Regional economic integration in the Horn of Africa: Wishful thinking or a basis for peace?
Authors
Peacebuilding and economic integration are both long-term gradual processes that must evolve together, with an important regional dimension. No one regional organisation can take full responsibility for this, but by being adaptive and opportunistic, building on bilateral processes and growing economic interdependence while supporting peace resolution, the role for an organisation like IGAD will only grow.
What comes first? A peaceful society leading to more economic exchange, growth and improved well-being? Or growing economic exchange and interdependence leading raising the costs of conflict and leading to a more peaceful society? That is a fundamental question for many, but is of particular importance in the Horn of Africa, where within and between-state conflicts underline the importance of a regional approach and the importance of regional bodies such as IGAD - the Intergovernmental Authority for Development. While IGAD has a strong focus and considerable renown on peace and security issues, economic integration is often seen as lower priority in the region. But rising economic interdependence in the region may be slowly altering the interests and incentives for conflict. By adapting to these changing interests and incentives, IGAD may be able to play a supportive role in promoting regional peace and prosperity with benefits at the national level.
The mutual connections between regional security and the economy relate particularly to the geographical constitution of the Horn of Africa. A number of landlocked countries, including newly independent South Sudan, are slowly but surely intensifying cross-border cooperation to ensure access to water, energy and existing transport networks in the region in the midst of long-running tensions within and between countries, the effects of climate change and drought, and influences from outside the region. In response, Peace and Security, and Economic Integration are two of the three pillars underpinning IGAD’s strategy (the third being Agriculture, Natural Resources and Environment). IGAD is a ‘building bloc’ of the African Peace and Security Architecture (APSA) and hosts one of Africa’s most elaborate Conflict Early Warning Systems (CEWS). Peace and security is also a key area for donors supporting the region, forming one of the EU’s key pillars along with economic integration and natural resource management in its Regional Indicative Programme for 2014 to 2020 , for example. Although IGAD has become best known for its peace and security related activities, not least in Sudan and South Sudan, it is also one of eight Regional Economic Communities (RECs) recognised by the African Union (AU) and a building block of the African Economic Community (AEC) under the AEC Treaty. This brings commitments to establishing a free trade area (FTA), macro-economic convergence, industrial development and investment promotion, infrastructure and transport development, information technology, tourism development, and the development of energy, agriculture, environment and natural resources. The recently approved Horn of Africa Initiative (HoAI) by the World Bank, EC, and AfDB among others further supports the linkages between these, with a large pool of external funding targeted at vulnerability and resilience, and economic opportunity and integration.
While operating regionally brings additional complexity, and while this region is home to three of Africa’s most protracted conflicts in Darfur, South Sudan and Somalia, IGAD can point to impressive progress. Besides its extensive CEWS, IGAD has managed to consolidate expertise in conflict mediation, supported by a heavily engaged IGAD Assembly of Heads of State and Government. Part of IGAD’s success in building common interest around mediation, early warning and conflict resolution are due precisely to the economic and political cost of cross-border conflict spillovers. Though observers have lamented the lack of institutionalisation of IGAD’s peace and security architecture and the democratic deficit, with Heads of State primarily relying on ad-hoc approaches to conflict resolution and management, the economic and political costs encourage high-level political ownership of IGAD’s peace and security agenda through inter-state bargaining. This helped IGAD broker the 2005 Comprehensive Peace Agreement in Sudan, leading to the successful referendum in southern Sudan and South Sudan’s independence in July 2011. Although violence broke out in December 2013, a peace agreement was signed in August 2015 and is being monitored by IGAD, with a Transitional Government of National Unity (TGNU) expected to take office now for a period of 30 months, preparing the country for next elections. Meanwhile in Somalia, where the AU is present with its largest peace support operation, IGAD has booked progress in pushing forward the federalisation process through its Facilitator’s Office for Somalia. This includes a number of agreements on interim regional administrations in the South-West and Central regions, a peace deal in 2014 between former opposition leader Col. Barre Hirale and the Interim Jubba Administration and the inauguration of Jubaland Parliament. In tandem with the AU, IGAD has launched a security sector reform process and continues to mediate between rival clan militias in Southern and central parts of Somalia, where reports indicate that Al-Shabaab is expanding its activities into bordering Kenya, and that increased efforts will be needed to further eradicate the group. As with South Sudan, IGAD’s role as a neutral platform have helped minimise the economic fallout from regional conflict. This has included some thorny issues, such as the deployment of Ugandan troops in South Sudan. These are notable successes in a region facing considerable environmental pressures and confronted with longstanding regionalised conflicts. But common challenges associated with the physical environment and landlocked countries equally underpin the logic of greater regional collaboration, spearheaded by the convening power of the IGAD Assembly of Heads of State and Government.
