From Regional Security to Regional Integration in West Africa


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From Regional Security to Regional Integration in West Africa

  1. 1. CDD Occasional Paper Series 6 Regional Integration in West Africa From Regional Security to Regional Integration in West Africa: Lessons from the ASEAN Experience This paper is divided into four sections including the introductory one. Section 2 presents intra-regional trade in ECOWAS and its benefit, followed by ASEAN Experi- ence of Regional Co-operation in Section 3. Section 4 examines the lessons from ASEAN. The concluding section summarises the major findings and the way forward.SECTION 1: INTRODUCTION AND BACKGROUNDPERSPECTIVES ON REGIONAL CO-OPERATIONRegional organisations are a major feature of the global economic system. The basic point orfactor of regional organisations, as has also been recognised within the framework of the UN,is to ‘make use of deliberate governmental and private efforts to strengthen South-South tradeand economic links more rapidly than would be the case if such links were to be created onlyby market forces.’1The rationale for such co-operation among the developing countries is provided for by the factthat it takes cognisance of the varying degrees and stages of development among thedeveloping countries, their low industrial and resource base and at the same time, significantamounts of unutilised productive power and resource endowments. Globalisation, or thechallenge of globalisation, has given the governments a strong enough justification forundertaking reform in pursuit of such co-operation. The institutional opportunity allows thecountries to organise themselves for regional co-operation schemes, seen as an importantelement of their globalisation policy. In essence, regional co-operation helps its participants totake part in global economic integration more effectively as a group of regional economies.It is of no surprise, therefore, that in West Africa, ECOWAS and ASEAN, APEC and AFTAare widely seen as representing the globalisation phenomenon. However, most of theseorganisations proved to be stillborn, and only a few made some headway. Apart from theoverall economic backwardness and lower degree of complementarity, the regions in generalare politically underdeveloped with strife-torn inter-state relationships. Power configuration inthe respective regions also impinged on the co-operation process. Moreover, it is observedthat developing countries are (individually as well as a group) too weak within the existingtrade arrangements of the World Trade Organisation (WTO) to exert meaningful pressure totheir benefit.One cannot possibly talk about Southeast Asia without referring to ASEAN. I will be usingthe terms interchangeably as ASEAN encompasses the Southeast Asian region. WhenASEAN started in the late 1960s, the Vietnam War had just ended and confidence in thefuture of Southeast Asia was low. It was believed by sceptics that the region would becomethe ‘Balkan of Asia’ – a source of instability rather than a peaceful and prosperous region. Butagainst expectations, the region stabilised and boomed. The countries liberalised theireconomies, encouraged foreign investments and promoted export-oriented growth, andbecame the most dynamic and fastest growing region in the world. The phenomenal growth ofthe economies of Southeast Asia countries in the 1980s and 1990s brought about a newdiscourse on ‘development’ in the Third World. Why is, say, Singapore more successful thanJune 2001 1
  2. 2. CDD Occasional Paper Series 6 Regional Integration in West Africamost West African countries? Not because of its population but because it has two things.Well-qualified human capital and political stability – because of these, the investment climatealso brought resources. Singapore is one of the few non-European countries to be admittedinto the OECD. One could concede the basic argument that ASEAN trade liberalisation andindustrial co-operation formed the core of development in Southeast Asia.2It must be recalled that a sense of external threats to the Southeast Asia region from China andthe Vietnam War combined to allow the creation of the Association of Southeast AsianNations (ASEAN) in August 1967 through the Bangkok Declaration.3 On the other hand,ECOWAS was formed in 1975 with 16 of the Anglophone, Lusophone and Francophonecountries (See Table 1) to promote co-operation and integration, leading to the establishmentof an economic union in West Africa in order to raise the living standards of its people,enhance economic stability and contribute to progress and development of the Africancontinent.4However, 25 years later, ECOWAS has spent a substantial part of its existence on resolutionof crisis in Sierra Leone, Liberia and Guinea Bissau, without much economic integrationbeing achieved. Manufacturing is the fastest expanding opportunity area for developingcountries, as America, Japan and Europe advance into the post-industrial high-tech economy,but, unfortunately, this is the sector of the ECOWAS economy in worst shape. The problemwith intra-ECOWAS trade is that member states mainly produce the same things; thus, youhave, for example, Ivorian plastic goods competing against their Nigerian counterparts in theNigerian market and Nigerian plastic products competing against Ivorian ones in Côted’Ivoire. It is also disheartening that there is little or no linkage between the manufacturingsector and other sectors such as agriculture. This explains why regionally availableintermediate goods and primary materials used in the manufacturing sectors are importedfrom overseas.Presently, ECOWAS affords manufacturing only marginal advantages, since the similarity ofproducts manufactured throughout the Community precludes a broad range basis for inter-state trade. However, potential for ECOWAS is tremendous. The Industrial Master Plan(IMP), adopted by ECOWAS at the 17th Session of the Authority in 1994, provides a strategyfor optimising industrial integration. It has essentially created an avenue for the industrialsector becoming normative by creating more forums for business people and professionals tocommunicate, congregate and generally interact. Despite the IMP, programme implementa-tion has been difficult, mainly because of paucity of funding, apathy of member states andinsufficient information.There is also the problem of intra-ECOWAS trade and level of investment (See Table 2). Thisis further compounded by the relative inconvertibility of currencies; scarcity of foreignexchange and the high cost of imported capital goods from Europe and the Americas. AllASEAN economies are trade-oriented; each having a large external sector provided by theASEAN Preferential Trade Agreements (PTA). The ASEAN currencies – the baht (Thailand),peso (Philippines), ringgit (Malaysia), dollar (Singapore) and rupiah (Indonesia) – however,faced an excruciating financial crisis in July 1997. These are lessons to be learnt byECOWAS.Another observation on integration may also be made, in a bid to explain why most of theregional organisations have not made much headway in intra-regional co-operation althoughthey start off with great promise. Integration as a penultimate step in trade liberalisationJune 2001 2
  3. 3. CDD Occasional Paper Series 6 Regional Integration in West Africainvolves industrial complementation and opening up of the domestic markets, which althoughapparently a primarily economic issue requires a bold and substantive political decision.Empirically, however it has been found that this is not always possible because of theprevailing socio-economic realities at home. Viewed in this perspective, integration requiresmajor economic and political preparation that does not come overnight.Against this backdrop, it was thought appropriate that the experience of ASEAN, which wasset up in 1967, be studied. Mistakes learned in Southeast Asia could serve as importantlessons for West Africa. The question then is what is the nature of the ASEAN economicsuccess? What lessons does West Africa need to learn? The lessons for West Africa are quiteclear. It is, however, important to point out at the onset that while different circumstances ledto the establishment of these organisations, nevertheless, certain common strands still runthrough. A major objective for the establishment of these organisations was to raise theeconomic well being of their citizens and promote the goals of security, democracy anddevelopment, therefore, regional stability. This have become manifest following the adoptionand implementation of the ECOWAS Treaty and its protocols, and especially the fast-trackapproach being pursued to speed up the integration process.Regional DynamicsSince our overall concern is with regional security and integration, it is necessary to examinewhat a region is. A region is a political-spatial identity consisting of a group of states, whichare proximate and interdependent. It is generally characterised by geographical relatednessand other affinities. A region may be defined as ‘a set of contiguous states with a level ofinteraction between them, such that a lack of security within or between individual states inthe region affects the security of the set of states as a whole.’5 Ghana for example, hasobvious common interests, and somewhat similar problems to face, as Nigeria or Senegal,which she does not have as compared with Malaysia or Argentina.Moreover, there exist certain ethno-cultural and economic similarities within each region,which are far more remarkable than the differences. These are enhanced by cross-bordertrading and free movement of people, which in West Africa pre-date ECOWAS. This does notpreclude the members of the organisation having areas of conflicts – for example over theartificial borders inherited from the colonial powers, and the rivalry over the relative weightand influence of member states, especially Côte d’Ivoire, the most prosperous of the WestAfrican Francophone states, and Nigeria as the largest of the Anglophone states. Analysts6suggest that Côte d’Ivoire’s relations with Nigeria are based on rivalry because the countryhas a leadership aspiration in the sub-region and, therefore, sees Nigeria as a stumbling block.From this detailed background, the most important features of a regional configuration are therelative degree of balance and complementarity and the extent to which the component statesare oriented to integrative behaviour.7 It is argued that a relatively balanced distribution ofeconomic capabilities ensures genuine equalities and breeds mutual confidence while unequalcapabilities cause apprehensions – real or perceived – among the weaker states because oftheir being disadvantaged economically and politically. In regions where there is a highdegree of balance and complementarity, as in Western Europe, usually there are a number ofcore members and a graduation of economic power levels and a regional unanimity thatprotects the interests of the small members.8On the other hand, marked contrast in economic power levels, degrees of complementarityJune 2001 3
