The European Union (EU) has made a significant impression on the international monetary system.(2) African leaders in the African Union (AU) have theorised the possibility of creating such a community for Africa. This paper will thus discuss the African plan to re-organise the continent into a federal entity, as inspired by the EU. To draw comparison, this paper will explore the possibilities of an Asian continental union and which continent is most likely to succeed.
Therefore, the benefits and costs of the EU shall be investigated and applied theoretically to both African and Asian institutions that aim to cater for a majority membership in the continent. This discussion will include what Africa may hope to gain from a continental integration, and why Asia has avoided forming a binding economic and political community.
The European Union: An inspiration
Before its official creation in 1993,(3) the EU found its origins in the European Coal and Steel Community after the World War II. The notion of shared economic values or a partnership between countries was developed throughout the decades; as the membership grew gradually, custom duties were eradicated, joint control over food production was implemented, loans for infrastructure and employment creation were given, citizens were allowed to vote for the EU Parliament, and fiscal plans were introduced.(4) The EU agenda has also increased its political agenda with the fall of the Berlin Wall, the terrorist attacks on 9 September 2001, and the 2008 global financial crisis.(5) The EU strives for “peace, prosperity and stability,”(6) which is based on a single market and the idea that interdependence will ultimately avoid conflict amongst its members.(7)
Before 1993, scholars thought the EU would benefit the continent by eliminating the need to exchange currencies, eradicating volatile competition and interaction between countries; leading to swift economic and financial integration; creating an unproblematic manner of adopting and expanding fiscal policies; enabling greater economic discipline, international prestige, a reduced cost of loans; and facilitating greater inter-regional trade and cooperation.(8) The subsequent policies that would be implemented were speculated to bring a greater prosperity to Europe or, rather, its member countries. This made the EU membership increasingly attractive and its current 27 members benefit from many collective policies.(9)
However, not all its members share such congenial beliefs that the EU is as beneficial. A poll taken in February 2010, which measured the support for the European Union membership, showed that the majority of citizens living in Latvia, Poland, Sweden, and the United Kingdom (UK) thought the membership to be negative. Furthermore, there are 16 European countries that have not petitioned to join the EU for economic, political and social reasons.(10) In 1992, the costs of the EU membership was questioned and it was determined that the following factors impressed greater obligations. First, the European Central Bank (ECB) demanded that countries apply “asymmetric demands” and subsequently deal with supply shocks. Next, this membership would affect joining countries or regions differently, which may create a detrimental effect for that country’s economy or an intra-regional deficiency. This was followed by a complacent work force at national levels because competition would be eliminated. Finally, when adhering to the policies of a monetary union, the work force will have a “direct downward wage adjustment” that may change the employment policies drastically, which will create heightened tension between the Governments and workforce, and was subsequently met with strong resistance.(11)
Perhaps the shock of drastic economic change creates a greater political opposition to EU membership or disdain of its implications; however, the social component is greatly ignored, as ethnic differences such as language and human needs, like employment, remain contentious issues.(12) In spite of negative press surrounding the EU, other organisations such as the African Union (AU) have been deeply moved by the noteworthy achievements of the organisation.
A ‘United States of Africa’
The AU draws inspiration from the EU’s Parliament, Central bank and Court, as the AU has created identical organs.(13) Before the conversion of the AU in 2002, its predecessor, the Organisation of African Unity (OAU), which shares its principles with the AU, was shaped by the values and efforts that “rid the continent of the remaining vestiges of colonisation and apartheid to promote unity and solidarity among African States, to coordinate and intensify cooperation for development, to safeguard the sovereignty and territorial integrity of Member States and to promote international cooperation within the framework of the United Nations.”(14) In comparison, the EU was initially and primarily based on economic proponents. This showed a separation from the emotive drivers that a political agenda may be incorporated into an institution or a country.
The levels of poverty, disease and corruption bring panic to the AU representatives, who have come to believe that only cohesive action or unification will bring greater prosperity.(15) Three options for such unification are possible: one, a conservative approach that wishes to work towards an African Union Government; two, a “progressive continentalist” or gradualist approach that places greater importance on the Union of African countries; and three, a radical approach that lobbies for total and instant integration.(16)
This transformation would take place in three phases, the first would consist of the formation of an African Union Government that would bring a few countries under its mandate and exercise the financial and authoritative plans.(17) In comparison to the precursor of the EU, the European Coal and Steel Community, it too started with fewer members. However, it was a trade regulating institution that did not impose restrictive financial or authoritative measures. The expansion and extension of EU authority occurred gradually, as opposed to the somewhat radical ideas that were proposed to achieve this in a matter of years.(18) The following phase contained the drafting of a continental constitution and the creation of an African Central bank.(19) Finally, the last stage required all mechanisms to be put into place with the adoption of the continental constitution and the election of the Pan-African Parliament. This conservative approach was agreed upon in the AU Constitutive Act and that integration would be based on an African agenda. This plan did not include the free movement of the African citizens and this placed a greater emphasis on sovereignty.(20) This clashes with their EU role models as they have granted their members free movement as part of the Schengen Agreement.(21)
The gradualist approach focuses on a union of African countries that will collectively agree to share a political and economic agenda whilst maintaining a degree of sovereignty. This would be achieved by working closer with the AU in its organs such as the Economic, Social and Cultural Council (ECOSOCC), the New Partnership for Africa’s Development (NEPAD), the African Peer Review Mechanism (APRM), and the Regional Economic Communities (RECs).(22) This programme of action, which is currently being implemented, is similar to how the EU model came into existence.
