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Political Will versus Political Legitimacy

 Political Will versus Political Legitimacy in Regional Integration: The case of West Africa(Political Economy of Regional Integration: Speaking Notes)

1. The guidelines for this panel are mainly framed around the need to address the political impediments to faster integration, and this is in the context of progress which is seen as being made among the RECs, in particular at different stages in their launching of their FTAs, Customs Union, and so on.  The assumption is that these different projects of regional integration are basically sound and that their benefits are clear; the challenge of implementation is political.  In a sense it is a variation of the usual refrain: only the absence of political will stands in the way of progress towards regional integration. I want to agree with only a small part of this assumption.

2. There is indeed a key political problem for progress in RECs.  But judging from the experiences of West Africa, this political deficit is not simply, as is normally implied, one of the failure of political leaders or elites  to live up to their commitments. I think that the question is broader than that.  It has a lot to do with the fact the aspects of focus in the regional integration lacks compelling political relevance among many of social groups who could be counted to support it. It suffers a deficit of political legitimacy.

3.  I’m not here referring to what is now usually called “ownership”, popular among technocrats and NGOs, which is defined in such a way that the solution becomes one of awareness raising workshops and communication of projects in simplified language.  What I mean is this.   By focusing, at least on the outset, on such issues as tariff harmonisation, convergence criteria for single currency, etc, regional integration and its particular sequences appear to have little of by way of direct connection to the aspirations of ordinary people for the resolution of the concrete problems that they face in the organisation of production and exchange.

4.  Let me illustrate.  If the Member of Parliament for my village went to campaign among the villagers saying that when elected he would work for the adoption of free movement of people, goods and capital in West Africa, such that the villagers can go all the way to Nigeria and Senegal, and sell their goods, and borrow money everywhere, they may find it interesting.  But I doubt that they would be inspired enough to elect him on that basis.  Some may even leave his rally before he is done with his vision of free movement of goods, and persons.  Now let’s put the same MP among the group of people in Northern parts of Ghana, who recently almost went to war with their Burkinabe neighbours over what they considered to be the dumping of cheap Burkinabe tomatoes in their markets, driving them out of business. If the MP made the same speech about free circulation of goods, etc, he may be lucky to escape with his seat.

5. However he would stand a better chance if he said that upon election, he will ensure the tomato processing plant in the neighbouring village is revived, up scaled, so that all the tomato producers can have a ready market; and that since the plant is so big, it can take all the tomato from the North, and from Burkina Faso. That in fact the Burkinabe tomato imports will help the plant meet is capacity so that it can continue operation.  In fact, if elected he will get the Ghana government to have an agreement with the Burkinabe government so that many more such plants can be cited strategically around the region, so that even Ghanaian framers in the North can have their tomato processed in Burkina.

6.  The point of this illustration is this. There are obvious challenges in their socio-economic life that ordinary people want to be addressed.   A key element is how to transform the immiserating patterns and relations of production within which the majority of producers and working people in West Africa are trapped.   There is a narrative of regional integration which can take this as starting point, a narrative which poses regional integration as the regionalist dimension of the same necessary transformation in national economies.   To be concrete.  African economies are structured in primary commodity export dependence, with small-holder based agriculture, and little manufacture.  The abiding challenge is then one of how to re-organise agricultural production and the rural economy in linkage with a strategy of industrialisation, both of them mobilising the mineral economy,  into the engine of transforming the structure of Africa economy.  Such as process would involve the inter-setoral integration of national economies.  We can start with this and ask what are the policy requirements in trade, finance, and so, and then see how these can be reflected at regional level.  Regional integration in this scenario is a step-by-step process of addressing concrete issues in the real economy supported by common regional policies and mechanisms.  In this way, it easier for different social groups to see more directly what is at stake for them, and be engaged with the process.

7. By contrast, the approach to regional integration and its projects that now in operation in the RECs and elsewhere seems to be one that takes off from one notion or the other of the general theoretical determinants of integration, and then set out to realise the series of logically necessary principles arising therefrom.  Sometimes, this takes the form of so-called best practice which basically consists of cherry picking from other models outside the continent.  Here,  regional integration becomes a discussion among experts and bureaucracies.  It is not a political project of social transformation, driven by social economic constituencies who see their interests bound with this or that aspect of this or that outcome.

8.  In the West African case, I suggest that this has a lot to do with the nature of evolution of the RECs, and the economic rationale and purpose that has over time come to govern and define the agenda of integration, and its various elements.  Complicated by the fact that, in West Africa, the integration process often involves a difficult bargain between two RECs with distinct trajectories:  UEMOA and ECOWAS.  In their formation and evolution, UEMOA and ECOWAS have been driven by different practical integration agenda, which are in turn rooted in different immediate economic imperatives.

