How our bad culture is eating up all our plans

Since the advent of civilization and establishment of territorial boundaries, sovereign states have continually sought to extent their economic and political influence far and wide. Historically, global power relations were defined largely by military mighty. Nations with superior and more sophisticated weaponry conquered foreign territories, colonized them and exploited their natural resources for the advancement of their home economies.

However, after the devastation of “Little Boy” and “Fat Man” in Hiroshima and Nagasaki respectively in August 1945, the world was awakened to the vanity of pursuit of military prowess without humanity. Thus, since the turn of the second half of the 20th century, the economic mighty of a nation now defines their role in geo-political power relations.

That explains the emergence of the exclusive clubs of the Group of Seven (G-7) and the Group of Twenty (G-20). Ordinarily, it is a great honour for any non-member state to get an invite into any meeting of these exclusive clubs.

But of interest for us here are two important questions. One; why would sovereign states want to form such exclusive clubs? And two; what MUST Kenya do to break this “BIG BOYS” glass ceiling?

It’s about permanent interests

Just like individuals and communities evolve, so do nations. As an individual goes through different economic states in the course of life, their priorities, interests and affiliations change. For instance, it is basic common wisdom that a poor man cannot lead another into wealth and prosperity.

Thus, to prosper economically, you must find company in men who’ve been there before you. From the ruins of Babylon, George Clason explains that if you wanted to grow your gold from the trade of making bricks, you go to he/she that has experience in making bricks and not by going to a gold smith.

In a similar vein, developed nations coalesce around each other to learn and advance their economic, military, political and cultural influence to the rest of the world. Through these exclusive clubs, the member states are able to define and influence global trade policies, control world resources and technically dictate governance systems in poor states. Among themselves they reserve veto powers on matters that individual members may consider not to advance their strategic interests.

Interestingly, every time the leaders of the G-7 and G-20 hold summits in the various capitals of their member states, they have traditionally attracted outrage and protest from activists demonstrating against capitalism, patriarchy and racism. Ironically, at individual levels we never protests against membership into exclusive members clubs that largely serve and advance similar interests for their members.

To break the glass ceiling

I have previously argued here that no individual or nation can cheat their way around the unchanging basic rules of economics. As a matter of fact, there are fundamental differences in the economic architecture, governance structure, culture and ethical conduct between poor and rich nations.

As a rule of thumb, the economies of rich nations are by and large build around the market forces of demand and supply. Despite the advancements of the 21st century, economists are yet discover a better allocator of productive resources than the invisible hand proposed by Adam Smith in 1776. Part of the reasons why the Soviet Union collapsed was largely due to misallocation of productive resources caused by centralized planning.

Since economic forces harbour no vacuums, the inefficiencies of central planning are sorted out in a black market that undermines economic growth in the long term.    

Even though in theory Kenya adopted a capitalistic economic system at independence, in practice we have never institutionalized the tenets of market based economies. The country retained price controls up to the early 1990s. Even after abolishing prices controls, there have still been frequent bouts of controls on various segments of the economy. A case in point is the ongoing interest rate, pump price controls and the unclear policy statements to cap retail maize floor prices. Such disruptive government interferences only fuel the underground economy.

Turning to governance and economic advancement, there is nothing that sums up this like former President Moi’s famous declaration that “Siasa mbaya, maisha mbaya”. A plot of the economic growth of the country since the 1960’s clearly captures economic dips around all the election cycles since the advent of multi-party democracy in the 1990s. Make no mistake on this, the problem is not the democratic space that we enjoy today, but the problem has everything to do with how we’ve managed that democracy.

Democratic space is not a license to keep a country perpetually on a campaign and election mood. Democracy is not a permit to destroy businesses, infrastructure and livelihoods when an outcome does not favour us. In all developed nations, democracy and political competition are practiced without or with minimal interference with the economic systems of the nation. People campaign and vote without closing factories and declaring holidays to moan or celebrate an outcome.

Culture and economy

Finally, culture and ethics form an integral ingredient for the economic growth of a nation. But despite this fact, in practice economists have traditionally shied away from studying the influence of culture for fear of characterization of communities. But then, how does culture come into economics?

In Kenya today, it’s a mark of sophistication the further away we move from you cultural roots. Our cultural identities have been turned into conveyor belts to political power. Years gone by, we were the economic power house in Eastern Africa.

Economic growth projections place Ethiopia, Tanzania and Rwanda as the 2nd, 5th and 8th fastest growing economies in Africa respectively.  Nigeria is now Africa’s largest economy at a GDP of $376 billion. If you took a trip to West Africa, would there be any doubt as to who is the boss in that region?

It bothers me day and night how our top bureaucrats and political class seems not to care about the dwindling influence of the nation in the region.

Dr Muinde is an economist