In contrast to its relative success on conflict mediation, in 2012 IGAD described its own progress on economic integration as ‘dismal’. Nonetheless, market integration and broad regional economic integration remain key stated IGAD objectives to create not only a free trade area, but also a customs union and eventually a common market. Beyond market integration, sometimes referred to as ‘shallow integration’, IGAD’s strategy also reflects aspirations of ‘deep integration’ including the soft and hard infrastructures that facilitate economic exchange and interdependence. Economic integration and market access also underpin IGAD’s approaches to its third pillar of food security and drought and disaster reduction, reflecting the fundamental place economic integration takes in its vision for regional cooperation and integration. But actually implementing the economic integration agenda is subject to wide variations in economic policy approaches and challenges among member states, limited economic complementarity, and the fact that most are also pursuing economic integration through the EAC (East African Community) and COMESA (the Common Market of Eastern and Southern Africa). The tensions in the region also undermine the investment climate. This then raises questions about the potential role and specific added value of IGAD’s economic agenda and who is driving it. It also raises a challenge to IGAD to identify how to build on the high levels of informal regional trade and the growing sub-regional and bilateral relations among members as a basis for greater regional economic integration - particularly given the risks of engaging in business in fragile states, characterised by conflict. The challenge is heightened by the scale of informal trade. According to the World Bank (2014), “IGAD has lagged behind other Regional Economic Communities (RECs) in negotiating and interpreting trade agreements, and the institutional framework to resolve associated disputes is weak”. As such, IGAD faces a Catch-22: while it lacks the resources or capabilities to achieve economic integration on its own, its international partners appear unconvinced of IGAD’s abilities in this field (Woodward, 2013).
The potential for peace cannot be seen in isolation from the growing drivers for economic cooperation in the region, which will raise the bar to finding common interests and priorities. In particular, the centrality of Ethiopia to the region cannot be understated - in both physical and metaphorical terms. Stability in the region is increasingly a primordial concern for Ethiopia, due to the danger of overspills into Ethiopia near Somalia and South Sudan, but also in relation to its investments in the Grand Ethiopian Renaissance Dam (GERD), energy agreements and its expanding railway networks to overcome its landlockedness. Ethiopia has already begun supplying neighbouring countries with energy from hydroelectric power, gaining the moniker the ‘water tower of East Africa’ with its seven major drainage basins and related potential for hydroelectric power generation, generating over 2000 MW and soon to acquire a 10,000 MW production capacity once the projects under construction are completed in the coming four years. Though not without risks (for example tensions with Egypt around the use of the Nile Waters as recently discussed in an article from The Economist) these dynamics then also raise the opportunity cost of tensions and conflict - the potential benefits of the GERD to Sudan have reportedly improved relations and even extended to their role in the South Sudan conflict.
