From regional security to regional integration in west africa

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 BACKGROUND

PERSPECTIVES ON REGIONAL CO-OPERATION

Regional organisations are a major feature of the global economic system. The basic point or
factor 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 trade
and economic links more rapidly than would be the case if such links were to be created only
by market forces.’1

The rationale for such co-operation among the developing countries is provided for by the fact
that it takes cognisance of the varying degrees and stages of development among the
developing countries, their low industrial and resource base and at the same time, significant
amounts of unutilised productive power and resource endowments. Globalisation, or the
challenge of globalisation, has given the governments a strong enough justification for
undertaking reform in pursuit of such co-operation. The institutional opportunity allows the
countries to organise themselves for regional co-operation schemes, seen as an important
element of their globalisation policy. In essence, regional co-operation helps its participants to
take 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 AFTA
are widely seen as representing the globalisation phenomenon. However, most of these
organisations proved to be stillborn, and only a few made some headway. Apart from the
overall economic backwardness and lower degree of complementarity, the regions in general
are politically underdeveloped with strife-torn inter-state relationships. Power configuration in
the respective regions also impinged on the co-operation process. Moreover, it is observed
that developing countries are (individually as well as a group) too weak within the existing
trade arrangements of the World Trade Organisation (WTO) to exert meaningful pressure to
their benefit.

One cannot possibly talk about Southeast Asia without referring to ASEAN. I will be using
the terms interchangeably as ASEAN encompasses the Southeast Asian region. When
ASEAN started in the late 1960s, the Vietnam War had just ended and confidence in the
future of Southeast Asia was low. It was believed by sceptics that the region would become
the ‘Balkan of Asia’ – a source of instability rather than a peaceful and prosperous region. But
against expectations, the region stabilised and boomed. The countries liberalised their
economies, encouraged foreign investments and promoted export-oriented growth, and
became the most dynamic and fastest growing region in the world. The phenomenal growth of
the economies of Southeast Asia countries in the 1980s and 1990s brought about a new
discourse on ‘development’ in the Third World. Why is, say, Singapore more successful than

June 2001 1


most 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 climate
also brought resources. Singapore is one of the few non-European countries to be admitted
into the OECD. One could concede the basic argument that ASEAN trade liberalisation and
industrial co-operation formed the core of development in Southeast Asia.2

It must be recalled that a sense of external threats to the Southeast Asia region from China and
the Vietnam War combined to allow the creation of the Association of Southeast Asian
Nations (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 Francophone
countries (See Table 1) to promote co-operation and integration, leading to the establishment
of 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 African
continent.4

However, 25 years later, ECOWAS has spent a substantial part of its existence on resolution
of crisis in Sierra Leone, Liberia and Guinea Bissau, without much economic integration
being achieved. Manufacturing is the fastest expanding opportunity area for developing
countries, 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 problem
with intra-ECOWAS trade is that member states mainly produce the same things; thus, you
have, for example, Ivorian plastic goods competing against their Nigerian counterparts in the
Nigerian market and Nigerian plastic products competing against Ivorian ones in Côte
d’Ivoire. It is also disheartening that there is little or no linkage between the manufacturing
sector and other sectors such as agriculture. This explains why regionally available
intermediate goods and primary materials used in the manufacturing sectors are imported
from overseas.

Presently, ECOWAS affords manufacturing only marginal advantages, since the similarity of
products 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 strategy
for optimising industrial integration. It has essentially created an avenue for the industrial
sector becoming normative by creating more forums for business people and professionals to
communicate, congregate and generally interact. Despite the IMP, programme implementa-
tion has been difficult, mainly because of paucity of funding, apathy of member states and
insufficient information.

There is also the problem of intra-ECOWAS trade and level of investment (See Table 2). This
is further compounded by the relative inconvertibility of currencies; scarcity of foreign
exchange and the high cost of imported capital goods from Europe and the Americas. All
ASEAN economies are trade-oriented; each having a large external sector provided by the
ASEAN 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 by
ECOWAS.

Another observation on integration may also be made, in a bid to explain why most of the
regional organisations have not made much headway in intra-regional co-operation although
they start off with great promise. Integration as a penultimate step in trade liberalisation

June 2001 2


involves industrial complementation and opening up of the domestic markets, which although
apparently 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 the
prevailing socio-economic realities at home. Viewed in this perspective, integration requires
major economic and political preparation that does not come overnight.

Against this backdrop, it was thought appropriate that the experience of ASEAN, which was
set up in 1967, be studied. Mistakes learned in Southeast Asia could serve as important
lessons for West Africa. The question then is what is the nature of the ASEAN economic
success? What lessons does West Africa need to learn? The lessons for West Africa are quite
clear. It is, however, important to point out at the onset that while different circumstances led
to the establishment of these organisations, nevertheless, certain common strands still run
through. A major objective for the establishment of these organisations was to raise the
economic well being of their citizens and promote the goals of security, democracy and
development, therefore, regional stability. This have become manifest following the adoption
and implementation of the ECOWAS Treaty and its protocols, and especially the fast-track
approach being pursued to speed up the integration process.

Regional Dynamics

Since our overall concern is with regional security and integration, it is necessary to examine
what a region is. A region is a political-spatial identity consisting of a group of states, which
are proximate and interdependent. It is generally characterised by geographical relatedness
and other affinities. A region may be defined as ‘a set of contiguous states with a level of
interaction between them, such that a lack of security within or between individual states in
the region affects the security of the set of states as a whole.’5 Ghana for example, has
obvious 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-border
trading and free movement of people, which in West Africa pre-date ECOWAS. This does not
preclude the members of the organisation having areas of conflicts – for example over the
artificial borders inherited from the colonial powers, and the rivalry over the relative weight
and influence of member states, especially Côte d’Ivoire, the most prosperous of the West
African Francophone states, and Nigeria as the largest of the Anglophone states. Analysts6
suggest that Côte d’Ivoire’s relations with Nigeria are based on rivalry because the country
has 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 the
relative degree of balance and complementarity and the extent to which the component states
are oriented to integrative behaviour.7 It is argued that a relatively balanced distribution of
economic capabilities ensures genuine equalities and breeds mutual confidence while unequal
capabilities cause apprehensions – real or perceived – among the weaker states because of
their being disadvantaged economically and politically. In regions where there is a high
degree of balance and complementarity, as in Western Europe, usually there are a number of
core members and a graduation of economic power levels and a regional unanimity that
protects the interests of the small members.8

On the other hand, marked contrast in economic power levels, degrees of complementarity

June 2001 3


and extent of integrative orientation to the region are observed in many regions like Latin
America, South Asia and West Africa as this study indicates. In each of these regions there is
one strong core member (Brazil in Latin America, India in South Asia and Nigeria in West
Africa). The degree of complementarity is also very low.

Apart from balance and complementarity, level of domestic political development and foreign
policy orientations are important determinants of integrative or co-operative behaviour in a
region. Moreover, since conflicts having foremost a bilateral and local relevance can escalate
to 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 aimed
at protecting the expected gains of their mutual co-operation and interests from being
undermined militarily or through other, more subtle means.

