Tuesday, March 15, 2005

Each of us really need the freedom to buy and sell the tools we need to make our dreams come true- from whomever we please

People all over the world are turning their dreams and ideas into products and
services that are so valuable to making it ever so easier to communicate,
travel, transfer money, manufacture things, organise corporations, and
perform all sorts of tasks. Most of the time the only thing keeping us from
accessing these things for our use, learning and application, and from
engaging in this process ourselves are laws that either unjustly
prohibit
people's entry in to several areas of business, the arbitrary
exercise of powers
such as arresting and beating up street vendors, and
the
disregard for property
rights are afew examples

By Ochieng Rapuro

For Kenyans who placed their bet on the ability of political freedom to transform the country’s economy, these must be heady days indeed.
Two years after the Kanu dictatorship was removed from power and replaced by a popular government, only minimal progress has been made on the economic front.
Growth, which was expected to accelerate, the economy having been relieved of the burdens of dictatorship, has only painstakingly staggered on.
The country’s social and economic infrastructure is yet to be cured of the infections of the former regime and poverty in all its ugly forms remains rampant.
In the first year of the Narc administration, amid the hubris exhibited by the new political elite, the economy only expanded by a paltry 1.8 per cent against a projected figure of 3 per cent.
Prospects for the third year of the Kibaki administration do not look any better.
The Government has itself revised the projected growth rate downwards from five per cent to 2.3 per cent, pointing to the underperformance that characterises all sectors of the economy.
And with the political arena looking ever more chaotic following the latest differences over party elections, not much impetus can be expected for the economy in the form of improved governance structures.
Kenya is certainly not alone in this.
Africa today is replete with examples of countries that have since the early 1990s made great strides along the path of free markets and plural democracy but with only subliminal economic gains to show for it.
In economic terms, the relationship between political freedom or lack of it and economic progress should be unambiguous.
Under a dictatorship, the economy of a nation is shackled by, among other things, the curtailment of individual freedoms, including the freedom to experiment with new ideas that has been the main driver of progress in many parts of the world.
Authoritarian regimes are also known to be prone to wasteful economic practices such as nepotism, cronyism and ethnicity that lead to massive misallocation of human resources.
Besides, in such societies, corruption is known to be rampant emboldened by the knowledge that the media are firmly emasculated and the chances of the perpetrators being exposed slim.
The fall of a dictatorship is, therefore, deemed to provide a nation with a golden opportunity to unleash the entrepreneurial spirit from among its citizens, streamline the allocation of whatever resources are available as well as reduce wastage through corruption by increasing the risk of exposure. But alas!
For Kenya, no such fruits have been borne out of the tree of democracy. Instead, the wastefulness of dictatorship has been replaced lock and stock by that of rudderlessness.
In post-authoritarian Kenya, competition among the political elite has only entrenched cronyism, old boy networks, corruption and outright theft of public resources with disastrous results for the experiment of democracy. Increased freedom in Kenya appears to have merely provided the political elite with unlimited opportunities to inflame the fire of inter-ethnic and intra-class struggles.
Most importantly for Kenya, political freedom does not appear to support the broader economic framework.
This is partly because contemporary civic groups continue to demonise time-tested apparatus of economic management such as taxation as instruments of oppression.
T
he question is whether – in spite of what has come of the experiment with Narc – Kenyans should still cling to the hope that one day they will reach the economic nirvana via political emancipation.
Shouldn’t we also be asking whether the development path we have chosen as a nation is the right one?
Milton Friedmann, an American professor of political economy and the 1976 winner of the Nobel Prize in Economics is one of the world’s prominent scholars who have been examining the relationship between freedom and economic progress.
In a 2002 evaluation of his seminal work on freedom and capitalism that was written some 40 years ago he says: "If there is one major change I would make, it would be to replace the dichotomy of economic freedom, civil freedom, and political freedom. While economic freedom is a necessary condition for civil and political freedom, political freedom, desirable though it may be, is not a necessary condition for economic and civil freedom."
This particular statement does amount to a recognition of the fact that although political, economic and civil freedoms are values that all human beings desire, their achievement largely depends on the order in which they are introduced in society. A look at Asia does provide concrete examples of what systematic unraveling of economic freedom, even under extremely authoritarian conditions, can achieve for an impoverished nation. China and Vietnam stand out as examples of states that have and continue to make big strides in the area of economic development, growing at an average annual rate of nine and seven percent respectively despite heavy curtailment of political and civil freedoms.
The idea is that an economically emancipated people do in the end claim their political and civil rights. That is not true for political freedom. As the Kenyan case shows, a people may be politically liberated but forever remain economically subjugated thereby entrenching the ugly culture of political patronage that feeds on increased impoverishment of the masses.
As long as we continue to avoid the more fundamental issue of what political and economic framework suits us at this stage of our country’s development, one can predict without the fear of contradiction that the riddle of a "politically free people" living under the bondage of poverty will continue to characterize our society.
People may be politically liberated but forever remain economically subjugated

