Economic Benefits of Regional Integration to Member States

President Museveni in his recent end of year speech highlighted about nine thematic areas on which his government is going to put emphasis in 2019 and called upon everyone to direct efforts towards these areas, and one of the thematic areas was regional integration, where he said that he will show the need for common market by working with the people within the regional blocks to consolidate the unity of East Africa and then work through the Common Market for Eastern and Southern Africa (COMESA) and the African Union (AU) to build the African common market. The president has always been vocal when it comes to the issue of the regional integration and we have seen a lot of effort at the high level to actualize this concept.

Regional integration is an arrangement where countries in the same region enter into an agreement to enhance economic cooperation through agreed institutions and rules, focused on removing barriers to free trade in the region, increasing the free movement of people, labour, goods, and capital across national borders. It is mainly trade-driven, and is a process that involves increasing participation in a regional economy through trade, and at a later stage involves integrating other economic, social, and political governance policies (Matambalya, 1993).

These include monetary integration, factor market integration, and government activity and regulation integration (Foroutan F, 1992).

Customs union – a free trade area in which members impose common tariffs on non-members and members may also cede sovereignty to a single customs administration (EAC 1999).

Common market– a customs union that allows free movement of the factors of production (i.e. capital and labour) across national borders within the integration area (EAC 2000).

It is also a process in which neighboring states enter into an agreement in order to upgrade cooperation through common institutions and rules.

Regional integration has been defined as the process through which independent national states “voluntarily mingle, merge and mix with their neighbors so as to lose the factual attributes of sovereignty while acquiring new techniques for resolving conflicts among themselves.”

De Lombaerde and Van Langenhove describe it as a worldwide phenomenon of territorial systems that increases the interactions between their components and creates new forms of organization, co-existing with traditional forms of State-led organization at the national level.

Some scholars see regional integration simply as the process by which states within a particular region increase their level of interaction with regard to economic, security, political, or social and cultural issues.

In short, regional integration is the joining of individual States within a region into a larger whole. The degree of integration depends upon the willingness and commitment of independent sovereign States to share their sovereignty. The deep integration that focuses on regulating the business environment in a more general sense is faced with many difficulties.

An arrangement for enhancing cooperation through regional rules and institutions entered into by states of the same region.  It could have as its objective political or economic goals or in some cases, a business initiative aimed at broader security and commercial purposes.

Regional integration is so important for resource-driven diversification in Africa. Natural resources management, particularly in the extractives industry, can make a meaningful contribution to a country’s economic growth when it leads to linkages to the broader economy

Regional integration arrangements are a part and parcel of the present global economic order and this trend is now an acknowledged future of the international scene. It has achieved a new meaning and new significance. Regional integration arrangements are mainly the outcome of necessity felt by nation-states to integrate their economies in order to achieve rapid economic development, decrease conflict, and build mutual trusts between the integrated units.

The nation-state system, which has been the predominant pattern of international relations since the Peace of Westphalia in 1648 is evolving towards a system in which regional groupings of states is becoming increasingly important vis-a-vis sovereign States. Some have argued that the idea of the State and its sovereignty has been made irrelevant by processes that are taking place at both the global and local level.

Walter Lippmann believes that “the true constituent members of the international order of the future are communities of states.”  E.H. Carr shares Lippmann view about the rise of regionalism and regional arrangements and comments that “the concept of sovereignty is likely to become in the future even more blurred and indistinct than it is at present.

The objectives of the agreement could range from economic to political to environmental, although it has typically taken the form of a political economy initiative where commercial interests are the focus for achieving broader socio-political and security objectives, as defined by national governments. Regional integration has been organized either via supranational institutional structures or through intergovernmental decision-making, or a combination of both.

The East African Community (EAC) is an intergovernmental organization composed of six countries in the African Great Lakes region in eastern Africa: Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda.

John Magufuli, the president of Tanzania, is the EAC chairman. The organisation was founded in 1967, collapsed in 1977, and was revived on 7 July 2000. In 2008, after negotiations with the Southern Africa Development Community (SADC) and COMESA, the EAC agreed to an expanded free trade area including the member States of all three organizations. The EAC is an integral part of the African Economic Community.

The EAC is a potential precursor to the establishment of the East African Federation, a proposed federation of its members into a single sovereign state. In 2010, the EAC launched its own common market for goods, labour, and capital within the region, with the goal of creating a common currency and eventually a full political federation. In 2013, a protocol was signed outlining their plans for launching a monetary union within 10 years.

In September 2018 a committee was formed to begin the process of drafting a regional constitution and this is likely to be a very big milestone for regional values and practices in governance and leadership

Just like anywhere else, the EAC efforts at regional integration have focused on removing barriers to free trade in the region, increasing the free movement of people, labour, goods, and capital across national borders, reducing the possibility of regional armed conflict (for example, through Confidence and Security-Building Measures), and adopting cohesive regional stances on policy issues, such as the environment, climate change and migration and this has registered a huge pay off if one analyses the volume of trade and labor, and conflict resolution mechanisms among the partner states.

Intra-regional trade refers to trade which focuses on economic exchange primarily between countries of the same region or economic zone. In recent years, countries within economic-trade regimes have increased the level of trade and commodity exchange between themselves which reduces the inflation and tariff barriers associated with foreign markets resulting in growing prosperity as it has been in the East African States. In this light, last year alone, Uganda saw its export to the regional increasing significantly as compared to imports from the region.

The EAC aims at widening and deepening co-operation among the partner States and other regional economic communities in, among others, political, economic and social fields for their mutual benefit

Besides that, regional integration can strengthen the voices of all small nations. These countries often face severe disadvantages in dealing with the rest of the world because of their low bargaining power and high negotiation costs. The regional integration also can affect the economic development or economic growth.

Regional integration initiatives, also has at least the following eight important functions:

• strengthening of trade integration in the region
• creation of an appropriate enabling environment for private sector development
• development of infrastructure programmes in support of economic growth and regional integration
• development of strong public sector institutions and good governance;
• reduction of social exclusion and the development of an inclusive civil society
• contribution to peace and security in the region
• building of environment programmes at the regional level
• strengthening of the region’s interaction with other regions of the world

By supporting this initiative not only will we achieve the above mentioned but we will have shared prosperity, peace and security as the people of the region in relation to the democratic peace theory suggestions, which has enabled the Europeans to avoid or deal with regional conflicts and forge a shared wealth for its citizenry and we should all support the president of Uganda and his counterparts in the region for this to be realized because we win or lose together as the people of the region.

For God and My Country