UNCLAS SECTION 01 OF 02 KAMPALA 001090

SIPDIS

SIPDIS

DEPARTMENT PASS TO USAID

E.O. 12958: N/A
TAGS: PNAT PGOV PREL UG
SUBJECT: EAST AFRICAN FEDERATION GETS BIGGER

REFERENCE: KAMPALA 0511


1. Summary. Rwanda and Burundi were admitted to the East African
Community (EAC) during a regional summit in Kampala on June 18. The
expanded community increased the number of member states which also
includes Kenya, Tanzania and Uganda. The EAC leaders committed to
working together for socioeconomic improvement. For Uganda, the
enlarged community represents an expanded regional block and an
attractive destination for investors. End Summary.

--------------
Rwanda and Burundi Join Regional Block
--------------


2. On June 18, Rwanda and Burundi joined the East African Community
(EAC) at the fifth Extra-Ordinary Summit of the Heads of State,
after signing the treaties of consent. The two countries fulfilled
the key requirements for joining the community which included having
a border with one of the three countries, possessing a
democratically elected government, and operating a free market
economy. EAC membership of Rwandan and Burundi took effect on July
1, 2007.

--------------
The Benefits of Regional Integration
--------------


3. The EAC region has the potential to be a formidable economic
power with a land of 19 million sq kilometers of Africa's most
productive landscapes and continued GDP growth of over $40 billion.
The social-economic benefits are also potentially largeenormous; it
includes free movement of labor across borders, intra-trade
activities, common external tariffs strengthened bargaining power,
and protection of common interests.


4. The admission of Rwanda and Burundi to the EAC would contribute
to Africa's current efforts for a strategy to deal with deep-rooted
structural problems that hinder development. In addition, the
integration could contribute to member states overcoming constraints
like small size, market limitations and structural challenges.

--------------
Leaders Embrace Integration
--------------


5. Paul Kagame described admission to the EAC as an important
milestone, not only for the people of Rwanda, but for EA. He said,
"it marks our formal entry into a family of nations with long
historical and cultural ties, which provides an opportunity for
wider and deeper integration." He added that "a united and
prosperous EAC will enable us to assert our collective interests as
a stronger economic bloc in Africa and in the Global world." Pierre
Nkurunziza of Burundi said that it was a rare pleasure and honor for
his country to join the EAC. He appeared particularly pleased with
the summits proceedings, according to journalists covering the
event.


7. Speaking about the two new member states, Tanzania's President
Jakaya Kikwete said, "the expanded membership gives reason to hope
and celebrate to overcome backwardness and underdevelopment."
Kenya's Mwai Kibaki said "the accession of Rwanda and Burundi
completes the link as the two countries are geographically,
culturally and economically connected to the region." President
Museveni said the community was the only answer to the "colonial
irrationalities" that divided Africa with artificial borders. He
said the EAC was the most well-placed to lead Africa out of the
"straight jacket of political balkanization."

--------------
Integration faces Challenges
--------------


8. Despite potential benefits, the EAC region is among the poorest
in the sub-Saharan Africa and in the world. It is one of the most
affected by HIV/AIDs. All the countries (apart from Kenya) that
were surveyed have been ranked by Transparency International as
among the most corrupt in the world. Rwanda and Burundi will likely
face stiff competition from partner states whose manufacturers
dominate the region's market.

--------------
Comment
--------------


9. GOU officials were pleased with the attendance and the outcome
of the EAC summit. It is anticipated that the expanded EAC will
assist the region's unity. The accession of Rwanda and Burundi to
the EAC received wide media coverage. Ugandans welcome the economic
benefits that come with the integration. Other EAC issues to watch
are, fast tracking of the political federation and harmonizing of
the region's configuration negotiations with the EU, in respect to

KAMPALA 00001090 002 OF 002


World Trade Organization rules governing liberalized trade and
stages of integration.
End Comment.
BROWNING



1