Nairobi — BOTH MR SAM MWALE IN HIS contribution, "Poverty becoming worse? This is a pernicious myth", (DN, October 30), and Prof Anyang' Nyong'o in his rejoinder, "The increase in poverty is only too real, Mr Mwale", (DN, October 31) are right about the three issues critical for assessing Kenya's economic policy.

The first is economic growth, and whether it has been "felt" by the vast majority of Kenyans. Mr Mwale says it has, Prof Nyong'o disputes this.

The second issue is poverty. Have the levels changed? Mr Mwale observes there's been a fall in overall poverty and an increase in welfare. Prof Nyong'o notes that welfare for the poor has been eroded by the high prices of basic goods and services.

Third is the issue implied in both their analyses, and which I would like to emphasise: have jobs been created in the last five years when growth has risen from 0.5 per cent in 2002 to 7 per cent?

A comprehensive picture of poverty and its related dimensions is the Kenya Integrated Household Budget Survey (KIHBS), a study conducted by the Ministry of Planning, which assessed 13,430 households countrywide between May 2005 and May 2006.

KIHBS IS, THEREFORE, ARGUABLY Kenya's most comprehensive review of development to date. It contains vast statistics, so the challenge is to read and draw the appropriate conclusions.

According to the KIHBS, poverty in Kenya has fallen from 52.3 per cent in 1997 (computed after the third welfare monitoring survey of 1997) to 45.9 per cent in 2005/06.

Curiously, the current analysis is comparing fall in poverty from 56.8 per cent in 2000, to show a huge 10 per cent reduction, which, to my knowledge, was not the product of any nationwide survey. Good analysis requires comparing apples with apples.

Nevertheless, even with the fall in poverty to the current 45.9 per cent, KIHBS noted that the number of poor Kenyans has, indeed, increased from 13.4 million in 1997 to 16.5 million currently. The survey attributes this to the fact that population increased over that period, from 27 million to 35.5 million.

And herein lies the quandary that both Prof Nyong'o and Mr Mwale face. Should we assess poverty as a relative percentage measure or should we look at the absolute number of Kenyans who are actually poor?

Viewed this way, one would then note that there has been an additional three million poor Kenyans since 1997. If poverty levels in 2005/06 were the same as those in 1997, of course, there would have been a lot more poor people. In urban areas, where poverty is said to have dramatically fallen, inequality has gone up.

Countries like China, India, Vietnam, and other Asian Tigers, were able to cut both the percentage rate and absolute number of poor people. We should be careful when claiming victory midway.

It has been reported also that personal incomes have increased from $400 in 2002 to $630, a 57 per cent rise. Various editions of the Economic Survey and the Monthly Economic Review of the Central Bank shows different figures: real personal incomes (adjusted for inflation) was Sh31,828 in 2002 rising to Sh34,435 in 2006, an 8 per cent increase.

Admittedly, growing from 0.5 per cent in 2000 to 7 per cent currently is a major achievement, an outcome that critics might have to painfully accept. However, we should ask ourselves a fundamental question: what is the purpose of growth?

How growth translates to quality of life is crucial. Otherwise, one would ask, why it is that poverty in a province like Coast stands at a staggering 70 per cent, and this is the region that hosts the tourism sector responsible for much of the 7 per cent growth? Many people at the Coast noted that lack of jobs has become much worse in the last five years.

The link between growth and employment creation is even more curious. According to the Economic Survey when the economy grew by a meagre 0.6 per cent in 2000 about 459,000 new jobs were created, but when the economy grew by 6.1 per cent in 2006 about 470,000 new jobs were created.

SO, WITH A MAJOR JUMP IN GROWTH only 10,000 new jobs were created. This shows that growth might be coming from technical progress or capital-intensive investments, meaning the type of growth needed for the millions of unemployed is yet to be engineered.

Other mismatches and disparities are evident in many other indicators, in many other regions. One cannot build a country of few "winners", as Mr Mwale terms the people that have driven the growth, and a vast majority of "losers". That is building a nation on shaky foundations, which may in the long run, make the winners the net losers.

Mr Gitau works for the Society for International Development. These are his personal views.