Let’s move to an action footing in 2006

Jan 22, 2006 Management, Sunday Nation

Over the past two weeks, this column has outlined the elements of a new economic agenda for Kenya. In the first week we looked at the fundamental pillars that we must put up to support the new economy: better, stronger institutions; investments in knowledge that will arm us with skills and ideas; and a sense of nationhood built around our shared values.

The second part in the series focused on the investment climate, and tried to prioritise the specific initiatives for 2006 that could send us off to a flying start: taking a fresh look at how we regulate business; managing a sustained crackdown on violent crime; and initiatives in the three infrastructural areas that would have the biggest impact on the economy: roads, power and telecommunications.

This final part will concern itself with the problems of participation and equity. It is now widely accepted that economic development cannot be achieved by focusing on a few players or sectors in the economy. Sustained, widespread growth happens when a country harnesses the potential of all its people, all its industries, all its sectors. And for that, a fundamental rethink is needed. The days of enriching the already-rich and waiting for an elusive trickle-down are long behind us. A modern, progressive agenda is inclusive and participative.

New development thinking focuses on “life chances”: that individuals should have equal opportunities to pursue a life of their choosing, and should be spared extreme deprivations. We all need to be involved in the social affairs, economic productivity and political choices of our society in order to have fulfilling lives; but surprisingly few are offered that opportunity.

The issue was clouded in the past by artificial intellectual dichotomies that were placed between equity and efficiency, or between “pro-poor” and “pro-business” policies. These are the reddest of herrings. Equity is not about annulling market mechanisms, nor about discouraging business; it is about using the free-market framework to achieve an agreed set of outcomes incorporating all economic agents.

The simple fact of the matter is that Kenya simply cannot afford the extremes of inequality we find in the country today. We are on record as being one of the world’s most unequal societies. Our ability to neglect and even detest the forgotten residents of the North and East of our country has been brought into sharp relief by the current famine.

This skewed distribution – across region, gender and social class – has severe consequences. It leaves a huge amount of potential human capital unutilised, and is severely wasteful. It leads to social and ethnic discord and battles based on resource capture. It feeds the beast that is stifling us all – the threat of sudden and violent crime. It leaves a cloud of frustration and resentment hanging over the economy.

It really is time to do something about it. In 2006, we need a set of measures that bring more and more people into the tent, that increase the quality of life chances given to the common man, that allow people to feel the warm embrace of nationhood. But the time for committees and policy groups is gone. Let us prioritise a small set of things and just do them. Here’s a quick look at two things that are eminently achievable in 2006: food and entrepreneurship.

In a famine year, food must top the agenda. Many studies have shown that access to food is the single most important inequality-inducing issue in Kenya. It is the first thing we must act on. A quick win that has been suggested is to put in place an output-based incentive scheme for a small set of core food crops, to boost their production. To support this, a key part of the roads plan for 2006 must focus on rural access roads, to allow this produce to come to market. And we must remove all the barriers that mean we allow food to rot in one part of the country while people drop dead from hunger elsewhere. That is a criminally stupid arrangement.

The second burning platform concerns our world-famous informal sector. This is an arena that creates half a million jobs annually and provides a huge range of things that poor people need: from furniture to repairs, food to personal services. It is high time we channelled this energy into the main currents of the economy.

For that, we need purposefully designed and designated business parks that allow enterprise to be conducted in an orderly fashion, and where basic sanitation and security services are obtained for a license fee. We need to set up marketing mechanisms that allow these entrepreneurs to bring their wares to the middle classes in a systematic way. We need to offer incentives to the financial sector to provide innovative funding and insurance products to this group. None of these are “giveaways”: they are the necessary steps that allow us to formalise what is already thriving and buoyant, and take it to the next level of evolution. Who wants to argue with that?

Let’s stop there. There are, of course, many, many other things that we need to do on the equity agenda. We have to reform the legal system and allow the poor the rights to their productive assets – rights against which they can raise their own capital, instead of awaiting handouts from assorted NGOs. We have to take another look at education and access to knowledge, and create an assortment of training colleges that focus on low-cost provision of basic business and technical skills.

We have to transform our agricultural productivity with judicious use of excellent practices from around the globe. We have to revisit the tax system and correct the disincentives it throws up for the small entrepreneur. We must build social indicators into our national economic measurement system. We have no choice but to devise a low-cost universal health plan.

Most of those things will take time. The ideas are endless, and they are not mine alone. They will keep emerging from the fertile minds and active imaginations of Kenyans. What we lack in this country has never been the knowledge of what to do; it is the will and ability to do it. In 2006 we need to move to an action footing. We must stop thinking, believing, imagining and arguing, and just start doing. We must shake off the paralysis of over-analysis, and reward action, movement and results.

As any project manager will tell you: start with a simple plan, and do a few simple, impactful things. After that, Project Kenya Take-Off will gather its own momentum. This plan will get things moving for the businessperson as well as the common Kenyan, in towns as well as in rural outposts. It will not cost the arm and leg that we have already lost in buying froth. It has simple targets and measures. Why can’t we do it?

Unfortunately, it requires the will and action of leaders. So let the clamour begin. In 2006 we will accept nothing less than the beginnings of our economic transformation.