A new economic agenda for Kenya

Jan 08, 2006 Management, Sunday Nation

It’s time to get back to what really matters.

We’ve had an unruly and all-consuming referendum campaign. We’ve been up to our necks in political intrigues. We’ve brought the cows home while yakking incessantly about leadership, personalities and new political bedfellows. And we’ve had the Christmas break to recover our wits.

Now, let’s get back to the thing that butters our bread, lights our jikos and fuels our profit machines. It’s time to forget about everything else for a while and just focus on the economy. There is only so much hot air we can produce; let’s get back to the business of producing goods and services, driving economic growth and alleviating poverty.

If we’re serious about this (and no one could blame you for having doubts), then we must construct a systematic agenda for the economy. There is so much to do; so many issues to deal with; so much disarray. Where do we start? What do we do immediately, and what do we leave for later? What are the “must-dos”? Managing an economy is always about making choices, about deciding what not to do as well as what to give priority to. So, if anyone’s listening, here’s a personal agenda for economic recovery.

Fundamentally, we need a model that allows all the people of this country to participate in their own development. We must move away from the enrichment of the few, towards the participation by the many. Not one of the remarkable economic transformations experienced in world history has been exclusionary. Economic development is sustained and meaningful when it is widespread. To achieve far-reaching participation, we need two words: freedoms and incentives. People participate when they are free to do so; and when faced with the correct incentives.

We must start with the premise that some of the central pillars that support economic growth collapsed a long time ago. So our recovery plan should, first and foremost, focus on rebuilding these pillars. I would give emphasis to just three: rebuilding institutions; rebuilding knowledge; and rebuilding values.

Let’s start with institutions. Without robust institutions, we are in the hands of individual politicians. Without independent watchdogs, we are at the mercy of plunderers. The key institutions to focus on are: the police and judiciary; the media; the central bank; the public revenue bodies; and anti-corruption and human-rights watchdogs in and out of government. These institutions, when correctly constituted and organised, will protect our political and economic freedoms for generations.
In this regard, the Governance, Justice, Law and Order Sector (GJLOS) reform programme is one of the most ambitious attempts to transform many of these key institutions once and for all. If delivered, this programme could strengthen our democracy, human rights, and service delivery. With a bit of luck, it might even give us a new Companies Act – replacing the archaic pre-independence laws governing businesses. Clearly, something to watch and support in 2006.

The second pillar to rebuild is that of knowledge. Here, we would really be rebuilding the capacity to think for ourselves and do things for ourselves. Without knowledge and skills, nothing is possible. Like it or hate it, we have to compete in the world. We need ideas, innovation, and processes that set us apart. None of that happens without education.

But education is about more than just herding millions into primary school. It is more than asking students to sit through 3 mind-numbing years of university and emerging devoid of personal insight, armed with a piece of paper that says ‘Bachelor of Irrelevance’. It is more than reciting the formulas of others. It is about funding and setting up world-class research centres. It is about having a handful of elite institutions that attracts the best minds from across Africa. And, most crucially, it is about dotting dozens of little centres across the land that provide practical job skills to tens of thousands of ordinary people at little cost.

The third pillar that will sustain our economic growth focuses on our values as a people. Without values we all believe in, we are lost. Our values today focus on quick enrichment. In Kenya, shylocks and shysters always lead the way: make the right contacts, grease the right palms and you’ve made it. This short-termist behaviour does not a great nation make. We must build an economy that gets onto a sustained growth path, and that is able to weather all storms.

Economic strategies should emerge from deeply held values, not from textbooks and political stances. Questions we must ask ourselves: Do we believe in economic equality? Equality of opportunity, or equality of outcome? How far will we go in redistributing income?

Do we believe in the principle, long abandoned by our leaders, that we should live within our means? Do we understand what it means to cut your coat according to your cloth? To sacrifice current consumption in favour of saving, in order to enjoy greater utility at a later date? Can we live with austerity for 5 years? Can we undertake a 10-year plan to eliminate foreign aid from our lives?

Do we believe in our inter-connectedness? Can we agree that the single-minded personal drive for profit and gain, oblivious to the harm done to others, yields no joy and no real advancement in life? As a nation, can we feel the joy of giving, and would we want to embed it into our economic life? Is a Kenyan a Kenyan, regardless of skin shading and location? Can we see Kenya (and indeed the world) as an inter-connected system containing the most subtle cause-and-effect mechanisms?

Rescuing our values will take a generation or more. But it cannot be shirked. How do we do it? We know that human beings respond to example and peer pressure. Public campaigns work. Role modelling works. Constant reinforcement in the schools, places of worship and families will work. All these things require funding, planning and execution. Yet there is no better thing on which to spend our money.

These three pillars will deliver us from economic stagnation. Armed with knowledge, protected by institutions and inspired by values, we can develop policy that means something to us. We can take our envious eyes away from the Singapores and South Koreas. We can shut out the whisperings of best practice from faraway places. We can shake off the arm-locks of international financial institutions. We can move up from knee-jerk “left-wing” and “right-wing” economic posturing.

Those are the fundamentals, and can only be rebuilt using sustained effort over several decades. But we need more than that. We also need strategies and actions that will set the scene and launch us into a growth trajectory more immediately. We need to do things on the ground, in 2006 and in every year that follows. We need to create an investment climate and nurture our existing sources of employment and profit generation. We need a set of year-on-year initiatives that will deliver growth and spread its benefits. For more on that, see you next week. You know where to come.