Monday, October 30, 2006

Raila’s Speech in Canada shameful

If a person -with no clue of where Kenya is on the world map- heard Raila Odinga speak at the University of Toronto, he would have concluded that Kenya is the worst place to invest in. He tore down his country using any negative adjective that he could lay his hands on.

Raila talked in depth about corruption and red tape that is threatening Foreign Direct Investment (FDI). He avoided informing his hosts of the little opportunities that are available in Kenya. As much as Kenya has her own share of corruption, she is welcoming when it comes to foreign investors who are given better treatment than even local investors. A close look at the EPZ will show that foreigners have a better deal than locals. This is attributed to the overkill efforts made to attract FDI.

While on the issue of FDI, I will like to point out that many foreigners have invested in Kenya and continue to do so. An example is the Canadian energy and minerals firm, Energem which owns controlling shares at Spectre International. Many more firms -especially South African firms - are making inroads in the Kenyan market. I do not think that Raila could have advised his business partners Energem to invest in Kenya if Kenya was the hovel he was trying to paint.

In his speech, Raila informed a crowd -made up university professors and people with a minimum of secondary school education- that, “At the moment, the government has laid emphasis, like the West, on the service sector mainly banking, insurance, tourism and the stock market. These sectors employ fewer people and also bring huge disparities in earnings.”

For a start, no country has made it to the top depending on Agriculture as Raila is trying to imply. Building an economy based on the Western model is not a crime. Raila wants Kenya and Africa to be satisfied with the agrarian economy when there is plenty of money to be made in the services and technology sectors.

It is laughable for that Raila belittles the impact of banking on economic growth. Any economist will tell you that the banking sector is the key to economic growth. Raila seems to have focused only on the money “storage” function of banks (by the way, banks never store money. They loan it or invest it). Banks are more than “stores” of money. Banks create money and banks provide loans that are pumped back into the economy.

The Nobel Committee recognized the role of banks in an economy to an extent that it awarded Muhammad Yunus and the Grameen Bank the 2006 Nobel Peace Price. It was in recognition that Yunus and Grameen bank were extending loans to the poor hence giving them a chance to better their lives. As our future president, Raila should be encouraging Kenyans to interact more with banks.

According to Raila, a thriving stock market is not great for the economy because he claims that the stock market does not create jobs. Instead, Raila wants Kenya to hold on to the pipedream of an economy based on Agriculture. Raila seems to forget that companies listed on the stock market employ millions of Kenyans. It is through the stock market that capital is harnessed and put to work. Most Kenyans have realised the importance of the stock market. I don’t think the millions of Kenyans –poor and rich- who have a stake in the market are stupid. Raila may have picked the wrong audience to lecture about the demerits of a stock market. After all Canada was built from the trade of shares and bonds.

Raila blames the services industry and the capital market as the causes of huge disparities in earnings. I wonder where he got that from! From what I know, Bunge is not listed on the Nairobi Stock Exchange (NSE) but the MPs earn several thousand times more than the official minimum wage. This is an indication that income disparity is not a creation of markets but an indication of an inept legislature. It is the legislature that is charged with ensuring a just society and not the NSE.

Today, the NSE ranks the fourth most capitalised bourse in Africa after Johannesburg (South Africa), Nigeria, and Cairo (Egypt) -in that order. This speaks volumes since Kenya unlike the top contenders has no oil or mineral resources. It shows that Kenya remains a destination for investors and should be doing better if political rhetoric is toned down.

Raila told his hosts, “I do not believe the classic capitalist theory of ‘laissez faire’ alone, where market forces are entirely responsible for determining the allocation of resources on the basis of supply and demand, can work in our situation of numbing poverty.”

It is shocking that several years after the collapse of communism, Raila still believes in a system where the government dictates the market. Markets that are free of government manipulation are boon to the economy. The woes of Kenya stem from too much government control. For example, the government controlled telecommunications industry for a long time leading to a near collapse of the industry. It is only after the government loosened her grip that we saw more people get access to telecommunications. I believe that government should be restricted to provision of public goods like security, clean water, roads etc. Government has no business competing with kiosks –though Uchumi- in selling sukuma wiki and salt to the masses.

I think Raila chose the wrong crowd to show his petty politics to. It is time our leaders outgrew childish politics and looked at the impact their rhetoric has on the country. Taking a trip to Canada to paint his country as one of the worst countries to invest in is not in the interest of Wanjiku. Raila should borrow a leaf from Senator Barrack Obama. When he visited Kenya, he sold America as a beacon of hope in a desolate world. As a Democrat, he did not use Kenya as a dais to attack President Bush, the Bush administration, the government and his country. Instead, he used the opportunity to buttress the US stand on the Doha Round and farm subsides among other agenda. Hon. Obama also used his trip to sell American foreign policy and build closer ties between African countries and America.

Our leaders should try to notice the difference between the president, the government administration, the government and the country. The fact that Raila wants Kibaki’s seat does not give him a right to market Kenya as a hovel that should be avoided at all costs. We have to put Kenya’s interests above petty politics! Kibaki will at one time go back to Muthaiga but damage Raila et al have done to Kenya’s image will last for years. Even our neighbours in Tanzania never take their dirty laundry to clean in foreign countries.

Raila’s speech fits a Kenyan audience and not a foreign one. After all, only Kenyans have the power to vote. Better still, Raila should stop his “Raila na Mpira” speeches that he gives in Kenya and give Kenyans the kind of rhetoric he entertained the Canadians with.

When he visits the US in a week, I hope Raila will use the forum to sell his policy. We already know that Kenya is not at its best. We don’t want him to regurgitate what we already know. We want him to offer solutions and tell us the steps he will follow to the solution.


Jakajulu said...

You were unfair to Raila

You took his words out of context an twisted them to reach your goals. Raila is not a fool as you try to always present him. He knew what he was taking about when he rubbished the growth in the banking sector.

A majority of those transactions are from drug money laundering that the Kibaki government is engaging in. The the American DEA is already investigating Kibaki's role in drug money laundering. It is a shame that we have a president who is a drug dealer.

The Stock market is controlled by a few people and so has no impact on the people in the village. How many Kenyans are employed in the Nairobi stock exachange? Most of the traders there are Kikuyu due to their connection.

You are not yet in Raila's legue so you should not try to lock horns with him. You don't even exist in his life. You are like a small flea that thinks it can bring down an elephant.

Anonymous said...

you make sense to me. please be forwarding your comments to kenyan dailies for dissemination in kenya. we still lack articulate people like you, that is why people like raila take advantage.