Approaches to Regional Co-operation

Regionalism 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 defined
area, to foster economic or political co-operation among themselves in order to lessen their
dependence on others outside the region. It can be deduced from the above definitions that
regional groupings are a continuum of three stages – co-operation, co-ordination and full
integration with an ulterior motive in accommodating local conflicts. Economic integration,
according to the functionalist model, contains in it a certain dynamic logic that by bargaining
collectively fulfils the background functions of a ‘pluralist political structure, similarities in
economic and industrial development and ideological political structure with its inherent spill
over.’9 Spill-over implies that success in one integration sector will then lead to advances
across a much broader front, just as the economic achievements of the European Union have
since then generated additional political and strategic co-operation.

It should be pointed out that the functionalist approach looks at regional co-operation process
as a transitional stage of regional integration, rather than an end in itself. However, some
important deductions follow from these premises. In the first place, the approach appears to
be an oversimplification in the sense that it ignores the primacy of politics in the co-operation
process among the developing countries. It has been observed that even if co-operation starts
in few discrete and non-controversial areas, it soon gets over-politicised negating the validity
of a gradual politicisation process.

Secondly, the functionalist approach also implies surrender of some elements of sovereignty
to 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 to
share even the smallest degree of sovereignty with these regional institutions excepting where
the member states explicitly agree to do so within an integration framework. Concrete
examples of these exceptions are hard to come by except in the case of the EU. In effect, the
real decision making power lay with the government representatives rather than the
bureaucrats of these organisations. This amounts to inter-governmentalism; that is
government 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 of
functionalism 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 economic

June 2001 4


integration, let alone political integration, even if it was so desired.

As opposed to functionalism ‘communication theory’ takes a bottom-up approach in terms of
development of a sense of community defined in a much broader sense than the economic
focus of functionalism, to include social perceptions, values and sentiments and articulation of
these values, and a sense of community in formal and structured forms.10 According to this
view, 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, student
travels, tourism and intra-regional trade.

At the regional or continental level, attempts at fostering a strong economy and security
situation in Africa have been exemplified with a series of treaties from the OAU’s 1980
Lagos 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 ECOWAS
in West Africa, SADC in Southern Africa, Maghreb in North Africa, the COMESA for
Eastern and Southern Africa, and ECCAS / CEEAC for Central African States, were to
translate these socio-economic and security issues of the OAU into operational programmes at
the sub-regional level. This is against the background of the social, political, economic,
ideological, geographical spread and external commitments and diplomatic problems
encountered at the continental or regional level (OAU).11

Given the precarious environment facing ECOWAS members, particularly under the World
Trade Organization agreement and the current globalisation, questions have variously been
raised by some African bureaucrats about the ultimate importance of regional economic
integration. The examples of Malaysia and Singapore – members of ASEAN – are cited as
proof that it is not impossible for a compact of body politics to reach the sky on its own, with
the 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 joined
the ranks of the ‘developed’ countries, with a per capita income in excess of US$25,000.12

On a more theoretical level this paper seeks to investigate whether the intra-regional trade has
been of benefit to ECOWAS or the ASEAN, and whether these initiatives draws us near any
development ‘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 Africa
and other developing countries. It is self-evident that every region sets a specific regional
agenda, 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 manage
change in a dynamic world: to understand ongoing changes in the world, predict as yet
unexperienced future changes and to respond flexibly, effectively and in good time to them.13
The key therefore, lies in ECOWAS’s ability to write its own agenda for sustained economic
growth and development in West Africa through mutually supportive facilitating conditions
and operational factors.

The research project was funded by the MacArthur Foundation. It was a pioneering study in
so far as review of existing literature and other secondary data on ASEAN / ECOWAS
economic co-operation are concerned. It was complemented by extensive and interesting
primary information generated through five weeks field survey conducted among the
academics, professionals and other opinion making sections in some ASEAN / ECOWAS
countries, notably in Malaysia, Indonesia and Nigeria. In addition, telephone conversations

June 2001 5


were had with scholars in Singapore and Brunei. It is hoped, that the outcome of the project
would be useful to all those who would be interested not only in ASEAN and ECOWAS as
two Third World regional groupings, but also in the dynamics of inter-state relations in the
two regions and their interactions with the problems and prospects of regional and inter-
regional co-operation.

OBJECTIVES AND METHODOLOGY

Objectives: 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; and
e. 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 and
primary data. Available literature, documents and statistics on both the ASEAN and the
ECOWAS protocols and treaties were collected at Institute of Strategic and International
Studies (ISIS) Malaysia, Sarawak Development Institute (SDI), the ECOWAS Secretariat,
Abuja, ASEAN Secretariat, Jakarta and reviewed. Discussion of the study objectives and
extensive 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 primary
data. For this purpose, visits to the ASEAN and ECOWAS countries were necessary. Whilst
there, the first hand views of scholars, and other opinion-formers and policy decision-makers
of ASEAN countries were obtained. At places such as Ministry of African co-operation,
Abuja, Nigeria, ECOWAS Secretariat, ASEAN Secretariat, Malaysian Institute of Diplomacy
and 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 discussion
was on perception of the goals, benefits and problems of regional and intra-regional co-
operation, decision-making mechanisms, organisational issues, and politico-strategic issues
impinging on the co-operation process. Attempts were made to obtain a country perspective
as far as possible from the interviews within the limited time and resources. At a number of
places, specifically, in university faculties and research institutions this was mainly in the
form of informal discussion in a small impromptu or prearranged gathering that helped cover
a broader spectrum of issues. The interviews were recorded, where possible. In other cases
notes were taken. In some cases, the respondents volunteered to offer written replies in
accordance 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 the
economic and political situation in Indonesia.

Analysis: As the primary data were being collected a preliminary report was prepared on the

June 2001 6


basis of secondary data to arrive at some tentative conclusions after my field trip to the
ECOWAS headquarters in Abuja, Lagos. However, this helped in the collection and analysis
of the primary data. Since the focus of this study was on the experiences and lessons thereof
and as such was mainly perceptional in character, care was taken not to cram the report with
statistics. Qualitative arguments, indication of trends and assessment perspectives were made
while dwelling on various issues involved in the study.

SECTION 2: GENESIS AND EVOLUTION OF THE ECOWAS

Even 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 essential
for the maximisation of the continent’s vast potentialities, and resources. The UN Economic
Commission for Africa (ECA), established in April 1958 inspired by economic development
in Latin America in the 1950s, (in turn modelled upon Western European experience of free
trade) insisted on functional economic co-operation among African countries as part of the
overall strategy towards achieving industrial development on the continent. In fact, the ECA
acted 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 regions
to stimulate the governments concerned to practical measures of economic co-operation. ECA
believed that integration measures like liberalisation of international trade, adoption of a
common tariff for member countries of a regional body and the co-ordination of investment
policies, theoretically would make the regionalisation of import substitution policies more
viable. As earlier noted, the main objectives of ECOWAS were the eventual elimination of all
tariffs and barriers between members, the establishment of a customs union, unified fiscal
policy and co-ordinated regional policies in the transport, communication, energy and other
infrastructural facilities.