9.  UEMOA has evolved as an imperative to construct the broader economic conditions for a single currency that had been in existence for 40 years as WAMU. On the eve of the devaluation of the CFA in 1994, political actors and elites in the so-called French zone woke up to the realisation that:

 “For more than forty years the West African Franc-zone has been a monetary union without meeting most of the theoretical economic requirements of an optimum currency area, i.e. high factor mobility, diversified export base to sooth possible external shocks, and price and wage flexibility between regions, etc”.

Thus we had a powerful largely independent central bank for CFA economies (BCEAO), setting policies, but the countries forced to finance their deficits through bilateral loans outside. And although we had a WAEC, which was supposed to address the broader economy issues, there was  little or no correlation between it and WAMU and its all-powerful BCEAO.  The contradictions and irrationalities of this precipitated the painful CFA devaluation of 1994

10. UEMOA set out to correct this.  While maintaining and even enhancing the powerful BCEAO there was in addition to this the rush for:

(a) macro-economic policy convergence—“avoid excessive budgetary deficits, respect budgetary discipline, harmonise tax policies—prescribed in the treaty.  [UEMOA – indirectly bound to the Maastricht criteria of convergence – thereby adopting a “monetary policy established for advanced industrial economies – without regard to the effects on developing economies – if it does not want to face constant devaluation” [Sven Grim: 1998: 17];

(b) Common market – with a common external tariff, with conditions such as: (i) promote rationalisation; (ii) have no or positive effects on budgets of member states; (c) be WTO compliant,  especially with the idea that the common tariff should generally not be higher than that of the member states. With associated rules of free movement of goods internally, and then external trade and compensation.

(c) common sectoral policies – to be developed in mining; agriculture, and which turned out in the end to be the worst race to the bottom.

11. Thus with UEMOA, the normal process of regional is reversed, turned on its head even. Single currency at the beginning, then fiscal harmonisation, before step earlier in the process like tariff harmonisation, etc.

 12. ECOWAS started with the reverse approach. The treaty of Lagos consists of two inter-locking processes:

(a) number of time-tabled commitments with respect to a tariff standstill, trade liberalisation, fiscal harmonisation, and the introduction of common external tariffs; coupled with

(b) untime-tabled obligations to adopt wider policy measures of ‘positive’ economic integration, including industrial co-operation.

Of course, even here the member states of ECOWAS, stagnated at the implementation of their second committed stage, that of regional trade liberalisation, which had started to consider in 1981.  It is not by accident that by then, member-countries were at the beginning stages of the Washington Consensus, and the unilateral trade liberalisation to the world.

But the orientation was clear of a gradual move to higher stages of integration accompanied to co-ordinated policies for transformation in the real economy; the very reverse of UEMOA.

13. Managing these two arrangements within the same geo-political and economic space of West Africa produced tensions most of which were not  constructive.  Take the case of the CET.  Over the past two years, as ECOWAS eventually got round to adopting a common external tariff (CET), it was forced to negotiate a modification of  UEMOA’s existing four-band regime in order to establish the fifth band that every body agreed was necessary.  Even so, it could not fix the fifth band at the tariff level that was widely recognised as called for by industrialisation challenges of most West African countries.   This was because the UEMOA countries had, unnecessarily, bound their tariffs too wide and low in the World Trade Organisation (WTO).

To have a WTO-compatible CET for ECOWAS, the Anglophone member- countries would have to give up the very rights they have managed to secure under the WTO.  At the same time, the majority of the francophone member-country themselves, by their own earlier action, have undercut the more generous tariff terms due similarly-placed countries under the WTO.  Under such circumstances, an ECOWAS CET meant to facilitate the industrial development of the region, is already hobbled from inception.

14. But in spite of their internal tensions, there is one critical area of convergence has turned out to be inimical to both projects and their political relevance.  Both of them succumbed to structural adjustment policies of the past decades and dictates of the Washington consensus.   Regional integration as purposive act of supra-national intervention took back-stage national economic deregulation and liberalisation.  Open regionalism and getting prices right in the global market became the approach.

15.  Thus when ECOWAS revised treaty in 1993, all the industrial and agricultural transformation elements disappeared, and in their place emerged a simplistic unilinear four-stage trajectory.  First, a free-trade area; second, a customs union; third, a common market (adding the free movement of factors to the earlier stages); and finally, a full economic union including a common currency.    Focus now became simply market integration, getting the price right, etc.  Any notion of development strategy gave way to the idea of competition and free working of market forces.   As one expert then lamented:

“It is unfortunate that having devised a Treaty whose general provisions are coherent and ultimately mutually reinforcing, the Community should nevertheless have pro-ceeded to give so much initial weight to market integration and free competition - when market signals, because of widespread distortions, are at first likely to be so misleading, anyway - to the neglect of the wider positive policy measures on which the success of the integration process must largely hinge.

