Africa, prosperity and its ever-seeking union

In 1940, in order to put a warm glow over their war efforts, the Japanese Imperial Army announced that the reason they were hacking their way through Asia was the pursuit of a Greater East Asia Co-Prosperity Sphere.

The Imperial Army were not demolishing local governments and murdering people, they were simply chasing out Western imperialists and promoting regional economic union.

The reason this was a complete failure was that “union” - either political or economic - requires that the parties to that union actually want to be together.  A shotgun wedding works as well as a shotgun economy.

The end of the Second World War left much of the world in tatters.  In Europe, the full extent of the devastation was so frightening that it finally prompted political action to “make war unthinkable and materially impossible” in the words of Robert Schuman, France’s then foreign minister.

“Europe will be born from this, a Europe which is solidly united and constructed around a strong framework. It will be a Europe where the standard of living will rise by grouping together production and expanding markets, thus encouraging the lowering of prices.”

Schuman’s belief was that countries which are economically linked and leveraging their shared markets for mutual gain would be unlikely to ever go to war.  His thoughts echoed those of Abraham Lincoln who had bound north and south into the United States after their destructive civil war.  America got very rich soon after.

Unfortunately, successive generations prefer to fight first and chat later.  Only once a threshold of depravity has been crossed do negotiations start around improving livelihoods.

Africa has been the poster-child for opportunities trampled underfoot since the end of the war which set Europe on its “noble” path.  The shuffle of borders that were left grouped old enemies together.  This pitted fellow countrymen against each other in endless conflict until a continent of almost a billion people forms a statistical rounding error in the global economy.

Yet that market is still extremely large.  Chinese businesses, looking for raw materials and new consumers, have quickly come to dominate the continent.  For the first time some African leaders are pondering the benefits of economic union.

All the more reason to celebrate the East African Customs Union which finally came fully into being on 1 January 2010.

The union includes Kenya, Uganda, Tanzania, Rwanda and Burundi.  For the last five years, Kenya’s neighbours have had tariff-free access to its markets in order to gradually build up their competitiveness.  Now all the barriers are down and goods should (in principle) have trouble free access across the region.

The hope is that this will mark the end of a host of petty and expensive inconveniences to regional trade. The difficulty of moving goods around has certainly impeded capital growth, but so too do the poor roads and limited legal protections.

There are also concerns that the hard job of making customs integration possible have not been done.  “Member states were required to establish a unified regional Customs Authority, the entity to run the single Customs territory. This has not been done,” says an editorial in Kenya’s East African.

However, even an imperfect customs union can have tremendous results.  NAFTA specifically forbids Mexicans from finding work in the US, but trade goods worth over $200 billion a year cross the border into the US and Canada.

The 126 million people in East Africa have a per capita income of only $424 per year.  Even a small amount of increasing trade can have a big impact on individual prosperity.  Once the benefits of economic integration start to show it can only be hoped that regional politicians find ways to agree on easing the last of the restraints.

If East Africa, so full of conflict and hostility, can find a way to integrate then what hope for a United States of Africa.