Unlike ASEAN which has been primarily a state to state relationship par excellence, over the
years ECOWAS members have developed an increasingly intensive web of relations with
developed countries characterised by what can be likened to the structural imperialism
relationship. The facts are, to say the least, very depressing when we look at the structure of
community trade and ECOWAS trade with other regions (See Table 4). ECOWAS trade
amounts to approximately 11% of the sub-region’s total trade with the world. According to
the 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’s
import from, and export to, Europe of $7,525m and $8,114m respectively for 1997. Thus, the
intra-regional trade, level of investment, and industrial development remains much
undeveloped. To a certain extent this has created dichotomy in ECOWAS co-operation. The
leading industrial states in the region – Nigeria, Senegal, Côte d’Ivoire, and Ghana – believe
that they are individually important enough to secure a better deal if they pursue their cause as
individuals rather than as a group (See Tables 5). Many of them feel that they will be better
served individually if they link up with developed countries (See Tables 6 a & b); and the last
group of these – landlocked countries (Niger, Burkina Faso and Mali) – are merely frustrated
because they are rather too small to make any significant impact in the global arena. The
extractive industries contributed 82 percent of the GDP in most of the ECOWAS States. (See
Tables 7 on ECOWAS Exports of principal items).

Within the sector, agriculture predominates in Benin, Burkina Faso, Côte d’Ivoire, the
Gambia, Ghana, Guinea, Guinea-Bissau, Mali, Niger, Nigeria, Senegal, Sierra-Leone, and
Togo.14 The regional trade is dominated by Nigeria, Ghana, Côte d’Ivoire and Senegal.

June 2001 7


Nigeria’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 of
goods 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. While
most of the imports, which accounted for trade records 6.3m metric tonnes in 1999, came
from UK, the North Continent, the Far East and Africa. Imports of African origin dominated
the trade, amounting to 2.6m metric tonnes, of which crude oil and petroleum products
recorded 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 the
agricultural sector but the boom went a long way to boost her foreign policy posture in West
African sub-region.

It is against this current background that we examine the ability of the ‘intra-regional trade’ in
the 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; and
h) establish a fund for co-operation, compensation and development.

Under the theoretical framework for economic integration, the implementation of the above is
expressed 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 labour
remains a distant and difficult aspect. But it has come a long way. Most trade within
ECOWAS is already tariff-free. Free movement of designated goods, reduction of custom
duties and ECOWAS passport / travelling documents have also been adopted. The three
provisions of the Protocol came into force respectively in 1980, 1986 and 1989. Two major
ECOWAS 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 entered
into circulation, a veritable asset for intra-regional trade promotion and, at the same time, a
major step towards the realisation of a single monetary zone.

June 2001 8


Though a bold and imaginative step towards meaningful regional economic integration came
under the framework of ECOWAS, lack of potential for increased trade within West African
states is frequently mentioned as an explanation of the lack of success of ECOWAS. There is
an important qualification to be made at the outset, as there is evidence that the potential for
intra-ECOWAS trade is greater than is usually thought. The calculated statistics are for
recorded or official trade. It is known that for many West African countries a sizeable volume
of unrecorded or unofficial trade (80%) is done through informal sector.16 As regards the
potential for intra-regional trade in sub-Saharan Africa, an interesting analysis was outlined in
the 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, which
amounted to US$ 65 billion.17

GAINS FROM ECONOMIC INTEGRATION

Using the Jacob Viner hypothesis,18 the effectiveness of any economic integration such as
ECOWAS is seen in terms of its relative size of gains owing to trade creation and losses from
trade diversion. However, the determination of the exact incidence of gain to loss depends on
the 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 a
relatively high cost before the integration, with goods imported from another member country
within the union at a relatively lower cost. However, trade diversion or suppression occurs
when low-cost goods previously imported from the outside world are replaced by a higher
cost import from a member country within the union.

On the supply side, ECOWAS enterprises (both small and large) are likely to enjoy more
efficient allocation and management of available regional resources among members based on
each country’s comparative advantage. The consequent enhanced efficiency within the region
would further stimulate production for export into the outside world. On the side of the
consumers within the region, the lower prices (arising from allocating production to the
cheapest per unit cost location of a product within the region), and the greater variety of
consumables 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 in
the world, as regionalisation will inevitably divert their consumption to the cheapest producer
within the ECOWAS sub-region.

OBSTACLES AGAINST ECOWAS

ECOWAS faced problems similar to other regional groupings. Mauritania withdrew from the
group in late December 2000 and dramatic changes in the sub-region and external processes
hampered the growth of ECOWAS. Although its main objective is to promote economic
integration of the sub-region, it has spent the last 10 years resolving political and social
conflicts in some of its member countries such as Liberia, Sierra Leone, Guinea Bissau and
Niger. Nonetheless, since ECOWAS was established in 1975, West Africa has witnessed
tremendous, far-reaching changes. On the political scene, the principles of democracy, free
and 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 the
day as the countries prepare to meet the challenges of globalisation to avoid being
marginalised 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


corruption, mismanagement, low investment rate, falling prices of raw materials on the world
market, foreign debt, and the burden of structural adjustment.

Perhaps, in determining the benefits of the level of economic integration among ECOWAS
countries, the following questions are relevant: Is the geographical proximity of members of
any importance? Is it desirable for members to be similar in terms of the types of commodities
they produce as well as income levels? If two countries (like Nigeria and Ghana) are already
members of an economic integration programme, what are the implications for both of them if
new arrangements are involved?19 What are implications for countries left out? Is it desirable
to make exceptions to the WTO provision that makes it mandatory for any preferential free
trade agreement to eliminate trade barriers on substantially all the trade between the
members? How have the ECOWAS economies been performing and maintaining their
positions in the foreign direct investment (FDI)? While I have not attempted to provide
answers to these practical questions, some obstacles to the realisation of ECOWAS objectives
are briefly highlighted.

