Research into Models of Economic Cooperation in the Horn of Africa.

The new prospects for peace, in some of the countries of the Horn at least, offer new opportunities to develop economic cooperation across countries in the region. This paper suggests practical ways of achieving integration and uses three case studies from Ethiopia, Eritrea and Sudan, to look at the various opportunities (and difficulties) which can be envisaged.

The Sudan case study gives an outline of suitable approaches to economic integration. Several alternatives are put forward but, as the author concludes, existing constraints on regional trade such as complicated import-export procedures, lack of incentives and government support as well as inadequate transport and communications render things difficult.

In Eritrea industries have been adversely affected by colonial economic policies and of course by the prolonged war. The paper enumerates a number of steps the present government should take to make public industries efficient. It further argues that since the inter-dependence between Eritrea and Ethiopia is very strong, it would be in the interest of both to use the same currency, and to exchange resources in order to promote economies of scale. With the rest of the region measures such as collaboration in regional development, planning, and banking in order to avoid duplication ought to be followed. However peace and stability are a pre-requisite effectively to bring about these developments.

The question of shared water resources is addressed in the last case study. Since agricultural resources are important for the economies of all Horn countries, the question of water resources is crucial. The study highlights the areas, potentials and problems of sharing cross-border water resources.

Effective management and utilisation of water resources is key for the socio-economic development in many of the countries concerned. At present there is no legal mechanism to apportion water among the riparian states. On the whole water uses have been maintained by threat of force. What prevails is a state of confrontation leading to latent, and sometimes open, conflict. New negotiations need to be entered upon. The recent agreement signed between Ethiopia and Egypt shows signs that more rational negotiations can begin. This might pave the way for other countries to follow this example.