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Tool Category D: Economic and Social Measures

12. Regional Economic/Resource Cooperation
(Joint Resource Management)

Description

  Regional cooperation is a pattern of cooperative economical, environmental, political or security agreements among states or communities. This profile focusses on the role regional cooperation plays to regulate conflict between or within states and regions.
     

Objectives

  Regional economic cooperation aims to find potential areas of collaboration in the pursuit of sustainable economic development, to optimize geographical proximity and economic common interests to gain economic advantages and stability by reducing member economies' vulnerability to outside forces and promoting more equitable development within the target region, or to prepare for entry into other, more established, more ambitious integration institutions.

Regional environmental cooperation and joint resource management efforts aim to slow or reverse the degradation of natural resources in the region or to promote more efficient and more equitable use of existing regional resources.

Various avenues of cooperation, including economic, environmental, and political, can help avoid or postpone ethnic groups’ requests for excessive autonomy. Regional cooperation can be an indirect tool to overcome strict political borders in a contentious region and to diminish the rigidity and distance between the institutional environments of neighboring countries through political dialogue and trade cooperation, helping to overcome intra-regional divisions. Regional cooperation may be used to help prepare for the domestic economic and political adaptations needed to avoid fragmentation and nationalism and to assist in a transition towards democracy.

     

Expected outcome or impact

  Concerted regional cooperation on economic problems—regional food shortages, commodity trade problems, debt, environmental degradation—can contribute to preventing conflict. Increased regional cooperation can pressure member governments to remove constraints to regional trade and can increase trading activities among neighboring countries. This in turn can contribute to improving social welfare in the area, increasing regional political stability if common interests come to dominate existing differences.

Regional economic and social cooperation can reduce political conflicts and wars: as cooperation expands to cover different spheres of activities, inter-governmental conflict declines; analogously, intra-state cooperation among competing regions within a state can reduce internal conflict.

     

Relationship to conflict prevention and mitigation

  Resource scarcity, economic underdevelopment and environmental degradation pose serious long-term threats to stability, and many actual and potential conflicts cross national boundaries. Environmental degradation and resource scarcity can lead to decreased agricultural production, general economic decline, population displacements, disrupted institutions and social relations, increasing demands on key institutions such as the state while reducing these institutions’ capacity to meet those demands, and can prompt national or subnational actors to take steps to increase in their own favor already inequitably distributed resources. Any of this can cause conflict.

Cooperative actions to slow down or stop resource degradation, to reallocate or better manage existing resources within states and across borders or to restore renewable resources can increase regional stability, prevent violent conflicts over resources, or mitigate existing conflicts in which resource scarcity or misallocation is a factor. Regional cooperation can be a confidence-building mechanism. Some regional concerns such as environmental issues can only be addressed cooperatively.

     

Implementation

Organizers

  Regional resource cooperation can be initiated by national (governmental or non-governmental) or foreign actors; extra-regional involvement may support negotiations to establish inter-regional cooperative entities. Externally-prompted initiatives should be run by local government or civil organizations. Environmental agreements typically address transboundary issues and are therefore most appropriately implemented and monitored by supranational institutions.
     

Participants

  Participants in regional economic and resource cooperation include heads of states or designated representatives of would-be member countries. Regional economic coordination organizations such as PTA and IGAD can play key roles in coordinating development programs and strengthening regional information centers.
     

Activities

  Promoting regional resource cooperation to prevent or mitigate conflict:

· Identify potential areas of conflict over resources within countries and regionally.

· Identify possible forms of and issues for cooperation.

· Create institutions to mediate and adjudicate regional resource disputes.

· Support the development of local institutions; build their capacity for resolution of resource disputes. Develop regional countries’ capacity to design and institutionalize mechanisms for resolving resource disputes and preventing them from escalating to violence.

· Negotiate agreements which initiate actions such as clean-up projects, waste reduction measures, and other cooperative efforts.

· Support assistance by technical experts.Promoting regional economic cooperation:

· Support the creation of institutions to promote trade and economic cooperation in the Greater Horn region along the lines of the Preferential Trade Area for Eastern and Southern African States (PTA).

· Use regional countries’ membership in subregional and regional groupings such as IGAD and PTA to support political stability within each country, and good political and diplomatic relations between neighboring countries. Horn countries should first liberalize their domestic trading systems so goods and services can move freely in the region, with a goal of developing similar rules and regulations for various economic trade.

· Promote regional trade through steps such as creating trade agreements, barter deals, a currency union, and integrating industrial planning.

· Adopt appropriate pricing and exchange rate policies, especially for agricultural products.

· Take steps to remove tariff and non-tariff borders in line with PTA principles. Liberalize trade regimes to facilitate transborder exchange in the region by providing adequate credit facilities from regional trade and development banks and other measures. Governments should encourage traders to use regional financial institutions such as the PTA clearing house to minimize the use of convertible currencies.