First, and the most obvious, is that for intra-ECOWAS trade to be mutually beneficial in line
with economic integration postulations, the potential incidence of trade among the member
countries should be substantial. Cross border communication and information technology are
expected to play a vital role in this quest. It is to the credit of ECOWAS that it has adopted a
protocol that has made it possible for community citizens to move freely throughout the West
African sub-region without need for entry visa. In addition, the fast track approach,
elimination of rigid border formalities and modernisation of border procedures through the
digitisation 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 road
and 11,000km interconnecting roads to open up land-locked countries.20

Investment partners are also being invited to participate in the construction of a railway line
between Lagos and Accra. However, long after political independence, many of the West
African countries still run systems established in the colonial era, and as such still maintain
more links and trading relations with former colonial powers in Europe than with
neighbouring West African countries with whom they signed the ECOWAS Treaty. Thus, the
level of poor infrastructure linkages among member nations tend to worsen whatever trade
initiatives that are embarked upon. It is hoped that the connection of West African countries
capitals by automatic telefax links (Intercom 1 and 11) funded by the ECOWAS Fund would
ease some of these problems.21

Secondly, the larger the area constituting an economic union in terms of population, income
and geographical spread, the greater the potential benefits to participating members. Most
members of ECOWAS are wretchedly impoverished and depend heavily on grants from
Overseas Development Assistance (ODA) and IMF, as well as other donor countries outside
West Africa. It is unfortunate that many of the operating companies in the sub-region are
owned by former imperialist capitalist classes headquartered in the developed countries. So,
when agreements are concluded among the member countries of ECOWAS, the dominance of
the transnational corporations (TNCs) reduces the effective implementation of such
agreements. 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 are
tied to or influenced by foreign governments, the less the benefits of economic integration

June 2001 10


accruing to citizens of member countries. There are nine different currencies in the sub-region
with seven of the 16 countries having a common currency tied to France. The French
speaking West African countries maintain a very strong monetary union via the CFA-franc
through the Union Economique et Monétaire l’Ouest Africaine (UEMOA) that constitute a
threat to the monetary union of the entire ECOWAS community. Until the currency barrier is
dismantled, the prospect for increased intra-ECOWAS trade cannot be realised. However,
with the harmonisation of ECOWAS and UEMOA programmes22 in order to avoid
overlapping and a duplication of efforts, especially those requiring trade liberalisation as well
as 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 into
economic integration, the more likely it would be for the most efficient producer within the
region to capture the enlarged market. That is, if ECOWAS countries are competitive in their
production of similar goods, there will be many opportunities for the substitution of the
commodities of one country for another and consequently leading to more trade creation than
diversion. On the other hand, when community members are complementary to each other
(producing similar commodities), intra-union substitution would be difficult as re-allocation
of production between high- and low-cost producers will be rare. So, while elimination of the
tariff wall will increase trade among complementary union members, trade creation would not
occur 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 to
point 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 high
degrees of unequal development among ECOWAS states. If large disparities between member
nations exist, some are bound to gain at the expense of the others as many industries will be
relocated (as specialisation occurs among participating countries) on the basis of comparative
advantage in production; foreign direct investment may be more attracted to some countries
than the rest; factors of production may be attracted from less efficient firms to more efficient
ones; and marginal-producing firms may be forced to reduce costs or leave the industry. Such
rationalisation may lead to polarisation of opportunities if not safeguarded; and the allegiance
of 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 outset
by making provision for the Fund for Co-operation, Compensation and Development.

Finally, the success of any economic integration programme depends on whether the benefits
from 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 West
African sub-region, revenue derived from import and export duties account for a substantial
figure in annual budgets. It follows therefore, that unless an opportunity is created to
adequately cater for revenue loss arising from dismantling of custom duties, the loyalty
towards the common market is doubted. The problem becomes more pathetic because of the
dwindling 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 to
congratulate African countries for having numerous regional integrations when there are
serious financial constraints facing members of these institutions. In fact, the financial burden

June 2001 11


of some of them are so heavy and unbearable that many of them depend on external funds for
implementing their programmes.’24

June 2001 12


SECTION 3: ASEAN’S EXPERIENCE OF REGIONAL CO-OPERATION

The Association of South East Asian Nations (ASEAN) was born in 1967 amidst under-
development, chronic instability, and inter-state conflicts. The original five members (now
10) had little in common apart from climate and natural resources and somewhat similar
ideological orientation. However, right from the outset ASEAN leaders recognised that
integration as in the EU (or EEC at that time) would be difficult to reconcile with national
interests and priorities. ASEAN leaders have, therefore, always shunned any suggestion of
supra-nationalism and have been averse to the idea of building a strong institutional
framework with rigid procedures as found, for instance, in the EU.

The statement of intent in the 1967 Bangkok Declaration, through which ASEAN was
formed, reveals so.25 Member countries would engage in such activities as joint cultural
endeavours, exchange of cultural groups, meetings of scientists, agriculturists, postal
authorities 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 not
to supplement national development efforts in the case of ASEAN. ASEAN emerged as an
extension of national efforts for development through co-operation in the socio-economic,
technical and cultural fields. More importantly, the countries, especially, Malaysia, the
Philippines and Indonesia, were afflicted by incipient communist insurgency. The alleged
Chinese involvement in fomenting communist insurgency movements and their alleged
complicity in the attempted coup in Indonesia sharpened the threat perceptions of these
nations in more or less similar direction. Thus, the central goal is the furtherance of the cause
of peace, harmony and stability in the region and to concert and harmonise efforts in
accelerating economic development.

In many ASEAN countries today there is a widely-shared view that by and large the
governments have been quite successful in undertaking first-order domestic adjustments,
measured in terms of enhancing the economy’s ‘international competitiveness’. It simply
suggests that in ASEAN countries, where economic reform is being initiated and promoted by
the governments, their focus of attention and efforts have been first and foremost with the
question of managing the process of reform and opening up of the economy, namely, with the
problems of how to maintain macroeconomics stability as a pre-requisite for the reform, how
to 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 reform
process do not only depend on its positive achievements, but also on how well the negative
impacts are seen to be dealt with. It can be asserted, therefore, that the second-order
adjustment are as important as the first-order adjustments, since the process of participating in
globalisation will need to be compatible with the country’s domestic social and political
stability. This requirement becomes more real and urgent in the societies with more
democratic political systems. In the longer run it is also important for more authoritarian
systems.

ASEAN has drawn considerable interest in and outside the region because of its pragmatic
policy, based on the objective assessment of what other countries (the East Asian newly
industrialised 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 as
a 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 the
globalisation phenomenon because of the importance of trade and investment liberalisation at

June 2001 13


the agenda of these forums.

This paper undertakes a review and assessment of economic co-operation in a number of
specific areas.26 While there is no direct causality that can be attributed to the dynamic
economic performance of the ASEAN economies to economic co-operation in the last three
decades, it cannot be denied that the relative peace and stability in the region, and the
increasing interactions among ASEAN states (officials, businesses, citizens) greatly enhanced
the process and character of growth. According to an ASEAN scholar, Professor Jomo of the
University of Malaysia, Kuala Lumpur, ASEAN has been able to attain such spectacular
growth because of several factors:27

a. 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; and
d. favourable political situation strongly conducive to economic development.

The ASEAN economies have grown rather accustomed to growth. The question has
traditionally 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, have
been negligible, at best. The reason for the slow progress, according to Dr Samuel Okposen of
the Multimedia University Malaysia may be traced to a number of factors.28 Those familiar
with what drives the ASEAN economies understand that dependence on commodity exports is
both a bane and a blessing to them. Nine of the ASEAN Ten – Singapore excepted – are
immensely well-endowed and major exporters of primary commodities. Thailand, the
Philippines and Indonesia are the region’s ‘food bowls’ while Malaysia and Vietnam, along
with the previous three, produce large quantities of rubber, palm oil, coconut and tin for
export. Indonesia and Brunei serve as the region’s ‘petrol pumps’, relying heavily on it for
export revenue, while Malaysia also produces large amounts of petroleum and liquefied
natural 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 made
great inroads in producing certain items – it is the third largest producer of semi-conductors in
the world after the United States and Japan – this is not true for the whole. ASEAN industry
has prospered in light-consumer products such as textiles and resource-based products.

