Democracy Lab

Learning Europe's Lessons in Africa

Why five East African countries are trying to follow in the European Union's footsteps -- minus the common currency.

Even as the European Union's sovereign debt crisis comes "back from vacation," as a New York Times Magazine headline recently put it, a far less-known group of countries is following in the EU's very footsteps. This is the East African Community (EAC), a five-country bloc that is moving headlong toward the same kind of economic and political union now in peril in Europe.

The EU's experience -- including, not least, the ongoing Eurozone crisis -- offers plenty of lessons that could help the EAC replicate the EU's successes while avoiding its troubles. Economically, the evidence suggests that East African countries should vigorously integrate their markets but move cautiously regarding a common currency. Politically, they should focus intensely on accountability for democratic practices, though progress on this front will be more difficult than in the economic sphere.

The EAC's five countries -- Burundi, Kenya, Rwanda, Tanzania, and Uganda -- have made astoundingly rapid progress since the bloc was re-launched in 2000. (An earlier union of Kenya, Tanzania, and Uganda dissolved in 1977, ten years after its founding.)

On paper, at least, the EAC has harmonized rules and tariffs and guaranteed the free movement of labor, capital, goods, and services among member states. In the EU, this occurred through the acceptance of the Acquis Communautaire, the body of EU law. In the EAC it has, so far, meant adoption of a common market and customs union, joint judicial and legislative bodies, and measures such as the mutual accreditation of higher education institutions.

The EAC's progress offers a welcome, if little-noticed, argument that the Euro's troubles need not discredit the EU's model for integration. There is no need to throw out the baby with the bathwater. Indeed, economically, the EAC has an enormous amount to gain from integration. According to the latest data in the World Bank's global poverty statistics, 81 percent of Burundians, 43 percent of Kenyans, 63 percent of Rwandans, 68 percent of Tanzanians, and 38 percent of Ugandans live on less than $1.25 per day. IMF data show that GDP per capita is only $850 in the wealthiest EAC country, Kenya. In Burundi, the poorest, it is just $279.

Each EAC member economy is also small in the aggregate. Kenya, the largest of the five, has a 2011 GDP of only $35 billion, according to the IMF -- about the same as South Dakota. This suggests that integration could unlock tremendous growth and economies of scale.

Geography, too, points to substantial advantages if East African states can successfully merge their markets. Kenya and Tanzania enjoy long coastlines; Burundi, Rwanda, and Uganda are landlocked. With under-developed infrastructure throughout the region, the gains from the construction of roads and railways, carefully streamlined border crossings, and improved connections from the interior to Kenyan and Tanzanian ports could be huge. A modern transport network would allow investment to increase and spread throughout the region.

The EAC has traveled quickly along the continuum of economic integration through the development of a customs union and common market, which have begun to support intra-regional development and specialization. Kenya is supplying financial services and Uganda is increasingly providing education and health services to other members, for example. This is all to the good.

The next major step, a common currency, is more problematic, however. East African leaders have announced their intention to form a currency between 2012 and 2015. The group's leaders recently urged negotiators to "move with greater speed" to conclude a protocol that would lay out steps toward implementation. Officials hope to reach agreement by the end of the year. But the EU's experience suggests this is premature.

With diverse levels of wealth and widely varying approaches to regulation and competitiveness, and with some members (notably Germany) running current-account surpluses while others (such as Greece) run deficits, the Eurozone has been unable to promote stability and growth in all its members at the same time. The EAC faces a similar range of economic disparities.

As recent headlines show, the EU also sorely lacks sufficient fiscal integration and institutional consensus. A decade after the Euro entered circulation, the role of its governing organization, the European Central Bank (ECB), remains a subject of acrimony, and there is no cross-national budget surveillance or credible penalty for violating agreements. ECB president Mario Draghi on Thursday announced a plan to buy the bonds of indebted national governments, but it comes over vehement opposition from Germany, the Eurozone's dominant economy. The EAC lacks consensus on these questions as well.

Europe's experience and the EAC's situation on the ground argue for eschewing a monetary union until East Africa's integration advances considerably. Harmonizing regulations; facilitating travel, investment, and trade; maintaining consistent control over inflation; investing in infrastructure; balancing levels of wealth and competitiveness; sharing greater sovereign authority over policies and decisions; building institutions with secure and agreed-upon powers -- all these should come before a common currency.

Fortunately, some officials and experts appear to recognize that haste is dangerous. The EAC's secretary general, Richard Sezibera, said this spring that "we are not rushing to single currency before putting our house in order." Delegations from the region are visiting Brussels to analyze Europe's experience (they are also visiting West Africa to learn about that region's monetary union).

At a conference in Tanzania earlier this year, Oxford economist Paul Collier said: "Considering what happened in the Eurozone, the monetary union is not the way to go." Rwanda's New Times has featured a series of articles expressing skepticism about the region's readiness for a common currency. Even the chief economist of the National Bank of Rwanda, Thomas Kigabo, has written a paper arguing that "the economic convergence and institutional development needed to support monetary union is likely to take an extended period of time." A former governor of the Bank of Uganda, Leo Kibirango, recently sounded a similar cautionary note.

