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Friday, June 5, 2020
Patricia Handley interviews YASH TANDON, Ugandan political economist (Part 2)
CAPE TOWN, Apr 8 2010 (IPS) - The current course of the talks on economic partnership agreements (EPAs) is particularly destructive for low income African countries and may contract democratic space in such countries even further.
So says Yash Tandon, Ugandan political economist and senior advisor to the South Centre intergovernmental think tank on developing countries in Geneva, Switzerland.
“I would say that small countries through the EPAs will lose all their independence and sovereignty. Political independence that they fought for 20, 30 years ago will be compromised,” Tandon told IPS during a visit to South Africa.
Q: How do the problems presented by the EPAs affect poorer countries in Africa? A: If you look at the sections which the smaller counties of Africa are being forced to sign with the EU, you find that some of these include issues that are already precluded by the World Trade Organisation (WTO).
In the WTO it is agreed that issues like competition policy, investment policy and government procurement – the so-called Singapore issues – are outside the WTO remit. But countries in Africa are being forced by the EU to negotiate these as part of the EPA.
The South Centre has carried out extensive analyses and found that including these issues will more or less erode any policy space on the part of the countries that sign the EPAs.
These are services that should of necessity be provided by the state but when you make these subjects of international negotiations and international treaty, you open up these services for international tender. Because European companies bring with them the power of money and influence, these services can be taken away from local companies.
Smaller countries don’t have the capacity to negotiate on equal terms with Europe. Look at Swaziland, Lesotho, Namibia and my own country of Uganda. Partly because of their size and their dependence on aid from European countries, they are very weak in the negotiations and the (resultant) effect on them is serious.
For one, they will lose policy space on matters related, for example, to industrialisation, agriculture and food security. The governments will not be able to make policies that are necessary for them to service their own people.
Secondly, in the present global economic crisis, these countries are likely to look to Europe and to the U.S. and the International Monetary Fund (IMF) for bailing them out. I hope they don’t do that because we do have alternatives.
But the present leadership in our countries is so psychologically attuned to getting aid from outside that they are likely to go to these very institutions. The effect will be even more serious than that of the World Bank’s structural adjustment programmes over the last 20 years.
Thirdly, the EPAs will undermine the democratic process within these countries because these countries will be accountable to the donors rather than to their own electorates.
Q: Why are EPAs an issue now? A: The EPAs have become urgent mainly because of the pressure put on us by the European Commission.
The EU is desperate to conclude an agreement with African countries because in the present period of trade liberalisation, combined with the global economic and financial crisis, there is an intense struggle for the markets and resources of the world.
Q: Since negotiations began in 2002, what has been achieved, considering the original intention to facilitate trade? A: The Europeans have not got it all their way. Eight years down the road there is some self-awareness and resistance building up in Africa. That said, there have been some negative developments already.
The European Commission has negotiated a comprehensive EPA with the Caribbean countries. This has weakened the stand and broken the unity of the ACP (African, Caribbean and Pacific) countries.
In Africa, there are some countries in ECOWAS (Economic Community of West African States), like Ghana and Ivory Coast, that have signed the interim agreement. This has fragmented ECOWAS, although big countries like Senegal and Nigeria are still standing strong.
East Africa has allowed itself to be persuaded to sign the interim agreement, which is tragic. In Southern Africa, four countries have signed the interim agreement but the others are holding out. So there is some hope there.
I am a bit more optimistic than many people. Why? Because even in the case of Botswana, Lesotho, Swaziland and Mozambique, there are still pending issues such as export tariffs. These are an important means of revenue for small countries and of securing control over national resources for local processing with added value.
The other extremely important issue is the most favoured nation clause. There is no reason why we need to sign an MFN clause. Under the WTO rules, it is possible for the South to carry out their own trade without such concessions to the North. That is quite legitimate and legal.
There is no reason why our countries should not be able to sign agreements with other countries in the South without offering them to the EU.
Q: Your 2008 book is entitled “Ending Aid Dependence”. Can Africa escape the trap of aid? A: Most of our countries in Africa have become so donor-dependent for their development that they have sacrificed policy space in return for money.
One has to look into the budgetary systems in our countries and ask, why are there deficits? Once this exercise is carried out, there is no reason why any country in Africa should be short on budget.
Not only can we liberate ourselves from aid and do away with it, but it is obligatory that we do so.
Q: Including the low income nations? A: Especially the low income countries of Africa. I don’t mean we can do it at the snap of a finger. In my book I propose a seven-step strategy, beginning with ending our psychological dependence on aid.
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