· Provide incentives for indigenous entrepreneurs and businesspeople to promote trade in the region.

· Recognize the necessity and value of cross-border informal trade and allow it to operate. Work to find alternative sources of state revenue which do not dampen incentives for production and trade.

· Reorganize production structures to develop and expand the production of food and consumer goods for domestic and neighboring markets. Increase interstate trade in this items.

· Develop an effective trade information network on the region’s market situation; strengthen and support the Trade Information Network created within the PTA.

· Support programs to improve the regional transportation infrastructure.

· Complement the Greater Horn region’s development programs with financial and technical assistance from the international community.

PTA and IGAD can play key roles in coordinating development programs and in strengthening regional information centers. Other regional cooperative arrangements could include a Regional Maritime Surveillance and Safety Regime, with agenda such as monitoring illegal maritime activities (smuggling, unlicensed fishing), combating piracy, and controlling marine pollution; and an Environmental Security Regime, to monitor region-wide environmental degradation, changes in climactic patterns, rises in sea levels, and the production of acid rain and greenhouse gases, to coordinate reactions to specific environmental catastrophes, to cooperate in environmentally-related economic reconstruction such as financial compensation for curtailing deforestation and to coordinate responses to the consequences of environmental insecurity.

Cooperation for regional security. One analyst offers the following strategies to accelerate closer cooperation and regional security in Africa.

· Some countries from the different sub-regions could serve as catalyst core countries to champion the cause of integration and to push and canvas it among other countries in various conferences of heads of state. As it may not be possible for all countries to join at the same time, don’t wait until the less willing countries are ready.

· Continue to insist on cooperation in trade and production as well as political integration.

· Ensure that regional cooperation is effectively funded by denying voting rights to non-contributing members (as done in the OAU) and making automatic deductions from sales taxes and import duties from member states (similar to the EC).

· Revamp the African Development Bank’s (ADB) role in multinational financing to strengthen the financial implementation of regional cooperation.

· Revamp the African sub-regional groupings (ECOWAS, PTA, SADCC, Maghreb Union) and link them to the African Economic Community. Problems of the African sub-regional groupings include weak political will of the leaders, diversion by rival sub-regional groupings, poor funding through member-state contributions, non-ratification of cooperative protocols, external interference, low or non-participation by non-governmental groups such as trade unions, chambers of commerce, academics and other professionals, women, youth and the peasantry. Effective political will can be mobilized and sustained through effective popular participation by trade unions, academics, and the organized private sector, by creating supranational institutions, and by ensuring that the integration process benefits all members.

Sequencing regional cooperation.

· Continue to pursue trade, production and political integration simultaneously.

· Harmonize macro-economic policies and administrative procedures such as licensing.

· Work towards currency convertibility; although this would be difficult in Africa, judicious monetary management with realistic exchange rates could ensure a minimum of currency convertibility.

· Set well-defined and realistic objective for different stages of the integration process.

Other regional and multilateral organizations and bilateral donors could encourage closer cooperation among regional countries through including such conditions in association agreements or assistance programs.

     

Cost considerations

  Major regional cooperative programs are not cheap, and regional countries’ resources are limited. Regional economic cooperation can be funded through payment of a small percentage on top of national import duties and sales tax to the regional entity for its administrative and development programs. Member-state contributions are another funding alternative although this method has been shown likely to be spotty and inadequate. External funding sources are a final possibility.
     

Timeframe

to see results

  Reduced or averted violence attributable to regional cooperation can be evidenced in the short or long term.
     

Conflict context

Stages of conflict

  Regional efforts to manage resources are best implemented prior to an outbreak of violence or as part of post-conflict reconstruction.
     

Type of conflict

  Regional resource and economic cooperation efforts are interventions to prevent or mitigate conflicts stemming from resource disputes. Environmental scarcities are often less obvious contributing causes to other types of conflicts; efforts to slow the degradation of, reallocate or renew resources can help prevent or reduce the level of violence of conflicts with multiple causes.
     

Causes of conflict

  Regional resource and economic cooperation may serve both operational and structural prevention of violent conflict and address a conflict’s economic roots.
     

Prerequisites

  Regional countries must be receptive to strengthening and expanding existing bilateral cooperative arrangements. All participating countries must bring political will derived from regional leaders’ enlightened national interest as well as popular support, with intellectuals playing a catalytic role. Also required are long vision, a regional concept of development, effective individual and institutional administrative capabilities and political skills, frank acknowledgment and discussion of the fact that as different states and areas have different interests, the process of creating a web of regional cooperation means members will have to make tradeoffs, with cooperation’s overall benefits worth the compromises.
     

