Ideas & Debate
Let’s debate wheelbarrows and economic reinvention
Friday May 07 2021
By DENNIS KABAARA
- Away from political fun and games, discussions on a new economic model for Kenya are welcome, especially in these reflective Covid-19 times.
- The proposed engagement promises to cover all counties, all regions and all sectors of the economy. It shouldn’t be the only engagement. We should have more. (Again, wasn’t this the point of BBI?)
Is that it, then?” blared the cover headline of last week’s Sunday Nation. The loud question was posed against collated mugshots of “the usual suspects” in Kenya’s 2022 presidential election battle; six men, all potential candidates, with a “combined political age…close to a century”. In a country crying for something, or someone, different or better or a break from the past, that’s a pretty depressing picture.
Particularly during a Covid-19 moment that has exposed our economic fragility, as it has others. Definitely given the growing consensus that our current economic model, Covid-19 notwithstanding, has outlived its usefulness. But that isn’t today’s news.
As part of a ground-breaking Scenarios project, a group of young, smart thinkers, working through the Institute of Economic Affairs, said exactly this in 2000. That’s more than 20 years ago. Hell, even the World Bank’s 2004 Country Economic Memorandum on Kenya echoed this finding, which its more recent Country Economic Updates politely remind us. Two words here. Productivity. Inclusion.
Here are some more recent words. “(Kenyans) welcomed the proposal to build the economy from the grassroots and undertaking development activities in every county at the ward level that address their specific products (sic)”. Whose proposal, you ask? Remember the Building Bridges Initiative (BBI)? Believe it or not, this a recommendation made by the BBI Task Force!!
How ironic that it is Deputy President William Ruto, and not the BBI principals, running away with this “hustler’s bottom-up” language, in which the wheelbarrow image is as inspiring as it is threatening.
Throw in US President Joe Biden’s April 29 tweet – “Trickle-down economics has never worked. It’s time to grow the economy from the bottom up and the middle out”. “Middle out”? Food for thought for our own middle-class economic bubble.
Indeed, Mr Biden has backed these words with a $6 trillion fiscal blast in approved jobs, and proposed infrastructure and family economic recovery/rebuilding plans; a sum greater than the regular annual $5 trillion federal budget, and 30 per cent of the country’s $ 21trillion GDP. In Kenyan equivalent that would be a spending moonshot around Sh4 trillion on a budget basis or Sh3 trillion on a GDP basis.
We’re not yet in this “pro-poor-action” territory, but reports of emerging political engagement on a fresh national economic charter, so far between Mr Ruto, Mount Kenya politicians and leading economists, suggest that while we may not have fresh new faces in 2022, we might have fresh new ideas, which ironically, was the entire objective of BBI, wasn’t it?
More cheekily, is it likely that the bottom-up proposals that emerge will reflect the spirit and content of the opposition National Super Alliance (NASA) 2017 election manifesto? Considering the political leadership role reversals occasioned by BBI, and the March 2018 handshake, who’s eating whose lunch?
Away from political fun and games, discussions on a new economic model for Kenya are welcome, especially in these reflective Covid-19 times. The proposed engagement promises to cover all counties, all regions and all sectors of the economy. It shouldn’t be the only engagement. We should have more. (Again, wasn’t this the point of BBI?)
To my mind, this engagement might also benefit as much from lessons about what works, as it would about what doesn’t or hasn’t. Here are four very quick opening thoughts.
First, any progressive economic model cannot afford either bloated national government or predatory county government. We have both right now; we can’t have either in the future. This isn’t a big versus small government argument; it’s a foundational proposal for smart and fit for purpose government. Government in this context refers to all of public sector, not just ministries, agencies and counties.
Second, drive the job creation challenge to the private sector. Smart and fit for purpose government does not crowd out private sector through excessive borrowing. It enables and facilitates entrepreneurs big and small; promotes and platforms innovation large and little. It is less about theoretical ease of doing business and more about its real life cost. It does not support a “no-man’s land” of regulation between formal and informal that marginalises the latter.
Third, practice fit and proper investment. Logically, public investment should crowd in, not crowd out, private investment. The jury is still out, but the IMF heroically assumes this will finally be the case in its forward projections of Kenya’s economic growth. Yet, the different problem we have today is “over-projectisation” – the ubiquitous “project” is the basic currency of Kenya’s weak public accountability. A smart and fit for purpose government practices accountable investment that is fit and proper.
Finally, reform as the keyword. Twenty years ago, after years of painful IMF medicine, Kenya seemed to have stabilised the macro-economy, and even though macro-level structural and governance reforms were not quite done, we had a potential micro-economic sector, industry, cluster and firm level reform moment. Plenty of water has flowed under that bridge.
Today, we need to do it all in a fast-morphing digital and green economy context, not as modernization gadgetry and gimmickry, but as fundamental transformation of the workings of the economy.
So, won’t our wheelbarrow-inspired, bottom-up economic reinvention require reinvented government? If you’re wondering, it’s that, then.
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