With a shared currency, entrepreneurs like this Tanzanian vendor won't have to change money when selling their products in other countries. Photo: justCRONO (flickr).

Has the eurozone crisis made shared currencies passe? East African leaders don’t think so, and they’re looking to Europe for an example of what not to do.

Economic integration isn’t a new idea for the East African Community. Its five member states&mdashUganda, Kenya, Tanzania, Rwanda, and Burundi&mdashalready have free movement of goods and labor, thanks to a customs union and, since last year, a common market (a type of trade bloc). According to EAC Deputy Secretary General Dr. Enos Bukuku, a shared currency would build on this by controlling price instability and exchange rate volatility among the states, writes In2EastAfrica. He says this would encourage businesses to invest and spur development in the region.

An EAC monetary union could face many of the same problems Europe has already experienced. Critics point out that the five EAC states’ economies differ greatly in size and scope. Kenya’s GDP is $31,408,632,915, while Burundi, with a fifth of Kenya’s population, has a GDP of $1,610,544,922, according to the World Bank. This could mirror the dynamic between powerful European states like Germany and the EU’s smaller states like Greece, as Tanzanian IMF head John Wakeman-Linn told The Financial Times. But EAC Secretary-General Dr. Sezibera doesn’t think this will be an issue. “If you look at EAC trade statistics, all the partner states have gained. I do not think Kenya will swallow up the other countries; it will only enrich the economic base of the community,” he said in an interview with The East African.

To the citizens who will be affected by these changes, the European Union’s tribulations are probably either unknown or seemingly distant, but EAC leaders are paying attention and believe that they can avoid Europe’s mistakes. At a round of negotiations in Uganda earlier this month, Bukuku said "For the eurozone ... maybe there wasn't well coordinated fiscal policy management and enforcement. If there are benchmarks that are agreed upon, it would be expected that the community would also agree on sanctions and enforcement mechanisms," reports The Christian Science Monitor. He also cited the issue of fiscal discipline and said that many of Europe’s problems are a result of the eurozone countries not having “lived up to what was in the treaty.”

Economists like the World Bank’s Paul Collier warn that a currency union could hurt East African economies, according to allAfrica.com. Others feel it’s simply inappropriate in the current economic climate; The Financial Times cites shrinking regional growth and depreciating currencies as discouraging indicators. But Wakeman-Linn disagrees, telling the newspaper that even if a common currency isn’t feasible, putting the necessary components in place could help East Africa:

“All the things that they need to do to achieve a common currency – integrate financial markets, trade policy, labour markets, capital markets, statistics databases, develop easy mechanisms for exchanging each others’ currencies – all of these things would be extremely valuable and would help develop the regional economy, and so these are things they should do.”

By revealing the cracks in the world’s financial systems, the global financial crisis has provided developing nations with a handy "What not to do" guide. EAC leaders are strong in their belief that a shared currency is possible, even if there are challenges along the way. “The monetary union is a possibility, not a dream,” Dr. Sezibera told The Financial Times. They originally hoped to implement the currency union by next year, a deadline that has proven to be overly optimistic.

With the lessons they’re learned from the euro’s failures, they hope to avoid some of the bumps along the way.

Margo Conner is a senior at Lewis & Clark College in Portland, Oregon, majoring in international affairs. Read her other contributions to Global Envision.

Calls to make changes to our international financial system are being heard. Will they be listened to? Photo: itspaulkelly (Flickr)

Mass unemployment, an overwhelming sense of unfairness and a loss of hope need no translation. Even without written demands, the sentiments of Occupy Wall Street have been interpreted through similar protests in 941 cities in 82 countries - and counting.

Global leaders are taking note. And they agree: A lot has gone wrong in the banking sector. While the basic purpose of the financial sector must remain intact, it’s gotten off track. After all, we still need a secure place to store our money, we still need credit and loans, and advice on how to grow our nest eggs. We need banks.

Can we hit the reset button?

The global financial crisis we’re in is incredibly complicated, and it’s not going away soon. And sadly, there’s no reset button. But changes are needed and changes are happening.

In forthcoming posts, we’ll explore the origins of the crisis, key players, innovative solutions, how the decisions made by developed world financial sectors affect the global poor, how local protests affect global politics, and where we go from here. And we hope to hear your thoughts, too.

Our Series Begins:

An historical look at "too big to fail," in four acts:

•      Act 1: The battle over the lessons of the Great Depression.
•      Act 2: The first bailout leads to the next, and the next.
•      Act 3: The value and perils of deregulation.
•      Act 4: Banking crises go global.

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Europe's financial troubles worry its neighbors

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East Africa seeks to learn from the Eurozone's mistakes

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Bank transfer day: A symbolic move

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Social Workers Getting to the Root of Debt

For decades, newly minted business-school graduates have flocked to Wall Street in New York, eager to make their mark in one of the biggest financial hubs in the world. Today, these “high-level” jobs are increasingly moving abroad, fueled by Wall Street companies’ efforts to reduce operating costs in a bad economy.

Over the past year, domestic financial markets have been hit hard. From 2004 to 2007, the top U.S. financial companies earned approximately $254 billion in profits. Over the past year, however, these companies’ combined assets value has decreased by $107.2 billion. Companies in the financial sector have been outsourcing for years, but the recent economic downturn has changed the types of jobs going overseas. Instead of the so-called “back-office operations” such as IT and accounting, companies are increasingly relocating research and data analysis jobs to places like India and Eastern Europe.

According to the International Herald Tribune,

[This] could signal the beginning of a profound change in the way investment banks are structured, with everyone but the top deal-makers, client representatives and the bank management permanently relocated to cheaper areas like India, the Philippines and Eastern Europe.

Some U.S. workers are adapting by moving where the jobs take them, whether that’s Latin American or Asia.

Although this trend might suggest that emerging and developing economies are booming, the International Monetary Fund’s July 2008 World Economic Outlook Update suggests otherwise. Economic growth in developing economies is expected to slow from 8 percent in 2007 to 7 percent in 2008-2009 — still better than U.S. forecasts, but an indication that clear-cut winners are hard to find in today's harsh economic climate.