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Kenya could join list of states that have faced bankruptcy

MAKAU MUTUA
By Makau Mutua | November 1st 2015

NAIROBI: Call them PIGS, PIIGS, PIIGGS, or whatever. It doesn’t really matter because we know the jargon. It’s a derogatory term which refers to EU member states whose economies have been on the verge of collapse. The infamous group includes — depending on the speaker — Portugal, Ireland, Italy, Great Britain, Greece and Spain. France escaped the tag by the skin of its teeth. As I write, some of them are on life support, while others are on a slow and painful mend. There’s heated dispute on how they got there, but there’s agreement that sovereign debt is the key denominator. In layman’s language, the ratio of debt to GDP can bankrupt a country. That’s why Kenya could be the next PIG.

The European Union has not been the blissful marriage its engineers promised. Yoking together unequal — and dissimilar — economies and socio-political cultures — has virtually failed. Absorbing weaker economies under traditional models of integration and free markets has wreaked havoc. This has left Germany — the anchor of the EU — with buyer’s remorse. To the chagrin of the PIGS, the Germans have cast themselves as “hard working, ethical, and fiscally responsible” as opposed to the “profligate, lazy and gluttonous” PIGS elites. Some see racist overtones and the spectre of the Germans of yore — ala First and Second World Wars. It hasn’t helped that German officials don’t hide their contempt for the PIGS. But Germans will have to bail out the PIGS.

You might wonder what the PIGS have to do with Kenya, a tropical country far from the centre of Europe. Simple. It doesn’t matter why the PIGS are in the mess they find themselves in. Europe can’t be Europe — an economic behemoth with the highest living standards on earth — without the PIGS. There wouldn’t the EU, or a Europe to speak of, without the PIIGGS. It doesn’t matter if the Greeks are simply lazy and splurgers. Or that the Spanish like to doze off in long siestas instead of working. Or that the Italians are Mafioso-prone and evade taxes. Or the French and the Brits live like superpowers when they are second-tier ex-imperial states whose sun has long set.

The point is that these stereotypes can’t buy Germany out of the fix. It has to carry everybody with it if the EU and Europe are to avoid disintegration and another war. But that’s not Kenya’s case. Kenya is swimming in the shark-infested waters of international finance without body armour, or a protector. A naked swimmer like Kenya could be easy dinner for the predators. That’s why the Jubilee regime should level with Kenyans. Why? Because if the Kenyan shilling and economy goes into the toilet, those with accounts in Swiss and other offshore banks will catch the first flight out. It’s going to swim, or drown. But how can you swim if you were never taught? Sit up.

I’ve three reasons why Kenya could go the way of the PIGS. First, the Jubilee regime isn’t transparent about the public purse. Kenyans don’t know how much sovereign debt the country carries. Or how much we’ve borrowed. Or the ratio of debt to GDP. Or the cash on hand — liquidity. State monies are like household budgets. You can’t spend what you don’t have. Economist David Ndii has correctly been telling Kenyans the Jubilee regime is driving the country over the economic cliff. But the country is too obsessed with URP William Ruto’s woes at the ICC to take note. Parliament is in willful and blissful amnesia. That’s because transparency would expose MPs and senators. It’s a conspiracy of opacity.

Second, there’s looting everywhere. In every nook and cranny of government. Including in State House, as Jubilee’s Uhuru Kenyatta has publicly admitted. The police, the DPP, and the AG are totally impotent, compromised or willing charlatans. Corrupt cartels patrol the corridors of the Judiciary despite CJ Willy Mutunga’s efforts to torment them out of the courts. In a word, we are up a creek as they say. There’s no one — nada — who’s minding the store. Every mega project is a gravy train — the SGR, NYS, you name it. The Auditor General revealed that billions couldn’t be accounted for. Yet life has gone on. There are no checks, or balances, which is the central pivot of the 2010 Constitution.

Finally, unlike the PIGS, there’s no Germany to bail Kenya out. Mr Kenyatta said he can’t — and won’t — pay teachers. How can he pay when he has no money because it’s been looted? He won’t pay because he really can’t. He had the sequence backwards — it’s not that he can’t pay because he won’t BUT he won’t pay because he can’t. He got lucky because the courts bailed him out. But that’s a palliative, not a solution. The question of PIGS still looms large.

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