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Speech by Danish Minister for Development Cooperation Søren Pind Launch of Trade Mark East Africa, Nairobi, 1 February 2011

The spoken word counts

Your Excellencies – (Prime Minister from Kenya, Honorable Raila Odinga), Ministers from East Africa, Government and development partners, distinguished guests - Ladies and Gentlemen,

I am very pleased to be here for the launch of Trade Mark East Africa. As a liberal politician, it will come as no surprise that I am a strong supporter of economic integration and free markets. In my home country, Denmark, we have enjoyed the benefits of a common and free market within the European Union for almost 40 years. Free markets create wealth by spurring competition and forcing the private sector to constantly be more innovative and effective.

Some researchers question if trade liberalisation and free markets are right for Africa. I would argue that they are not only right – they are a necessity if the private sector in East Africa is to survive increased global competition.
Some of the main benefits from globalisation are faster and cheaper communication, easier transfer of money and lower transport costs. Today, shipping a container from Asia to Mombasa is cheaper than sending a container from Kigali to Mombasa. African countries must reduce the costs of communication, transport and energy in order to transform its economies. Otherwise it will remain exporters of primary goods and importers of manufactured goods from Asia.

The good news is that investments are flowing into these areas. Fiber-cables are now connecting countries along the cost of the Indian Ocean and fish bone projects are plugging land locked countries into this electronic highway. The energy producing capacity is increasing and transport corridors are improved. And of course - to follow up on our discussion with the Kenyan Government and private sector yesterday - an important consideration is to ensure the long term environmental sustainability by using green energy as much as possible.

The customs union already implemented in East Africa has shown that liberalisation works in Africa. Internal trade has increased tremendously and jobs have been created. Furthermore, a market of 133 million consumers is also much more interesting to foreign investors and traders – including Danish.
The agreement to establish a common market in East Africa is a quantum leap forward. I commend you for that. Integration in East Africa is deeper and wider than in other regional blocks in Africa.

Why is that? Firstly, there is of course the history of East African Community. It was quite advanced in the 70’s and there was something to build upon. Secondly, you are only five countries with fairly similar trading interests. And thirdly – but most importantly - there has been strong political will to move the integration forward.

“However beautiful the strategy, one should occasionally look at implementation”. Please forgive me for paraphrasing Churchill. The point is that the common market protocol for East Africa will not in itself change things - unless it is implemented at national level. Moving from a customs union to a common market is challenging. In Europe it took us a long time to implement the necessary body of rules and regulation across the member states. Implementation will also be a huge challenge for East Africa.

Integration is not only about economics. Integration does also provide peace and stability. Democracies that trade with each other do not settle their dispute with arms. They negotiate. The political benefits of integration should not be overlooked in a region that has seen quite some turbulence in the past decades.
I believe that TradeMark East Africa is a great initiative. Contrary to many other regional programmes, it has a strong national focus. It involves the private sector and the civil society as stakeholders and beneficiaries. As the process unfolds it is import to involve the private sector and the civil society in order to ensure their ownership.

Europe has learned this lesson the hard way. EU has struggled to win the hearts and minds of its citizens. Denmark is a case in point. Also in Kenya and the other East African Countries, the awareness of the East African Community is limited. Unfortunately, many of those who are aware are sceptical. Information to the citizens on gains and benefits from a common market is a must. There need to be strong public backing and a permanent push from the business societies in order to keep the process on track. Regional integration may generate winners and losers – in the short run. But there will be much more to win for all, than there will be to lose. That is why integration requires leadership. The foresightedness and courage of those African leaders already paving the way for economic integration in African regions must be commended.

This is the right time. Africa’s potential has never been greater. We want Africa to develop into a vibrant part of the world economy. Denmark has decided to double its annual support to private sector development in Africa by 2014. At the same time, we will stimulate the increasing interest among Danish businesses and financiers in the potential of emerging markets in Africa. We stand ready to do our part in the push forward to realize this potential.

Thank you.