By Dr. Julius Kiiza, Dept of Political Science, Makerere University Email: juliuskiiza@yahoo

1. Deepening Integration:The Political Economy of Regionalism in East Africa IDEAs Workshop, Nairobi21 - 27 Jan 2007 By Dr. Julius Kiiza, Dept of Political Science, Makerere University Email: juliuskiiza@yahoo.com

2. Introduction • Purpose of this paper is to critically reflect on regional integration in East Africa • Focus will be on the key individual and institutional political economy actors; esp: • Contest between the “go-slow” & the “first-tracking” integrationists will be highlighted • Central argument:

3. Central Argument • Integration should be deepened and hastened, given: • The enormous challenges posed by the harsh global political economy • The domestic developmental challenges esp the massive poverty (31% Uganda; 56% Kenya; over 50% Tanzania) • The shortfalls of our donor-driven PEAPs/PRSPs; and • The potential benefits of integration

4. The Debates • Two major debates have emerged on regionalism: 1. Feasibility & the real or perceived benefits of regionalism 2. “Appropriate” pace or speed of integration • Theorists of globalization argue that: • Globalization has resulted in Ungovernable Markets • That Nation-States Need to Liberalize Domestic Markets • Regional Integration: Higher Level of Liberalized Domestic Mkts

5. Globalization Theories …. • From perspective of Globalization Orthodoxy: • Purpose of Regionalism is: • To fit in the emerging free “global” markets • Attract FDI • Be “compliant” with WTO rules (on freer trade) • Adopt “global” “best practices: • Look! Every regional is integrating - ASEAN, EU, NAFTA

6. Skeptical Viewpoint • Critics of the globalization orthodoxy urge caution • Critics do not oppose increased regionalism • Their contention is over the purpose • The claim is that: • Integration should serve to govern, not deepen globalization • But Why? Globalization has two faces, not one. • Beneficial to advanced (OECD) countries; & largely detrimental to poor commodity economies • Regionalism should “distort” free “global” markets for the benefit of cooperating member-states

7. Skeptical Viewpoint … • ToT in international markets - unfavourable to developing countries • Thus, regionalism must enhance quality of exports • Attracting foreign K - esp FDI (not portfolio K) is important • Regionalism also promotes “economies of scale in international diplomacy”

8. On the Pace of Integration • Again 2 major debates: • The “Go-Slow” Argument; and • The “Fast-Tracking” Strategy • The “Go-Slow” claim alleges that integration is like marriage • PLO Lumumba (2006) for example argues: “U cant meet a lady for 1st time and say: I love U, I need U, I want to marry U right now!” • 2nd Claim: Need for broad consultation

9. The Fast-Tracking Initiative Argues: • Time is a scarce resource • Zeit ist Geld! • Globalization poses serious challenges calling for urgent action • WTO evolving into a Monster: Unity is Our Strength (as small economies) • Poverty - a serious problem (31% Uganda; 56% Kenya; over 50% Tanzania) • Our State officials typically move at snail’s pace • Nobody in their right mind asks a snail to go-slow • Conclusion: GET SERIOUS!

10. Who Shd Get Serious - and How • The foll institutional political economy actors must get serious: • Our Presidents + Cabinet (Initiate policies) • Rotating President: Announces policy priorities • EALA Members: Our lawmakers • National Parliaments • Sectoral Committees • Elite Academics • Our bureaucrats/ Civil Servants • Donors? Development Partners??

11. How Should the Actors Get Serious? • Rethink the dominant “trade theory” of integration • Revisit the contest btn trade theory and production economics theory • Address the fundamental question of “trade in what?” • An appropriate trade policy must be STRATEGIC

12. Key Elements of Strategic Trade (and Industrial) Policy • Import of Capital goods is encouraged • Country or region-specific industrial policies • Promote selected priority industrial sectors • Export of raw materials is prohibited • Infant industry protection - is promoted • Build developmentalist institutions eg EADB, UDC, the railways, etc • Massive use of subsidies • Struggle for structural economic transformation from primary commodities to value added pdts

13. Lessons from Successful Integration • The “go-slow” theorists point to EU as a model for African integration • This is erroneous • The best models for EA integration are: • German Unification - Bizmark • Unification of USA - 18th C • Unification of Japan - 19th C • Unification of Italy • CRITICISM: THE TIMES HAVE CHANGED

14. Conclusion & The Way Forward • Integration is not an end in itself • It is a means to larger developmental goals • Global political economy is harsh • Poverty is a serious problem • Time is a scarce resource • Hence the need for deeper and faster economic integration • But this calls for economic integration and political union as joint objectives

15. Thank You Ladies & Gentlemen I hope you enjoyed my Talk