Friday, December 23, 2011

It should be the economy, stupid!

Francis Atwoli, the frequently excitable Secretary-General of the Central Organisation of Trade Unions, surely overreached when he called for a ten-day nation-wide strike by operators of Public Service Vehicles to demand a thirty per cent reduction in the prices of automotive fuels this past Sunday. Amos Kimunya, the rather impressive Minister for Transport, surely overreacted when he denounced the strike in such strong language the following Monday. Both were wrong.

It is difficult to ascertain, as Mr Kimunya pointed out, where Mr Atwoli derived the authority to call for such a strike from. The Matatu Welfare Association (led by Dickson Mbugua) and the Matatu Owners' Association (led by Simon Kimutai) are not workers' unions; they are employers. Mr Atwoli, to the best of our knowledge, is not a member of either organisation, nor is he an investor in the matatu industry. The core of Mr Atwoli's argument, however, must be seriously considered - the price of fuel affects the cost of living which affects the workers of Kenya when they must pay a higher proportion of their wages in increased transport costs. Mr Kimunya was wrong in denying that there was a justified foundation for calling for the strike; surely, even he must admit that the matatu operators will certainly pass on the increased cost of fuel onto their customers, reducing the amount of money they have to invest in other ventures.

Calling for a matatu strike at the height of the Christmas season was the height of folly. How did Mr Atwoli hope to persuade the thousands of matatu operators to forgo the hefty fares they would charge during this period, or ameliorate the suffering of thousands of passengers who would have few alternatives when attempting to make to their families for Christmas? The proper recourse, which Mr Atwoli, Mr Kimunya and their fellow national leaders, have failed to pursue is a review of Kenya's energy policy, such as it is in the context of the national economy.

President Kibaki and Prime Minister Odinga promised that one of their priorities when they formed the Grand Coalition would be an improvement in the economy, pursuing growth in Kenya's Gross Domestic Product with an eye to generating jobs and raising the standard of living of all Kenyans such that they are able to lead more comfortable lives. Instead, wealth creation in Kenya has stagnated; the only institution that seems to be investing in the economy is the government, and its investments are now being called into question as it is merging that these have not had the effects that were promised by the two. While economic growth has been steady, it has not been sufficient to generate new jobs, and with the ending of the Economic Stimulus Programme it seems that Kenya will start shedding more jobs than it generates, pushing more families into poverty and leading to more hardship as we enter a period of political instability and economic uncertainty in 2012. It is expected that the cost of living will rise and consequently, more industrial action is anticipated in 2012.

Our failure to debate robustly the state of our economy is a sign that as a nation we are yet to mature fully into a liberal democracy. Our obsession with the minutiae of political contest, at the expense of everything else, has all but guaranteed that our economic future is held hostage by a cabal that may have very little insight into the solutions that must be implemented f we are to avoid civil strife. The fallacy that the government must constantly invest in the economy to ensure GDP growth and job-creation has been exposed, but no one is talking about it or discussing alternative solutions. This, in turn, guarantees that when questioning the bona fides of the presidential candidates during the 2012 campaign period, we will be unable to question their economic policies or promises. We are likely to elect a person based on their populist rhetoric rather than their proposals for the national economy and we may pay a high price for such myopia.

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