Past practice

Inside the Greater Horn

  African Economic Community. The 1980 second extraordinary session of the OAU’s Assembly of Heads of State and Government devoted to economic problems in Africa committed to set up an African Economic Community by the year 2000, to ensure the economic, social and cultural integration of the African continent, with the following objectives: "to promote collective, accelerated, self-reliant and self-sustaining development of Member States; cooperation among these states and their integration in the economic, social and cultural fields." This was to be achieved in two stages: 1) in the 1980s, to strengthen existing regional economic communities and establish new economic groupings in the other African regions to cover the continent as a whole; to strengthen sectoral integration at the continental level; and promote coordination and harmonization among the existing and future economic groupings to gradually establish an African Common Market; and 2) in the 1990s, to strengthen sectoral integration further and take measures toward establishing an African Common Market and an African Economic Community. Several sub-regional organizations were successively created, including the 16-member Economic Community of West African States (ECOWAS) in 1975, the 1982 Preferential Trade Area (PTA) for Eastern and Southern African States, also with 16 members; and the Economic Community of Central African States (CEEAC) in 1983, with 10 member states.

PTA. The Preferential Trade Area for Eastern and Southern African States (PTA) was established in 1982 and became operational in 1984, with the main objective of promoting cooperation and development in all fields of economic activity, including trade, customs, industry, transport, communications, agriculture, natural resources and monetary affairs. All Greater Horn countries belong to this regional grouping. However, the level of intra-African trade in general and of regional trade in the Horn in particular has not improved significantly. One may argue that trade between East African countries may have been more extensive had there been greater peace and political stability in the region. However, the reverse can also be said: that through greater trade, peace and stability might be enhanced. At the same time, figures on trade generally come from official statistics which do not include the substantial unrecorded trade in the region. Official trade between neighboring countries in the Horn has been stagnating and even declining, and the composition of this trade has remained basically unchanged. Official marketing channels for livestock, cereals and pulses are not well developed in many areas where most agricultural and some industrial production marketing takes place, seen as a main reason for unrecorded border trade.

There are political, security, economic, institutional and physical constraints on expanding trade in the region, especially political differences between countries and political instability within countries in the Horn. Economic constraints include the existing structure of production and distribution—all the region’s countries are mainly primary producers, while their demands are for manufactured goods and capital (their limited demand for raw materials results in export to developed countries outside of Africa)—regional countries’ pricing and exchange rate policies, including overvalued currencies which encourage informal trade, and the persistent use of convertible currencies for trade transactions despite the establishment of regional payment and clearing systems.

Institutional constraints on regional trade in the Horn include a lack of information on regional demands and marketing institutions—for instance, failure to increase food production beyond a country’s internal demand when other areas of the region suffer from food shortages, causing imports from outside the region although the capacity for increased production exists within the region—poor marketing channels; complicated export and import procedures; an absence of quality standards; a lack of incentives and government support; and tariff and non-tariff —PTA provisions to reduce tariffs and remove non-tariff barriers have been difficult to implement because tariffs are a major source of revenue. Inadequate transportation, communication and maintenance systems are further constraints to expanding regional trade.

IGAD. In 1986 the Inter-Governmental Authority on Drought and Development (IGADD), later renamed the Inter-Governmental Authority on Development (IGAD), comprised of Djibouti, Ethiopia, Somalia, Kenya, Sudan and Uganda, was created to coordinate Horn countries’ efforts to establish food security and to combat desertification through environmental protection.

     

Outside the Greater Horn

  Macedonia. Search for Common Ground/Macedonia is developing a project with a local environmental NGO in the Lake Prespa region to bring together Macedonians and Albanians in mixed villages to clean up polluted waterways.

Black Sea Economic Cooperation (BSEC). Originating from a June 1992 summit, the 11 state member BSEC mainly has economic objectives. Factors which have kept the BSEC from playing a conflict mediation role in the region include its members’ wide economic disparities, the absence of free market conditions in many countries which inhibit its ability to become a free trade area, political instability in the sub-region, a lack of financial resources and limited participation of European institutions such as the EU and OSCE.

SADCC. Nine independent countries created the Southern African Development Coordination Conference (SADCC) and joined in the formation of the larger Preferential Trade Agreement of Eastern and Southern Africa (PTA). SADCC called for a "development integration" approach, stressing the need for close political cooperation at an early stage of the integration process, equity and balance in relations among member states, including compensatory measures for the weaker members in any transactions that might adversely affect them. SADCC has "shown there are several areas of economic cooperation and regional integration in which the development prospects of its members would be enhanced in a much more viable unit." SADCC has engaged in regional collaborative efforts to curb arms proliferation, mediate interstate and internal conflicts, exchange information on demobilization and civil-military relations, and create a peacekeeping capacity.

