Address causes of poverty, inequality to ease planning

The level of poverty among citizens is derived from personal income distribution, which many of us think is based on ethnicity. [Courtesy]
Universities in India offer a course on the Indian economy. Unfortunately, I have never come across a local university offering a course on the Kenyan economy and our economists are yet to write a book on the same.

As a country, we need a book and a course highlighting problems of economic growth.

The course should teach us about poverty, inequality and planning processes.

A majority of us do not agree on the definition of poverty.

Poverty and inequality are critical because the benefits of economic development must accrue more to the relatively fewer privileged classes of society.

There should be a progressive reduction of the concentration of incomes, wealth and economic power.

The nearest we get to define poverty is that it is a social phenomenon in which a section of the society is unable to fulfil even its basic necessities in life.

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Definitions are important because they express the essential nature of something.

Specifically, definitions enable us to have a common understanding of the subject.

As a nation, we need to understand poverty, its marauding effects on the quality of life of a majority of our citizens and its affinity to culture insecurity. This will enable us to re-engineer our planning processes to tackle this monster.

In the 2005/2006 financial year, 47 per cent of us were unable to meet the cost of buying the number of calories sufficient to meet the recommended daily nutritional requirements and minimal non-food needs.

Major goals

The current percentage of the poor could be much, much higher. The World Bank captured it in one of its reports, saying: “the violence in January-March, 2008 highlighted the importance of addressing poverty and inequality as major goals in their own right but also for instrumental reason.”

“This is because the growth is unlikely to be sustained in the presence of severe inequalities, which increase the risk of conflict.” In Kenya, we report economic growth, yet many of us are excluded from the benefits of that growth.

This explains why the clarity in the definition of poverty and inequality is a must.

Poverty can be defined in terms of an average calories intake per capita per day or in terms of shillings needed to support that level of calories.

The level of poverty among citizens is derived from personal income distribution, which many of us think is based on ethnicity.

This has fuelled negative ethnicity and might soon ignite a class struggle in the country.

Income distribution tells us how we share income and how this changes over time. 

We do not see much of this kind of data in the local news. This could be a pointer to higher poverty levels in rural areas and a small clique of wealthy individuals in urban areas.

Insecure situation

This explains the concentration of economic power among the rich. There are different explanations for this unsustainable and insecure situation.

Unemployment and underemployment explain low levels of income among the majority in the population. Our planners are not creating enough jobs.

Many young graduates are not at work due to inadequate economic development; it is not an issue of distribution.

Even those at work are underemployed. The employed are taxed to a level that saving part of the income is almost impossible. In addition, it is possible that the super-rich do not honour their tax obligations.

Tax evasion aggravates poverty and inequality.

Hopefully, the findings of the next census will shed more light on these issues. Planning at the national and county levels must be about raising the standards of living of the poor.

Unfortunately, it appears that a substantial part of our plans are “projects” to line the pockets of the rich, and this explains why a number of projects are not about employment and education.

Maybe bureaucrats commission projects to collect a commission. There is massive financial mismanagement within the public sector. The auditor general’s report attests to the same. This must be stopped.

It appears that the untamed growth and increase in income do not translate to poverty reduction; it is an inadequate attack to affluence and poverty.

We must remove both adverse affluence and poverty and not treat production and distribution separately.

All these require a political solution. We will need to debate poverty reduction programmes. Loans will be an asset to ownership and the sharing of earnings from those assets. Let’s train economists.

-The writer teaches at the University of Nairobi

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Kenyan economyIndian economyPoverty levelsNegative ethnicity