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African Union An Infant Organization Stephanie Chapman and Magda Khoury A continent in need of integration. *Regional Trade Agreement is a n economic trade agreement to reduce tariffs and restrictions on trade between two or more nations within a certain region African Statistics:

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african union an infant organization

African Union An Infant Organization

Stephanie Chapman

and

Magda Khoury

background
A continent in need of integration.

*Regional Trade Agreement is an economic trade agreement to reduce tariffs and restrictions on trade between two or more nations within a certain region

African Statistics:

Of the UN’s 50 least developed countries list, 32 are member nations of the African Union(United Nations).

There are 14 regional trade agreements* on the continent (Africa Union Website).

In Africa, there are 43 different currencies plus 2 currency unions (Wikipedia).

The African Union has 53 member nations—all the African nations except Morocco (AU Website).

Background
the predecessor
The Predecessor

THE OAU: The Organization of African Unity

  • Created in 1963 to promote strong united African states against colonial subjugation and racism who work together to improve the lives of African people.
  • Mostly united by apartheid in South Africa.
  • Was seen to have failed to respond to serious intra-African conflicts or to act as a pan-African body against foreign intervention.

Rukare, Donald, and Corinne A. Packer. "The New African Union and Its Constitutive Act." The Journal of International Law 96 (2002): 365-379. JSTOR.

the decline of the oau
The Decline of the OAU
  • Post Cold-War, the entire world changed, yet Africa and the OAU did not.
  • The major world powers did not assume leading roles in promoting peace and development in African regions.
  • Africa had to consider a new political and economic order:

“African Solutions for African Problems”

Rukare, Donald, and Corinne A. Packer. "The New African Union and Its Constitutive Act." The Journal of International Law 96 (2002): 365-379. JSTOR.

the interim aec of 1991
The Interim: AEC of 1991

The AEC:The African Economic Union

  • Established to implement an economic community to be carried out over a period of 34 years (the Abuja Treaty--still in effect).
  • Intent to establish an Africa Common Market*
    • Calls for trade liberalization through abolition of customs duties on imports/exports with the object of creating a free trade area* in each of the four sub-regional economic communities of Africa

*A Common Market is a level of integration in which a free trade area exists with a common external tariff and the free flow of resources among member countries. I.e. The European Union

*A Free Trade Area is the level on integration in which there is elimination of tariffs between countries on specific segments of goods, but some external tariffs still exist. I.e. NAFTA

Rukare, Donald, and Corinne A. Packer. "The New African Union and Its Constitutive Act." The Journal of International Law 96 (2002): 365-379. JSTOR.

the abuja treaty
The Abuja Treaty

Provided for the AEC to be set up through a gradual process built on the strengthening, gradual harmonization and then integration of regional economic cooperation: 6 stages over 34 years from 1994 to 2028:

  • Strengthening regional economic cooperation (5 years)
  • Stabilization of tariffs & other barriers to regional trade, strengthening of regional integration & infrastructure, coordination & harmonization of regional economic cooperation (8 years)
  • Establishment of a free trade area & customs union at a REC level (10 years)
  • Coordination & harmonization of tariff & non tariffs between REC’s (2 years)
  • Establishment of an African Common Market & common policies (4 years)
  • Integration of all sectors, establishment of African Central Bank, African single currency, African Economic & Monetary Union and electing the first Pan-African Parliament (5 years).

Strategic Plan of the Commission of the African Union. African Union. Addis Ababa: Commission of the African Union, 2004. P. 52. 24 Apr. 2007

groundwork for the african union
Groundwork for the African Union

The constitutive acts of the AU are based on CH. III of the AEC treaty, which identifies the organs of the governing body:

-Composition

-Functions

-Powers

-Terms of Procedures

+ Number of Meetings

+Rules for decisions and appointments

…But with a few modifications:

Most important being the creation of three financial institutions and placing them firmly within the hierarchy of the union.

Rukare, Donald, and Corinne A. Packer. "The New African Union and Its Constitutive Act." The Journal of International Law 96 (2002): 365-379. JSTOR. Philip Weltner Library, Atlanta. 24 Apr. 2007

the creation of the au
The Creation of the AU
  • July 11, 2000: The OAU Assembly adopted the Constitutive Acts.
  • April 26, 2001: The 2/3 majority of the member states of the OAU ratified the Constitutive Acts of the AU
  • May 26, 2002: The OAU would completely cease to exist.

STRATEGIC PLAN OF THE AFRICAN UNION COMMISSION. “Volume 1: Vision and Mission of the African Union”. 2004. p.21. 24 Apr. 2007.

the vision of the au
The Vision of the AU*
  • Promotion of accelerated socio-economic integration of the continent
  • Greater Unity and solidarity between African countries and peoples
  • Based on the common vision of a united and strong Africa and on the need to build a partnership between government and all segments of civil society.
  • Promotion of peace, security and stability on the continent as a prerequisite for the implementation of the development and integration agenda of the union.

