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Greece's economic collapse could have parallels in Kenya

Discussion in 'Kenyan News and Politics' started by Kabaridi, Dec 17, 2011.

  1. Kabaridi

    Kabaridi JF-Expert Member

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    Some of the causes of Greece's economic collapse are present in Kenya today – could the same thing happen there?

    By Ory Okolloh,
    September 29, 2010
    [​IMG]

    A construction worker erects scaffolding on a new bridge along the Nairobi-Thika highway project, under construction near Kenya's capital Nairobi, on Sept. 13. The road, which is being built by China Wuyi, Sinohydro and Shengeli Engineering Construction group, is funded by the Kenyan and Chinese government and the African Development Bank (AFDB). The project will cost 28 billion Kenyan shillings ($330 million), according to the Chinese company.

    Johannesburg, South Africa


    I've just finished reading a fascinating article in Open Democracy about the collapse of the Greek economy and what it will take to fix it. While Greece and Kenya are fundamentally different countries, I was struck by how well the author unpacked the underlying dysfunction of Greece as a country and an economy and how some of the issues apply to the Kenyan economy today.


    Don't have anything clever to add to the article's analysis, just want to point out the things that stood out for me.
    For starters, the author notes:
    In a small-scale economy households make different choices from those in an economy of salaried employees and large organizations. The family will seek stability in polyergy: in having varied sources of income, as many as it can find and appropriate.
    How many Kenyans do we know who have a side hustle? Banker by day, butchery/hair salon owner by side…. Even during the times we have experienced growth – it's been a false growth, barely any trickle-down (hence Kibaki and his cronies shock in '07 when his re-election wasn't guaranteed based on economic growth).

    Author goes on:
    In a small-ownership economy household saving and investment is also different. It is channeled, quite rationally, into real estate and into education. In western economies savings are invested collectively through pension funds, mutual funds and bank deposits. They end up funding industry, technology, infrastructure, and in general, sizeable organizations. In the Greek micro-economy monetary savings have few reliable collective outlets.
    Cue the ubiquitous Kenyan dream of owning a plot and investing in your kids education. NSSF is widely regarded as a rip-off, and other forms of investment and saving (e.g. stock market) are only taking hold fairly recently.

    And does this sound all too familiar?
    But clientelism and favoritism have been inherent in the modern Greek state since its inception, and the state has always been a major player in the economy. Distributing political rents was a necessary means of legitimation of politicians in the eyes of the electorate, and harvesting rents was a major egoistic reason for becoming a politician.
    And wonder why we don't hear of enough success stories from Kenyan entrepreneurs – very few can tell the story of how they got from A to point Z without some murky stories or connections in the middle – usually related to government connections or at minimum great skill at navigating the political rent space. Try pitching your open source solution to a government official, unlikely to move anywhere because no fat budget attached.

    Business strategy: if businesses can make high profits from government contracts or from other privileges, they will invest more to gain the privileges than to become competitive in an open market. Over time this distorts their whole mode of operation: a good salesman is one who can build personal relationships with bureaucrats, a good engineer is one who can draw out a project to make it more expensive. It is rare for a state-dependent enterprise to be also competitive. This was true for the big so-called ‘national suppliers', as well as for the small I.T. companies, in which many bright engineers wasted their youth working on useless R&D projects funded by EU Programmes.

    And finally, I think this captures the essence of why I think it is – generally – tough to transition big/large scale companies successfully in Kenya and to translate the innovation that we see all around into tangible (profitable) businessess – we work hard, but are loathe to collaborate, because someone inevitably stabs you in the back and there is no penalty – legal or social (as in they'll be catching pints next to you in the bar a week later as if nothing happened). So most of that innovation and entrepreneurship bubbling around either doesn't transcend the individual or the small scale – you cannot grow in an environment that lacks trust or that is full of what the author calls low-trust opportunism (I am so adapting this phrase!).
    Maybe Greeks will work as hard as westerners when given the same set of choices; but they will not collaborate as well. In game theory an opportunist is one who grasps the chance to make a good profit today, even if that may have negative repercussions tomorrow. Usually, he will break a rule or spoil a collaboration to make the ‘grasp' (αρπαχτή – ‘arpachti', from the verb αρπάζω, to grasp).

    -- Ory Okolloh is a social activist and co-founder of the mobile-phone crisis-mapping service Ushahidi.com, who blogs at Kenyan Pundit.
     