Uhuru Ni Haki

1 comment:

Akinyi J. Arunga said...

By Noel Wandera

Pakistani rice traders have stopped exporting rice to Kenya to protest the new import duty of 75 per cent.

As part of a new regional tariff under the EAC trading protocol, Kenya, like Tanzania and Uganda has started charging all rice imports a 75 per cent duty as from January 1, 2005.

The new tariff raised from 35 per cent has unruffled feathers with Pakistani rice exporters said to be pressurising their Government to arm-twist Kenya into deferring the duty using the tea threat.

The new development has also raised fears of a rice related inflation, since Pakistan imports account for 77.5 per cent of local rice market.

"This is relatively high, such that when the new duty is imposed, both traders and exporters will lose," said Shem Ochola, a trade and development officer at the Pakistan High Commission in Nairobi.

Last year, said Ochola, rice traders exported 166,897 metric tonnes of rice to Kenya.

The traders play a crucial role in bridging the country’s rice deficit, estimated at 215,000 metric tonnes, arising from a production capacity of 35,775 metric tonnes and a consumption rate of 250,000.

Ochola said importats from Uganda and Tanzania can not satisfy Kenya’s demand.

Both countries have a combined capacity of up to 180,000 metric tonnes.

With the current diplomatic exchanges and the tea factor, the Vice Chairman of the Rice Exporters Association of Pakistan (REAP), Anwar Miannoor, was quoted in a Pakistani daily saying: "Pakistan is the major buyer of Kenyan tea and the Kenyan government and its high commissioner in Pakistan know this hard fact."

As we went to press, frantic diplomatic notes were being exchanged between Kenya and Pakistan to ensure the situation did not boil over.

The Press report quoting Miannoor said the Kenyan High Commissioner to Pakistan, Mr David Mutemi, had expressed hope that Kenya would defer the increase in import duty on Pakistan rice.

According to Miannoor, Mutemi rang REAP offices and informed him he (Mutemi) had taken up the duty matter with the Government and was hopeful that Kenya would defer the tax.

"We are fully aware of your concern on the recent duty news, which we have taken up with our Government and we are hopeful that it will be put on hold. We are in constant touch with Kenya and will keep you posted on the latest developments," Mianoor quoted Mutemi as saying.

Mianoor said the Pakistan Ministry of Commerce officials had also taken up the matter with Kenyan authorities in Nairobi and expect positive results.

"We have approached every quarter to stop Kenya from increasing import duty on rice as Pakistan was the leading exporter of IRRI-6 rice to this country," he said.

Kenya’s position in the saga is precarious given that the Government can neither reverts to the old duty tied by a binding new regional economic protocol. It also cannot afford to antagonise Pakistan, a leading Kenyan tea importer.

In the 2003/04 financial year, tea exports to Pakistan earned Kenya Sh9.4 billion (US$118,346,632.56) from a volume of 59,896,452.75 kg.

However, Kenya Revenue Authority (KRA) through Florence Otory, a senior assistant commissioner in charge of EAC, was adamant that no such decision would be made.

"We are trying to protect the local industry. Not all is lost, however as there is still a window of opportunity for Pakistani traders. We agreed that Pakistan traders can import duty free, any deficit of the commodity," said Otory.

She said production and consumption quantities would have to be ascertained to determine the deficit before such arrangements can be made.