  4. 4. CDD Occasional Paper Series 6 Regional Integration in West Africaand extent of integrative orientation to the region are observed in many regions like LatinAmerica, South Asia and West Africa as this study indicates. In each of these regions there isone strong core member (Brazil in Latin America, India in South Asia and Nigeria in WestAfrica). The degree of complementarity is also very low.Apart from balance and complementarity, level of domestic political development and foreignpolicy orientations are important determinants of integrative or co-operative behaviour in aregion. Moreover, since conflicts having foremost a bilateral and local relevance can escalateto regional level, settlement of such conflicts is foremost a question of state to state relations.Thus, regional defence agreements or pacts are concomitant to regionalism as they are aimedat protecting the expected gains of their mutual co-operation and interests from beingundermined militarily or through other, more subtle means.Approaches to Regional Co-operationRegionalism as it applies to our study may be defined as attempts by contiguous nation-states,reinforced by a sense of common purpose or predicament within a definite region or definedarea, to foster economic or political co-operation among themselves in order to lessen theirdependence on others outside the region. It can be deduced from the above definitions thatregional groupings are a continuum of three stages – co-operation, co-ordination and fullintegration with an ulterior motive in accommodating local conflicts. Economic integration,according to the functionalist model, contains in it a certain dynamic logic that by bargainingcollectively fulfils the background functions of a ‘pluralist political structure, similarities ineconomic and industrial development and ideological political structure with its inherent spillover.’9 Spill-over implies that success in one integration sector will then lead to advancesacross a much broader front, just as the economic achievements of the European Union havesince then generated additional political and strategic co-operation.It should be pointed out that the functionalist approach looks at regional co-operation processas a transitional stage of regional integration, rather than an end in itself. However, someimportant deductions follow from these premises. In the first place, the approach appears tobe an oversimplification in the sense that it ignores the primacy of politics in the co-operationprocess among the developing countries. It has been observed that even if co-operation startsin few discrete and non-controversial areas, it soon gets over-politicised negating the validityof a gradual politicisation process.Secondly, the functionalist approach also implies surrender of some elements of sovereigntyto the regional body, which in turn, gradually attains some amount of autonomy and decision-making role. Empirically, however, it has been found that the member states are unwilling toshare even the smallest degree of sovereignty with these regional institutions excepting wherethe member states explicitly agree to do so within an integration framework. Concreteexamples of these exceptions are hard to come by except in the case of the EU. In effect, thereal decision making power lay with the government representatives rather than thebureaucrats of these organisations. This amounts to inter-governmentalism; that isgovernment to government relations rather than what is known as ‘supra-nationalism’.Thirdly, the transitional status of regional co-operation as conceived in the very approach offunctionalism may be questioned in the context of the developing countries. A regional co-operation process in most cases is an end in itself, intentionally stopping short of integration.Moreover, hardly any organisation in the Third World has been able to achieve economicJune 2001 4
  5. 5. CDD Occasional Paper Series 6 Regional Integration in West Africaintegration, let alone political integration, even if it was so desired.As opposed to functionalism ‘communication theory’ takes a bottom-up approach in terms ofdevelopment of a sense of community defined in a much broader sense than the economicfocus of functionalism, to include social perceptions, values and sentiments and articulation ofthese values, and a sense of community in formal and structured forms.10 According to thisview, co-operation could be measured empirically in terms of frequency and nature of border-crossing communications like mail flows, people-to-people contact, electronic media, studenttravels, tourism and intra-regional trade.At the regional or continental level, attempts at fostering a strong economy and securitysituation in Africa have been exemplified with a series of treaties from the OAU’s 1980Lagos Plan of Action (LPA), to the 1990 African Charter for Participation in Development,and the Abuja Charter of July 1991. Within the different sub-regions in Africa, the ECOWASin West Africa, SADC in Southern Africa, Maghreb in North Africa, the COMESA forEastern and Southern Africa, and ECCAS / CEEAC for Central African States, were totranslate these socio-economic and security issues of the OAU into operational programmes atthe sub-regional level. This is against the background of the social, political, economic,ideological, geographical spread and external commitments and diplomatic problemsencountered at the continental or regional level (OAU).11Given the precarious environment facing ECOWAS members, particularly under the WorldTrade Organization agreement and the current globalisation, questions have variously beenraised by some African bureaucrats about the ultimate importance of regional economicintegration. The examples of Malaysia and Singapore – members of ASEAN – are cited asproof that it is not impossible for a compact of body politics to reach the sky on its own, withthe latter accounting for more than half its $111 billion intra-community trade (See Table 3).Indeed, Singapore, considered as a first-tier Newly Industrialised Country (NIC), has joinedthe ranks of the ‘developed’ countries, with a per capita income in excess of US$25,000.12On a more theoretical level this paper seeks to investigate whether the intra-regional trade hasbeen of benefit to ECOWAS or the ASEAN, and whether these initiatives draws us near anydevelopment ‘model’ and hence illuminate another aspect of development strategy in the‘New World Order’. The direct application of the ASEAN model is problematic. This means,of course, that the ASEAN experience cannot automatically be transplanted to West Africaand other developing countries. It is self-evident that every region sets a specific regionalagenda, which is a product of its time and place and cannot be emulated exactly elsewhere.The key element (and missing link in the African case) is the capacity of the people to managechange in a dynamic world: to understand ongoing changes in the world, predict as yetunexperienced future changes and to respond flexibly, effectively and in good time to them.13The key therefore, lies in ECOWAS’s ability to write its own agenda for sustained economicgrowth and development in West Africa through mutually supportive facilitating conditionsand operational factors.The research project was funded by the MacArthur Foundation. It was a pioneering study inso far as review of existing literature and other secondary data on ASEAN / ECOWASeconomic co-operation are concerned. It was complemented by extensive and interestingprimary information generated through five weeks field survey conducted among theacademics, professionals and other opinion making sections in some ASEAN / ECOWAScountries, notably in Malaysia, Indonesia and Nigeria. In addition, telephone conversationsJune 2001 5
  6. 6. CDD Occasional Paper Series 6 Regional Integration in West Africawere had with scholars in Singapore and Brunei. It is hoped, that the outcome of the projectwould be useful to all those who would be interested not only in ASEAN and ECOWAS astwo Third World regional groupings, but also in the dynamics of inter-state relations in thetwo regions and their interactions with the problems and prospects of regional and inter-regional co-operation.OBJECTIVES AND METHODOLOGYObjectives: The basic purpose of the study was to examine and assess:a. Conditions for effective intra-ECOWAS trade.b. ASEAN experience of regional co-operation, both successes and failures, taking the economic, strategic and political elements of the co-operative experience into consideration;c. The ASEAN policy and experiences of inter-regional co-operation-areas (i.e. co-operation with other regions), institutional mechanism and problems faced;d. Lessons for the ECOWAS, if any, from ASEAN experiences in regional and inter- regional co-operation; ande. Academic views and opinions regarding the possibilities of benefits of intra-regional trade.Methodology: The study was based on consultation and analysis of both secondary andprimary data. Available literature, documents and statistics on both the ASEAN and theECOWAS protocols and treaties were collected at Institute of Strategic and InternationalStudies (ISIS) Malaysia, Sarawak Development Institute (SDI), the ECOWAS Secretariat,Abuja, ASEAN Secretariat, Jakarta and reviewed. Discussion of the study objectives andextensive consultation of the available literature enabled the author to identify the data gap,which in turn, helped prepare the checklist of information to guide the collection of primarydata. For this purpose, visits to the ASEAN and ECOWAS countries were necessary. Whilstthere, the first hand views of scholars, and other opinion-formers and policy decision-makersof ASEAN countries were obtained. At places such as Ministry of African co-operation,Abuja, Nigeria, ECOWAS Secretariat, ASEAN Secretariat, Malaysian Institute of Diplomacyand Foreign Affairs Ministry, the respondents included a cabinet minister, senior counsellors,director-generals and directors.The respondents were interviewed in an informal way. The focus of the informal discussionwas on perception of the goals, benefits and problems of regional and intra-regional co-operation, decision-making mechanisms, organisational issues, and politico-strategic issuesimpinging on the co-operation process. Attempts were made to obtain a country perspectiveas far as possible from the interviews within the limited time and resources. At a number ofplaces, specifically, in university faculties and research institutions this was mainly in theform of informal discussion in a small impromptu or prearranged gathering that helped covera broader spectrum of issues. The interviews were recorded, where possible. In other casesnotes were taken. In some cases, the respondents volunteered to offer written replies inaccordance with the questions submitted to them. My visit to the ASEAN Secretariat, Jakarta/Indonesia in May 2000 was hampered by coinciding with the political unrest in Jakarta,related to the removal of the Prime Minister. However, I gained a first hand assessment of theeconomic and political situation in Indonesia.Analysis: As the primary data were being collected a preliminary report was prepared on theJune 2001 6
