Since 1902

Next government must emulate Germany, US economic recovery models

 

The next government without a doubt will take the reins in the middle of the worst economic crisis ever. Our economy is losing thousands of jobs as the cost of living escalates.

With little effort being made to address the runaway cost of living, corruption and the effects of coronavirus pandemic, impoverished Kenyans will remain stuck in despair and anxiety.

It is incumbent therefore for the incoming government to device strategies to enhance economic recovery, preferably by emulating either the US, France, UK or Germany's economic recovery models, that involves enacting Economic Recovery and Reinvestment Act to address economic woes.

For Kenya to recover from economic doldrums, the next president will have to deploy the model used in Malaysia and the four Asian Tigers – South Korea, Singapore, Hong Kong and Taiwan, among others, ensures which community ownership, commitment and accountability to the development projects which are initiated from the bottom upwards.

The US democrats and like-minded parties, Social democrats in Germany and the Labour Party of UK have strongly advocated for bottom-up economic concept which time-without-number has steered economies to recover from depression and ensured equality across social classes.  

Such economic recovery models will assist in developing strategic policies that stabilise markets and attract investors, leading to job creation and addressing rampant corruption which discourages domestic and foreign investments.

Tax evasion

The models would eliminate unjust and discriminatory business competition, and rightly put an end to tax evasion. The models would give specific directions on how the government should cushion impoverished citizenry through tax cuts.

Enacting the Economic Recovery Act is the way forward as it has succeeded in restoring the economies of many countries. In the Kenyan situation, the Act would lead to a balancing act which see taxes go down for the working class and businesses. The legislation will help the government strike a balance between the interests of the country and those of the people.

For the sake of clarity, tax cuts will be used as incentives for individuals and businesses to work hard and produce more goods rather than as an incentive for consumers to buy goods and services.

The Act will outline measures on tax relief for county governments, State corporations, business entities and individuals. Tax relief will assist firms to avoid laying off workers, and also make the cost of living affordable to poor households.

Ideally, the aim of the Act is to put billions of shillings in the pockets of the citizenry and inject the much-needed funds in the economy. The legislation will assist to get rid of counterfeit products and illicit trade which has deprived the government of large amounts of money.

This legislation should be part of concerted efforts to jump-start the economy.

Mr Sossion is a member of parliamentary committees on Education and Labour