The ripple effect

When one throws a stone in a pool of water the impact causes ripples, tiny circles that radiate gradually outwards with ever decreasing intensity. Such is the effect of globalisation and the power of states in this brave new world.

When one throws a stone in a pool of water the impact causes ripples, tiny circles that radiate gradually outwards with ever decreasing intensity. Such is the effect of globalisation and the power of states in this brave new world.

At a recent lecture at the Oxford Union, our President dropped a bombshell; he said that the goal of the East African community was political and economic integration. Until then like most people I had expected the fruits of economic union to be the only goal of the EAC.

When one looks at this globalised world we come to the conclusion that the Nation-state as we know it is obsolete. James Rosenau puts it succinctly “trapped by territoriality of their power, policy makers in their traditional settings often have little choice but to address the symptoms rather than the causes of public problems.”

As we have overcome physical and spatial limitations by effective communications and transport, our problems have also gotten bigger and affect wider geographical areas. This is not a new concept, in our history we started as semi-autonomous kingdoms, gradually becoming a centralised state but now we have to integrate into a wider collective.

 The model of the European Union is often cited as the best example of the benefits of bloc power but the current crisis shows the negative effects of such bloc power on smaller nations with size comparable to Rwanda.

Ireland is a modern economic miracle but a miracle that is loosing its lustre as economic realities bite. Ireland gained independence from Britain in 1916; it spent 50 years as an isolated backwater of the British Isles.

Ireland joined the EU and got all the benefits of membership such as a guaranteed market for its goods, funding for mass-construction projects, and above all cheap credit. Ireland was known as the Celtic Tiger and had growth of more than 10% for nearly 15 years; their low population of 4 million made its GDP rise at a high rate.

After years of being the laughing stock of Europe, the Irish grasped at a chance to be the envy of Europe; they worked harder than any nation, they became a bridge across the Atlantic as they straddled both the American sphere and the EU sphere.

But there were cracks in this model; the Irish surrendered economic and political sovereignty for a quick boom. The political parties were all in favour of the EU; none of the politicians even questioned EU policy assuming it was in their interest. 

Now Ireland stands to lose all it worked so hard to get; it borrowed more than any nation, it ran a huge trade deficit, it relied heavily on construction, and it accepted neo-liberal ideas without questioning the benefits or costs.

When smaller nations join bigger regional blocs; they are often less questioning and just happy to be accepted. But like Ireland shows; when a downturn happens, the small nations suffer.

Ireland was able to borrow large amounts of cash from German banks which had huge savings reserves and could offer low interest rate, but now that credit has dried up and the interest rates have gone up.

Now they are stuck in the Euro and have no means of affecting their fiscal crisis; they cannot devalue their currency or raise interest rates. This is one of the characteristics of the new world order; we live in a world where power is multi-layered, and national government is sandwiched between the layers be they sub-state, national, regional, international.

These institutions are pluralistic with opposing objectives and no locus of power, as leadership is rotated between heads of state there needs to be coordination between successive leaders.

The institutions created have varying levels of authority for example with an East African customs agency vs. a national customs agency; who is superior? These institutions make the regional bloc structurally complex as they vie for resources, jurisdiction and functionality.

However experts agree that far from making national governments obsolete, these national governments become crucial strategic sites to assist in stitching together regulatory and governing bodies.

As a child, my mother used to live in Rwanda, fetch water in Tanzania and go to school in Uganda because she lived on the border of three nations. Now we all live on the borders of all nations because of the information age and the globalised world.

ramaisibo@hotmail.com

 

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