  2. Kabaridi

    Kabaridi JF-Expert Member

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    Those who want to analyze this man from SA with his article Pls Do. This is Mudslinging because people want to focus on the negatives and not the positives. Can we really go down like the path of Greece? Here there will be open debate no ridicules or traits similar of that nature.
     
  3. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

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    The answer is yes ...and worse too.
     
  4. Kabaridi

    Kabaridi JF-Expert Member

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    Ok
    Ab-Titchaz, Given your analysis, give me your points on why you think it will fail, then I will concede if they are true
     
  5. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

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    Mzalendo452,

    Mazee morio this thing is a no-brainer to start with and I dont know why you want to engage.

    For crying out loud why are you comparing oranges to bananas in the first place? What is Kenya's economic mainstem
    viz-a-viz the Greeks? Kisha take a look at the platform upon which these two countries stand. The Greeks have the
    European Union to bail them out during economic crises (as is the current situation)...Kenya nao wana nini?...EAC is a non-starter
    so to speak.

    Kisha look at the political landscape of the two entities kisha utafakari. Kenya is riddled with corruption and reeks of impunity
    and nothing seems to move unless President Kibaki and his pet project Uhuru Kenyatta say so (on the economic front that is).
    Right now as we speak the son of Jomo is single handedly trying to manipulate the tax system for his own selfish benefits and
    the parliament is up in arms. Sample this:

    Uhuru in fresh clash with MPs over taxes *- Politics*|nation.co.ke

    Kisha the Kenyan Central Bank is also being ran by a single individual called Ndungu who is basically a puppet on a string
    taking directions from non other than the blue-eyed-silver-spoon-fed-son-of-a-thief called Uhuru Kenyatta who also doubles in
    as the Minister for Fnance. We have all witnessed a massive depreciation of the once 'mighty' Kenya shilling against the
    dollar. Rumour has it that all this is being done with the 2012 elections in mind. Now how does this augur well with the
    principles of a sound economy with a free market? Capitalism dictates a free economy where the market forces determine
    everything. Yet in Kenya's case it is very obvious that a few elite individuals determine the price of essential commodities
    and the taxes to be levied. Sasa hio unaeza linganisha na ugiriki?

    The ramifications of Kenya's tribal arithmetic need not even be argued about. Development projects are earmarked for
    places that are pro-establishment (read central kenya) instead of doing viability studies together with cost benefit analyses.
    Case in point is that Thika Highway that the above article highlights. Between that and the Mombasa-Busia highway, which
    road brings in more money to Kenya?..Another no brainer.

    When the estimations for the Thika road were done, inflation had not set in. Now it has set in and the bill has doubled so to
    speak. Sasa hio hela ya kujaza hilo pengo mtatoa wapi? Banks have increased interest rates by whooping percentages and
    folks who took out loans are sweating beads on how to pay back!!!...I hope you are catching my drift Mzalendo452.

    Lemmie stop here for now and over to you.
     
  6. simplemind

    simplemind JF-Expert Member

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    Am i missing something? Will someone tell how one services a loan charging a whooping 25% interest rate? Who paying the cost?
     
  7. Kabaridi

    Kabaridi JF-Expert Member

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    I did not see it until where you said a free enterprise economy is controlled by market forces. The market in Kenya is currently controlled by very few individuals, which is not typical of free enterprise economies that we know like US & Japan for e.g. Yes that is very true (100%). Another valid point you said is the U.Kenyatta factor, yeah! that is quite plain to see and a pain in reality. How can we pull down this Uhuru factor?, because really he is a hypocrate. The Kenyan, local banks are the ones that have caused this massive inflation and the weakening of the Ksh/= through his permission, and yet U.K. comes as the saviour that they have made the Ksh/= strong, and yet @ the first place, he is the one that allowed that to happen via his central bank of Kenya maffia cronies. Their actions are causing the Kenyan economy to nose-dive & still he is trying to increase taxes to the local mwananchi and adjust their own taxes based on the cost of living. We have been made fools by this "vision 2030" and "economic stimulus plans for agenda Kenya" things to mislead us thinking that they will be help we need to achieve growth. But this is all a hoax because people are securing their interest here & we can never achieve vision 2030. How can we and yet those puppet MPs cannot speak in one accord, even on the simplest of matters? We really need bold whistle blowers. Who can tell Raila to shut-up with his vision 2030 Agenda?!!!!!!..................... This is tough for us though, because at least Greece can turn to the EU for bailout, but Kenya can't turn to EAC because it is a non-starter quite right. Maybe that is why Kibaki is really pushing for this EAC thing, knowing they are squeezing the people's pockets dry. He is contemplating on competing with U.K. but on a large scale via EAC.
     