  7. 7. CDD Occasional Paper Series 6 Regional Integration in West Africabasis of secondary data to arrive at some tentative conclusions after my field trip to theECOWAS headquarters in Abuja, Lagos. However, this helped in the collection and analysisof the primary data. Since the focus of this study was on the experiences and lessons thereofand as such was mainly perceptional in character, care was taken not to cram the report withstatistics. Qualitative arguments, indication of trends and assessment perspectives were madewhile dwelling on various issues involved in the study.SECTION 2: GENESIS AND EVOLUTION OF THE ECOWASEven during the continental phase of development of pan-Africanism in the 1950s and 1960s,African leaders had realised that after independence, regional co-operation would be essentialfor the maximisation of the continent’s vast potentialities, and resources. The UN EconomicCommission for Africa (ECA), established in April 1958 inspired by economic developmentin Latin America in the 1950s, (in turn modelled upon Western European experience of freetrade) insisted on functional economic co-operation among African countries as part of theoverall strategy towards achieving industrial development on the continent. In fact, the ECAacted as a catalyst in the movements that led to the formation of integrations in West, East,South and North Africa by sponsoring in 1965-66 a series of meetings in each of the 4 regionsto stimulate the governments concerned to practical measures of economic co-operation. ECAbelieved that integration measures like liberalisation of international trade, adoption of acommon tariff for member countries of a regional body and the co-ordination of investmentpolicies, theoretically would make the regionalisation of import substitution policies moreviable. As earlier noted, the main objectives of ECOWAS were the eventual elimination of alltariffs and barriers between members, the establishment of a customs union, unified fiscalpolicy and co-ordinated regional policies in the transport, communication, energy and otherinfrastructural facilities.Unlike ASEAN which has been primarily a state to state relationship par excellence, over theyears ECOWAS members have developed an increasingly intensive web of relations withdeveloped countries characterised by what can be likened to the structural imperialismrelationship. The facts are, to say the least, very depressing when we look at the structure ofcommunity trade and ECOWAS trade with other regions (See Table 4). ECOWAS tradeamounts to approximately 11% of the sub-region’s total trade with the world. According tothe ECOWAS Handbook of International Trade, 1998 data, intra-community trade stood at$1,813m for total imports and $2,539m for total exports. When compared with the region’simport from, and export to, Europe of $7,525m and $8,114m respectively for 1997. Thus, theintra-regional trade, level of investment, and industrial development remains muchundeveloped. To a certain extent this has created dichotomy in ECOWAS co-operation. Theleading industrial states in the region – Nigeria, Senegal, Côte d’Ivoire, and Ghana – believethat they are individually important enough to secure a better deal if they pursue their cause asindividuals rather than as a group (See Tables 5). Many of them feel that they will be betterserved individually if they link up with developed countries (See Tables 6 a & b); and the lastgroup of these – landlocked countries (Niger, Burkina Faso and Mali) – are merely frustratedbecause they are rather too small to make any significant impact in the global arena. Theextractive industries contributed 82 percent of the GDP in most of the ECOWAS States. (SeeTables 7 on ECOWAS Exports of principal items).Within the sector, agriculture predominates in Benin, Burkina Faso, Côte d’Ivoire, theGambia, Ghana, Guinea, Guinea-Bissau, Mali, Niger, Nigeria, Senegal, Sierra-Leone, andTogo.14 The regional trade is dominated by Nigeria, Ghana, Côte d’Ivoire and Senegal.June 2001 7
  8. 8. CDD Occasional Paper Series 6 Regional Integration in West AfricaNigeria’s export to other West African States has been mainly crude oil and refined oil.Important West African and African states destinations in 1985 - 1995 included Côte d’Ivoire,Mali, Mauritania, Niger, Ghana, Burkina Faso, Gabon and Tanzania. Ghana’s total amount ofgoods exported in 1999 stood at 2.4m metric tonnes, mainly cocoa beans, sawn timber,aluminium, coffee, yam, all of which accounted for 53% of the country’s total exports. Whilemost of the imports, which accounted for trade records 6.3m metric tonnes in 1999, camefrom UK, the North Continent, the Far East and Africa. Imports of African origin dominatedthe trade, amounting to 2.6m metric tonnes, of which crude oil and petroleum productsrecorded 1.3 and 0.9m metric tonnes respectively.15 Others include grains, coke, sugar,chemicals and rice. This is particularly important because as will be shown later in this study,Nigeria’s generosity cut across the UEMOA or ECOWAS blocs. The upsurge in oil revenue,which accounted for 95% of Nigerian export earning in the 70’s indirectly ruined theagricultural sector but the boom went a long way to boost her foreign policy posture in WestAfrican sub-region.It is against this current background that we examine the ability of the ‘intra-regional trade’ inthe sub-region.ECOWAS established on May 28, 1975 was mandated by its Treaty to:a) eliminate, between member states, custom duties and other charges of equivalent effects on imports and exports:b) eliminate quantitative and administrative restrictions on trade among members:c) establish a common tariff structure and commercial policy towards non-member countries:d) eliminate obstacles restricting the free movement of persons, services and capital between member states:e) harmonise agricultural policies and promote common projects in the member states notably in the fields of marketing, research and agro-industrial enterprises:f) evolve a common policy in, and jointly develop, the transport, communication, energy and other infrastructural facilities:g) harmonise economic, industrial and monetary policies of members, as well as eliminate disparities in the levels of their development; andh) establish a fund for co-operation, compensation and development.Under the theoretical framework for economic integration, the implementation of the above isexpressed as follows: a & b imply the establishment of a free trade area; c is a custom union;d - a common market and a functioning of e - g is an economic union.ECOWAS is still some way from being a common market because free movement of labourremains a distant and difficult aspect. But it has come a long way. Most trade withinECOWAS is already tariff-free. Free movement of designated goods, reduction of customduties and ECOWAS passport / travelling documents have also been adopted. The threeprovisions of the Protocol came into force respectively in 1980, 1986 and 1989. Two majorECOWAS events were the decision of the summit of 1980 to establish a Free Trade Area(FTA) for unprocessed agricultural products and the signing of the Protocol on Non-Aggression and Mutual Defence Assistance of 1981. A common traveller’s cheque enteredinto circulation, a veritable asset for intra-regional trade promotion and, at the same time, amajor step towards the realisation of a single monetary zone.June 2001 8
  9. 9. CDD Occasional Paper Series 6 Regional Integration in West AfricaThough a bold and imaginative step towards meaningful regional economic integration cameunder the framework of ECOWAS, lack of potential for increased trade within West Africanstates is frequently mentioned as an explanation of the lack of success of ECOWAS. There isan important qualification to be made at the outset, as there is evidence that the potential forintra-ECOWAS trade is greater than is usually thought. The calculated statistics are forrecorded or official trade. It is known that for many West African countries a sizeable volumeof unrecorded or unofficial trade (80%) is done through informal sector.16 As regards thepotential for intra-regional trade in sub-Saharan Africa, an interesting analysis was outlined inthe World Bank’s Long-Term Perspective Study on Africa (1989). Official trade among sub-Saharan African countries was estimated at around US$ 4 billion or 6% of the total, whichamounted to US$ 65 billion.17GAINS FROM ECONOMIC INTEGRATIONUsing the Jacob Viner hypothesis,18 the effectiveness of any economic integration such asECOWAS is seen in terms of its relative size of gains owing to trade creation and losses fromtrade diversion. However, the determination of the exact incidence of gain to loss depends onthe type of integration as well as on the pre-union trading positions of participating members.Trade creation arises when a member country replaces goods produced domestically at arelatively high cost before the integration, with goods imported from another member countrywithin the union at a relatively lower cost. However, trade diversion or suppression occurswhen low-cost goods previously imported from the outside world are replaced by a highercost import from a member country within the union.On the supply side, ECOWAS enterprises (both small and large) are likely to enjoy moreefficient allocation and management of available regional resources among members based oneach country’s comparative advantage. The consequent enhanced efficiency within the regionwould further stimulate production for export into the outside world. On the side of theconsumers within the region, the lower prices (arising from allocating production to thecheapest per unit cost location of a product within the region), and the greater variety ofconsumables is capable of increasing the general welfare of citizens within the sub-region.The consumer will, however, lose some welfare by not buying from the cheapest supplier inthe world, as regionalisation will inevitably divert their consumption to the cheapest producerwithin the ECOWAS sub-region.OBSTACLES AGAINST ECOWASECOWAS faced problems similar to other regional groupings. Mauritania withdrew from thegroup in late December 2000 and dramatic changes in the sub-region and external processeshampered the growth of ECOWAS. Although its main objective is to promote economicintegration of the sub-region, it has spent the last 10 years resolving political and socialconflicts in some of its member countries such as Liberia, Sierra Leone, Guinea Bissau andNiger. Nonetheless, since ECOWAS was established in 1975, West Africa has witnessedtremendous, far-reaching changes. On the political scene, the principles of democracy, freeand fair elections, good governance and respect of human rights have gained wide acceptance.At the economic level, states are relinquishing their stranglehold on the major enterprises,whose management once was the sole preserve of government. Privatisation is the order of theday as the countries prepare to meet the challenges of globalisation to avoid beingmarginalised within the economic order. Paradoxically, twenty-five years after its inception,ECOWAS finds itself confronted with the same developmental challenges and problems:June 2001 9
