By Dr. Suleiman Walhad
May 26th, 2023
Integrating a region, fraught with challenges as those of Horn of Africa States, is a complicated process, requiring not only dedication, hard work and trust but also patience and a clear understanding of the project itself. It is in this latter aspect of understanding the project, that we would address in this article. While the ultimate goal may involve a political and economic union of the member states, there would be need to prepare the groundwork, in the initial stages, for setting up such a union and it would, no doubt, need time for consuming and clearly seeing the advantages and/or disadvantages of such a noble objective.
The region’s populations, although of the same stock, were exposed over the past nearly two centuries to the single nation-state format, requiring loyalty to the single and unitary state, antagonizing generally the neighbors, making claims on each other and sometimes absorbing each other. It was, indeed, an environment where cleavages in the regional population, pushed the interest of the nation state format vis a vis other states and hence competition on the economic, political, security, and even social aspects.
Each state developed its own economic and security infrastructures and laws, which contradicted the natural economic infrastructures of the region, which historically consisted of the highland farmers and the lowland pastoral societies, exchanging goods they produced. Note the highlands also depended greatly on the maritime states for their international trade and this went on with great difficulties in the nation-state format, which resulted in the absorption of Eritrea by Ethiopia at one time, giving rise to one of Africa’s longest liberation struggles. It also gave rise to disruption of the life and lovies of people who were living in the border areas and claims of one country against the internationally recognized territory of another such as that of Somalia on Ethiopia.
The region, because of its geostrategic location, further became a magnet for the antagonists of those bygone years. They were the Ex-Warsaw Pact and NATO, the first led by the Ex-Soviet Union while the other was and is still led by the United States of America. Both Somalia and Ethiopia eventually became members of the socialist bloc of the world of the time but that did not prevent wars between the two countries where a lot of lives were lost on both sides unnecessarily nor did it prevent the movement for the liberation of Eritrea, which finally saw the light of its sovereignty in 1993. Djibouti was born in a period of regional revulsions and repulsions and horrors of wars and civil strives in the region, and by sheer luck and, perhaps, through the presence of foreign naval forces in the country, it became an island of tranquility in the volatile region.
Although the populations of the member states of the region have now been exposed to each other in other strenuous situations such as in refugee camps and other countries across the globe, and have come to know each other better, realizing that they are no different from one another, there are still those who believe in the antagonisms created in the past with the belief that one country is out to get the other or others. Ethiopians are wary of Somalis who have claims on more than one third of Ethiopia, while Djibouti being an ex- French Somali colony is afraid for its unique stature, it has acquired as a result of the collapse of Somalia. Many Somalis believe that Ethiopia is still planning to gobble of what is left of Somalia and, of course, the story of Eritrea and Ethiopia is well known and would not need any regurgitation here.
The fears of each of the populace of each of the states in the region, though unsubstantiated and unnecessary, are played on by some politicians of each of the member countries to find space and platforms and hence, therefore remains. It is this fear itself that perhaps should be one of the main reasons for the creation of an integrated region, where possibilities of wars among the member countries are ruled out and eliminated and where quarrels are settled round the table.
The region should take cue from the European states, who created the European Union to avoid any more wars within the European region. This requires an infrastructure, which brings together the region’s members states and its populations at a supra-national level. The process cannot be overnight. It would require careful and deliberate action plans, which not involves easing of political tensions, creating trust among the leadership of the countries not only at the presidential/Prime Ministerial levels but even at lower echelons of the administrations of the countries.
In addition to government organizations and their coordination, there would also be a need to have the populations, their different sectors, business, educational, health services and even tourism being introduced to each other at calibrated levels that do not give rise to the realization of perceived fears. All of this would require time and effort, educating, conferences, and closer collaboration among the member countries when it comes to domestic political upheavals of each country and non-regional parties. It is these non-regional parties and rebellions and terror groups that currently benefit most from the chaos and disintegration of the region.
To realize the Horn of Africa States as a regional block, integrated economically and having a common outlook to both regional and international issues, there should first be a will and determination of the regional leaders or at least one or two of them to start the process. Where there is a will, they say, there is always a way and why should there not be a way if one or two of the leaders of the region put their heads together to proceed in the creation of an integrated Horn of Africa States region.
Coordinating economic activities first could be a good approach, where trade tariffs and easy movement of goods and people are encouraged through agreements among the regional member states. The irony is that they already do but on informal basis. They just need to be formalized. This would eventually lead to, probably, no borders for goods and people, where a merchant in one country can sell his/her wares across a much larger market than hitherto was available to him and/or her.
We know the regional member states generate revenues from taxes on goods and services across borders. Free movement of goods means there would be no tax collections within the internal boundaries of the region. However, one should note that most of the imports of the region would come through the frontiers of the members with other nations beyond the region. It is where the goods would be taxed, and such taxes would be shared according to the destination of the imported goods. There would be agreements managing this tax issue.
The region at present does not tax its populations as citizens. Probably only some civil servants are taxed and in the case of Djibouti, for instance, workers of major corporations. A citizen of a country should be paying his/her fair share of tax when taxes are applicable on the person. This would necessitate promulgation of a new tax code for each of the countries and region. The new tax formulation would generate more funds for the states. Many countries make the taxation of their populations high which encourages some of their citizens to abandon their homes and move on to other countries where taxes are more reasonable. We recommend a lower tax infrastructure for the Horn of Africa States to encourage every citizen to pay his/her dues without evading it. We will present the issue on taxation in another article in the future. We suffice it to say that tax collection of the states would be much larger and more systemic than is currently the case.
The economies of the region would expand as the merchant class of the region acquires a larger market of some 157 million people, which is still growing. It would lower the cost of goods imported into the region and may also help push its exports and export incomes up as the region negotiates with non-regional parties as one market. This would allow investors to eye the region and hence bring in investments into the region to take advantage of the larger market and the resources available in the region, whether this is sub-soil or above the ground.
An integrated economy does not mean loss of sovereignty, and it does not mean that a country would swallow another, the fear of most small countries. It actually would mean freedom of movement of people, goods and services and capital within the region and hence better employment of the populations, lowering the cost of labor within the region, higher wage-earning capacity of the population and hence more consumers and even larger and growing economy, which at the end of the day also means that governments would be collecting more taxes which enables them to provide the services they should be providing to the people. There would be less spending of defense postering to provide better services in terms of educational and health facilities for the population of the region.
Cooperation and collaboration of states in the Horn of Africa States region would be more beneficial for each of the countries singularly and collectively. As a region with a common historical background and a population of generally the same stock, it would help not only in the economic front but also in the social and cultural fronts. The region owns a shared heritage. The traditional highland/lowland formation of the region and the trade exchanges between the two would be helpful in setting up smooth trade flows, development of transportation, energy and other aspects of 21st century innovative economic activities.
The business infrastructure of the region would be in a better position to compete with other regional blocks, and it would also allow growth within the larger market in place, which in turn, means more opportunities to make more revenues and profits.
The process for a regional integration would require proceeding in stages. There may first be a creation of a free trading area along the borders, extending to the rest of the members states, followed by a customs union requiring uniform policies related to trade with non-regional members. This would be followed by the creation of a common market where there is not only free flow of goods and services but also labor and capital. This may be further developed into an economic union where common and/or uniform economic policies and formation of joint economic and financial institutions such as a regional central bank may be created. This may eventually lead to a monetary union and eventually a federation. This would, no doubt, take time as each stage takes time to be implemented and digested before moving on to another higher stage. Indeed, this is a long process and would need dedication and commitment from the member countries, which in a region like the Horn of Africa States is not easy but possible.