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Africa World Press
Regional Integration and Cooperation in West Africa: A Multidimensional Perspective / Edition 1

Regional Integration and Cooperation in West Africa: A Multidimensional Perspective / Edition 1

by Real P. Lavergne


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Product Details

ISBN-13: 9780865435674
Publisher: Africa World Press
Publication date: 01/28/1997
Edition description: New Edition
Pages: 350
Product dimensions: 5.95(w) x 8.95(h) x 1.07(d)

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Part I: Strategic Visions and Prospects - Building Partnerships for Innovation: A New Role for South-South Cooperation by Lynn K. Mytelka Lynn Mytelka takes a global view of developing country experience with regional integration. In her view, "market-driven" and "specialization-driven" models have failed, due to the zero-sum nature of the game and the lack of a constituency at the firm level. However, beginning in the late 1970s and early 1980s, developing countries began to turn away from the impor-substitution policies of the past. This was accompanied by a shift in strategic orientation at the firm level that included greater attention to technological advancement, greater use of information systems and networks in gaining access to technology, and the transformation of subsidiaries into independent profit centers.

Such changes provide the basis for a new approach to South-South cooperation around notions of dynamic competitiveness and innovation. Most developing countries in Africa and elsewhere lack the critical mass and technological infrastructure necessary to meet the challenges of a rapidly changing and increasingly competitive world market. Regional cooperation could help overcome these constraints by providing a framework for the adoption of new formulas for stimulating innovation. The author provides examples of the sorts of activities that could be pursued and calls for the establishment of a "Fund for Innovation and Development" in Africa.

During the 1970s and 1980s, several important changes took place in the world economy. The most salient of these, for the purposes of this paper, were the heightened pace of global competition and the accelerated rate of technological innovation and diffusion. Even in traditional industries such as textiles and clothing (Mytelka 1987, 1991a), the need to strengthen competitiveness has led to a rapid increase in the knowledge is understood to include research and development (R&D), design, engineering, maintenance, management, and marketing.

As the knowledge-intensity of production increased, both governments and firms came to regard technology as one of the key components in a strategy for building competitiveness. As one recent report (OECD 1992) pointed out.

Technology and other innovation-related phenomena, along with corporate organization and the proper use of human capital in all the phases of the production process, now represent one of the main pillars of competitiveness.... These features are not simply the attributes of individual firms, but also, to a large extent, those of national or local environments where organizational and institutional developments have produced conditions conducive to the growth of the interactive mechanisms on which innovation and the diffusion of technology are based.

Innovation has thus become a vital link in the relation between trade and development, and development itself can be seen as a continuous process of transformation, adaptation, and adjustment in advanced industrial and developing countries alike.

However, most African and many Latin American and Caribbean countries are singularly unprepared to meet the challenges of a changing technological and competitive environment. They lack the strong knowledge base, integrated physical infrastructure, and diversified economy required to weather shocks and to innovate by recombining existing resources in new ways or by introducing new products, processes, and organizational practices. The ability to their institutions to perceive opportunities and constraints and to translate them into effective policies for change is limited. The financing and skills needed to innovate, adapt, and diversify are also rare in these countries.

Although regional integration among developing countries might have compensated for some of these weaknesses, the application of such schemes, whether of the "exchange-driven" or "production-specialization" variety, has historically not focused on innovation and change. Their underlying conception was based on the replication of imports and reliance on intraregional trade as the agent of change.

Exchange-driven models of regional integration were based on a mix of considerations combining notions of comparative advantage and allocative efficiency derived from traditional neoclassical economics, with infant-industry arguments for protectionism. Typical examples are the Latin American Free Trade Area (LAFTA) established in 1960, the Customs and Economic Union of Central Africa (UDEAC) as it was initially set up in 1964, the Caribbean Free Trade Areas (CARIFTA) of 1967 and the Preferential Trade Area for Eastern and Southern African States (PTA) formed in 1982. Each involved the adoption of comprehensive external protection and, to achieve balance, step-by-step negotiated reduction of tariffs and other barriers to trade among the member countries. Advancement of the integration process thus depended on the constant renewal of government initiative in response to expected pressures for trade liberalization on the part of local firms. As we will see below, however, such pressures did not materialize.

Production-specialization models of regional integration adopted by the Central American Common Market (CACM), UDEAC after 1974, the Caribbean Community (CARICOM), which replaced CARIFTA in 1973, ECOWAS established in 1975, and the Andean Group created in 1969, were somewhat more dynamic. Taking as their point of departure the low level of existing industrial capacity and the tendency for production to be concentrated in the manufacture of similar finished goods, these intraregional imbalances that were likely to emerge in the course of trade liberalization (Myrdal 1957; Dell 1966), stimulate economies of scale, and create an internal dynamic based on increased domestic linkages, through regional planning and regulatory mechanisms. Yet only in the Andean Group were efforts made to stimulate the development of the mining sector, although initial designs for regional industrial programs in the metalworking and petrochemical sectors stressed the development of technological capabilities in addition to productive capacities (Mytelka 1979; Warhurst 1985). Top-down decision-making in all these integration schemes limited the involvement of precisely those economic actors whose cooperation was needed to give effect to investment and trade policies.

By the late 1970s, integration groupings of both the exchange-driven and the production-specialization types were stagnating or had collapsed. Trade liberalization had ceased or been postponed in LAFTA, CARICOM, UDEAC, and the Andean Group. Members had withdrawn -Chad from UDEAC, Chile from the Andean Group - or failed to honor regional commitments - Honduras in the CACM, Nigeria in ECOWAS. The motive force of the integration process had, for all practical purposes, ground to a halt.

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