10 years after the establishment of the East African Community, it collapsed for various reasons in 1997. One of the reasons was because of difficulty in balancing the power of countries. Kenya, for instance, demanded to exert more influence in decision-making process. Another reason was that they had different ideologies for economic system. While Tanzanian government preferred more socialistic system, Kenyan government sought capitalism for example. Likewise, it was challenging to integrate the East African economy without political integration at that time. However, East African community revived again after a gap of more than 20 years.
Some, especially among politicians who are old enough to remember the previous experience, are still skeptical about the integration of East African countries. However, process for economic integration is moving forward dramatically. One of the key issues being discussed in terms of economic integration is Custom union. Custom union is regarded as the third stage of the economic integration. Therefore, it is very crucial for East African Community to establish custom union in order to achieve further economic integration. In principle, three conditions have to be met in order to achieve custom union. First of all, they need to have common external tariffs on import from other country. Secondly, among member countries, trade transactions have to be done under the same procedure. Thirdly, trades between member’s countries need to be without tariffs.
As of now, there is still much room for improvement for custom union of East African community. They set the common external tariffs on imports from non-member country, but they still have quite a few exceptions. These exceptions have to be reduced to achieve more integrated economy. Nevertheless, economic integration still remains important and need to be driven forward given that it can foster the investment for public goods, especially infrastructure, within East African Community. This might realise the economic growth and reduction of poverty.
Following articles will explore in detail about economic integration currently ongoing in this region.
Naoya Saito
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