Moreover, expansion of intra-regional trade in manufacturing is constrained by lack of
complementarity among the ASEAN market. The major problem is one of evolving ‘an
agreed mechanism of who will produce what, and, their reluctance for market sharing
arrangements beyond economic co-operation.’29

Why then have there been so few takers when it comes to regional trade and industrialisation
schemes? Basically, the answer to this lies in determining the ‘truth’ behind the commonly
held assumption that ASEAN members are full-bloodedly and unabashedly committed to
‘regionalism’. Regional interests are accorded priority only when they promote national
interests. This also means that the ASEAN member countries had development perceptions

June 2001 14


regarding 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 is
certainly not true of all. Singapore and Brunei operate ‘free market’, and offer very little
protection to their industries from all imports, not just those within the region. Judging from
official and unofficial statements – gathered from the ASEAN Ministerial meetings
proceedings – by their ministers, the Philippines, Thailand and Malaysia may also not be
averse to the idea of initiating some economic integration scheme.30

Indonesia with a population of over 160 million people had taken a different course of action
from the very start of the organisation. She saw no need or little need to open its domestic
market to ‘foreigners’. Instead, national policies were adopted to actively protect its industries
from imports. Indonesians, therefore, have chosen to word their commitment to ASEAN
differently: ‘ASEAN’, Indonesians declare, ‘can only be as strong as its individual members’,
Ergo, what is good for Indonesia is also good for ASEAN.31

In 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 as
pointed out by Prime Minister of Malaysia – Dato’ Seri Dr Mahathir bin Mohamad ‘the
enormous speeds attained by the ASEAN economies in the past decade were almost entirely
of their own doing.’32 At its height, Singapore, for example, grew by an annual average of 9.2
per cent between 1984 and 1994, while Malaysia and Indonesia managed to attain 7.6 and 7.1
per cent respectively in the same period.33 Little of this can be attributed in any direct way to
regional economic efforts.

Given the above and the ASEAN gentlemanly tradition of obtaining agreement from all ten
parties before it proceeds on any decision, how then does closer co-operation come about? As
one 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 there
is more to be gained from mutual co-operation than mutual defection. It is also a matter of
shaping the characteristic of interaction so that over the long run there can be a stable
evolution of co-operation.’34

A careful reading of the unpublished ASEAN reviews indicate several salient points. For one,
significant accomplishments were made in various areas. These range from regular ministerial
meetings 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 collaborative
studies and understandings among all ASEAN states collectively (the 6-x, now 10-x
principles). These range from simple declarations to concrete policy directives (for example,
the use of ASEAN currencies for the settlement of trade payments, brand-to-brand
complementation, the Singapore-Johor-Riau agreements, BIMP-EAGA, and so forth). Also,
ASEAN solidarity was exhibited in various external fora, ranging from the ratification of
international conventions to trade negotiations. The initiation of the development discussions
with dialogue partners also strengthened ASEAN’s voice in dealing with bilateral donor
countries.

As an observer and ASEAN scholar, at least three pervasive views can be discerned from my
readings, interviews and judgement of economic co-operation in ASEAN. Transport co-
operation is dismal and lacks urgency, while trade co-operation is punctuated by nominal
agreements that mimicked progress rather than reflect forthright efforts.

June 2001 15


Second, the economic performance of ASEAN economies since the organisation started is
impressive. Observers take great care in their pronouncements about the causal influence of
ASEAN in this respect. Yet there is the acceptance of the fact that ASEAN’s conscious efforts
at the conference table to achieve relative peace and stability in the region have resulted in the
region’s ability to concentrate on substantial economic matters. The economic progress
achieved by member states since 1970 appears to be a result of unilateral economic reforms
and policies. Each member recognised early on that progress hinged on a predictable
economic environment and sufficient public resources for infrastructure, resources that would
have been earmarked for non-economic activities under less stable, less peaceful, and more
hostile conditions.

With internal threats set aside, ASEAN was poised to take advantage of global restructuring
in the late 1970s and mid-1980s. In particular, the currency realignments following the Plaza
Accord helped, in large measure, the export boom of the ASEAN members and reaffirmed the
importance of trade to these economies.

A final salient point of the reviews of ASEAN is the conclusion that ASEAN stands at a
crossroads of its existence. There is a diplomatic style, which emphasises organisational
minimalism, personal relationships, consensus, informality, politeness and intensive
consultation. The ‘ASEANization’ process on security matters operates under the purview of
musyawarah dan muafakat (the process of decision-making through discussions and
consultation leading to consensus),35 which are associated with traditional village politics in
certain parts of Indonesia, Malaysia and the Philippines. It has engendered what can only be
called the quiet diplomacy on issues of tension and rivalries. Agendas and discussions are
constructed in such a way as to minimise conflict and to maximise the comfort level for all
participants. 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 but
within the ASEAN ten raises some fundamental issues.

However, according to Dr Pushpa Thambipillai (University of Brunei) who conducted a study
on ASEAN negotiating methods, there are a number of do’s and don’ts in the face of ASEAN
negotiators: ‘For example, one does not approach a topic too directly in the initial stages, but
probes around with the preliminaries before ‘coming to the point’.’36

The very fact that negotiations occur at different levels is viewed as an asset in consensus
formation. 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 basic
differences would have been ironed out and the public would only hear the common areas of
co-operation agreed upon, or the policy statement on a particular issue.

The issue of organisational structure and decision-making mechanism was discussed with
scholars and opinion-formers in ASEAN capitals. The respondents, while recommending
delegation of more responsibility to the ASEAN Secretariat, were in favour of not creating a
highly centralised regional bureaucracy that may tend to subvert national sovereignty.
Moreover, the respondents also supported the present lengthy but consultative and consensual
method of decision making.

June 2001 16


AREAS AND MODALITIES OF COOOPERATION

Attempt at regional economic co-operation began with the signing of the Declaration of
ASEAN Concord in 1976. Trade liberalisation and industrial co-operation formed the core of
the effort. In addition, there is regional co-operation in resource pooling and sharing, finance
and banking, food, agriculture and forestry, transport and communication and private sector
trade 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 of
economic co-operation. In the first place, co-operation programmes are conceived, proposed
and carried out in an informal and consultative manner. A certain country comes up with a
proposal and discusses with one or more of his colleagues in other ASEAN countries. If they
agree, the programme is undertaken under ASEAN banner. Secondly, it is not necessary that
all ten have to agree to undertake an ASEAN programme because there is scope to opt out
under 10-x formula of decision making. Thirdly, in view of the divergent economic structures
and levels of economic development, ‘the pace of development of the slowest member,’ as
described by a respondent of the present study, ‘is the pace of economic co-operation of the
ASEAN.’

