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Category Archives: Economics

Preliminary Thoughts on Foreign Influence

A U.S. soldier radios base, watched by displaced villagers, Mogadishu Image courtesy of: REUTERS/Dan Eldon  (SOMALIA)

A U.S. soldier radios base, watched by displaced villagers, Mogadishu
Image courtesy of: REUTERS/Dan Eldon (SOMALIA)

I have been reading the book Confessions of an Economic Hitman. In the third-to-last chapter of the book, the following quote from the New York Times of 14 April 2002 is included:

[The United States] supported authoritarian regimes throughout Central and South America during and after the cold war in defense of its economic and political interests.

In tiny Guatemala, the Central Intelligence Agency mounted a coup overthrowing the democratically elected government in 1954, and it backed subsequent right-wing governments against small leftist rebel groups for four decades. Roughly 200,000 civilians died.

In Chile, a C.I.A.-supported coup helped put Gen. Augusto Pinochet in power from 1973 to 1990. In Peru, a fragile democratic government is still unraveling the agency’s role in a decade of support for the now-deposed and disgraced president, Alberto K. Fujimori, and his disreputable spy chief, Vladimiro L. Montesinos.

Folks, allow me to repeat that that is a quote from the New York Times .

It is human nature to read this kind of narrative and begin to draw parallels between it and one’s own experience. (Human nature errs also; we sometimes inflate our own importance.) It is therefore difficult to read this article and find innocence in Raila’s sojourns in the US this year, or innocence in the speeches he made during his visit and upon his return. While in the U.S. he criticized Jubilee for blanket condemnation of an entire community (i.e. for targeting Somalis’ in its investigations on terrorism) – fairly inflammatory talk at a time when grenades were going off in matatus and markets. In the Uhuru Park speech he gave upon his return, he (at that time) gave Jubilee 60 days to convene national dialogue, prompting fears that CORD was seeking regime-change.

Let us add to this knowledge the fact that we have struck oil. Or rather that – perhaps more ominously – Western companies have struck oil in northern Kenya. Oil has been a major factor in many bitterly tragic tales of US neo-colonialism: in Iran in 1953; in Iraq in 1991 and in 2003; in Venezuela in a failed coup attempt in 2002; and in all likelihood Libya in 2011 to name but a few examples. The fact that Kenya has reserves of oil gives cause for a deepening of already grave concerns.

It is alleged that as Minister for Energy, Raila orchestrated the entry into the Kenyan market of Bakri Energy, a wealthy Arabian conglomerate; his brother Dr. Oburu Odinga is an active Director in the company (I was told this by a man who was a staff member of Bakri at the time). If this is true, then Raila Odinga is no stranger to the Machiavellian interplay between politics and wealth that always impoverishes a nation’s citizens.

Having carefully weighed all these issues, it becomes us to be extremely wary of the kind of foreign influence that does not directly benefit the Kenyan people (China is no saint, and this is why looking East is a fallacy that Jubilee itself has abandoned). We need the West’s markets for our tea, our horticultural products, our coffee, our tourism, and in future (we hope) our oil. We also need the East’s infrastructure and its technology. But these trades must be done on terms that are fair to Kenya and to all her people, and not merely a select political few.

Happy New Year, and may God bless the nation of Kenya.

 
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Posted by on December 31, 2014 in Economics, Politics

 

Thoughts on the Night Travel Ban

Gateway to Auckland

Photo credit: Man’s Pic / Foter.com / CC BY-NC-ND

The National Transport and Safety Authority recently introduced new rules that included a ban on night travel by Passenger Service Vehicles (PSVs) in the country.

Let me start by saying that if you haven’t used a matatu for a couple of years, please try it! And carry your kids along. That is how the majority of Kenyans live, but once we have been “blessed with a car” and start using it to get around, we forget very, very quickly. Personally, I fear that this ban has been effected by elitists who haven’t used public transport in the last decade. Perhaps these policymakers can’t remember when they last went to “Shagz” by bus. Perhaps their children are dropped off at school by drivers. Perhaps they buy their veggies at Galleria as opposed to Marigiti. There is nothing wrong with living like that at all, but that is not how the majority of Kenyans live, and policy should be made with the interests of the majority in mind (the greatest good).

Now I’m certainly not condoning loss of life. We should protect every Kenyan’s life (from Westgate to Ntulele to Moyale), for every Kenyan’s life is invaluable. Undeniably, the directive has reduced road carnage, and another very good outcome is that the bus companies are feeling the pinch and beginning to understand the importance of safety. But to punish travellers for the sins of operators doesn’t really make sense.

Take for example the case of the trader who travels to Uganda by night, buys goods during the day (kitenge material I hear), and travels back with them the following night. He/she now has to spend two nights in Uganda, on top of the transport cost. That extra cost will be shared with his/her customer, or at worst just loaded onto them.

Rather than pulverizing mosquitos with hammers, let us start from the point that matatus have been forced to operate within savings and credit cooperatives (saccos). The Government should stipulate that any bus company/matatu sacco/PSV marque whose vehicle is involved in a road accident with a fatality/serious injury should be banned from having ANY of their vehicles on the road for a month. Further, if a company has three fatal accidents within a specified period (say 2 years) then the Directors of that company (or the owners of matatus in that Sacco) should be permanently banned from operating PSVs (to prevent the Directors from just starting new companies).

These two measures may not be entirely fool-proof, but:

  1. They’re simple,
  2. They can be implemented immediately,
  3. They allow night travel to continue,
  4. They’re a little easier to implement than ensuring there are working speed governors in every vehicle, or giving the police handheld speed cameras (these sorts of measures merely become a personal source of revenue for police),
  5. Most importantly, they shift the responsibility for road safety away from the travellers, away from the (massively corrupt) traffic police, and onto the vehicle owners, where it belongs.