The final option describes the unification of African Governments. Some African leaders, such as former Libyan President Colonel Muammar Gaddafi, felt that unless Africa had total cohesion, they would not be able to eradicate poverty disease and corruption. This most radical option asks African countries to pool their sovereignty into a single entity. It romanticises the process of unifying all Governments in Africa, and draws the focus away from the issue that African countries will lose their sovereignty.(23) In retrospect, the EU does have great influence over the political and economic activities of its member countries; however, this took place gradually as the EU evolved.
African integration would hypothetically lead to the economic benefits that the EU experiences; however, the EU has had a degree of political and economic development and maturity that contributed to its successes. African countries may not be able to adapt economically, as the AU has a predetermined political orientation. Furthermore, there is a greater issue of mistrust amongst African leaders, a wariness of losing regional power and a greater question of who would assume continental leadership roles that make binding decisions. Africa should gradually adapt due to the vast array and complexity of the social, political and economic problems.(24) It is therefore valuable to compare another developing continent such as Asia to explore the possibilities of other success for a federal model.
The prospects of an Asian Federation through the Asian Development bank
Asia does not have a Pan-Asian institution as Africa or Europe that encompasses both political and economic values. This is due to a number of factors: ethnic divisions, intensified competition amongst sub-regional groupings, and apprehension in losing regional stature.(25) It is apprehension in forming an institution that is important because it acknowledges that the region is not yet stable in creating an integrated community, instead of forcing the integration of a continent. However, it is important to discuss the possibilities of a broader Asian community, as there are greater prospects of prosperity in comparison to other developing continents such as Africa.
The Asia-Pacific Economic Community (APEC) negotiates economic cooperation such as regional trade agreements, services as well as production.(26) This institution is a positive entity for the region because it is designed to push and promote multilateral interactions amongst members. Although it differs slightly from the EU through its programmes, it maintains a primary economic agenda that may use political imperatives to benefit it.(27)
The Asian Development Bank (ADB) is based on development and alleviating poverty.(28) Its members include Asian and Asian Pacific countries, as well as non-Asian members. The “main devices for assistance are loans, grants, policy dialogue, technical assistance and equity investments,” and it caters to the Asian sub-regional groupings. ADB has a greater economic orientation in comparison to the African Central Bank, which is greatly dependent on member countries with a highly politicised agenda.(29)
Lastly, the Association of Southeast Asian Nations (ASEAN) draws inspiration from economic and social aspects such as development, regional integration and human security, which translate into political-security objectives.(30) This institution is the only sub-regional grouping mentioned in this study because of the large membership. Its social and economic plans portray a positive relationship between its members and the organs; however, it provides sovereignty.(31)
If these and other similar institutions were to combine, member countries would be obliged to submit their national policies to an institution that may place their economy and sovereignty under temporary or prolonged shock. In addition, the institutions involved would need a major reconciliation to one another. This may set the region back further in restructuring its existing and new institutions and create a greater economic shock, as not all countries are impervious to the negative effects. Asian countries have been prominent actors in international economic affairs because of their growth rate, and production and trade capabilities have given the Asian continent a positive economic image.(32) It is important to remember that all regions have countries that fall into an economic disparity group, and Asia is no different. This is how Africa and Asia are similar. What separates them is the Asian economic focus; Africa is predominantly politically focused. Therefore, with such an economic orientation, a Pan-Asian institution modelled according to a EU plan has greater chances of succeeding.
Discussing both African and Asian institutions and their orientations portrays the different levels of success that a federal Government can implement for economic and monetary successes. Africa and the AU have a lesser chance of achieving the benefits of a federal Government, because they face many issues with a political nature. Furthermore, the agenda is politicised to a greater extent, thus there is a lesser focus on the economic imperatives that are vital for the development of the African continent. Asia could gain more from a greater Pan-Asian multilateral setting, like the EU, because the institutions in place have a greater economic focus. However, Asia has not created a federal institution due to the lack of agreement on contentious issues such as sovereignty and ethnicity. This may be the better option because less conflict in the region allows the country in question to develop at its own pace.
(1) Contact Arina Muresan through Consultancy Africa Intelligence’s Asia Dimension Unit (
(2) Fink, G. and Salvatore, D., 1992. Benefits and costs of a European economic and monetary union. The Brown Journal of World Affairs, 6(2), pp.187-192.
(3) European Union website, http://europa.eu.
(13) Owour, H., ‘Building on the European Model: Challenges for the African Union’, World Press Review, October 2002, http://worldpress.org.
(14) African Union website, http://www.au.int.
(16) Landsberg, C., 2007. The Grand African Debate. New Agenda, 1(25), pp. 56-59.
(17) ‘An African Union Government towards the United States of Africa’, African Union, June 2006, http://www.africa-union.org.
(25) Camroux, D., 2007. Asia…whose Asia? A return to the future of a Sino-Indic Asian community. The pacific Review, 20(4), pp. 551-575.
(28) Asian Development Bank website, http://www.adb.org.
(30) Association of Southeast Asian Nations website, http://www.aseansec.org.
(32) Bajrektarevic, A. H. Preventative diplomacy: No Asian Century without the Pan-Asian Institution. PostScript, 8(3), pp. 8-18.