  10. 10. CDD Occasional Paper Series 6 Regional Integration in West Africacorruption, mismanagement, low investment rate, falling prices of raw materials on the worldmarket, foreign debt, and the burden of structural adjustment.Perhaps, in determining the benefits of the level of economic integration among ECOWAScountries, the following questions are relevant: Is the geographical proximity of members ofany importance? Is it desirable for members to be similar in terms of the types of commoditiesthey produce as well as income levels? If two countries (like Nigeria and Ghana) are alreadymembers of an economic integration programme, what are the implications for both of them ifnew arrangements are involved?19 What are implications for countries left out? Is it desirableto make exceptions to the WTO provision that makes it mandatory for any preferential freetrade agreement to eliminate trade barriers on substantially all the trade between themembers? How have the ECOWAS economies been performing and maintaining theirpositions in the foreign direct investment (FDI)? While I have not attempted to provideanswers to these practical questions, some obstacles to the realisation of ECOWAS objectivesare briefly highlighted.First, and the most obvious, is that for intra-ECOWAS trade to be mutually beneficial in linewith economic integration postulations, the potential incidence of trade among the membercountries should be substantial. Cross border communication and information technology areexpected to play a vital role in this quest. It is to the credit of ECOWAS that it has adopted aprotocol that has made it possible for community citizens to move freely throughout the WestAfrican sub-region without need for entry visa. In addition, the fast track approach,elimination of rigid border formalities and modernisation of border procedures through thedigitisation of passports and construction of the Trans-Coastal (from Lagos to Nouakchott)and the Trans-Sahelian highways (from Dakar to N’Djamena), a total of 90,000km of roadand 11,000km interconnecting roads to open up land-locked countries.20Investment partners are also being invited to participate in the construction of a railway linebetween Lagos and Accra. However, long after political independence, many of the WestAfrican countries still run systems established in the colonial era, and as such still maintainmore links and trading relations with former colonial powers in Europe than withneighbouring West African countries with whom they signed the ECOWAS Treaty. Thus, thelevel of poor infrastructure linkages among member nations tend to worsen whatever tradeinitiatives that are embarked upon. It is hoped that the connection of West African countriescapitals by automatic telefax links (Intercom 1 and 11) funded by the ECOWAS Fund wouldease some of these problems.21Secondly, the larger the area constituting an economic union in terms of population, incomeand geographical spread, the greater the potential benefits to participating members. Mostmembers of ECOWAS are wretchedly impoverished and depend heavily on grants fromOverseas Development Assistance (ODA) and IMF, as well as other donor countries outsideWest Africa. It is unfortunate that many of the operating companies in the sub-region areowned by former imperialist capitalist classes headquartered in the developed countries. So,when agreements are concluded among the member countries of ECOWAS, the dominance ofthe transnational corporations (TNCs) reduces the effective implementation of suchagreements. These TNCs would only co-operate if such agreements will benefit their interests(foreign interests).Thirdly, in relation to the second point, the more the economies of participating members aretied to or influenced by foreign governments, the less the benefits of economic integrationJune 2001 10
  11. 11. CDD Occasional Paper Series 6 Regional Integration in West Africaaccruing to citizens of member countries. There are nine different currencies in the sub-regionwith seven of the 16 countries having a common currency tied to France. The Frenchspeaking West African countries maintain a very strong monetary union via the CFA-francthrough the Union Economique et Monétaire l’Ouest Africaine (UEMOA) that constitute athreat to the monetary union of the entire ECOWAS community. Until the currency barrier isdismantled, the prospect for increased intra-ECOWAS trade cannot be realised. However,with the harmonisation of ECOWAS and UEMOA programmes22 in order to avoidoverlapping and a duplication of efforts, especially those requiring trade liberalisation as wellas the macroeconomic convergence, the aim is to achieve a single monetary zone by 2004.Fourthly, the more competitive the productive structure of member nations going intoeconomic integration, the more likely it would be for the most efficient producer within theregion to capture the enlarged market. That is, if ECOWAS countries are competitive in theirproduction of similar goods, there will be many opportunities for the substitution of thecommodities of one country for another and consequently leading to more trade creation thandiversion. On the other hand, when community members are complementary to each other(producing similar commodities), intra-union substitution would be difficult as re-allocationof production between high- and low-cost producers will be rare. So, while elimination of thetariff wall will increase trade among complementary union members, trade creation would notoccur and a considerable amount of trade diversion might occur through substitution of low-cost external producers with high-cost internal producers. This was why Viner was quick topoint out that a regional integration was more desirable ‘the less the degree of comple-mentarity – or the greater the degree of rivalry.’23 Whether competitive or complementary,exportable and importable potentials are very low among member nations of ECOWAS.Fifthly, for ECOWAS policy programmes to benefit its members, there should not be highdegrees of unequal development among ECOWAS states. If large disparities between membernations exist, some are bound to gain at the expense of the others as many industries will berelocated (as specialisation occurs among participating countries) on the basis of comparativeadvantage in production; foreign direct investment may be more attracted to some countriesthan the rest; factors of production may be attracted from less efficient firms to more efficientones; and marginal-producing firms may be forced to reduce costs or leave the industry. Suchrationalisation may lead to polarisation of opportunities if not safeguarded; and the allegianceof the weaker economies within the ECOWAS sub-region may be shaky without compensa-tory measures are taken such as the provision of capital by an established regional develop-ment bank; or common exchange rates; and fiscal redistribution policies within the region.ECOWAS has envisaged the possibility of such imbalances in gain and losses from the outsetby making provision for the Fund for Co-operation, Compensation and Development.Finally, the success of any economic integration programme depends on whether the benefitsfrom trade creation are substantial enough to outweigh the side effects of trade diversion,particularly measured in terms of foregone revenue from custom duties. Within the WestAfrican sub-region, revenue derived from import and export duties account for a substantialfigure in annual budgets. It follows therefore, that unless an opportunity is created toadequately cater for revenue loss arising from dismantling of custom duties, the loyaltytowards the common market is doubted. The problem becomes more pathetic because of thedwindling fortunes of member countries in the sub-region. The OAU Secretary General,Salim A. Salim (1997) supported this claim when he stated that: ‘there is nothing tocongratulate African countries for having numerous regional integrations when there areserious financial constraints facing members of these institutions. In fact, the financial burdenJune 2001 11
  12. 12. CDD Occasional Paper Series 6 Regional Integration in West Africaof some of them are so heavy and unbearable that many of them depend on external funds forimplementing their programmes.’24June 2001 12
  13. 13. CDD Occasional Paper Series 6 Regional Integration in West AfricaSECTION 3: ASEAN’S EXPERIENCE OF REGIONAL CO-OPERATIONThe Association of South East Asian Nations (ASEAN) was born in 1967 amidst under-development, chronic instability, and inter-state conflicts. The original five members (now10) had little in common apart from climate and natural resources and somewhat similarideological orientation. However, right from the outset ASEAN leaders recognised thatintegration as in the EU (or EEC at that time) would be difficult to reconcile with nationalinterests and priorities. ASEAN leaders have, therefore, always shunned any suggestion ofsupra-nationalism and have been averse to the idea of building a strong institutionalframework with rigid procedures as found, for instance, in the EU.The statement of intent in the 1967 Bangkok Declaration, through which ASEAN wasformed, reveals so.25 Member countries would engage in such activities as joint culturalendeavours, exchange of cultural groups, meetings of scientists, agriculturists, postalauthorities and so on. Seen in this perspective, ASEAN’s main objective clearly is co-operation rather than integration. It can be asserted, therefore, that regional co-operation is notto supplement national development efforts in the case of ASEAN. ASEAN emerged as anextension of national efforts for development through co-operation in the socio-economic,technical and cultural fields. More importantly, the countries, especially, Malaysia, thePhilippines and Indonesia, were afflicted by incipient communist insurgency. The allegedChinese involvement in fomenting communist insurgency movements and their allegedcomplicity in the attempted coup in Indonesia sharpened the threat perceptions of thesenations in more or less similar direction. Thus, the central goal is the furtherance of the causeof peace, harmony and stability in the region and to concert and harmonise efforts inaccelerating economic development.In many ASEAN countries today there is a widely-shared view that by and large thegovernments have been quite successful in undertaking first-order domestic adjustments,measured in terms of enhancing the economy’s ‘international competitiveness’. It simplysuggests that in ASEAN countries, where economic reform is being initiated and promoted bythe governments, their focus of attention and efforts have been first and foremost with thequestion of managing the process of reform and opening up of the economy, namely, with theproblems of how to maintain macroeconomics stability as a pre-requisite for the reform, howto sequence the reform, and how to be able to demonstrate clear benefits from the reform.There has not been a sufficient awareness that the sustainability and the success of the reformprocess do not only depend on its positive achievements, but also on how well the negativeimpacts are seen to be dealt with. It can be asserted, therefore, that the second-orderadjustment are as important as the first-order adjustments, since the process of participating inglobalisation will need to be compatible with the country’s domestic social and politicalstability. This requirement becomes more real and urgent in the societies with moredemocratic political systems. In the longer run it is also important for more authoritariansystems.ASEAN has drawn considerable interest in and outside the region because of its pragmaticpolicy, based on the objective assessment of what other countries (the East Asian newlyindustrialised economies – NICs) have been able to achieve. As a consequence, regional co-operation helps its participants to take part in global economic integration more effectively asa group of regional economies. Thus, in Southeast Asia, AFTA (ASEAN Free Trade Area)and APEC (Asia Pacific Economic Co-operation) are widely seen as representing theglobalisation phenomenon because of the importance of trade and investment liberalisation atJune 2001 13
