It's industries, not wheelbarrows, that will lift Kenyans out of poverty
Opinion
By
Suleiman Shahbal
| Aug 17, 2021
It would have been amusing had the subject not been so serious. Suddenly many politicians have now become platform economists pontificating on the merits of the “bottom -up” approach to economics. Some of them will even spice the debate by discussing the “trickle down” effect as well.
Deputy President William Ruto has thrown his lieutenants into a tizzy. Ruto has a PhD, the gift of the gab and an educated understanding of economics. This economic theory stems from Prof Prahalad’s famous book “Wealth at the bottom of the pyramid”.
Unfortunately, many of the politicians have never read an economic textbook or sold anything, and some have never worked in a serious job in their lives. Most do not realise that the dream of every hustler is to become a Sonko and therefore the wheelbarrow symbolises a step backwards. The debate would have been funny if it was not such a serious matter that affects the lives of millions.
This debate started with India at independence in 1948. Mahatma Gandhi favoured an economy focused on improving lives in the one million villages where the hustlers lived while Nehru, the Prime Minister, believed that industrialisation would lift India out of poverty. India ultimately chose the middle path and achieved neither. The villages are still languishing in poverty and backwardness, and little has changed. It is only in the late 1990’s that the country finally started focusing on industrialisation that it became an economic powerhouse.
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In the 1980’s China finally shed its communist ideas and focused on industrialisation and moved 600 million people out of poverty. It was the focus on exports and setting up of Special economic zones that made China a modern country. Villagers quickly moved into the cities looking for jobs. This was the same model that the Southeast Asia “Tigers” followed to move their people from poverty to prosperity.
Kenya cannot afford to lose focus on this critical debate because of political expediency. Kenya’s greatest problem is how to create jobs for its youth. In the rural areas, there are not enough paying jobs in agriculture nor in the urban areas. The youth are forced to find any means to make some money – hence hustling. Even the employed earn so little that they have to find a “side hustle” to increase their income.
The Jua Kali (SME) sector has emerged because of this. This sector has become so critical and now accounts for over 60 per cent of our employment. Our challenge is to help the SME grow. The growth is slow and limited and will not lift our people out of poverty, just as it didn’t help India’s million villages. We too need to focus on industrialisation. Unfortunately, industrialisation in Kenya is declining in terms of contribution to GDP.
Like China and the Asian Tigers, we need to start the special economic zones. We need to help our small businesses grow and create more jobs and we need to promote the “blue economy.” The country needs to help the small businesses, but in the long run we need to focus on industrialisation. That is what will create jobs and lift our people out of poverty.
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