Insecurity: The unintended economic consequences

The shock resulting from terrorist attacks might obscure us from the long-term economic consequences of insecurity and terrorism.

Both sides of the political divide like blaming each other. In other countries, during times like these, political parties forget their differences and pull together.

I’m not boasting, I’m just informing you that I was in the US during the September 11, 2001 terror attack. Americans forgot there were Republicans or Democrats. They forgot they were black or white. From the Deep South to the Pacific Northwest, from the Great Lakes to the Atlantic Coast, Americans were one.

US leaders encouraged citizens to fly the national flag on their cars and homes. I’d never seen such an emotional outpouring of patriotism.

Securing our borders

Compare that with the current blame game going on in Kenya. While no one can easily defend the Government for failing to secure our borders, we should not politicise security; when this happens, it becomes insecurity.

Enough digression.

What are the long-term consequences of insecurity? I will deliberately focus on economic ones and leave others to lay bare the other consequences.

First, insecurity will realign economic fortunes in the country. In the aftermath of tribal clashes in the 1990s and 2007-2008, a lot of economic realignments took place away from the eyes of the public.

In some parts of the country, the price of land dropped as owners dumped property to escape insecurity. Rift Valley is an example. Considering that lots of Kenyans invest their savings in land, that was a huge loss.

In secure parts of the country, the price of land went through the roof. Insecure people created demand for land and the consequent rise in prices. When we ask why the price of land has gone up so much in Kenya, particularly in urban areas, blame insecurity.

We can safely say that insecurity after the land clashes led to a transfer of wealth, not through efficient markets, but through fear. Will the same happen once more?

Recently, I met some Kenyans trying to sell property in Mombasa. They decided not to sell it because the price is too low. Is it possible that some people will acquire prime property in insecure places and lead to another inefficient transfer of wealth?

And it goes beyond land. Lots of entrepreneurs travel beyond the comfort of their homes and are heavily affected by insecurity.

Will insecurity dampen our entrepreneurial spirit? Will more men and women be tempted to stick to their villages to be safe (physically)? Yet, universally, immigrants, have contributed disproportionately to entrepreneurship.

Sticking to our villages has other unintended consequences: alcoholism, early marriage and less diversity as villagers marry villagers. Does it surprise anyone that alcoholism became a big problem in Central Kenya after land clashes in the 1990s?

The men and women who leave the comforts of their homes usually prosper, not just in business, but in their professions, too.

Brain drain

Some have argued that insecurity will have another unintended consequence — brain drain. Already there are calls for professionals to leave insecure areas.

It takes years to train doctors, for instance. If they leave, insecure areas will suffer the consequences. Insecure places already happen to have a shortage of skilled staff, so this flight will exacerbate the problem.

Feeling insecure, lots of Kenyan professionals will be tempted to immigrate to other countries. It is usually the best and the brightest who leave — they have the confidence and skills to succeed elsewhere.

Lots of Kenyans left the country in the aftermath of the post-election violence. We lost precious manpower. Even average people left and now provide the ageing populations of Europe with much-needed labour.

The other unintended consequence is the feeling of helplessness. Feeling that one could die at any moment can lead to self-destructive behaviour, from alcoholism to irresponsible sexual behaviour. The prevailing idea is to enjoy oneself as much as possible before the Grim Reaper makes an appearance. Some could argue that cults could easily fill the spiritual void created by fear.

These unintended consequences could have an international dimension. It unlikely that insecurity will attract good people to Kenya; instead, it appeals to lots of bad guys, from drug dealers to gun runners. Such characters make a fragile situation worse.

Some argue that insecurity could give us a chance to examine our socio-political and economic systems and reform them. September 11 changed America, and the world. Observers could even argue that the current terrorist attacks in Kenya are a reverberation of 9/11.

Looking at all these consequences, one hopes that what we are experiencing is normal terrorism (to use police language — they talk of normal thuggery).

What next?

Where do we go from here?

The socio-economic costs of terrorism are well known. The war on terror will be won if we all pull together. After all, we suffer together. We hope the proposed laws will turn the tide against terrorists and their sympathisers.

Celebrating each other’s failures seems to be a time-honoured tradition among us. We should not extend it to grave matters like security.

We cannot exploit the economic potential of this country when the long shadow of insecurity and terror hang over us. We can shorten this shadow by working together; we shall reap the benefits together.

The writer is a lecturer, University of Nairobi.

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