* The Strategic Plan of the Commission of the African Union. http://www.africa-union.org/root/au/AboutAu/Vision/volume2.pdf

a few objectives of the au
A Few Objectives of the AU*
  • To defend the sovereignty, territorial integrity and independence of its member states
    • Member states are held accountable to the non-interference principle which prohibits interference into the internal affairs of another member state.
    • Right of the Union to intervene in a member state pursuant to a decision of the assembly in respect of grave circumstances, namely: war crimes, genocides, and crimes against humanity. It may also intervene for mediation and peacekeeping missions.

*"Constitutive Act." African Union. African Union. 19 Apr. 2007.

objectives of the au continued
Objectives of the AU Continued…
  • Accelerate political and socio-economic integration of the continent.
  • Establish the necessary conditions which enable Africa to play its rightful role in the global economy and in international negotiations.
  • Promote sustainable development and the economic, social and cultural interests, as well as the integration of African economies.
  • Coordinate and harmonize the policies between the existing and future Regulatory Economic Committees for the gradual attainment of the objectives of the Union.

"Constitutive Act." African Union. African Union. 19 Apr. 2007.

strategy for continental integration
Strategy for Continental Integration

Strategic Plan of the Commission of the African Union. African Union. Addis Ababa: Commission of the African Union, 2004. p.12. 24 Apr. 2007

challenges the au faces with integration
Challenges the AU Faces with Integration
  • There are different currencies and visa requirements for each country.
  • Having 14 regulatory trade agreements results in a lacking of economic integration and leads to confusion.
  • Poor infrastructure that limits mobility throughout Africa
    • Rural areas beyond cities are hard to reach

Strategic Plan of the Commission of the African Union. African Union. Addis Ababa: Commission of the African Union, 2004. p.6. 24 Apr. 2007

current african trade agreements
Current African Trade Agreements

Strategic Plan of the Commission of the African Union. African Union.

Addis Ababa: Commission of the African Union, 2004. p.8. 24 Apr. 2007

the african union today
The African Union Today
  • The African Union today is in the beginning stages of implementing its ultimate goal of becoming a common market a market consisting of an agreement between countries to maintain a free-trade area, a common external tariff, and free mobility of capital and labor.
  • It will be very hard for the African Union to actually become an economic union, which consists of an agreement between countries to maintain a free-trade area, a common external tariff, free mobility of capital and labor, and some degree of unification in government policies and monetary policy. This will not happen because there are 54 nations on the African continent divided by political ideals, religion and geography.
  • The most feasible goals for the African Union are outlined in their objectives, and deal more with social and cultural issues in the present to create a social climate that will be conducive to the future changes the Union wishes to make by creating a common currency and a central bank.
objectives for the commission for 2007
Objectives for the Commission for 2007
  • Profound institutional transformation based on three components:

・Institutional strengthening of the AU Commission

・ Refinement of AU governance processes ・ Rationalization of the institutional architecture

  • Enforce an action plan in six areas with the intent of networking Africa’s resources:

・ Shared Vision

・ Peace, security and good governance

・ Regional economic integration

・ Infrastructure development

・ Culture

・ Social development

Strategic Plan of the Commission of the African Union. African Union. Addis Ababa: Commission of the African Union, 2004. P.13. 24 Apr. 2007

current issue zimbabwe
Current Issue: Zimbabwe
  • A recent problem of concern for the African Union is Robert Gabriel Mugabe, “a near-parody of an African dictator.”
  • He employs secret police called the Central Intelligence Organization to keep his opposition, the Movement for Democratic Change at bay, even resorting to beating their leader Morgan Tsvangirai almost to death.
  • Under this man’s rule, Zimbabwe’s economy has gone from being one of the greatest economies in Africa, to one of the worst.

"The Man Behind the Fall." The Economist 31 Mar. 2007: 27-30.

problems the au faces with the zimbabwe crisis
Problems the AU faces with the Zimbabwe Crisis
  • The fall of Zimbabwe’s economy creates set backs for the development of the African Union’s economies.
  • The Union, under its new charter has the right to intercede in human rights problems and any other case they may deem necessary, but problems arise as other countries’ leaders fear intervention and are not willing to do to their neighbor what they would not have done to themselves.
  • The Economist explains this apathy saying, “…African leaders are unlikely to get out their megaphones. Their mumbling and conciliation have continued. Only a few weeks ago, Mr. Mugabe landed a power deal with Namibia that should help ease Zimbabwe’s crippling power cuts. He also paid a recent visit to oil-rich Equatorial Guinea, which seems happy to assist. Angola has been rumoured to be ready to send paramilitaries to help retrain the Zimbabwean police, although both sides now denied this.”

"The Man Behind the Fall." The Economist 31 Mar. 2007: 27-30.

zimbabwe conflict continued
Zimbabwe Conflict Continued…
  • Zimbabwe is a central concern of the Southern African Development Community (SADC) at the moment, but little is being done.
  • The African Union along with the this regional trade community must decide whether it is important to intervene and help elect a more democratic leader with goals of development, or to sit back.
  • By not intervening the African Union risks set-backs in their campaign for a common market and better economic standing for the continent as a whole. Under poor rule, corporations pondering foreign direct investment (the act of a domestic corporation purchasing real assets, such as plant and equipment, in a foreign country) will be deterred by political instability.

