The Question of South Sudan’s Accession to the East African Community (EAC)–Part 1
By David Mayen Ayarbior, Juba, South Sudan
July 8, 2015 (SSB) — South Sudan’s accession to the East African Community (EAC) has been at the forefront of economic progress projections since the country became independent in 2011. Two camps have emerged with diametrically opposite perspectives as to whether the country should or should not join the regional economic block. Each of the two camps have had compelling reasons to support its position.
The group ‘for joining’ EAC has argued that South Sudan will stand to benefit significantly from being part of a bigger market. In addition, the country could not afford to be left out in the cold when the general global trend for economic growth has moved towards creating economic blocks. In fact, to protect against foreign domination of the country’s markets, which is seen by this group as inevitable in the short run, regional coalition of markets would ensure that most development contributions caused by South Sudan’s accession to EAC would be within our regional and continental (Africa) surroundings.
The group also holds that if the EAC develops because of South Sudan’s positive influence, then the economic principle of trickledown effect will allow South Sudan to equally experience positive economic growth. Hence, the perspective that the country will stand to lose out because it is not a producer of anything demanded by the region will be discredited by that firmly established economic principle of ‘rising tides will lift all boats.’
On the other side of the coin, the group ‘against accession’ to EAC argues that to benefit from any market an entity must be a producer of a good needed by that market. And since South Sudan will join as a big consumer of EAC countries’ goods, then it will suffer from the negative effect of massive income repatriation. And because its balance of trade is artificially positive as a result of one source of income, which is oil, then the country should wait until its economic diversification policy has taken a robust shape.
The difficulty with these analytical perspectives is that they are both rational and drawing from established economic principles. It seems that the only way to know will be through either acceding to EAC and observing the benefits, or not acceding to EAC and also observing the benefits. Ironically, either choice could prove to be good or bad for South Sudan’s economy.
The current state of Greece’s economy is a reminder that it is better to study other dynamics, including prospects of future currency unification and its impact on a country that depends on only one economic resource. Just like South Sudan’s dependence on oil will characterize its economic strength for the foreseeable future, Greece’s dependence on tourism proved to be its Achilles heels inside the EU. It was good for Greece when it was out of the Eurozone, but it became a negative when taxes from European tourists dried up. It is difficult to argue that South Sudan will lose its oil revenue benefits with accession to EAC.
Now, the main concrete things at the heart of accession to EAC for South Sudan’s government and legislatures (both federal and state legislatures) to analyze relates to the impact of what is termed as “the four freedom of movements.” These are freedom of movement of goods, services, capital, and people. They are the main pillars and foundation on which almost all legal and institutional structures governing economic blocks/communities/unions are built.
The issues then will be measuring the rate of movement of the four factors to-and-from South Sudan. It would seem that the highest and overwhelming percentage of all the four movements will be towards South Sudan rather than from it. The camp against accession, as we have seen, would argue that it would be a bad thing for South Sudan, while the one for accession will welcome it. Then, how will South Sudan manage completely new economic and legal arrangements.
Because of accession, South Sudan will be subject to EAC laws and regulations governing the four freedoms, rather than its own laws. Hence, the other question will then be whether the country’s authorities have thoroughly studied the impact of its institutions and citizens coming under new jurisdictions. Have the country’s lawyers and judges been adequately prepared to challenge and enforce EAC laws? Have the country’s citizens and traders been prepared to at least anticipate the new incoming waves of community citizens, goods, capital, and rules?
What is expected of those intellectuals currently being groomed to join the East African Parliament, since it is going to be the main institution where many important laws governing South Sudanese traders, citizens, and government institutions are drafted and passed? In other words, how are the new South Sudanese MPs to EAC Parliament going to argue for an influence amendments and enactments of rules that are going to benefit both South Sudan and other member states of EAC? Will the country accept to be ruled by community laws that its EAC MPs have strongly rejected? The principle of direct effect of economic community laws will say it must accept all laws passed by the EAC Parliament.
Not to suffer the negative impact of accession to an economic community, just like Greece is currently contemplating withdrawal from what was first projected as an economic heaven, South Sudan needs to answer all the above questions with utmost care. Being a member of the EAC will surely generate unprecedented high growth rates in the region, but South Sudan needs to be sure about what is going to “trickle down” to its economy and people.
In conclusion, the following interesting perspective could be relevant to this discussion.
At the international level of analyzing the theory of ‘the raising tides of economic growth will lift all boats’ one delegate to an international economic conference (who was from a developing country) argued in the negative. He (or she) I don’t remember, argued that: yes the rising tides of economic growth will lift all boats, except those that have sank and those standing at the shore worried about navigation.
Surely, South Sudan has not sank because it is yet to join EAC, but is the country ready for navigation? It is for the government and parliament to answer, since such a decision is not going to be referred to the people in a referendum, simply because of the complexity of what underlies the question of accession itself. At this stage, the people of South Sudan will be shepherded by the patriotism and prudence of the political class and institutions.
David Mayen Ayarbior is the Press Secretary in the Office of H.E. the Vice President of South Sudan, James Wani Igga. He could be reached at dmayend@yahoo.com
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