  14. 14. CDD Occasional Paper Series 6 Regional Integration in West Africathe agenda of these forums.This paper undertakes a review and assessment of economic co-operation in a number ofspecific areas.26 While there is no direct causality that can be attributed to the dynamiceconomic performance of the ASEAN economies to economic co-operation in the last threedecades, it cannot be denied that the relative peace and stability in the region, and theincreasing interactions among ASEAN states (officials, businesses, citizens) greatly enhancedthe process and character of growth. According to an ASEAN scholar, Professor Jomo of theUniversity of Malaysia, Kuala Lumpur, ASEAN has been able to attain such spectaculargrowth because of several factors:27a. emergence of ASEAN as one of the world’s most important exporters of primary products, such as rubber, tin, coffee, palm oil, rice, tapioca and copra, several kinds of other minerals like crude oil, petroleum, natural gas;b. private enterprise, dependence on market forces, emphasis on international standards of economic efficiency in resources allocation and production;c. financial stability and favourable foreign investment policy and liberal system of capital movements; andd. favourable political situation strongly conducive to economic development.The ASEAN economies have grown rather accustomed to growth. The question hastraditionally been ‘how much?’ rather than ‘will there be?’ as in ECOWAS. However,ASEAN’s achievements in the main areas of economic co-operation, specifically PTA, havebeen negligible, at best. The reason for the slow progress, according to Dr Samuel Okposen ofthe Multimedia University Malaysia may be traced to a number of factors.28 Those familiarwith what drives the ASEAN economies understand that dependence on commodity exports isboth a bane and a blessing to them. Nine of the ASEAN Ten – Singapore excepted – areimmensely well-endowed and major exporters of primary commodities. Thailand, thePhilippines and Indonesia are the region’s ‘food bowls’ while Malaysia and Vietnam, alongwith the previous three, produce large quantities of rubber, palm oil, coconut and tin forexport. Indonesia and Brunei serve as the region’s ‘petrol pumps’, relying heavily on it forexport revenue, while Malaysia also produces large amounts of petroleum and liquefiednatural gas.ASEAN countries are dependent on both capital and intermediate goods such as chemicals,steel, iron, machines and transport equipment. While some, like Malaysia, may have madegreat inroads in producing certain items – it is the third largest producer of semi-conductors inthe world after the United States and Japan – this is not true for the whole. ASEAN industryhas prospered in light-consumer products such as textiles and resource-based products.Moreover, expansion of intra-regional trade in manufacturing is constrained by lack ofcomplementarity among the ASEAN market. The major problem is one of evolving ‘anagreed mechanism of who will produce what, and, their reluctance for market sharingarrangements beyond economic co-operation.’29Why then have there been so few takers when it comes to regional trade and industrialisationschemes? Basically, the answer to this lies in determining the ‘truth’ behind the commonlyheld assumption that ASEAN members are full-bloodedly and unabashedly committed to‘regionalism’. Regional interests are accorded priority only when they promote nationalinterests. This also means that the ASEAN member countries had development perceptionsJune 2001 14
  15. 15. CDD Occasional Paper Series 6 Regional Integration in West Africaregarding the long-term benefits to be derived from industrialisation or market sharing basis.While a more rigid trade regime may be acceptable to a number of ASEAN countries, this iscertainly not true of all. Singapore and Brunei operate ‘free market’, and offer very littleprotection to their industries from all imports, not just those within the region. Judging fromofficial and unofficial statements – gathered from the ASEAN Ministerial meetingsproceedings – by their ministers, the Philippines, Thailand and Malaysia may also not beaverse to the idea of initiating some economic integration scheme.30Indonesia with a population of over 160 million people had taken a different course of actionfrom the very start of the organisation. She saw no need or little need to open its domesticmarket to ‘foreigners’. Instead, national policies were adopted to actively protect its industriesfrom imports. Indonesians, therefore, have chosen to word their commitment to ASEANdifferently: ‘ASEAN’, Indonesians declare, ‘can only be as strong as its individual members’,Ergo, what is good for Indonesia is also good for ASEAN.31In many respects, although Indonesia may stand out in its ‘regionalism through nationalism’attitude; this sentiment is shared by other countries as well for very different reasons. For aspointed out by Prime Minister of Malaysia – Dato’ Seri Dr Mahathir bin Mohamad ‘theenormous speeds attained by the ASEAN economies in the past decade were almost entirelyof their own doing.’32 At its height, Singapore, for example, grew by an annual average of 9.2per cent between 1984 and 1994, while Malaysia and Indonesia managed to attain 7.6 and 7.1per cent respectively in the same period.33 Little of this can be attributed in any direct way toregional economic efforts.Given the above and the ASEAN gentlemanly tradition of obtaining agreement from all tenparties before it proceeds on any decision, how then does closer co-operation come about? Asone ASEAN scholar, Professor Othman of University Malaysia, Kuala Lumpur puts it:‘Promoting good outcomes is not just a matter of lecturing the players about the fact that thereis more to be gained from mutual co-operation than mutual defection. It is also a matter ofshaping the characteristic of interaction so that over the long run there can be a stableevolution of co-operation.’34A careful reading of the unpublished ASEAN reviews indicate several salient points. For one,significant accomplishments were made in various areas. These range from regular ministerialmeetings and dialogues to specific agreements (for example, coverage of tariff concessions,ASEAN Industrial Joint Ventures (AIJV) approvals, qualities of food security reserves,creation of ad hoc committees, and so forth). Another is the completion of many collaborativestudies and understandings among all ASEAN states collectively (the 6-x, now 10-xprinciples). These range from simple declarations to concrete policy directives (for example,the use of ASEAN currencies for the settlement of trade payments, brand-to-brandcomplementation, the Singapore-Johor-Riau agreements, BIMP-EAGA, and so forth). Also,ASEAN solidarity was exhibited in various external fora, ranging from the ratification ofinternational conventions to trade negotiations. The initiation of the development discussionswith dialogue partners also strengthened ASEAN’s voice in dealing with bilateral donorcountries.As an observer and ASEAN scholar, at least three pervasive views can be discerned from myreadings, interviews and judgement of economic co-operation in ASEAN. Transport co-operation is dismal and lacks urgency, while trade co-operation is punctuated by nominalagreements that mimicked progress rather than reflect forthright efforts.June 2001 15
  16. 16. CDD Occasional Paper Series 6 Regional Integration in West AfricaSecond, the economic performance of ASEAN economies since the organisation started isimpressive. Observers take great care in their pronouncements about the causal influence ofASEAN in this respect. Yet there is the acceptance of the fact that ASEAN’s conscious effortsat the conference table to achieve relative peace and stability in the region have resulted in theregion’s ability to concentrate on substantial economic matters. The economic progressachieved by member states since 1970 appears to be a result of unilateral economic reformsand policies. Each member recognised early on that progress hinged on a predictableeconomic environment and sufficient public resources for infrastructure, resources that wouldhave been earmarked for non-economic activities under less stable, less peaceful, and morehostile conditions.With internal threats set aside, ASEAN was poised to take advantage of global restructuringin the late 1970s and mid-1980s. In particular, the currency realignments following the PlazaAccord helped, in large measure, the export boom of the ASEAN members and reaffirmed theimportance of trade to these economies.A final salient point of the reviews of ASEAN is the conclusion that ASEAN stands at acrossroads of its existence. There is a diplomatic style, which emphasises organisationalminimalism, personal relationships, consensus, informality, politeness and intensiveconsultation. The ‘ASEANization’ process on security matters operates under the purview ofmusyawarah dan muafakat (the process of decision-making through discussions andconsultation leading to consensus),35 which are associated with traditional village politics incertain parts of Indonesia, Malaysia and the Philippines. It has engendered what can only becalled the quiet diplomacy on issues of tension and rivalries. Agendas and discussions areconstructed in such a way as to minimise conflict and to maximise the comfort level for allparticipants. Culturally, this particular model may be considered as part of the regional socio-cultural system. Prior to 1995, ASEAN has one ethnic and culturally dominant group –peoples of the Malay stock (except in Thailand). This may be unique to the ASEAN six butwithin the ASEAN ten raises some fundamental issues.However, according to Dr Pushpa Thambipillai (University of Brunei) who conducted a studyon ASEAN negotiating methods, there are a number of do’s and don’ts in the face of ASEANnegotiators: ‘For example, one does not approach a topic too directly in the initial stages, butprobes around with the preliminaries before ‘coming to the point’.’36The very fact that negotiations occur at different levels is viewed as an asset in consensusformation. From the committees to the senior officials and finally, to the ministerial meetings-at each level consensus is sought. By the time the final meeting on an issue is held basicdifferences would have been ironed out and the public would only hear the common areas ofco-operation agreed upon, or the policy statement on a particular issue.The issue of organisational structure and decision-making mechanism was discussed withscholars and opinion-formers in ASEAN capitals. The respondents, while recommendingdelegation of more responsibility to the ASEAN Secretariat, were in favour of not creating ahighly centralised regional bureaucracy that may tend to subvert national sovereignty.Moreover, the respondents also supported the present lengthy but consultative and consensualmethod of decision making.June 2001 16
