State must strive to build an economic empire

From thousands of years ago, governments have been on a fierce endeavour to build empires. From the Biblical days of King David, through the conquest times of Alexander, Napoleon and the recent history of British Imperialism, the agenda of setting up empires has been advanced by all means possible, leaders knowing that in order to give their citizens quality lives, some foreigners had to be controlled so as to act as markets for the produce of the controlling state, act as forced labourers for the controlling state or produce resources that could be consumed by the controlling state. This has not changed and it may never change!

Throughout history the trend has been that a nation is as great as the empire it controls. A century ago no nation could challenge British power.

With an empire that spread from the east in Australia, through India, Africa and all the way to the west, in deed ‘the sun never set on the British empire.’ In a similar style, Hitler knew that in order to give Germans comfortable lives, Germany had to conquer Europe and build a European empire, while the Japanese knew they had to elbow Britons out of Asia and build an Asian empire, failed attempts that resulted in the Second World War.

Today, empire wars continue. However, today it’s no longer by brawl but by brain. The list of the largest corporations in the world reads like a substitute list for the largest nation economies in the world.

Through firms like ExxonMobil, Sinopec, Volkswagen, Total, Toyota and Samsung among many other mega corporations that dominate commerce all over the world, their host countries of US, China, Germany, France, Japan and South Korea respectively have become some of the wealthiest countries in the world.

The fastest growing economies of this century are using the same imperialistic approach.

Even with populations running to billions, China and India still know that to maintain prosperous economies, their large populations are not enough markets and they therefore have to flood the world market with their goods and services so as to build their national wealth through a vibrant export trade.

The Kenyan situation is not different. Standing as East Africa’s largest economy, Kenyan firms like KCB, Equity, Uchumi, Nakumatt, Bidco and many others run large profitable businesses across East Africa. If Kenya must make leaps towards becoming the globally competitive economy it aspires to be, then the strategy should be about building firms that can expand its economic empire outside its boundaries. However, building the globally influential corporations requires a lot of capital and expertise, much of which may not be easily accessible by Kenya’s private sector today, hence the need to have the government take a leading role.

It has taken the current private global firms like Mercedes and Ford hundreds of years to get where they are. To the contrary, with government involvement, it has taken Chinese firms like the state-owned China Wu Yi just a few years to become one of the largest construction firms in the world, running huge projects like the Thika Superhighway.

Strict capitalists will call the involvement of governments in commercial ventures communism, socialism or some other ‘ism’ but whatever you call it, this is the best model to grow the economy and some other third world economies. In Kenya for instance, the government has the financial resources needed to set up industries that can easily dominate the world trade especially using raw materials available locally such as leather, tea, coffee, sugar and a lot more. The amount of capital the government can afford for such industries is many times more than what private investors can raise.

Secondly, the government also has the expertise, having attracted some the best minds, even from the private sector, the likes of Adan Mohamed, the Cabinet Secretary for Industrialisation, who previously headed one of the most profitable banks in the region; Barclays.

Kenya needs to capitalise on this expertise and financial muscle of the government to build state-owned firms that can play a leading role on the global economic stage because without an economic empire that can help the country earn large amounts of foreign exchange, economic prosperity may take ages.