Trade Co-operation: ASEAN economies are trade-oriented,37 each having a large external
sector. Intra-ASEAN trade remains a small percentage of total trade for each of the ASEAN
countries and a large share is accounted for by Singapore’s ‘entrepot’ trade. With the
exception 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, the
growth in intra-ASEAN trade can, in a large part, be attributed to overall growth of trade and
the economies of each of the ASEAN countries as part of their overall restructuring and
adjustment 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 still
confined to tariffs at present. Trade co-operation in ASEAN takes the shape of liberalisation
which 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 of
tariffs and non-tariff barriers.

Co-operation through selective trade liberalisation was designed to increase efficiency and
secure a more economic use of resources and in the long run, increasing trade among the
ASEAN countries. Intra-ASEAN trade is relatively high for Malaysia, Singapore and
Indonesia, but low for Thailand and the Philippines. Most of the intra-ASEAN trade that takes
place 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 in
the case of European co-operation and integration, but more in line with increasing ASEAN’s
competitiveness as a production location so that the ASEAN countries can compete in the
world market.38

As earlier mentioned, the basic framework for the promotion of intra-ASEAN trade is
provided by the ASEAN Preferential Trade Arrangements (PTA) signed by the Foreign
Ministers of ASEAN countries in February 1977, and which comprised preferential tariffs on
selected products which was only enjoyed based on ASEAN most favoured nation status.
Specific instruments identified in PTA are: a) exchange of tariff preferences; b) purchase
finance support; c) long term quantity contracts; and d) preference in procurement by

June 2001 17


government entities and liberalisation of non-tariff measures on a preferential basis.

The most important measure for liberalising intra-ASEAN trade involved extension of tariff
preferences on a product-by-product basis. The fifteen commodity groups initially considered
for PTA were certain types of textiles, clothing and footwear, certain chemicals and
pharmaceuticals, certain types of preserved and packaged foodstuffs and certain types of
household equipment and other consumer durables chosen to be on the fast track.39 For fast
track products with tariffs greater than 20 per cent, there would be an immediate reduction to
20 per cent, and within 10 years to 0-5 per cent. For fast track products with tariffs at about 20
per cent or below, tariffs would be reduced to 0-7 per cent within seven years. For other
manufactured goods with tariffs greater than 20 per cent, the schedule of reduction was to be
announced at the start date.

Accelerated Tariff Reduction Schedule

Old Timetable Accelerated Timetable
Normal Track
Tariffs > 20% 20% by 2001 20% by 1998
15% by 2003 0-5% by 2003
10% by 2005 0-5% by 2007
Tariffs < 20% 15% by 2003 0-5% by 2000
10% by 2005 0-5% by 2007
Fast Track
Tariffs > 20% 0-5% by 2003 0-5% by 2000
Tariffs < 20% 0-5% by 2000 0-5% by 1998

Source: 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 other
countries. The principle was applied to those industries in which production was in the hands
of 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 and
strengthening 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 to
Secretary General Dato’Agit Singh, is in the process of transforming into ‘a single investment
region.’40

Foreign Direct Investment (FDI): Another sector that attracted much attention was the
AFTA and the impact of FDI on trade. FDI refers to private long-term capital flows, which
are intended to acquire a significant interest in an enterprise with the objective of being
directly involved in its management. Evidence suggests that ASEAN remains relatively
attractive as a regional haven for FDIs. Among the ASEAN countries, Malaysia, Singapore
and Indonesia have continued to be still attractive. A 1998 UNCTAD survey of 500 largest
MNCs in the world notes that Malaysia continues to remain an attractive investment
destination. Amongst the reasons given are its lower property prices and cost of production
arising from the currency depreciation and its relatively more liberal approach to FDI.41

Generally, 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 to
promote foreign direct investment (FDI), but discourage destabilising short-term capital
flows. The ASEAN countries recognises that FDI has brought benefits in terms of transfer of
technology and management expertise, employment creation, new product development, trade

June 2001 18


generation and access to new markets, beside being an important source of capital.

ASEAN countries continue to provide a liberal and competitive environment for FDI, by
ensuring the presence of suitable supporting infrastructure, the availability of a well-trained
manpower, consistency of policy, controlled repatriation of profits, expeditious approvals for
investments and the provision of an attractive incentive package. While providing an
appropriate environment for investment, the Southeast Asian countries made sure that FDI
flows are mutually beneficial as well as consistent with the development objectives of the
country in question. For example, Malaysia promoted FDI inflows which were assembly-type
and 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 that
newly established domestic industries which have potential are not exposed to unfair
competition and that the employment and equity objectives under the New Economic Policy
and the National Development Policy are not jeopardised.

Industrial Co-operation: The basic purpose of ASEAN industrial co-operation is to enable
the ASEAN economies to reap the benefits of economies of large scale production, given
relatively small domestic markets of the ASEAN countries, through various programmes such
as the joint production of basic industrial goods, industrial complementation in specific
sectors 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 was
allocated a large scale (US $300-400 million) industrial project, the output of which was to be
accorded preferential access under PTA. The package included Urea Project in Indonesia and
Malaysia, Copper Fabrication Project in the Philippines, a Hepatitis Vaccine Project in
Singapore 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 and
Communication, 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 hitherto
co-operated primarily not for regional development, but basically for national development.
Thus, economic nationalism limits co-operation, a pattern that ASEAN shares with other
regional organisations where nationalistic impulses collide with collective goals. This is
particularly acute in ASEAN in view of the fact that the smallest member of the ASEAN
happens to be economically the most advanced, while the largest and politically most
influential country is economically comparatively less developed. Such disparate levels of
economic development had led to search for national solution of problems. Singapore, for
example, 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 of
joint projects, in line with what it could accommodate nationally. Consequently, ASEAN
adopting common policies in certain areas appears to be a contentious point in regional
discussions. There will always be differences in the distribution of benefits from a common
regional policy and compensatory mechanisms for adjustment problems may not be
automatic, 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 connection
with the study indicated a general consensus that ASEAN would follow its own course

June 2001 19


through experiences over time. So they are ‘not worried about the extent of co-operation
actually achieved at the moment.’43 Another overall assessment of the ASEAN respondents
was that on the whole ASEAN’s success was more in politico-strategic fields, specially in
evolving an ‘ASEAN stand’, generating ASEAN identity and attaining regional stability, than
in economic fields. Going into details of the political achievements, scholars in Malaysia and
Indonesia 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 strength
by joining together and attainment of regional security. They also pointed out that bilateral
problems are now easily solved. By way of example they mentioned that Thailand and
Malaysia 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 create
confusion among the ASEAN countries because each country briefs the others about the
proceedings of meetings with them. This practice contributes to dispelling of misgiving and
building of greater confidence. Kuala Lumpur respondents also underscored the value of
diplomacy of conciliation based on mutual respect and consideration.