While much of the progress and growing interdependence in the IGAD region relates to bilateral agreements and joint ministerial arrangements outside the IGAD framework, it nonetheless points to the potential opportunities for greater coordination through IGAD and/or other regional organisations. IGAD can facilitate bilateral meetings on a range of topics, representing a pragmatic approach given the challenges of operating regionally and that it may eventually manage to ‘regionalise’. But recent ECDPM analysis (forthcoming in PERIA) suggests that further integration in the Horn of Africa will rely on a combination of support for top-down, state-led processes and building on bilateral, national, informal and ad hoc processes. This is in line with Healy (2011), who argues for a less state-centric approach to regional integration that could capitalize on the strengths of informal cross-border relationships and Fisher (2014), who suggests international actors should fund more regular, high-level summits at the regional level, rather than the everyday activities of the IGAD secretariat and other bureaucratic organs. Regional peacebuilding and economic integration are both long-term gradual processes and both must evolve together. No one regional organisation can take full responsibility for this, but by being adaptive and opportunistic, building on bilateral processes and growing economic interdependence while supporting peace resolution, the role for an organisation like IGAD will only grow. This article draws on ECDPM analysis on the political economy of regional integration in Africa, in particular the IGAD study, forthcoming at http://ecdpm.org/dossiers/peria-political-economy-analyses-african-union-regional-economic-communities-africa/
Fisher, J., 2014, Mapping ‘Regional Security’ in the Greater Horn of Africa: Between National Interests and Regional Cooperation, Friedrich Ebert Stiftung. Healy, S. 2011. Seeking peace and security in the Horn of Africa: the contribution of the Inter- Governmental Authority on Development. International Affairs. 87(1): 105–120. Woodward, P. 2013. The IGAD and Regional Relations in the Horn of Africa. In: The Horn of Africa. Intra-State and Inter-State Conflicts and Security, R. Bereketeab. London: Pluto Press: 141-155. World Bank. 2014. Draft Regional Initiative in Support of the Horn of Africa. Washington DC: World Bank. About the authors Dr Bruce Byiers is Senior Policy Officer for the Economic Transformation and Trade Programme at ECDPM. E-mail: bby@ecdpm.org Twitter: @BruceByiers Sophie Desmidt is Policy Officer for the Conflict, Security and Resilience Programme at ECDPM. E-mail: sd@ecdpm.org Twitter: @SophieDesmidt
What comes first? A peaceful society leading to more economic exchange, growth and improved well-being? Or growing economic exchange and interdependence leading raising the costs of conflict and leading to a more peaceful society? That is a fundamental question for many, but is of particular importance in the Horn of Africa, where within and between-state conflicts underline the importance of a regional approach and the importance of regional bodies such as IGAD - the Intergovernmental Authority for Development. While IGAD has a strong focus and considerable renown on peace and security issues, economic integration is often seen as lower priority in the region. But rising economic interdependence in the region may be slowly altering the interests and incentives for conflict. By adapting to these changing interests and incentives, IGAD may be able to play a supportive role in promoting regional peace and prosperity with benefits at the national level.
Intertwined security & economic integration
The mutual connections between regional security and the economy relate particularly to the geographical constitution of the Horn of Africa. A number of landlocked countries, including newly independent South Sudan, are slowly but surely intensifying cross-border cooperation to ensure access to water, energy and existing transport networks in the region in the midst of long-running tensions within and between countries, the effects of climate change and drought, and influences from outside the region. In response, Peace and Security, and Economic Integration are two of the three pillars underpinning IGAD’s strategy (the third being Agriculture, Natural Resources and Environment). IGAD is a ‘building bloc’ of the African Peace and Security Architecture (APSA) and hosts one of Africa’s most elaborate Conflict Early Warning Systems (CEWS). Peace and security is also a key area for donors supporting the region, forming one of the EU’s key pillars along with economic integration and natural resource management in its Regional Indicative Programme for 2014 to 2020 , for example. Although IGAD has become best known for its peace and security related activities, not least in Sudan and South Sudan, it is also one of eight Regional Economic Communities (RECs) recognised by the African Union (AU) and a building block of the African Economic Community (AEC) under the AEC Treaty. This brings commitments to establishing a free trade area (FTA), macro-economic convergence, industrial development and investment promotion, infrastructure and transport development, information technology, tourism development, and the development of energy, agriculture, environment and natural resources. The recently approved Horn of Africa Initiative (HoAI) by the World Bank, EC, and AfDB among others further supports the linkages between these, with a large pool of external funding targeted at vulnerability and resilience, and economic opportunity and integration.