"The Man Behind the Fall." The Economist 31 Mar. 2007: 27-30.

labor issues in africa
Labor Issues in Africa
  • Although there are incidents of corruption, political instability and poverty, the AU is experiencing growth. Foreign direct investment has increased from $17 billion in 2004 to $30 billion in 2005. However, the FDI’s hardly went into the 34 least developed countries.
  • An important factor that the AU has outlined as being important is the creation of intra-country infrastructure, to facilitate in the movements of the two factors of production, labor and capital.
  • Africa is a labor intensive continent that needs to increase infrastructure to attract FDI, as well as, domestic industries that will require the use of their most abundant factor of production, labor.
  • The International Labour Organization states, “Labour migration within Africa and originating from it generally improves the welfare of migrants and provides skills and labour needed by host countries. Migrant remittances improve the welfare of families at home, as well as enhancing human capital through expenditures on health, education, nutrition and housing. However, the current patterns of skilled migration lead to brain-drain losses that may impede economic development.”
  • Although migration is important, members of the AU need to create industries that attract their more highly skilled workers to avoid a brain drain.

Juan, Somavia. The Decent Work of Agenda in Africa. Eleventh African Regional Meeting, Apr. 2007, International Labour Organization.p.4. 26 Apr. 2007

poverty in africa
Poverty in Africa
  • Africa accounts for 11.9% of the world’s labor and accounts for the largest percent of unemployment in the world, meaning, jobs must be found to increase the welfare of the people as well as the economic welfare of the African Union.
  • According to the ILO, “…the number [of poor people] in sub-Saharan Africa increased from 164 million [in 1981] to 314 million [in 2001]. Of this total, some 155 million are women and men of working age. Africa has the largest number of working poor in total employment of any region. It is estimated that around 55 per cent of all people employed in sub-Saharan Africa do not earn enough to lift themselves and their families above the $1 a day poverty line and that about 80 per cent are subsisting on under $2 a day. These proportions have changed very little over the last 10 years.

Juan, Somavia. The Decent Work of Agenda in Africa. Eleventh African Regional Meeting, Apr. 2007, International Labour Organization. 26 Apr. 2007

conclusion
Conclusion
  • The African Union as a body that will bring about change for Africa has many roads ahead that it must build both literally and figuratively. The continent has large amounts of labor and many natural resources making creating hope for a better future.
  • Increased infrastructure and eventually the destruction of the 14 trade regions will lead to trade creation, as countries will do away with barriers to trade such as tariffs and quotas on products.
  • Trade creation creates an efficiency gain resulting from a free-trade area because more efficient member countries displace less efficient member countries. If the African nations can begin employing specialization, it would be feasible for them to one day become a self-sufficient continent under one currency, where imports from abroad are less important to sustaining the countries economies.
  • This change, however, will not take place immediately. The African Union’s plan for a common currency and central bank will not be completed for 20 more years, and further specialization may take much longer.
  • Because the African continent has 34 least developed countries and the largest amount of people living on $1 per day it is essential that some type of socio-economic plan be implemented, and that plan comes in the form of the African Union.
works cited
Works Cited

“UN Office of the High Representative for the Least Developed Countries”. http://www.un.org/special-rep/ohrlls/ldc/list.htm

“Central banks and currencies of Africa”. Wikipedia Encyclopedia.

http://en.wikipedia.org/wiki/Central_banks_and_currencies_of_Africa

"Constitutive Act." African Union. African Union. 19 Apr. 2007 www.africa-union.org/root/au/Aboutau/Constitutive_Act_en.htm.

STRATEGIC PLAN OF THE AFRICAN UNION COMMISSION. “Volume 1: Vision and Mission of the African Union”. 2004. 24 Apr. 2007. http://www.africa-union.org/root/au/AboutAu/Vision/Volume1.pdf

Strategic Plan of the Commission of the African Union. African Union. Addis Ababa: Commission of the African Union, 2004. 24 Apr. 2007 www.africa-union.org/root/au/AboutAu/Vision/volume2.pdf.

Rukare, Donald, and Corinne A. Packer. "The New African Union and Its Constitutive Act." The Journal of International Law 96 (2002): 365-379. JSTOR. Philip Weltner Library, Atlanta. 24 Apr. 2007 http://links.jstor.org/sici?sici=0002-9300%28200204%2996%3A2%3C365%3ATNAUAI%3E2.0.CO%3B2-K.

Juan, Somavia. The Decent Work of Agenda in Africa. Eleventh African Regional Meeting, Apr. 2007, International Labour Organization. 26 Apr. 2007 www.ilo.org/public/english/standards/relm/rgmeet/11afrm/dg-thematic.pdf.

"The Man Behind the Fall." The Economist 31 Mar. 2007: 27-30.