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Kenya: Time to Build an All-Inclusive Society
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Business Daily (Nairobi)
COLUMN
27 March 2008
Posted to the web 27 March 2008
M. J. Gitau
In the 1970s and 1980s, the problem of duality dominated economic and development policy, and it was only in the 1990s that liberalisation and problems of globalisation pushed these issues aside.
Duality, simply put, is the existence of a modern, more developed sector alongside a subsistence backward one. This not only applied to the economy in general, but in other sectors such as agriculture, labour markets and financial.
Then, it was held that there existed a symbiotic - others asserted beneficial - relationship between the modern and subsistence sectors. The former would provide markets and demand for labour supplied by the latter.
Today, however, we still grapple with the issue of duality, albeit in different forms and character. While duality then meant division (more developed and less developed) today the emergence of technology and information as key drivers of development have produced a different form of development challenge altogether.
In Kenya today, the stark reality of the current situation has hit home, mainly because of the nature and character of the post-election violence that rocked the country soon after declaration of disputed presidential results.
It is still amazing that over 80 per cent of the poor people in Kenya still live in rural areas, according to the Kenya Integrated Household Budget Survey, a government welfare mapping study launched last year.
In view of the post-election crisis, however, the issue of balancing regional development and fostering inclusive growth is perhaps one of the key challenges of economic and industrial policy. The economy cannot be properly balanced when eight in 10 poor Kenyans live in rural areas, or school enrolment in one area is a quarter of the rates in another. These are the part products of what I have elsewhere termed "urban-led recovery process".
In other words, a situation where access to basic social economic services varies a great deal, both among regions and even individuals. Granted, not all regions can be equal, as a good portion of regional, or even inter-personal, inequality is produced as a result of a region's endowment and natural conditions.
However, the role of public policy in general, and economic policy in particular, is to mediate and even out these nominal disparities in order to build what some authors have termed an inclusive society.
We can always fall back on experiences and research. It has been observed that regional inequity in societies that are more ethnically polarised can lead to tension and conflict.
We have seen a resemblance of this in the last few weeks. Also, it has been observed that poor societies that experience rapid growth (as Kenya did) are bound to produce some level of short-term inequality as a necessary consequence.
This is because in these cases growth emanates from a few leading sectors before it becomes broad-based and self-sustaining. Even some countries in the West have had to produce inequalities of one form or another in times of economic booms; the case of the Bill Clinton years in the United States being a good example.
But amidst all this, what options are open for a country like Kenya, especially seen in the context of trying to address the root causes of the post-election violence, and trying to operate within the limits of our economic and political realities? At the national level, the country must pursue growth that is high and sustainable.
But this is just part of the solution; the other part is actually the harder, as the experience of the last five years have shown that hitting seven per cent growth is not the preserve of Asian tigers.
Growth must be based on two primary pillars: the country's political process and deliberate social and industrial policy aimed at moving the entire country forward, if not equally, then equitably.
Ensuring a stable and acceptable political system on which production and exchange can take place freely and fairly has been a long experiment, and is certainly complex. Suffice it to say that while the last five years demonstrated that fairly sound economics can co-exist with fairly chaotic political processes, it gets to a point where both need each other. Kenya is at that point right now: a sound political settlement will determine Kenya's long-term growth path.
This broad point notwithstanding, there are policies that can be pursued at sector level that can be used to ameliorate human suffering and development. Firstly, the constituency development fund (CDF) experience shows that to a good measure, regions can be the unit of planning and proper use of tax payer money.
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If taken to its full course, the future of CDF lies in seeing it as some sort of fiscal decentralisation mechanism that specific regions use to undertake projects that are unique to that region and too small for the central government.
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has the kenyan military senior staff asked itself about its own redundancy? why spend much money and have sophisticated equipment which is unable to deter an inferior army like the Ugandan from reaching Eldoret? the gentlemen should silently go home and leave the army to people who are ready to fight for country, and leave the cleansing of the sabaot to the police and forest guards who seem to be doing a good job at it.
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