Opinion in Jakarta emphasised on the ASEAN identity and people-to-people contact at
various levels. In Manila this was termed as community feelings while in Bandar Seri
Begwan 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 the
same time, it was pointed out that the regional strategic environment has dictated such
deflection. As to poor performance in intra-regional economic co-operation, it was stated that
the major lacuna lies in not encouraging the private sectors in each country to cooperate with
the other.45 The emphasis on the unilateral, on what each nation can do for itself, is central to
creating a region of co-operative prosperity and economic dynamism. Moreover, Dr Mahathir
put 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 not
forget the old Arabian saying the whole road is clean if everyone sweeps the front of his
house.’46

June 2001 20


SECTION 4: RELEVANCE OF THE ASEAN EXPERIENCE FOR
ECOWAS

The 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 experiences
with 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 some
relevance and learning value for the late starters, at least in respect of trying the success path
and avoiding pitfalls that the early starters might have encountered.

Over the past few decades, despite internal conflicts in Indonesia and the Philippines the
Southeast Asian region has been cited as a shining example of stability and development
compared to other regions. What is critically important is that ASEAN is now a zone of true
peace, a community of warm and enduring peace. The achievements of the ASEAN in the
economic field have been at best moderate, although in recent years they have maintained
relatively high growth rates compared with other developing countries. Whether this was due
to co-ordinated efforts of the ASEAN countries in general or to factors specific to each
country, to congenial political atmosphere, or to a combination of them, all the countries in
the region experienced this growth in varying degrees.

However, experience – both successes and failures – of regional organisations with longer
experience (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 of
establishing regional organisations have been made in different parts of the world and only a
few 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 of
values, socio-cultural traits, and geopolitical situations, the experiences of the regional
organisations 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 and
courses of development, an objective analysis and assessment of the experiences of the
organisations, their successes and failures and associated factors may provide useful insights
and perspectives for other organisations in deciding on their respective courses of
development. Fourthly, in the context of the rising trend of inter-regional co-operating within
the framework of economic co-operation among developing countries (ECDC), a comparative
study of regional organisations is expected to lead to appreciation of each others’ objective
realities and perceptual dispositions.

It is with these ends in view that the ASEAN experiences of regional co-operation are looked
into and their relevance to the ECOWAS underlined. It should be stressed that the purpose is
not to equate the future prospects of ECOWAS with the experiences of ASEAN. There is no
automatic association of ASEAN experience with the ECOWAS process. ECOWAS formed
in 1975 has its own course in its quest for mutually beneficial co-operation for its sixteen
member 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, and
conditions 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- may
however be of interest to ECOWAS, in some cases as positive knowledge while in others as
the kind of the things to be avoided. The rationale and utility of a study like the present one

June 2001 21


are placed in proper perspective only if viewed in such a frame.

MOTIVE FORCES AND CIRCUMSTANTIAL FACTORS

As stated in the opening, regional organisations emerge and grow in a complex web of
interacting factors. Therefore, regional co-operation need not necessarily be viewed with any
doctrinaire approach to be contingent upon a smooth and idealistic matrix of inter-state
relations among members. Contrary to the conventional wisdom, the ASEAN was born and
nourished at a time when the politico-strategic environment and inter-state relations in
Southeast Asia were seriously distorted. The strains stemmed not only from bilateral
territorial disputes but also mistrust and suspicion toward each other. In the words of an
ASEAN leader, the member states at the early stage of ASEAN were not only separate from
each other but knew really nothing of, and were only too ready to, mistrust one another.47

The Southeast Asian leaders at the time of launching the association were all intent on coming
out of the morass of tensions and instability. The driving force was provided by the desire to
ensure 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 by
commonalties 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-state
political relations were far from happy and that it was political problems between ASEAN
states that brought them together. The basic purpose was of course, socio-economic
upliftment of the respective peoples. Juxtaposing this experience with the West African
situation, 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, first
by the gradual and incremental process of co-operation and, second, by the self-generating
compulsions of maintaining political stability or at least easing tensions in inter-state relations
in order to facilitate co-operation in socio-economic fields.

CONCEPT, APPROACH AND OBJECTIVES

Unlike the European Union (EU) which has the explicit objective of creating a regional
integrated community, the ASEAN approach was one of regional economic co-operation,
harmonisation and pooling up of resources among sovereign nations with no supra-national
authority to impose any ‘federal loyalty’. The concept of regionalism in ASEAN is one of
inter-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 in
the case of ASEAN.

Comparing the process of development in ECOWAS with that in the ASEAN, it may be
argued that both ECOWAS and ASEAN emerged as an extension of national efforts for
development through co-operation primarily in the socio-economic, technical and cultural
fields. 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 in
accelerating economic development. And for both, the immediate goal of socio-economic and
technical co-operation is viewed as a catalyst to the realisation of the ultimate goal of regional
peace, 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 adopt

June 2001 22


new strategies.

ORGANISATIONAL STRUCTURE AND DECISION MAKING MECHANISM IN
ASEAN AND ECOWAS

In terms of organisational structure and institutional arrangements ASEAN opted for a
relatively small, informal and functional bureaucracy following what has come to be known
as ‘minimalist approach’. All the functional committees and organs including the Secretariat
are inter-governmentally constituted. ECOWAS approach to regional organisation is also
observed to be similar. ECOWAS has a Secretariat. Decision making in both the
organisations is carried out through layers of horizontal and vertical committees. Although the
principle followed in ASEAN is flexible – one of consensus compared to the principle of
unanimity that has been adopted by the leaders of ECOWAS in the perceived interest of the
region, the mechanism followed in arriving at the decision is similar, that is practice of
extensive consultation, behind the scene negotiations in a bid to arriving at a position of
consensus or unanimity as the case may be.

The flexible formula of 10-x as followed in ASEAN should be understood in its own
perspective. Even if certain country or countries may opt out of a particular project, the
decision is an ASEAN one, not a 10-x one. There is, however the possibility, as has actually
happened also, that certain country or countries may avail this option frequently creating
misgivings among others. On the other hand, given the realities of Southeast Asia, the
principle of unanimity has been adopted in order to ensure democratic participation of all
members on the basis of sovereign equality. Whether a more flexible approach of decision
making in ECOWAS would be adopted or is being adopted is usually dictated by the course
of event in West Africa as demonstrated by ECOWAS peacekeeping mission in Liberia and
Sierra-Leone.

AREAS, EXTENT AND MODALITIES OF REGIONAL CO-OPERATION

ASEAN experience of regional co-operation show that although the avowed objective of the
association was primarily co-operation in socio-economic areas, over the years the association
appears 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 less
successful 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 projects
were apparently too ambitious, whereas in cases of issue-based and modest scale schemes and
most 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 not
merely been successful in their own way but has also contributed to the strengthening of the
popular base in favour of the association.