Finally, at the root of the carnage in the transport sector is the corrupt nature of the traffic police. Inevitably, buses like the one that crashed at Ntulele have passed numerous road-blocks before their doom. We should remember that any lasting solutions to our troubles should involve as little human intervention as possible; more detailed and rigid solutions, especially involving GPS trackers, can be implemented.

But we can start with those two simple directives.

 
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Posted by on January 7, 2014 in Economics, Life in Kenya, Politics

 

Why President Obama is going to Tanzania

Shipyard Cranes, Norfolk

Shipyard Cranes, Norfolk.
Photo credit: shoebappa / Foter.com / CC BY-NC

“The good news? U.S. President Barack Obama is making his second trip to Africa, the continent of his father’s birth. The ummm… ‘other’ news? He’s not coming to Kenya. What’s that? Yes, other news. Not bad news thanks, we’re Kenyans. We don’t really care whether he comes here or not (sniff). We don’t need the West. We have other trading partners… like China. And have you already forgotten what we did to Botswana? Leave us alone with our Uhurus and our Rutos, Kenyans know what’s best for Kenya…”

The paragraph above summarizes Kenyans’ reaction to the news that Air Force One will not be touching down at Jomo Kenyatta International Airport during President Obama’s upcoming trip to Africa. The President’s trip is scheduled for June 26th 2013 to July 3rd 2013 and will take in Senegal, Tanzania and South Africa. Undoubtedly, Obama’s avoidance of his father’s land is a snub – the second such snub if we count his trip to Ghana in 2009. What seems to rankle most is that Obama felt it wise to accord our neighbours to the South, Tanzania, a State visit. Why would he do this? If we dig a little deeper, we can start to understand (in particular) why Tanzania.

It may surprise most Kenyans to know that foreign direct investment inflows (FDI inflows) to Tanzania and Uganda have exceeded FDIs coming in to Kenya for most of the last decade. The table below shows FDI inflows to the three countries from 2001-2010 (figures in USD):

Year Kenya Tanzania Uganda
2001 5,302,623 388,800,000 151,496,100
2002 20,202,580 396,244,800 184,648,100
2003 79,662,930 364,258,900 202,192,600
2004 41,647,830 226,732,400 295,416,500
2005 11,524,460 935,520,600 379,808,400
2006 26,717,030 403,039,000 644,262,500
2007 693,011,400 581,511,800 792,305,800
2008 51,819,060 400,047,200 728,860,900
2009 70,269,790 414,544,600 788,694,300
2010 184,215,300 433,441,900 817,178,700
Total  1,184,373,003  4,544,141,200  4,984,863,900

Source: http://www.indexmundi.com

This table is a sobering read. It shows that Tanzania and Uganda have both attracted about 4 times the foreign investment that Kenya did during the 2000s. In other words, because of Tanzania’s natural gas, Uganda’s oil, and both nations’ relative stability, for every 1 million dollars foreign investors have invested in Kenya, the same investors have invested another 8 million dollars in Uganda and Tanzania, shared roughly equally. Although the fact that Kenya has now discovered oil deposits may change the broad outlook of this table over the course of the current decade, there is still cause for concern about these figures. And if we do have oil, shouldn’t that be enough to make the US/China fall over themselves to visit us?

The second point is this: remember the Chinese we said we’d trade with instead of the West? Well, China’s (new) President Xi recently went on a state visit that took in Russia, the Republic of Congo (Congo-Brazzaville), and South Africa. Oh, and Tanzania. Yes, China’s (new) President Xi also visited Tanzania recently. While it is true that socialist Tanzania has a long history of ties with China, it is still instructive that President Xi paid Dar-es-Salaam a visit; President Obama actually appears to be playing catch-up to the Chinese in this regard.

Thirdly, those selfsame Chinese recently pledged to help build a port at Bagamoyo, northwest of Dar, that’ll make Mombasa look like a small puddle. This week’s article in the East African on the matter states that the Bagamoyo port is set to cost USD 11 billion (nearly one trillion shillings). In tandem with this, Tanzania is revamping her rail network as well. If we are not careful, we ourselves will be importing and exporting via Tanzania before long.

The nation of Kenya has lost crown after crown economically speaking. We were on a par with Singapore and South Korea at independence. We’ve let them go. Fifty years later, our last remaining crown is “East Africa’s largest economy”. What are we doing to retain this status? Not much, it would seem. Here we are playing tribal games and thumbing our noses at the world by electing questionable “watu wetu“, and yet it is merely a matter of time before we lose our final claim to fame: that of “economic capital of East Africa”. Already Rwandan importers are saying that it takes them 3 days to import via Dar es Salaam, and 7 days to import via Mombasa. In all likelihood, our kids may study Economics knowing East Africa’s largest economy to be Tanzania.

President Obama’s snub should be waking us up to these realities. But much as we did during the Botswana incident, and instead of asking ourselves why the Presidents of the world’s two largest economies are queueing up to visit our southern neighbours (a nation we have grown up labelling an “economic backwater”), we’re busy saying “Kwani Obama ni nani? (Who is Obama anyway?)”. I urge us to realize that this is bigger than Uhuru. This is bigger than Ruto. This is bigger than Kogelo and Mama Sarah and serkal. It’s not a joke folks, this is about our land, our nation, and where we all are headed.

God bless Kenya.

 
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Posted by on May 22, 2013 in Economics, Politics