No development strategy has yet been devised by E.C.O.W.A.S., except in the limited sense that competition and the free working of market forces are to be facilitated. There are as yet no agreed external tariffs and, unlike the situation with the Treaty of Rome that established the European Economic Community, there is no indication as to how they are to be achieved. The  Treaty of Lagos, moreover, requires trade liberalisation to take place in advance of tariff harmonisation - unlike the procedures followed in other Communities, where liberalisation has been made conditional on prior tariff harmonisation, so providing a stimulus to the formation of a common external regime, thereby avoiding the possible misallocations of resources that might otherwise be produced. In themselves, the timetabled measures of trade liberalisation must be expected to operate adversely as regards the interests of the least-developed economies.

16.  From then on the weight of external policy and political drivers became even more heavily present as driving imperative of regional integration in West Africa. First came the WTO. Then the EPA arrived.  For instance, it is clear the recent rush to conclude the CET in West Africa is driven by EPAs, and is has been over-determined by the need to harmonise the CET with  the Sensitive list of the EPA Market Access.

17.  But the starkest example of the disruptive irrelevance of the external impetus is the convergence criteria for the common currency, in which Anglophone Africa is desperately trying to play catch-up with their francophone kin.    These are criteria more in sink with the Euro zone, than with the economic conditions in West Africa.  Thus:  (a) inflation rate – UEMOA target, 3% or less; BCEAA rate: 2%; ECOWAS, 5%; Euro zone benchmark: 1.5%;  (b) Total Debt to GDP -  UEMOA, 70%; ECOWAS, no sabe; Euro zone 60%.  Budget Deficit to GDP: UEMOA zero; ECOWAS, 10%; Euro zone (3%);

The total debt to GDP ration chosen by West Africa has no meaningful relevance to the economic conditions and developmental challenges in West Africa; it simply shadows the EU.  The inflation target is even more senseless.   If the West African countries tried achieve the 5% target by the 2015 deadline date of the single currency, their economies will simply explode.  The trouble within CFA countries where most productive activity is almost ground to a halt, or simply cast aside the inflation target should be stark warning enough.  And the CFA zone have the “unlucky” privilege of having their currency backed by the Euro, for which privilege they must deposit 20% of their foreign exchange earnings in the French treasury, which then freely plays with it on Western capital markets, and where the same CFA countries go to borrow money with high interest rates when they are in distress.

In short, the issue is not whether the convergence criteria are good or bad.  They are simply not relevant for West Africa, and they are not attainable in West Africa; at least not without doing violence to the real economy. Of course now we have the Euro zone trouble to inform us.   A similar scenario operates in relation to other areas of harmonisation such as tariff.

18. We see then that process of evolution of regional integration as open regionalism and/or market integration has simply diverted paths from the specific economic challenges of the economies that made a regional integration as economic transformation a compelling political project across society.

19. So what to do?  I am not advocating the total abandonment of the current projects, so that we start from scratch.  At least not yet.  Rather, my concern is for us re-discover the original animating spirit of regional integration, and use that to re-shape, re-balance, nuance and sequence even the current projects that we have.  This animating spirit of the immediate post-colonial years of independence, where regional integration is simply the other side of the coin of national economic integration.

20.  The recently adopted Africa Mining Vision is a good illustration of the approach I have in mind.    The AMV seeks to transform Africa’s mineral economy from an enclave, into one that drives interconnected industrialisation and sustainable growth.  At the heart of this is the challenge of building economic linkages with, and diversification, of the economy overall, a process concretely driven around greater domestic/regional procurement and beneficiation.  This process is national and regional at the same time.  And the trade, investment, finance, technology policies that must drive this at the national level has a necessary regional specifications. If this forms the basis of regional processes, institutions, and processes, then we have a concrete model of regional integration, where national economic transformation is simultaneously a process of regional integration.

21. And here then, we can have a regional integration process which is palpably a political process, where interested parties from local to national level, can commit to its fate, and engage with its process.  This is an example of regional integration with political legitimacy.   Tariff policy, convergence etc, can simply be part of, and judged from the perspective of this process.  The other approach with which concerns itself with tariffs, convergence, almost on their own, simply locks us into technicist debates among us as experts, consultants and bureaucracies, leaving us to forever bemoan lack of political will.

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