The combined GDP of its five member countries is a modest 75 billion USD, according to The Economist. The bloc plans to abolish internal tariffs by this summer and to later adopt a common currency as well, in a hope to improving trade, investment and the economic performance of its members.
According to observers, the country that stands to gain the most from closer economic integration with its neighbours is Kenya, which has sizeable manufacturing and retail sectors. Uganda is expected to be able to increase its agricultural exports; Burundi and Rwanda hope to benefit from the abolition of custom duties and cheaper access to Tanzanian ports; whilst Tanzanians fear that better-qualified Kenyans will be hard to compete against in an unrestricted labour market. All member countries hope to stave off the assault of Chinese imports and to export more goods to countries like Congo and Sudan.Florian Pantazi