  8. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

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    Now that we are on the same page, the question remains "How does Kenya stop the bleeding?"...because it is happening
    for sure. Our own Simplemind has asked about the servicing of loans which have shot up to 25 percentage points?
    Banks will reposess cars, houses and the land of all defaulters leaving the people hanging dry while the merchants of impunity
    who orchestrated this whole thing smile all the way to the banks...literally.
     
  9. Kabaridi

    Kabaridi JF-Expert Member

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    Please simplemind do not service any loan henceforth
     
  10. Kabaridi

    Kabaridi JF-Expert Member

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    There's is no other way but Egypt type protests Lol
     
  11. Smatta

    Smatta JF-Expert Member

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    Am smelling a revolution around the corner. To a certain extent, Kenyans deserve the problems that are befalling them, the polarized big tribes have for long voted in blocks for their kinsmen without regarding the qualifications, morality or ''passion'' of the said leader, this has brought thieves and schemers to parliament and now Kenyans are facing the brunt for voting in tribal kings who do not hesitate to steal from the public coffers and from the very same people who brought them to the helm of power.

    Kenyans will soon enough realize that there are only two tribes, the rich elite and the poor; this is the only time that we can rise and fight a common enemy, as long as the Kibaki's, Raila's and Moi's are still in power, we will never achieve any concrete development. the many strikes and go slows around the country will open up to a bigger demonstration of peoples power, that's when they will know who is boss..

    sorry for going off topic, but yes, we need a revolution, we need someone to believe in..
     
  12. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

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    Smatta,

    Mamboz?...:biggrin:

    I dont think you are off topic on this one because in as much as the economy is shakey and people are suffering
    because of inflated prices, then a 'Unga Revolution' is necessary so to speak. I pray for the day when Kenyans will
    call it as you see it: there are only two tribes in Kenya: the rich and the poor. This BS of siding with your tribesmen
    during elections yet you dont know them, at the expense of your neighbor is the height of stupidity or is it gullibility?
    Right now there is an article by that Hassan guy that potrays Kibaki as the biggest problem fr Kenya because of his
    tribalistic ways. The man is catching so much heat from many quarters yet he has said the blatant truth. Im seeing
    kikuyu folks baying for his blood in various internet foras yet Kibaki has not benefited them zilch!

    That is the fight that the common mwananchi should fight against...being gullible especially at election time. Uhuru
    and his mafia have manipulated the shilling and oil prices thus affecting all sectors of the economy. The man is in
    all facets of Kenyas economy and also doubles in as the Finance Minister. That is too much power in the hands of
    one man. Kisha he is gunning for the presidency.God forbid that he wins it! Wakenya mtahama mje bongo tu (pun intended...:biggrin:)

    Mungu saidia Kenya!
     
  13. Smatta

    Smatta JF-Expert Member

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    Am good AB, how's the U.S, thought you'd be dropping by this holiday season and probably bring in some dollars to save our shilling from its imminent slump.... One thing that you should note sir is that currently, Kenya has a leadership vacuum, its crazy to note that there is no single candidate that is popular enough to win the election without relying on his kinsmen. This is quite dangerous for the country considering the inflation and the unaffordability (if there's such a word) of basic, everyday commodities. The hopelessness and disillusion due to the above stated fact will and should lead to a revolution, the only problem is tribalism.

    I loved the article by Commissioner Omar Hassan, he said what everybody has been saying all along. Its common knowledge that Kibaki has given all the sensitive dockets to his tribesmen, ignoring and going against the constitution. the goons who have been baying for Omar's blood are just insensible and have buried their head in the sand like the proverbial ostrich, Kenyans are tired of their theatrics, we know who they are and they wont see parliament next election.

    Na AB unajua hatuwezi hamia tuje Bongo, you guys dont like us like that.. on a serious note, its about time the Kenyan public puts its act together, we need to be united to win this war against this mad cleptocrats.
     
  14. Askari Kanzu

    Askari Kanzu JF-Expert Member

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    Though you sound apocalyptic but that scenario is apparently true to almost all sub-Saharan African countries (which are yet to be shaken by popular uprisings). The way I see it, the cataclysm is unavoidable. We are in for another period of African renaissance, because the present generation of leaders have reneged their duties and responsibilities!
     
