Wednesday, 18 May 2011

A telegram from grandson: Hold your peace grandma, there is nothing to celebrate about the 5.6% growth!!!

Dear grandma,

It’s been a while since we last talked! Well many things have changed as well, the weather has gotten better - it’s a lot warmer here, the Queen’s grandson got himself a wife, Ghadaffi is still fighting and Osama finally went down. But there is something that has been troubling my mind of late, which I know you have probably heard about as well if you still keep your Sonnitect FM receiver and listen to news. It’s the ‘good news’ about the growth in our economy – the touted 5.6% growth in 2010 announced by the Minister for planning and Vision 2030 on 17th May, 2011. Growth is a good thing; we should be happy whenever it does happen and proceed with optimism for even better prospects.

a false upward mobility
However, though I know you will accuse me of being pessimistic, I just din’t find anything worth celebrating in that announcement. Come to think of it, of what use is 5.6% economic growth when over 40% economically active Kenyans still have no employment, when over 23% of ordinary Kenyans aren’t assured of even one square meal in a day? Of what use is it when the prices of basic consumer commodities like maize floor and kerosene continue to soar and public transport costs sky rocket?

Well, let me bring it closer home to be more relevant to you. When your two grandsons (Ariyo and Jakogolla) migrated to the city (Nairobi), they had hopes for a better life; get employment, earn some income and at least send you something once in a while. The truth is, in the city, there is no farm to till and people seldom get help from their neighbours so they entirely depend on their labour. They must work to eat. They must work to afford somewhere to live. They can’t afford to be sick, because when they do, they aren’t be able to work, they spend their little income on medication and this makes them more vulnerable to poverty. Our government knows too well about this, but what matters to it is how bigger that figure (the 5.6%) can get. What you and your two grandsons and indeed 3.8 million urban poor across the country eat, where they sleep, the distances they walk seeking employment remotely matters to this government and have very little to do with that 5.6%!

As harsh and scathing as that might sound, I say this without any reservations because am sure this government understands and knows what it needs to do to address these problems but has simply absconded its duty to its citizens and has ceased to care about the ordinary Kenyan. All they do in this government is perfecting their talents in rhetoric, loose talk and perennial political theatrics. I mean our government is not starved of technocrats who appreciate that to create more jobs and reduce vulnerability to chronic poverty; they need to pay serious attention to attracting more labour intensive investment, especially in manufacturing and construction and to increase public sector investment in social protection. They could look around; learn from successes in cities across the developing world like in Colombia, Chile, Malaysia, Singapore, Indonesia. These countries restructured their economies and transformed urban areas like Bogota, Santiago, Singapore from landscapes of deprivation, decay and social exclusion into competitive economic engines, markets; driving growth of their economies in profound ways through investments in manufacturing and construction industries.  Kenya is no doubt capital poor but we are very rich with labour and should focus more on policies that emphasise on the effective utilisation of idle labour. Instead of encouraging multinationals to borrow money for capital intensive investments in our country, we should move towards facilitating inward investors to obtain working capital for employing locally available labourers.

The paradox is that this government has elected rather to focus on the tertiary sector; that not only marginalises low income, less skilled groups but also generates far less employment opportunities compared to manufacturing and construction.  It has chosen to promote the same tertiary sector which research has shown to be precisely the reason for the dramatic recent increase in inequality and polarisation even in the economies of the North. The Economic Survey Highlights 2011 released on 17th May 2011 indicated that while growth in the manufacturing sector was a modest 4.4% other tertiary sectors like financial intermediation grew to 8.8% and wholesale and retail 7.8% in 2010. Employment in the manufacturing and construction sectors grew on average 5.5% and 2.3 respectively between 2005 and 2009 illustrating just how inadequate attention has been paid to such better options for employment creation. The perennial obstacles to inward investment – cost of energy and political instability still remain vaguely addressed.

While Minister Wickliffe Oparanya correctly articulated the need for broader and more effective social protection policies in his speech, the actions of the same government tell a divergent story. Government expenditure on social protection is even less than the country’s defence expenditure. Between 2006 and 2009 the government spent only 92.8 billion Kenya shillings on social protection policies and programmes (less than 8% of total expenditure) and it increased only by 9.2 billion throughout the same period when the defence budget was well over 103.7 billion This is against a background of a government that recognises that over 14 million Kenyans are vulnerable to chronic poverty and fills the ears of its citizens with empty promises of transforming the country into a middle income economy by 2030.

To cut the long story short grandma, because I know you have chores to attend to, what this sadly implies is that you are on your own! The promises of better life, more jobs for our youth, a more affordable cost of living and the infinite list of ‘we shall dos’ are but whirl wind that won’t change a thing. Tighten your belt, it aren’t getting better any soon by the look of things.

If you still find something to celebrate about our growing/recovering economy, do toss a glass of fresh milk to our beloved country.


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