Getting more peaceful?
While operating regionally brings additional complexity, and while this region is home to three of Africa’s most protracted conflicts in Darfur, South Sudan and Somalia, IGAD can point to impressive progress. Besides its extensive CEWS, IGAD has managed to consolidate expertise in conflict mediation, supported by a heavily engaged IGAD Assembly of Heads of State and Government. Part of IGAD’s success in building common interest around mediation, early warning and conflict resolution are due precisely to the economic and political cost of cross-border conflict spillovers. Though observers have lamented the lack of institutionalisation of IGAD’s peace and security architecture and the democratic deficit, with Heads of State primarily relying on ad-hoc approaches to conflict resolution and management, the economic and political costs encourage high-level political ownership of IGAD’s peace and security agenda through inter-state bargaining. This helped IGAD broker the 2005 Comprehensive Peace Agreement in Sudan, leading to the successful referendum in southern Sudan and South Sudan’s independence in July 2011. Although violence broke out in December 2013, a peace agreement was signed in August 2015 and is being monitored by IGAD, with a Transitional Government of National Unity (TGNU) expected to take office now for a period of 30 months, preparing the country for next elections. Meanwhile in Somalia, where the AU is present with its largest peace support operation, IGAD has booked progress in pushing forward the federalisation process through its Facilitator’s Office for Somalia. This includes a number of agreements on interim regional administrations in the South-West and Central regions, a peace deal in 2014 between former opposition leader Col. Barre Hirale and the Interim Jubba Administration and the inauguration of Jubaland Parliament. In tandem with the AU, IGAD has launched a security sector reform process and continues to mediate between rival clan militias in Southern and central parts of Somalia, where reports indicate that Al-Shabaab is expanding its activities into bordering Kenya, and that increased efforts will be needed to further eradicate the group. As with South Sudan, IGAD’s role as a neutral platform have helped minimise the economic fallout from regional conflict. This has included some thorny issues, such as the deployment of Ugandan troops in South Sudan. These are notable successes in a region facing considerable environmental pressures and confronted with longstanding regionalised conflicts. But common challenges associated with the physical environment and landlocked countries equally underpin the logic of greater regional collaboration, spearheaded by the convening power of the IGAD Assembly of Heads of State and Government.
And on the economic side?
In contrast to its relative success on conflict mediation, in 2012 IGAD described its own progress on economic integration as ‘dismal’. Nonetheless, market integration and broad regional economic integration remain key stated IGAD objectives to create not only a free trade area, but also a customs union and eventually a common market. Beyond market integration, sometimes referred to as ‘shallow integration’, IGAD’s strategy also reflects aspirations of ‘deep integration’ including the soft and hard infrastructures that facilitate economic exchange and interdependence. Economic integration and market access also underpin IGAD’s approaches to its third pillar of food security and drought and disaster reduction, reflecting the fundamental place economic integration takes in its vision for regional cooperation and integration. But actually implementing the economic integration agenda is subject to wide variations in economic policy approaches and challenges among member states, limited economic complementarity, and the fact that most are also pursuing economic integration through the EAC (East African Community) and COMESA (the Common Market of Eastern and Southern Africa). The tensions in the region also undermine the investment climate. This then raises questions about the potential role and specific added value of IGAD’s economic agenda and who is driving it. It also raises a challenge to IGAD to identify how to build on the high levels of informal regional trade and the growing sub-regional and bilateral relations among members as a basis for greater regional economic integration - particularly given the risks of engaging in business in fragile states, characterised by conflict. The challenge is heightened by the scale of informal trade. According to the World Bank (2014), “IGAD has lagged behind other Regional Economic Communities (RECs) in negotiating and interpreting trade agreements, and the institutional framework to resolve associated disputes is weak”. As such, IGAD faces a Catch-22: while it lacks the resources or capabilities to achieve economic integration on its own, its international partners appear unconvinced of IGAD’s abilities in this field (Woodward, 2013).