  17. 17. CDD Occasional Paper Series 6 Regional Integration in West AfricaAREAS AND MODALITIES OF COOOPERATIONAttempt at regional economic co-operation began with the signing of the Declaration ofASEAN Concord in 1976. Trade liberalisation and industrial co-operation formed the core ofthe effort. In addition, there is regional co-operation in resource pooling and sharing, financeand banking, food, agriculture and forestry, transport and communication and private sectortrade co-operation, tourism, science and technology, control of drug abuse and cultural affairs.As an observer of ASEAN, three general observations may be made about the modalities ofeconomic co-operation. In the first place, co-operation programmes are conceived, proposedand carried out in an informal and consultative manner. A certain country comes up with aproposal and discusses with one or more of his colleagues in other ASEAN countries. If theyagree, the programme is undertaken under ASEAN banner. Secondly, it is not necessary thatall ten have to agree to undertake an ASEAN programme because there is scope to opt outunder 10-x formula of decision making. Thirdly, in view of the divergent economic structuresand levels of economic development, ‘the pace of development of the slowest member,’ asdescribed by a respondent of the present study, ‘is the pace of economic co-operation of theASEAN.’Trade Co-operation: ASEAN economies are trade-oriented,37 each having a large externalsector. Intra-ASEAN trade remains a small percentage of total trade for each of the ASEANcountries and a large share is accounted for by Singapore’s ‘entrepot’ trade. With theexception of Brunei, intra-ASEAN exports have increased for most of the ASEAN countries.The picture of intra-ASEAN imports reveals a less dramatic growth trend. However, thegrowth in intra-ASEAN trade can, in a large part, be attributed to overall growth of trade andthe economies of each of the ASEAN countries as part of their overall restructuring andadjustment programmes domestically, rather than due to ASEAN Free Trade Area (AFTA).This is because tariff reductions only began in 1994 and the scope of liberalisation is stillconfined to tariffs at present. Trade co-operation in ASEAN takes the shape of liberalisationwhich was conceived of as far back as the 1970s when the ASEAN governments commis-sioned a UN Team to study the possibilities of closer co-operation, complete removal oftariffs and non-tariff barriers.Co-operation through selective trade liberalisation was designed to increase efficiency andsecure a more economic use of resources and in the long run, increasing trade among theASEAN countries. Intra-ASEAN trade is relatively high for Malaysia, Singapore andIndonesia, but low for Thailand and the Philippines. Most of the intra-ASEAN trade that takesplace for the aforementioned ASEAN 4 is with Singapore, while the highest share of intra-ASEAN trade in the case of Singapore is Malaysia. The underlying motivation for intra-ASEAN economic co-operation, as argued by Okposen is not aimed at ASEAN markets, as inthe case of European co-operation and integration, but more in line with increasing ASEAN’scompetitiveness as a production location so that the ASEAN countries can compete in theworld market.38As earlier mentioned, the basic framework for the promotion of intra-ASEAN trade isprovided by the ASEAN Preferential Trade Arrangements (PTA) signed by the ForeignMinisters of ASEAN countries in February 1977, and which comprised preferential tariffs onselected products which was only enjoyed based on ASEAN most favoured nation status.Specific instruments identified in PTA are: a) exchange of tariff preferences; b) purchasefinance support; c) long term quantity contracts; and d) preference in procurement byJune 2001 17
  18. 18. CDD Occasional Paper Series 6 Regional Integration in West Africagovernment entities and liberalisation of non-tariff measures on a preferential basis.The most important measure for liberalising intra-ASEAN trade involved extension of tariffpreferences on a product-by-product basis. The fifteen commodity groups initially consideredfor PTA were certain types of textiles, clothing and footwear, certain chemicals andpharmaceuticals, certain types of preserved and packaged foodstuffs and certain types ofhousehold equipment and other consumer durables chosen to be on the fast track.39 For fasttrack products with tariffs greater than 20 per cent, there would be an immediate reduction to20 per cent, and within 10 years to 0-5 per cent. For fast track products with tariffs at about 20per cent or below, tariffs would be reduced to 0-7 per cent within seven years. For othermanufactured goods with tariffs greater than 20 per cent, the schedule of reduction was to beannounced at the start date.Accelerated Tariff Reduction Schedule Old Timetable Accelerated TimetableNormal TrackTariffs > 20% 20% by 2001 20% by 1998 15% by 2003 0-5% by 2003 10% by 2005 0-5% by 2007Tariffs < 20% 15% by 2003 0-5% by 2000 10% by 2005 0-5% by 2007Fast TrackTariffs > 20% 0-5% by 2003 0-5% by 2000Tariffs < 20% 0-5% by 2000 0-5% by 1998Source: ASEAN Secretariat, Jakarta, Indonesia.Since 1980, this was complemented by across-the-board tariff reduction on selected items.Any tariff preference granted to one member country is automatically extended to all othercountries. The principle was applied to those industries in which production was in the handsof numerous small-scale or medium-scale enterprises. Progress in intra-regional trade liberali-sation up till 1991 had been slow due to implementation problems and lack of political will.In the early 1990s, the ASEAN governments increasingly realised that improving andstrengthening such co-operation was imperative for the viability and relevance of ASEAN.The prospects of this proposition are hinted by the success of ASEAN which, according toSecretary General Dato’Agit Singh, is in the process of transforming into ‘a single investmentregion.’40Foreign Direct Investment (FDI): Another sector that attracted much attention was theAFTA and the impact of FDI on trade. FDI refers to private long-term capital flows, whichare intended to acquire a significant interest in an enterprise with the objective of beingdirectly involved in its management. Evidence suggests that ASEAN remains relativelyattractive as a regional haven for FDIs. Among the ASEAN countries, Malaysia, Singaporeand Indonesia have continued to be still attractive. A 1998 UNCTAD survey of 500 largestMNCs in the world notes that Malaysia continues to remain an attractive investmentdestination. Amongst the reasons given are its lower property prices and cost of productionarising from the currency depreciation and its relatively more liberal approach to FDI.41Generally, most of the FDIs to ASEAN are from countries such as the United States, Japan,UK, Germany and Taiwan. Southeast Asian countries – especially Malaysia – continue topromote foreign direct investment (FDI), but discourage destabilising short-term capitalflows. The ASEAN countries recognises that FDI has brought benefits in terms of transfer oftechnology and management expertise, employment creation, new product development, tradeJune 2001 18
  19. 19. CDD Occasional Paper Series 6 Regional Integration in West Africageneration and access to new markets, beside being an important source of capital.ASEAN countries continue to provide a liberal and competitive environment for FDI, byensuring the presence of suitable supporting infrastructure, the availability of a well-trainedmanpower, consistency of policy, controlled repatriation of profits, expeditious approvals forinvestments and the provision of an attractive incentive package. While providing anappropriate environment for investment, the Southeast Asian countries made sure that FDIflows are mutually beneficial as well as consistent with the development objectives of thecountry in question. For example, Malaysia promoted FDI inflows which were assembly-typeand labour intensive, but in the 1990s favoured FDI which is capital- intensive and high-tech.(See Table on FDI Inflows by Home Region and Economy 1984-1994). It also ensures thatnewly established domestic industries which have potential are not exposed to unfaircompetition and that the employment and equity objectives under the New Economic Policyand the National Development Policy are not jeopardised.Industrial Co-operation: The basic purpose of ASEAN industrial co-operation is to enablethe ASEAN economies to reap the benefits of economies of large scale production, givenrelatively small domestic markets of the ASEAN countries, through various programmes suchas the joint production of basic industrial goods, industrial complementation in specificsectors and other schemes of joint industrial ventures.Attempts at industrial co-operation, namely, including ASEAN Industrial projects (AIP),started in the aftermath of the Bali summit. Under the scheme, each member country wasallocated a large scale (US $300-400 million) industrial project, the output of which was to beaccorded preferential access under PTA. The package included Urea Project in Indonesia andMalaysia, Copper Fabrication Project in the Philippines, a Hepatitis Vaccine Project inSingapore and Rock Salt Soda Ash Project in Thailand.42 Other areas of co-operation include(but are not limited to): Finance and Banking, Food, Agriculture and Forestry; Transport andCommunication, Mineral and Energy; Private Sector Economic Co-operation, Tourism,Science and Technology.One striking characteristic of the ASEAN organisation is that the member states have hithertoco-operated primarily not for regional development, but basically for national development.Thus, economic nationalism limits co-operation, a pattern that ASEAN shares with otherregional organisations where nationalistic impulses collide with collective goals. This isparticularly acute in ASEAN in view of the fact that the smallest member of the ASEANhappens to be economically the most advanced, while the largest and politically mostinfluential country is economically comparatively less developed. Such disparate levels ofeconomic development had led to search for national solution of problems. Singapore, forexample, seeks extra-regional contacts to sustain her economy and so do other member states.At the regional level however, it was left to Indonesia to determine the type and format ofjoint projects, in line with what it could accommodate nationally. Consequently, ASEANadopting common policies in certain areas appears to be a contentious point in regionaldiscussions. There will always be differences in the distribution of benefits from a commonregional policy and compensatory mechanisms for adjustment problems may not beautomatic, as in the case of a proposal for common agricultural policy in ASEAN.The assessments and viewpoints of the cross-section of the people interviewed in connectionwith the study indicated a general consensus that ASEAN would follow its own courseJune 2001 19
  20. 20. CDD Occasional Paper Series 6 Regional Integration in West Africathrough experiences over time. So they are ‘not worried about the extent of co-operationactually achieved at the moment.’43 Another overall assessment of the ASEAN respondentswas that on the whole ASEAN’s success was more in politico-strategic fields, specially inevolving an ‘ASEAN stand’, generating ASEAN identity and attaining regional stability, thanin economic fields. Going into details of the political achievements, scholars in Malaysia andIndonesia argued that the major gains have been:a. Overcoming of the political crises; the problems are not completely solved but they have achieved a crisis management mechanism through open consultation and some degree of tolerance.b. ASEAN spirit- they feel very much ASEAN when they talk to outsiders;c. Evolution of certain ethics and values which help maintain a good neighbourly conduct and environment of co-operation in which differences are not allowed to reach a crisis point;d. In case of external influence, ASEAN countries face it together. Any extra-regional country cannot influence any member without ASEAN consensus.The Thai scholars and opinion-forming elites stressed the achievement of bargaining strengthby joining together and attainment of regional security. They also pointed out that bilateralproblems are now easily solved. By way of example they mentioned that Thailand andMalaysia were able to solve a fishing problem by one visit of Thai officials to Malaysia.Views in Kuala Lumpur were also similar.44 It was pointed out that big powers couldn’t createconfusion among the ASEAN countries because each country briefs the others about theproceedings of meetings with them. This practice contributes to dispelling of misgiving andbuilding of greater confidence. Kuala Lumpur respondents also underscored the value ofdiplomacy of conciliation based on mutual respect and consideration.Opinion in Jakarta emphasised on the ASEAN identity and people-to-people contact atvarious levels. In Manila this was termed as community feelings while in Bandar SeriBegwan it was called political understanding and rapport.The contention that ASEAN has been deflected from its regional goal of economic co-operation was also dwelt on. The respondents agreed that such has been the case but at thesame time, it was pointed out that the regional strategic environment has dictated suchdeflection. As to poor performance in intra-regional economic co-operation, it was stated thatthe major lacuna lies in not encouraging the private sectors in each country to cooperate withthe other.45 The emphasis on the unilateral, on what each nation can do for itself, is central tocreating a region of co-operative prosperity and economic dynamism. Moreover, Dr Mahathirput this succinctly in a speech delivered on ‘The Future of Asia’ – ‘We must act unilaterally,wherever possible, to reduce tension, to solve conflict, to generate confidence. Let us notforget the old Arabian saying the whole road is clean if everyone sweeps the front of hishouse.’46June 2001 20