In relation to co-operation in the more vital areas like trade, the main problems, as discussed
earlier, 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 a
search for national solutions to problems. Member states have tended to develop and intensify
extra-regional linkages independent of the interest of the grouping as a whole, sometimes
adversely affecting the basis of confidence in the usefulness of regional co-operation. The
problem is further compounded by the structural linkage of the economies with the West on
the one hand and relatively low level of mutual complementarity on the other. The private

June 2001 23


sector performance in co-operative ventures has also not reached the desired level in some of
the economic sectors.

Despite the low level of performance in some of the economic sectors, the ASEAN has
continued to move forward while apparently aware of the limits to what regional co-operation
arrangement 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 much
was expected too soon. Regional co-operation is viewed as one of the many other ways that
member states endeavour collectively and severally to resolve the problems facing them
nationally, bilaterally and regionally. The basic approach admittedly was ‘go-slow’ so that
activities and programmes do not have any ‘grand design’ disproportionate to regional
preparedness.

In terms of the modality, the ASEAN approach has been fairly informal. The process of
decision-making and deliberations has been almost exclusively on the basis of mutual
consultation. There has been a tacit understanding of avoiding any disputable and conflicting
situation on matters both within and outside the purview of ASEAN. Problems of a bilateral
and contentious nature have been regarded as part of the reality and member-states did
recognise their impinging potential on the process of multilateral co-operation. It appears that
ASEAN member-states have followed a deliberate policy of keeping the bilateral discords
below a level that might lead to a crisis.

It is important to note in this connection that although bilateral and contentious issues are not
formally within the ASEAN agenda, the member-states are not precluded from using the
forum 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 ECOWAS

The ASEAN experience has shown that in the context of asymmetries and divergences, and
the concomitant disputes, member states have demonstrated over the years a remarkable
degree of understanding of each other’s problems, aspirations and limitations. There has been
more importantly, a tacit agreement on mutual role perception and role-playing. There have
been 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. It
is difficult, however, to generalise or offer a modulus of such understanding. But the
experience has certainly shown a working level of mutual give-and-take approach. In terms of
specific issues the member states have initially tried to iron out differences. In the event of a
failure 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 are
part of the reality in inter-state relations, and whilst there were attempts at settlement of such
disputes, failure to do so, was never allowed to impede the process of co-operation under
ASEAN.

As already indicated, considering the status of inter-state relations in the region this approach
has largely been regarded as a pragmatic one. In the backdrop of ASEAN experience, and
even from what has happened so far in the ECOWAS forum, there seems to be two aspects to
this problem.

June 2001 24


Firstly, 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 the
ECOWAS 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 the
advantage of the frequency of high political level meetings the member-states may
increasingly find ECOWAS a useful forum with an opportunity to iron out differences the
way their ASEAN counterparts have done.

The second aspect is linked with the role of Nigeria. It appears that the sooner there is an
understanding and consensus among the ECOWAS member-states about the mutual role
perception and role playing the better for co-operation within ECOWAS. There should be
more open and frequent discussion among the member-states at both official and unofficial
levels and certain degree of positivism and enlightened national interest member-states may
be able to cement the differences among them on that score.

The ASEAN and ECOWAS experience underlines, on the other hand, critical importance, in
this respect, of the foreign policy posture of Indonesia and Nigeria, both the largest and the
most powerful countries in Southeast Asia and West Africa. And, on the other hand, the
development of the spirit of mutual understanding, accommodation and trust which
characterised ASEAN and ECOWAS regional and inter-state relations. There is a clear need
for striking a balance between bilateral and multilateral interests of ECOWAS member states
for the better future of the region.

INTER-REGIONAL CO-OPERATION

ASEAN 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 establishing
closer linkage and co-operation with ‘third party’ states, groups of countries and other
regional and international bodies. ASEAN inter-regional co-operation has been effective not
merely in obtaining aid or assistance packages but also in building long term complementary
economic relations. Particularly notable has been the ASEAN success in the projecting the
region 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 an
overall Third World issue. Notable elements of inter-regional co-operation from ASEAN
experience 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 each
other. There should be a long term planning and vision in this respect and a pragmatic
approach. 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 should
necessarily be complementary to existing bilateral or multilateral relations rather than at the
latter’s experience. Inter-regional co-operation should also complement each other’s
capabilities and not supplant them. Any programme or project for inter-regional co-operation
from ECOWAS perspective should be untied and unconditional and should of necessity be
equitably beneficial to all ECOWAS countries. But, most important of all, any formal linkage
of ECOWAS with other regional bodies and for that matter any concrete co-operation project

June 2001 25


therewith should be deferred until such time as the underpinnings of the development of
ECOWAS member states is sufficiently strengthened.

CONCLUSION: THE WAY FORWARD

Effective regional integration is generally recognised as a component of a strategy to improve
economic growth. The initiative addresses some of the weaknesses of regional initiatives by
emphasising outward orientation, national and regional policy complementarity, and the direct
involvement of private sector. Given the precarious environment facing ECOWAS members,
particularly under the WTO agreement and the current globalisation, ECOWAS cannot afford
to lag behind in these developments. At least three of the findings that emerge from this
research may have a dramatic effect in creating an environment conducive to ECOWAS
economic co-operation.

First, the challenge to ECOWAS economies is to be able to maintain high and sustainable
rates 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 from
completed. Globalisation, or the challenge of globalisation, has given the governments a
strong enough justification for undertaking the reform. While at first it might be seen
paradoxical, 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. Regional
co-operation helps its participants to take part in global economic integration more effectively
as 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 Common
External Tariff (CET) are widely seen as representing the globalisation phenomenon because
of the importance of trade and investment liberalisation in these fora’s agendas. Further, the
ETLS seeks to consolidate customs duties and charges, liberalise all customs duties on
unprocessed and traditional handicrafts, liberalise tariffs on approved industrial goods –
making a zero rating and establishing a Common External Tariff (CET) regime to be applied
to third countries. The introduction of the CET and country standards will enable the West
African sub-region to respond more favourably to the globalisation phenomenon, while the
onus of economic discipline will force governments to be more circumspect in the
management of their economies.

ELTS also necessitates a series of domestic adjustments that are parallel with or may be
entirely 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 so
thus far, the sustainability of the reform programme itself will depend to a large extent on the
ability of the government and the society at large to redress the negative impacts of
globalisation as perceived by the public.

Second, ECOWAS countries need to offer attractive investment opportunities for foreign
companies. The regional governments should encourage private sector participation in many
of the infrastructure projects. In Ghana, for example, when the telecommunication sector was
liberalised recently, we saw an influx of service providers, such as Malaysia Telecommunica-
tion and MTV Asia managing the Ghanaian telecommunication system and setting up
broadcast centres there. The business community in Nigeria feels that in pursuing its policy of
globalisation, as manifested in the series of deregulation and liberalisation policy packages,

June 2001 26

From regional security to regional integration in west africa

From regional security to regional integration in west africa

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to From regional security to regional integration in west africa

Similar to From regional security to regional integration in west africa (20)

More from Kayode Fayemi

More from Kayode Fayemi (20)

Recently uploaded

Recently uploaded (10)

From regional security to regional integration in west africa