But wait - there is growing economic interdependence!
The potential for peace cannot be seen in isolation from the growing drivers for economic cooperation in the region, which will raise the bar to finding common interests and priorities. In particular, the centrality of Ethiopia to the region cannot be understated - in both physical and metaphorical terms. Stability in the region is increasingly a primordial concern for Ethiopia, due to the danger of overspills into Ethiopia near Somalia and South Sudan, but also in relation to its investments in the Grand Ethiopian Renaissance Dam (GERD), energy agreements and its expanding railway networks to overcome its landlockedness. Ethiopia has already begun supplying neighbouring countries with energy from hydroelectric power, gaining the moniker the ‘water tower of East Africa’ with its seven major drainage basins and related potential for hydroelectric power generation, generating over 2000 MW and soon to acquire a 10,000 MW production capacity once the projects under construction are completed in the coming four years. Though not without risks (for example tensions with Egypt around the use of the Nile Waters as recently discussed in an article from The Economist) these dynamics then also raise the opportunity cost of tensions and conflict - the potential benefits of the GERD to Sudan have reportedly improved relations and even extended to their role in the South Sudan conflict.
What role for IGAD?
While much of the progress and growing interdependence in the IGAD region relates to bilateral agreements and joint ministerial arrangements outside the IGAD framework, it nonetheless points to the potential opportunities for greater coordination through IGAD and/or other regional organisations. IGAD can facilitate bilateral meetings on a range of topics, representing a pragmatic approach given the challenges of operating regionally and that it may eventually manage to ‘regionalise’. But recent ECDPM analysis (forthcoming in PERIA) suggests that further integration in the Horn of Africa will rely on a combination of support for top-down, state-led processes and building on bilateral, national, informal and ad hoc processes. This is in line with Healy (2011), who argues for a less state-centric approach to regional integration that could capitalize on the strengths of informal cross-border relationships and Fisher (2014), who suggests international actors should fund more regular, high-level summits at the regional level, rather than the everyday activities of the IGAD secretariat and other bureaucratic organs. Regional peacebuilding and economic integration are both long-term gradual processes and both must evolve together. No one regional organisation can take full responsibility for this, but by being adaptive and opportunistic, building on bilateral processes and growing economic interdependence while supporting peace resolution, the role for an organisation like IGAD will only grow. This article draws on ECDPM analysis on the political economy of regional integration in Africa, in particular the IGAD study, forthcoming at http://ecdpm.org/dossiers/peria-political-economy-analyses-african-union-regional-economic-communities-africa/
Further references
Fisher, J., 2014, Mapping ‘Regional Security’ in the Greater Horn of Africa: Between National Interests and Regional Cooperation, Friedrich Ebert Stiftung. Healy, S. 2011. Seeking peace and security in the Horn of Africa: the contribution of the Inter- Governmental Authority on Development. International Affairs. 87(1): 105–120. Woodward, P. 2013. The IGAD and Regional Relations in the Horn of Africa. In: The Horn of Africa. Intra-State and Inter-State Conflicts and Security, R. Bereketeab. London: Pluto Press: 141-155. World Bank. 2014. Draft Regional Initiative in Support of the Horn of Africa. Washington DC: World Bank. About the authors Dr Bruce Byiers is Senior Policy Officer for the Economic Transformation and Trade Programme at ECDPM. E-mail: bby@ecdpm.org Twitter: @BruceByiers Sophie Desmidt is Policy Officer for the Conflict, Security and Resilience Programme at ECDPM. E-mail: sd@ecdpm.org Twitter: @SophieDesmidt
This article was published in GREAT Insights Volume 5, Issue 1 (February 2016).
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