  21. 21. CDD Occasional Paper Series 6 Regional Integration in West AfricaSECTION 4: RELEVANCE OF THE ASEAN EXPERIENCE FORECOWASThe upshot of the above discussion is that there is no single charted course for regional co-operation process. Each co-operation grouping goes through a series of unique experienceswith its own dynamics amidst socio-economic and geopolitical milieu of the region. However,the early starters in their course of co-operation gain certain experiences that may have somerelevance and learning value for the late starters, at least in respect of trying the success pathand avoiding pitfalls that the early starters might have encountered.Over the past few decades, despite internal conflicts in Indonesia and the Philippines theSoutheast Asian region has been cited as a shining example of stability and developmentcompared to other regions. What is critically important is that ASEAN is now a zone of truepeace, a community of warm and enduring peace. The achievements of the ASEAN in theeconomic field have been at best moderate, although in recent years they have maintainedrelatively high growth rates compared with other developing countries. Whether this was dueto co-ordinated efforts of the ASEAN countries in general or to factors specific to eachcountry, to congenial political atmosphere, or to a combination of them, all the countries inthe region experienced this growth in varying degrees.However, experience – both successes and failures – of regional organisations with longerexperience (ASEAN - 1967) are expected to be of relevance to the late starters (ECOWAS -1975) on a number of counts. The first is, of course, the fact that so many attempts ofestablishing regional organisations have been made in different parts of the world and only afew have survived. Very few of these few, again, are showing signs of continued viability.This makes the study of experiences of these fortunate ones all the more interesting.Secondly, in cases where the regional organisations are more or less similar in terms ofvalues, socio-cultural traits, and geopolitical situations, the experiences of the regionalorganisations with longer experiences are expected to have relevance for the younger ones.Thirdly, even when the organisations are different in their political settings, motive forces andcourses of development, an objective analysis and assessment of the experiences of theorganisations, their successes and failures and associated factors may provide useful insightsand perspectives for other organisations in deciding on their respective courses ofdevelopment. Fourthly, in the context of the rising trend of inter-regional co-operating withinthe framework of economic co-operation among developing countries (ECDC), a comparativestudy of regional organisations is expected to lead to appreciation of each others’ objectiverealities and perceptual dispositions.It is with these ends in view that the ASEAN experiences of regional co-operation are lookedinto and their relevance to the ECOWAS underlined. It should be stressed that the purpose isnot to equate the future prospects of ECOWAS with the experiences of ASEAN. There is noautomatic association of ASEAN experience with the ECOWAS process. ECOWAS formedin 1975 has its own course in its quest for mutually beneficial co-operation for its sixteenmember states. In that, there is little justification for it to follow the ASEAN pattern as such.The reason is too obvious: conditions are different in ECOWAS than that in ASEAN, andconditions in 1960s are different from the 1970s when ECOWAS institutions were developed.Some of the ASEAN experiences-successes as well as failures and factors behind both- mayhowever be of interest to ECOWAS, in some cases as positive knowledge while in others asthe kind of the things to be avoided. The rationale and utility of a study like the present oneJune 2001 21
  22. 22. CDD Occasional Paper Series 6 Regional Integration in West Africaare placed in proper perspective only if viewed in such a frame.MOTIVE FORCES AND CIRCUMSTANTIAL FACTORSAs stated in the opening, regional organisations emerge and grow in a complex web ofinteracting factors. Therefore, regional co-operation need not necessarily be viewed with anydoctrinaire approach to be contingent upon a smooth and idealistic matrix of inter-staterelations among members. Contrary to the conventional wisdom, the ASEAN was born andnourished at a time when the politico-strategic environment and inter-state relations inSoutheast Asia were seriously distorted. The strains stemmed not only from bilateralterritorial disputes but also mistrust and suspicion toward each other. In the words of anASEAN leader, the member states at the early stage of ASEAN were not only separate fromeach other but knew really nothing of, and were only too ready to, mistrust one another.47The Southeast Asian leaders at the time of launching the association were all intent on comingout of the morass of tensions and instability. The driving force was provided by the desire toensure peace and stability in the region to pave the way for unhindered national socio-economic development. The quest was coincidentally, and no less importantly, backed bycommonalties in threat and security perception from both within and outside the region. But,the real motivation emerged from an appreciation of the evils and futility of mutual mistrust,tension and confrontation, which forced the states to negotiate and eventually go for co-operation under the ASEAN. A point often missed or under-emphasised is that the inter-statepolitical relations were far from happy and that it was political problems between ASEANstates that brought them together. The basic purpose was of course, socio-economicupliftment of the respective peoples. Juxtaposing this experience with the West Africansituation, this line of thinking may be carried one step further to argue that regional co-operation in socio-economic areas would itself create a congenial political atmosphere, firstby the gradual and incremental process of co-operation and, second, by the self-generatingcompulsions of maintaining political stability or at least easing tensions in inter-state relationsin order to facilitate co-operation in socio-economic fields.CONCEPT, APPROACH AND OBJECTIVESUnlike the European Union (EU) which has the explicit objective of creating a regionalintegrated community, the ASEAN approach was one of regional economic co-operation,harmonisation and pooling up of resources among sovereign nations with no supra-nationalauthority to impose any ‘federal loyalty’. The concept of regionalism in ASEAN is one ofinter-governmental co-operation as compared to integration as in the EEC. Regional co-operation is not to supplant national efforts but to supplement national development efforts inthe case of ASEAN.Comparing the process of development in ECOWAS with that in the ASEAN, it may beargued that both ECOWAS and ASEAN emerged as an extension of national efforts fordevelopment through co-operation primarily in the socio-economic, technical and culturalfields. For both the associations, the central goal is the furtherance of the cause of peace,harmony and stability in respective regions and to concert and harmonise efforts inaccelerating economic development. And for both, the immediate goal of socio-economic andtechnical co-operation is viewed as a catalyst to the realisation of the ultimate goal of regionalpeace, stability and harmony. In the process, both the associations, as and when they deem fit,may include new areas of co-operation in addition to the so-called agreed areas and also adoptJune 2001 22
  23. 23. CDD Occasional Paper Series 6 Regional Integration in West Africanew strategies.ORGANISATIONAL STRUCTURE AND DECISION MAKING MECHANISM INASEAN AND ECOWASIn terms of organisational structure and institutional arrangements ASEAN opted for arelatively small, informal and functional bureaucracy following what has come to be knownas ‘minimalist approach’. All the functional committees and organs including the Secretariatare inter-governmentally constituted. ECOWAS approach to regional organisation is alsoobserved to be similar. ECOWAS has a Secretariat. Decision making in both theorganisations is carried out through layers of horizontal and vertical committees. Although theprinciple followed in ASEAN is flexible – one of consensus compared to the principle ofunanimity that has been adopted by the leaders of ECOWAS in the perceived interest of theregion, the mechanism followed in arriving at the decision is similar, that is practice ofextensive consultation, behind the scene negotiations in a bid to arriving at a position ofconsensus or unanimity as the case may be.The flexible formula of 10-x as followed in ASEAN should be understood in its ownperspective. Even if certain country or countries may opt out of a particular project, thedecision is an ASEAN one, not a 10-x one. There is, however the possibility, as has actuallyhappened also, that certain country or countries may avail this option frequently creatingmisgivings among others. On the other hand, given the realities of Southeast Asia, theprinciple of unanimity has been adopted in order to ensure democratic participation of allmembers on the basis of sovereign equality. Whether a more flexible approach of decisionmaking in ECOWAS would be adopted or is being adopted is usually dictated by the courseof event in West Africa as demonstrated by ECOWAS peacekeeping mission in Liberia andSierra-Leone.AREAS, EXTENT AND MODALITIES OF REGIONAL CO-OPERATIONASEAN experience of regional co-operation show that although the avowed objective of theassociation was primarily co-operation in socio-economic areas, over the years the associationappears to have concentrated more on co-operation in politico-security and strategic matters.To say that the ASEAN co-operation in the socio-economic fields have been relatively lesssuccessful is to state the obvious. It would be pertinent to observe that even within the socio-economic areas, the success has been of a lesser degree in cases where schemes or projectswere apparently too ambitious, whereas in cases of issue-based and modest scale schemes andmost importantly, in case of specific result-oriented ones progress has been considerable.Examples are areas like tourism, food security and the like, co-operation in which has notmerely been successful in their own way but has also contributed to the strengthening of thepopular base in favour of the association.In relation to co-operation in the more vital areas like trade, the main problems, as discussedearlier, have been linked to issues of ‘economic nationalism’ like market sharing and protec-tionism. Disparate levels of development coupled with divergent national interests lead to asearch for national solutions to problems. Member states have tended to develop and intensifyextra-regional linkages independent of the interest of the grouping as a whole, sometimesadversely affecting the basis of confidence in the usefulness of regional co-operation. Theproblem is further compounded by the structural linkage of the economies with the West onthe one hand and relatively low level of mutual complementarity on the other. The privateJune 2001 23
