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An economic interpretation to Justice Ringera’s exit

NAIROBIAN SHOP
By | October 6th 2009

By XN Iraki

After weeks of intrigue, Justice Aaron Ringera finally bowed to pressure. To most observers, it was a triumph of Parliament over the Executive, and the start of a new era.

The last part of the previous sentence is contestable. Now that the dragon slayer has been slayed, can we look through the political fog and give an economic interpretation to his exit? Why so much interest in his post? Would there have been this interest if his salary was Sh100, 000 a month?

First, corruption has been our soft underbelly, it is a bigger problem if we bundle together the petty corruptions that mwananchi experience. Take the case of that policeman who collects Sh50 from matatu driver to that idler who insists you buy him tea in your village because you are from Nairobi.

Though we think corruption is a moral issue, the devil at work, it is more than that. Corruption represents our collective failure to understand the modern economics, how money is made, entrepreneurs work and wealth generated, accumulated and turned into economic growth.

It might therefore be easier to fight corruption my making Kenyans understand these simple issues instead of condemning corruption in churches and political meetings.

Money does not grow on trees, — businessmen or entrepreneurs make money because of the goods and services they provide, and the risks they take. But most ordinary people think they "collect" money from them, and would wish they were getting the goods and services free. The entrepreneurs who invest in time and resources to have the goods and services are rewarded through profit. If we never paid for this, no one would provide them.

We also think that the Government has an inexhaustible source of money, yet it us our taxes.

When someone gets money for doing nothing, you demoralise the person who does the real work, because he gets less profit. It is no wonder corruption thrives as economy declines. His option is to work less hard, because he is not a "fool" or passes the costs to the consumer, who uses more of his income on unexpected goods and services. This stifles some sectors’ consumer demand, but in the long run every sector of the economy suffers because of interconnectedness. down the line, entrepreneurs leave less conducive locations; that is why there are disparities in economic growth among regions and nations.

In countries where citizens understand how money is made, entrepreneurs are given support and are celebrities; they make profits, expand their businesses and build the economy. Such countries spawn big corporations that dwarf some nations’ revenues.

The policeman or even pretender on the streets may not understand the issues. Our atitude towards money making has not been positive either, preferring to call great entrepreneurs devil worshippers or corrupt. The truth is that it is sweeter to make money through corruption than through hard work. But this sweetness is diluted by failure to enjoy the "loot," the illusion of prosperity and missing the fun involved in making money honestly.

"Take home"

Back to Ringera. The rising population and the number of Kenyans leaving schools have created a huge demand for jobs, yet there are only a few premium public jobs. That has made the competition very fierce with different arms of the Government attempting to be appointing body— that is power. Add in politics, where a member of Parliamenet can boast to his voters that he brought Ringera’s job "home" and you can see why the job is attracting so much interest. The incentives given, Sh2.5 million a month, is another source of interest. With no minerals, the Government is our leading natural resource, we want to own and control it hence the tensions generated by elections. Grand coalition reduced the tensions because more people have something to "take home."

Observers fear that in the long run, you may only get a top job if you have a "sponsor". That will go against meritocracy and our national interests. It is also possible that our MP could take another step in future, and go to the lower echelons of the civil service, influencing who gets hired, they could even demand affirmative action based on regions and tribes. Without economic growth, the few premium jobs will always be hotly contested; Ringera’s case may be a rehearsal.

But Ringera’s job could be attracting interest for a genuine reason; Kenyans now know the economic damage that results from corruption.

We however cannot rule out a cloak of hypocrisy, to most people corruption is only bad if they are not beneficiaries.

Truthfully, getting a Kenya Anti-Corruption Commission director and his assistants is the easier part, emancipating the country from the culture of corruption, disentangling the modern economic thinking from our traditional culture of "gifts" might be harder.

In fighting corruption, we should look at the whole "supply chain", focusing at the top is a national distraction. We should start from the content of our curriculum to what we preach in churches and in meetings. Don’t business schools, for example, focus too much on profit and its distribution and not how that money is made? We must relook at our economic incentives and reward systems to ensure they work.

It seems easier to make money through rent-seeking, corruption than genuine entrepreneurial activities. Ringera has exited the stage, another person will replace him as we wait in anticipation of the end of corruption, it might be a long wait, but that should not dissuade us from trying to slay the dragon identified.

—The writer ([email protected]) is a lecturer at the University of Nairobi, School of Business.

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