Politically, too, the EU offers valuable lessons for East Africa. But here it is not clear that the EAC can make use of them. Perhaps the EU's greatest achievement is cementing a zone of democracy and peace where armed conflict, once common, is unthinkable. Although governance across the EU is far from perfect, the bloc has created a large and growing space where basic rights and institutions are protected and peace is inviolate. Even with its current problems, the EU has become a global paragon of accountability and stability. This is a remarkable historical achievement.

The problem is that these political accomplishments were driven by a group of previously prosperous and institutionally robust Western European states. The attractiveness of their example, and the inducement of structural assistance, market access, and prestige, encouraged Eastern and Southern European countries to strengthen their democratic institutions and norms in order to join the EU.

In the EAC, there is no such core of rich and established democracies. No member is in a strong position to hold others to high standards of governance. The bloc already includes states whose democratic credentials are dubious at best. Neither is any member willing or able to offer significant funds to others as an inducement for reform. Indeed, perceptions of imbalanced benefits (with Kenya seen as reaping disproportionate gains) are part of what doomed the first attempt at East African integration in the 1970s.

In the near future, then, the EAC's major gains are likelier to come in the economic realm than the political one. That is no reason to abandon hopes for democratic progress, though. EAC states should still articulate a strong commitment to rights and freedoms and build institutions to hold each other firmly accountable for democratic practices (or lack thereof). They could learn from the Economic Community of West African States (ECOWAS), which has had some (but only some) success in condemning coups d'états and working to restore democracy -- as in Côte d'Ivoire in 2010-11 and in Mali more recently.

As the EU struggles to emerge from crisis, East Africans are demonstrating that the case for integration remains alive and well and the European model retains its aspirational sheen. If the EAC can learn from the EU's history, the people of East Africa could enjoy improved economic opportunities and political stability, in turn becoming a more important business and security partner for the United States and the European Union itself.



Is It Over Yet?

Watching the past two weeks of the Republican and Democratic conventions, it's hard to remember a more grotesque political event. 

LONDON — Watching the Democratic National Convention in Charlotte this week -- and with the horrors of the Republican assembly in Tampa still all too fresh in my mind -- I was reminded of Oscar Wilde's quip about fox hunting: "The unspeakable in full pursuit of the uneatable." Something similar may be said of the carnival of grotesques unleashed upon an innocent world these past two weeks. When Republicans or Democrats gather to celebrate their faith, America loses.

That's how it looks when viewed from the far side of the Atlantic Ocean, anyway. My, how each party is doing its best to make the other seem strangely electable. If Republican arrogance grates, Democratic smugness is just as aggravating.

Thank heavens for Michelle Obama. Her speech (perhaps the finest of either convention thus far) at least rescued something from what had been a grim, though doubtless successful, first night for the Democrats -- a night during which many of the party's worst attributes were not so much on display as celebrated with wild enthusiasm. But even the first lady's largely admirable speech was not without its low moments; declaring herself "mom in chief" was a toe-curling lapse of taste. Nonetheless, with the first lady's speech on Tuesday, Sept. 4, and Bill Clinton's on Wednesday, the Democrats marshaled star power that eclipsed anything the Republicans could offer in Tampa, Florida.

There are, in truth, two different conventions taking place in Charlotte, North Carolina, this week. One, televised in prime time, tries to talk to all Americans; the other, unscreened by the networks and followed only by political anoraks, is a back-slapping, complacent celebration held by and for a Democratic Party utterly persuaded it enjoys a monopoly on decency and wisdom.

Of course, the Republicans were just as bad. But no sentient person can possibly watch these pep rallies and think he or she wants to have any part of either party. By their nature, parties are cults, but their creepiness is never better displayed than at their quadrennial conventions. The theme of this week, always present in the background and sometimes stated quite explicitly, is that the United States and, hell, the world too, is lucky to have Barack Obama as its savior and protector.

If no one has yet quite plumbed the depths George Pataki reached in 2004, it's not for want of trying. Eight years ago, Pataki told the world: "Ladies and gentlemen, on this night and in this fight, there is another who holds high that torch of freedom. He is one of those men God and fate somehow lead to the fore in times of challenge. And he is lighting the way to better times, a safer land, and hope. He is my friend, he is our president, President George W. Bush." People actually cheered this. (To be fair, it might be said that if the United States could just about survive eight years of Bush, the republic can probably endure four years of Mitt Romney.)

If the Republican National Convention had one small saving grace, it was that there was a whiff of apostasy in the air. Granted, that's an unavoidable consequence of nominating Romney, but compared with past conventions and the Democrats this week, the GOP's reluctance to give its heart to Romney seems a model of prudent skepticism. There was plenty of hagiographical nonsense in Tampa too, but the Democrats' slavish enthusiasm for their candidate is something to behold. In primitive people, you'd consider it a kind of madness.

Some of it was oddly defensive too. According to Senate Majority Leader Harry Reid: "His [Obama's] whole life, there have been so many who told him what he shouldn't or couldn't do" -- which seems an odd way of describing a graduate of Columbia University and Harvard Law School who taught at the University of Chicago and worked at a top Windy City law firm before he entered politics. Instead, Reid presents Obama as a scrawny kid who can't go to the beach without having sand kicked in his face. Very strange.

