Someone is cracking the whip at Standard newspaper. They seem to be reporting news as opposed to making commentary disguise as news. The standard has to be raised to equal the nations expectations. Here is a doozey you wouldn't have seen a week ago.
The Standard Online Edition
The Standard Online | Sep 25 2007
Expectations on economic gains, poverty are misplaced
Published on September 26, 2007, 12:00 am
By Ndiritu Muriithi
There is an often repeated claim that Kenya’s robust economic recovery is not trickling down to the "common" mwananchi.
Apart from the fact that most Kenyans object to being referred to as common, this claim is without fact, and sadly, usually repeated by leaders. Just recently, none other than the Official Leader of the Opposition was repeating this claim on television. It has become accepted simply by being often repeated.
Is the economic recovery reaching everyone? The indisputable fact is yes. What is the evidence?
Let’s start at the beginning. What is economic (GDP) growth? How do we calculate it? Gross Domestic Product is the sum total of the year’s production. It is the sum of what farmers harvested, what the fishermen brought to shore, the livestock and milk sold, the cement produced, sugar and millet produced, what tourism brought in, and so forth. Production by all Kenyans and not, as the opposition would have you believe, by a selected few, who are close to the "centre" of power!
Growth then, is by how much this sum total of all Kenyan’s annual production increased.
Today, if you take a shilling slice of gross domestic product (GDP), it is made up of 24 cents from farmers, 10 cents from industry, 14 cents from tourism, hotels and restaurants and so forth. So it begs the question, if that shilling increased by 6.1 per cent last year, how can one possibly claim that the components that make up the sum total, did not grow?
Naturally, you might say that it is possible for some of the components to grow rapidly, and for some to contract. Last year, however, the least growth was experienced in agriculture at 5.6 per cent. Even this "poor" performance had some gems in it! Sample this: maize production grew by 11.8 per cent and coffee by 6.9 per cent. Marketed milk increased by 6.2 per cent.
Some sectors were sprinting. Tourism was powering away at 14.9 per cent, while transport and communications roared off at 10.6 per cent. In other words, all the components expanded, and jobs were created and the more jobs created, the more taxes the Government will have, and so buy medicines, build more schools and dispensaries and so on.
The trickle down model
Let us then revisit the notion that Kenya’s robust economic recovery is not trickling down to the "common" mwananchi. To make this claim, one is starting from the historically observed failure of trickle down policies.
Today, however, key initiatives of the Kibaki administration have been designed to redress that precise problem! They do so by by-passing the tradition development model, trickle down, and taking resources directly to the people. So that they directly use these resources to deal with their problems at the source!
How does the traditional model work? Simply put. The planners in Nairobi know best what is good for all of us.
But, take even the somewhat reformed and improved district planning process otherwise known as district focus for rural development. Here, projects, say the repair of the local bridge, are discussed at the location development committee. That committee recommends it to the District Development Committee. It is then adopted by the line ministry, say the ministry of Public Works. Once monies are voted for that repair in the Budget, these resources meander their way through the Government process. That is trickle down.
This trickle down model has been the convention, widely followed and practiced by many governments and development agencies since the end of the Second World War. However, alternative approaches have been advocated. These alternatives focus on elimination of primary deprivations.
What are these primary deprivations? Lack of literacy, training, hygiene, nutrition, and even the empowerment to demand better services, from our Government. Other deprivations are hunger, child mortality and maternal health.
The failure of trickle down to overcome these primary deprivations has left in our people locked in a vicious cycle of poverty. But, some countries such as Costa Rica defied the traditional model, and went for support led development model with commendable success. In Africa, Tunisia is a good example.
The Kibaki administration has, and for first time in this country, taken this alternative route. The magnitude for resources committed and sheer determination to see through the programme of overcoming primary deprivations is clearly evident in the last four years.
But with Kenya’s highly skewed income distribution, where the rich are alleged to hog most of the benefits of growth, skeptics and critics will not readily recognise the capacity of the new and radical approach to overcome the historical bias in income distribution.
This mental block arises from seeing the development process through the eyes of the traditional, and now outmoded, trickle down approach.
Vested interest
Trickle down may, for all we know, have failed because of institutional rigidities and by being held hostage by vested interests.
Support led development model is the opposite, and avoids or by-passes these historical constraints and bias.
Take free health care for children under five years. This is for all children. Not children of the better off or even the relatively better off. It is the same with free primary education. It is free, for every child, poor or rich, in primary school.
So even if, and I say, even if, an individual’s income has not increased, what she has to pay out has reduced, meaning of course, the net position is better off!
In addition the Government has devolved the use of the Local Authorities Transfer fund, Latf, the Constituencies Development Fund (Cdf), the Constituencies Aids Funds, the Constituencies Bursary Funds, Youth Fund, Women Fund and Rural Roads Fund. These initiatives by-pass the traditional trickle down development processes.
The writer is an economist and a member of the Democratic Party of Kenya
26th September 2007, 11:01 AM
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