Tremors in Europe should be lessons for EAC

2011 is likely to go down as the year of earthquakes. Every now and then, the stable ground many are used to experiences violent waves that turn skyscrapers into mere mounds of rubble. In the process several lives are lost, property worth so much money is destroyed and lives are disrupted. Rescue missions dominate news space as the survivours continue to hope that those missing can be found. But as days go by, this hope continues to painfully dwindle. Japan suffered a triple disaster when it had an earthquake that was followed by a tsunami and then had to deal with a nuclear plant leakage. Soon after, Christchurch in New Zealand was also in rubbles after an earthquake. And recently it was Turkey that had to deal with an earthquake that has so far claimed close to 500 lives. However, the real tremors worth worrying about are the ones that the European Union is experiencing. The economic bloc is having endless troubles since some of its economies got bogged down in debt. The term “PIIGS” has often been used in reference to the countries in a debt crisis or soon to be in one such as Portugal, Italy, Ireland, Greece and Spain. To stay afloat, the above countries are offered financial bailouts on condition that they institute some austerity measures. This combination of mounting debt and tough austerity measures has certainly resulted in social unrest with Athens experiencing some of the worst protests in the recent days. The other day, France’s leader who seems to be losing his diplomatic tone each day announced that it had been a mistake to admit Greece into the Eurozone in 2001. To sum it all up, the waves seem to be testing the strength of the EU ship right now. The richer economies are being viewed as bullies by some and now we are even hearing some people talking of abandoning the Euro and calling the European Commercial Bank (ECB) all sorts of names. There seems to be a growing rift between the bureaucrats in Brussels (EU chair) and the people bearing the current conditions. As all this unfolds one cannot help it but reflect on the East African Community and its future prospects. We have often been reminded that the next big step for the EAC is economic integration characterised by the creation of a single currency and a central bank. The above economic plans are apparently being formulated along the same lines as the EU and its famous Euro currency. In fact the EU has donated money and other forms of help aimed at assisting EAC to achieve its programmes. So, I think you can understand my fears and concerns as far as the direction of the EAC is concerned. I don’t know if our EAC top dogs in Arusha are following the developments in Europe and taking notes to avoid the same catastrophe. Considering the differences in strengths of our five economies it would be interesting to know if there are strong fiscal and monetary tools to avoid the Euro zone troubles. Already, the current inflationary troubles faced by the region seem to have affected each economy differently. We have different exchange rates and some economies like Kenya can be considered production economies while Rwanda and Burundi are largely consuming ones with a huge burden of being landlocked. How are all these differences going to be harmonised without creating any social pressures on the people who hardly know what goes on during the numerous summits held in their name. The EAC is often fronted as a large market of over 120 million people, but little is often mentioned about the production capacities of each country. More importantly the rising population especially in Uganda is hardly mentioned as a challenge for the block especially if you consider that South Sudan is also largely dependent on EAC produce. In the past, the East African Community collapsed partly because of the imbalances between the different economies of the three countries (Uganda, Kenya and Tanzania). It would be interesting to know whether there are efforts to avoid the repeat of this same scenario or the current dilemma in Europe by those in charge of steering the EAC ship. It would be a shame if we fail to learn from what happened in the 1970s when the EAC tumbled to a halt. What is transpiring in Europe is nothing but a free lesson to us. Over to you Arusha! Email: ssenyonga@gmail.comBlog: www.ssenyonga.wordpress.comTwitter: @ssojo81