Gulf of Aqaba. Israel, Egypt, Jordan and eventually Saudi Arabia have cooperated to promote the development of tourism, shipping, and limited food production while preserving the Gulf’s coral reefs and marine ecology, representing "one of the most promising avenues for multilateral cooperation, and one with potential for both economic and environmental benefits." This could serve as a pilot project for regional cooperation and peacebuilding: "cooperative environmental protection would set an important precedent for conflict avoidance, confidence-building, and economic development....The US should encourage regional actors to continue and strengthen this process.

     

Evaluation

Strengths

  Solutions to resource conflicts can cut across the lines of battle and encourage joint participation. The formation of such linkages can help to further mitigate and avoid violent conflict.

Regional cooperation can build the capacity and will to solve problems without recourse to external institutions.

Regional bodies are likely to respect to local sensitivities; solutions adopted regionally can be more politically acceptable to participating states.

Some problems such as environmental issues can only be solved regionally and cooperatively.

     

Weaknesses

  The dominant party in a resource dispute is likely to want to dictate the conditions of cooperation. Smaller member states may fear domination by larger members.

The process of reaching cooperative agreements and launching the new relations necessary for regional cooperation may take too much time to exercise any influence on an imminent military confrontation.

Efforts at regional cooperation can be limited by unresolved security issues, impermeable economic borders, or potential members’ search for alternative, more powerful external linkages outside the region.

States have dissimilar abilities to take advantage of economic opportunities offered by regional cooperation.

     

Lessons learned

  Few African regional integration schemes have achieved their stated goals. Some claim the failure is due to the lack of preconditions necessary for success. Political ideologies and related development strategies are also blamed for the slow pace of regional integration. Other problems include extra-regional power and influence and overlapping membership of members in other sub- or extra-regional economic cooperation arrangements, causing conflicts of allegiance and divided loyalties. The most effective regional cooperation occurs when national and regional interests coincide.

Foreign aid and programs to protect the environment are less important than individual countries’ and regional regulatory and economic frameworks.

The renewable resource most likely to cause resource conflicts in the Greater Horn of Africa is rivers, partly because water itself is an important resource, and because rivers form political boundaries and cross national borders, provoking problems of resource usage between upstream and downstream neighbors. Water sharing and water planning problems are regional in the broadest sense of the term, as actions in any part of a river basin affect all other users to some extent. "The river is a potential source of both cooperation and conflict." The riverine countries of the Nile basin need to participate in reaching an agreement on allocation of Nile waters and work out realistic, long-term plans for irrigation, hydro-electricity generation, the management and control of water for agriculture, and other uses. One option is to establish a Nile Basin Commission which includes all nine states of the Nile valley to discuss and coordinate policies on the Nile waters and related issues.

As this is a collection of sub-regions, each with different geostrategic circumstances, regional cooperation for security may be best approached at the sub-regional level.

The linkage between existing regional institutions and regional cooperation initiatives must be continuous and effective, to be ready to intervene as mediator in case of crisis, to provide the necessary means to overcome severe inequalities, and to condition the attitude toward cooperation as a method to resolve long-standing conflicts. Established institutions such as EU and NATO should exert pressure to consolidate present regional cooperation initiatives.

Initiatives to create and fortify regional cooperation institutions and the process of identifying and structuring agreements for specific areas of regional cooperation can, in themselves, be a means of reducing conflict. Such initiatives should not be postponed until some future date when complete peace is attained.

     

References and resources

  Search for Common Ground/Macedonia, Director, Dr. Eran Fraenkel.

Donald Kennedy, Stanford University, producing a study addressing the competition for resources and degradation and manipulation of the environment as causes of conflict, developing a conceptual framework to help devise tools and processes to identify high-risk situations or regions. Several case studies will suggest lessons for preventive strategies and for national initiatives and international agreements to meet environmental security challenges (forthcoming).

Khalid, M. "The Nile Waters: The Case for an Integrated Approach," in Beshir, M.O. (ed.), The Nile Valley Countries: Continuity and Change, Khartoum, Institute of African and Asian Studies, University of Khartoum, 1984.

Guy Martin, The Preferential Trade Area (PTA) for Eastern and Southern Africa: Achievements, Problems and Prospects.

Gianni Bonvicini, "Regional Cooperation as a Tool for Conflict Prevention: Feasibility and Usefulness," Research Institute for International Politics and Security (SWP), Joint IAI/SWP Project Conference on "Preventing Violent Conflict in Europe," Ebenhausen, Germany, 22-23 November 1996.

Carol B. Thompson, "African Initiatives for Development: The Practice of Regional Economic Cooperation in Southern Africa," Journal of International Affairs Vol. 46, No.125-144, Summer 1992.The Permanent Joint Technical Commission for Nile Waters, 1981, in "Experiences in the Development and Management of International River and Lake Basins," Natural Resources/Water Series No. 10, proceedings of the UN Interregional Meeting of International River Organizations, Dakar, Senegal and New York, United Nations.