  15. Ngongo

    Ngongo JF-Expert Member

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    Hapana Smatta tunawapenda sana wakenya tunawakaribisha TZ mradi msivamie ardhi yetu.
     
  16. Kabaridi

    Kabaridi JF-Expert Member

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    Up to when will we cry tribalism is affecting kenya? Yet we know for a fact that there is one tribe who will defend the kenyan top seat and fight for it like a birthright. Even if we had a serious contender from other regions from Kenya apart from the GEMA community, no one from Mount Kenya, no one will stand with him, even if his credentials were valid. But they, from mount Kenya will unanimously support one of their own, even if they were corrupt and had a bad past. There are very sensitive wounds and unhealed specifically from the past. Most people from other regions in the past, who've have sought for Kenya's top seat, have paid it dearly with their lives.

    I do not want to go down that road because of the sensitivity of the issue. But, for a fact, I think we are heading somewhere now with the new constitution. Because the executive wing of government has been made less lucrative than the Jomo & Mo1 eras . Now we have a small devolution across government. For me I think is healthy. But the challenge remains Economic devolution.
     
  17. N

    Nonda JF-Expert Member

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    UK debt set to pass 100pc of GDP, says watchdog - Telegraph

    Psssst France: Here Is Why You May Want To Cool It With The Britain Bashing – The UK's 950% Debt To GDP | WRC559
     
  18. N

    Namtih58 JF-Expert Member

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    I have to admit there are many parallels that can be made between Kenya and Greece. One of the major ones in my opinion is the culture of entitlements from our MP's. Consider just the recent pension plan they just awarded themselves (1,000 US dollars a month for life! ) to be footed by taxpayer money for each MP even if they served for one term.

    If the current trend of high MP turnover continues imagine how much of taxpayer money will be used to service the pension in the next ten years. How can one expect to earn a pension after five years of work when a regular Kenyan has to work for 50+ years before qualifying.

    Halafu you have the so called new generation of leadership akina UK and the like, who are just an extension of their father's hand in government, stooges set in place to cover up the evils committed by "daddy". We haven't even mentioned people like saitoti who have been in government since UK's fathers time. seriously if they did not help Kenya the first two terms how can Kenyans expect them to help Kenya now.

    This is how I look at it, uli mualika jamaa kwako mwaka jana, aka kuibia kila kitu. Mwaka huu akaja aka kubembeleza ukamlisha na kumpa malazi, keshoyake ulipoamka, tendo ni lile lile la mwaka jana, jamaa limekutia kidole kisha zaidi yake akapaka pilipili.
    Sasa jamaa likija mwakani halafu ulifungulie mlango kosa ni la nani?

    The day the regular mwananchi afrika will ealise that they have the power over this people and instead of complaining, just exercise their power, is the day afrika will change.

    We need new faces in government. If the new guy we put in is a thief at least we can stand proud and proclaim HATUKUJUA, but if invite the good old thief's and their apprentices then we have no rite to complain, infact I would venture to say we should praise them since we knew what they were good at before hand and all they are doing is what comes naturally to them after all we cannot hope for them to disappoint us.

    Here's a suggestion:
    How about we abolish campaigns and direct that all candidates appear in debates, or make written submissions to the people. the we can sit back and see how well the stooges can stand on their own when their puppet masters are not around to hand them written speeches.
    The days of "Wame ni nukuu vibaya" will gone with written submissions.
     
  19. M

    MkamaP JF-Expert Member

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    Kwanini serikali ya bongo isiwachukue graduate wa kenya nakuwapa shule za kata. Kiukweli kenya shughuri pevu wakati bongo hakuna walimu.
     
  20. Smatta

    Smatta JF-Expert Member

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    I couldn't have said it better, we are our own undoing. we vote in known thugs and drug dealers just because they give us something small and by the end of their term, we stay complaining on blogs, forums and social networks that the our ''leaders'' are grabbing land and distributing drugs to our children.

    We are failing as a nation when we use a democratic process (election) to entrench impunity in our country. who will we vote in this coming year? Uhuru Kenyatta? Raila? Ruto? Eugene Wamalwa? I cant give any of these thugs my vote, I'd rather stay in the house drinking my Tusker than waste my time queuing to enrich thugs who have raped us since we gained our independence.
     
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