  24. 24. CDD Occasional Paper Series 6 Regional Integration in West Africasector performance in co-operative ventures has also not reached the desired level in some ofthe economic sectors.Despite the low level of performance in some of the economic sectors, the ASEAN hascontinued to move forward while apparently aware of the limits to what regional co-operationarrangement can be expected to achieve in the specific context, terms of reference and time-span. The level of expectation in ASEAN seems to have been pragmatic so that not too muchwas expected too soon. Regional co-operation is viewed as one of the many other ways thatmember states endeavour collectively and severally to resolve the problems facing themnationally, bilaterally and regionally. The basic approach admittedly was ‘go-slow’ so thatactivities and programmes do not have any ‘grand design’ disproportionate to regionalpreparedness.In terms of the modality, the ASEAN approach has been fairly informal. The process ofdecision-making and deliberations has been almost exclusively on the basis of mutualconsultation. There has been a tacit understanding of avoiding any disputable and conflictingsituation on matters both within and outside the purview of ASEAN. Problems of a bilateraland contentious nature have been regarded as part of the reality and member-states didrecognise their impinging potential on the process of multilateral co-operation. It appears thatASEAN member-states have followed a deliberate policy of keeping the bilateral discordsbelow a level that might lead to a crisis.It is important to note in this connection that although bilateral and contentious issues are notformally within the ASEAN agenda, the member-states are not precluded from using theforum for informal discussion on any such subject. The resilience that the ASEAN member-states have shown in coping with a given situation impinging on their national interests is,perhaps, the most striking phenomenon in the development of the ASEAN.SETTLEMENT OF DISPUTES IN ASEAN AND ECOWASThe ASEAN experience has shown that in the context of asymmetries and divergences, andthe concomitant disputes, member states have demonstrated over the years a remarkabledegree of understanding of each other’s problems, aspirations and limitations. There has beenmore importantly, a tacit agreement on mutual role perception and role-playing. There havebeen references to the workshops organised by Indonesia, the pivotal power in the region,over the South China Sea disputes. A similar role has been played by Nigeria in ECOWAS. Itis difficult, however, to generalise or offer a modulus of such understanding. But theexperience has certainly shown a working level of mutual give-and-take approach. In terms ofspecific issues the member states have initially tried to iron out differences. In the event of afailure to do so they have opted for bypassing them in favour of the greater cause of co-operation. It appears that there was in ASEAN a consensus that disputes at bilateral level arepart of the reality in inter-state relations, and whilst there were attempts at settlement of suchdisputes, failure to do so, was never allowed to impede the process of co-operation underASEAN.As already indicated, considering the status of inter-state relations in the region this approachhas largely been regarded as a pragmatic one. In the backdrop of ASEAN experience, andeven from what has happened so far in the ECOWAS forum, there seems to be two aspects tothis problem.June 2001 24
  25. 25. CDD Occasional Paper Series 6 Regional Integration in West AfricaFirstly, although such issues are not excluded from the formal agenda of ECOWAS, member-states thus raise and discuss these issues when they assemble for meeting within theECOWAS forum. Indeed, some bilateral issues have already been picked up by member-states on more than one occasions and the forum has to that extent been found to be a tension-diffusing platform. It appears by all indications that given the political will, taking theadvantage of the frequency of high political level meetings the member-states mayincreasingly find ECOWAS a useful forum with an opportunity to iron out differences theway their ASEAN counterparts have done.The second aspect is linked with the role of Nigeria. It appears that the sooner there is anunderstanding and consensus among the ECOWAS member-states about the mutual roleperception and role playing the better for co-operation within ECOWAS. There should bemore open and frequent discussion among the member-states at both official and unofficiallevels and certain degree of positivism and enlightened national interest member-states maybe able to cement the differences among them on that score.The ASEAN and ECOWAS experience underlines, on the other hand, critical importance, inthis respect, of the foreign policy posture of Indonesia and Nigeria, both the largest and themost powerful countries in Southeast Asia and West Africa. And, on the other hand, thedevelopment of the spirit of mutual understanding, accommodation and trust whichcharacterised ASEAN and ECOWAS regional and inter-state relations. There is a clear needfor striking a balance between bilateral and multilateral interests of ECOWAS member statesfor the better future of the region.INTER-REGIONAL CO-OPERATIONASEAN is certainly a success story in terms of its experience in inter-regional co-operation,particularly the way ASEAN has proffered the member states the possibility of establishingcloser linkage and co-operation with ‘third party’ states, groups of countries and otherregional and international bodies. ASEAN inter-regional co-operation has been effective notmerely in obtaining aid or assistance packages but also in building long term complementaryeconomic relations. Particularly notable has been the ASEAN success in the projecting theregion as an ASEAN entity whereby it has been possible to strengthen its bargaining position.The association has often been successful also in projecting matters of its own interest as anoverall Third World issue. Notable elements of inter-regional co-operation from ASEANexperience include a) shared actions and approaches in furthering regional interests, b)sharing of benefits of each other’s experiences and advancement in various fields, and c)common front in relation to NIEO, WTO and other related matters.The present study has shown that prospects of co-operation between ECOWAS and ASEAN,two regions geographically far apart, are promising and are likely to be beneficial to eachother. There should be a long term planning and vision in this respect and a pragmaticapproach. Co-operation between the two organisations can take off only on a ‘go slow’strategy on the basis of a clear cut vision of both the sides on each other’s benefits and shouldnecessarily be complementary to existing bilateral or multilateral relations rather than at thelatter’s experience. Inter-regional co-operation should also complement each other’scapabilities and not supplant them. Any programme or project for inter-regional co-operationfrom ECOWAS perspective should be untied and unconditional and should of necessity beequitably beneficial to all ECOWAS countries. But, most important of all, any formal linkageof ECOWAS with other regional bodies and for that matter any concrete co-operation projectJune 2001 25
  26. 26. CDD Occasional Paper Series 6 Regional Integration in West Africatherewith should be deferred until such time as the underpinnings of the development ofECOWAS member states is sufficiently strengthened.CONCLUSION: THE WAY FORWARDEffective regional integration is generally recognised as a component of a strategy to improveeconomic growth. The initiative addresses some of the weaknesses of regional initiatives byemphasising outward orientation, national and regional policy complementarity, and the directinvolvement of private sector. Given the precarious environment facing ECOWAS members,particularly under the WTO agreement and the current globalisation, ECOWAS cannot affordto lag behind in these developments. At least three of the findings that emerge from thisresearch may have a dramatic effect in creating an environment conducive to ECOWASeconomic co-operation.First, the challenge to ECOWAS economies is to be able to maintain high and sustainablerates of economic growth and of exports. This requires them to sustain their economic reform.Although they have come a long way to liberalise their economy, their tasks are far fromcompleted. Globalisation, or the challenge of globalisation, has given the governments astrong enough justification for undertaking the reform. While at first it might be seenparadoxical, these countries’ participation in and efforts to promote a number of regional co-operation schemes are also seen as important elements of their globalisation policy. Regionalco-operation helps its participants to take part in global economic integration more effectivelyas a group of regional economies.It is of no surprise, therefore, that in West Africa, the Preferential Trade Area, the Ghana -Fast Track Approach, the ECOWAS Trade Liberalisation Scheme (ETLS), and the CommonExternal Tariff (CET) are widely seen as representing the globalisation phenomenon becauseof the importance of trade and investment liberalisation in these fora’s agendas. Further, theETLS seeks to consolidate customs duties and charges, liberalise all customs duties onunprocessed and traditional handicrafts, liberalise tariffs on approved industrial goods –making a zero rating and establishing a Common External Tariff (CET) regime to be appliedto third countries. The introduction of the CET and country standards will enable the WestAfrican sub-region to respond more favourably to the globalisation phenomenon, while theonus of economic discipline will force governments to be more circumspect in themanagement of their economies.ELTS also necessitates a series of domestic adjustments that are parallel with or may beentirely identical to those that are undertaken in response to the challenges of globalisation.Because globalisation is being used as a justification for economic reform, and successfully sothus far, the sustainability of the reform programme itself will depend to a large extent on theability of the government and the society at large to redress the negative impacts ofglobalisation as perceived by the public.Second, ECOWAS countries need to offer attractive investment opportunities for foreigncompanies. The regional governments should encourage private sector participation in manyof the infrastructure projects. In Ghana, for example, when the telecommunication sector wasliberalised recently, we saw an influx of service providers, such as Malaysia Telecommunica-tion and MTV Asia managing the Ghanaian telecommunication system and setting upbroadcast centres there. The business community in Nigeria feels that in pursuing its policy ofglobalisation, as manifested in the series of deregulation and liberalisation policy packages,June 2001 26