Nor was Reid alone. Massachusetts Gov. Deval Patrick -- who, oddly, seemed reluctant to lash Romney to his record of health-care achievement in Massachusetts -- told conventioneers that they can't allow Obama to be "bullied" out of office. That's an odd way to talk about an election, but then again, politicians are odd people. Regardless, this doesn't sound like a party that will take defeat well. Indeed, one suspects there are plenty of true believers gathered in Charlotte this week ready to believe that if Obama loses, it will be because Romney will have cheated.

Indeed, Bill Clinton may have put himself in a minority among convention attendees when he said: "Though I often disagree with Republicans, I actually never learned to hate them the way the far right that now controls their party seems to hate our president and a lot of other Democrats." The depth and range of conservative hatred for Obama is often startling, but many liberal Democrats are just as disinclined to grant that their opponents might plausibly be making their arguments in good faith. As former Ohio Gov. Ted Strickland put it: "If Mitt was Santa Claus, he'd fire the reindeer and outsource the elves."

The red meat chucked to the Democratic base was, like its Republican counterpart last week, a reminder that it's always wise to shield these moments from an easily startled public. "Women are not an interest group," said Obama in a video introducing one set of speakers. "They shouldn't be treated that way." I dare say this is true -- which left one wondering why speaker after speaker treated women as, well, an interest group. Moreover, and though Lilly Ledbetter stepped up to offer praise for the equal-pay bill named in her honor, it seemed as if the interest was particularly narrow -- as if abortion is the only women's issue that really matters to Democrats.

Nancy Keenan, president of the abortion-rights group NARAL, even made the bold suggestion that "health decisions" (i.e., abortion) should be made in consultation with a woman's God. Enlisting the Almighty in the service of unlimited abortion might verge on the presumptuous.

At the very least, there's usually a distinction to be made between defending abortion and celebrating it. Usually, I say, because Democrats so ignored that difference on Tuesday night that you could have been forgiven for assuming an abortion was some kind of feminine rite of passage without which no American woman could consider herself whole. Or patriotic.

"Safe, legal, and rare" -- Bill Clinton's elegant formula -- suddenly seems quaintly old-fashioned. Democrats in Charlotte proved themselves every bit as extreme as Republicans in Tampa. More so in fact, given that all-access abortion all the time is a minority view. "Don't assume that every voter knows what Barack Obama has done for the women in this country," said Keenan with all the smugness of someone who knows only wickedness, terminal gullibility, or incorrigible stupidity could persuade someone to vote for the other team.

If all this was predictable, so too was the party's cheerful xenophobia. The party elites and big thinkers may know free trade is a good thing that lifts American boats as well as those flying other flags, but deep down, the Democratic base doesn't believe in free trade. How else to explain the relentless foreigner-bashing on display in Charlotte?

According to Maryland Gov. Martin O'Malley -- as always, more impressive as an idea than in the flesh -- Romney wants to "ship our jobs to China." This is not, in fact, true -- though it's a mystery what poor Chinese people have done to so offend O'Malley. The idiocy of the Democratic position on outsourcing or, as it is also known, "overseas investment" is apparent if you consider what would happen if every company, from every country, followed the Democrats' advice and kept their investments inside their own borders. No more Toyota in America. No more BP. No more Deutsche Bank. And so on. Strickland's call for "economic patriotism" would, if emulated worldwide, see every foreign company flee the United States. Remember, they're "shipping jobs overseas" too.

And they call the Republicans the stupid party? I mean, come on. I understand why Democrats want to attack Romney's wealth and highlight his reluctance to release his tax returns. But there are limits. According to O'Malley, however: "Swiss bank accounts never built an American bridge. Swiss bank accounts don't put cops on the beat or teachers in our classrooms. Swiss bank accounts never created American jobs!"

Actually they did. That is, Swiss banks did. And so did British banks, German banks, and French banks. Foreign capital and foreign bondholders played a vital part in America's great 19th-century expansion. They still do. Why even today, it's Chinese bondholders who put cops on the street and finance the building of American bridges. Americans didn't build America on their own.

For that matter, mind you, let's not forget that this global financial crisis really was built in America. Other countries, especially in Europe, contributed to their own miseries, not least through their eagerness to buy whatever Wall Street was selling; and, yes, European banks acted like schmucks. Nevertheless, it all began in the United States. If there's any subject suitable for some kind of global apology tour, this might be it.

Perhaps only a fool would expect some appreciation of nuance or complexity to be allowed on stage at a political convention, but that's another reason for sensible people to be appalled by these cultish celebrations of mendacity.

If the Republicans demonstrated their unfitness for office in Tampa last week, all one can say today is that, on the evidence put before the court thus far, the Democrats are determined to give the Republicans a run for their money. No matter how pundits dress it up, this election is a contest between two political parties that deserve one another. Yet again, let H.L. Mencken be your guide: "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." Nor, he might feel like adding today, a Democrat.