Institute for Development Studies, University of Nairobi
Abstract
The paper examines the impact of state trading on the
operation of the East African Common Market. The first part of
the paper develops a general framework for the analysis of this
question. After setting out the alternative concepts of integration
corresponding to the principles of integration in market
economies and centrally planned economies and the role of state
trading therein, the paper contrasts them with the situation in
integration attempts among developing countries with different
economic systems. This is followed by a discussion of the
definition, functions, structure and operation of state trading
enterprises. An attempt is then made to explore the impact of
state trading systems on intra-regional trade in the light of
various obstacles to the expansion of such trade.
The second part of the paper traces the evolution and
structure of state trading enterprises in the East African
countries. The characteristics of state trading enterprises are
then related to their impact on the growth of East African trade
in recent years. Consideration is also given to other developments
such as the increasing foreign exchange difficulties being
experienced by the Partner States, especially Uganda and Tanzania,
and the growth of the system of foreign trade planning in Tanzania.
The implications of these developments for the East African Common
Market are spelled out. In conclusion, the paper considers various
recommendations to overcome obstacles to trade expansion posed by
state trading enterprises, increasing foreign exchange difficulties
and foreign trade planning
