Connect with us

Politics

Winter Is Coming: Why Our National Debt Is Illegitimate, Unjust and Unsustainable…and Why We Should Be Worried

14 min read.

Greece teaches us, if we will listen, that the time is likely to come when Kenya will be unable to pay government workers’ salaries and will not be able to fund essential public services, such as security. At this point, the Government of Kenya will be forced to take on yet more borrowing to prevent a mass uprising. These “rescue packages” will be offered on grossly usurious terms, terms that the government will have no choice but to accept.

Published

on

Winter Is Coming: Why Our National Debt Is Illegitimate, Unjust and Unsustainable…and Why We Should Be Worried
Download PDFPrint Article

Recently the matter of Kenya’s national indebtedness has gained wide coverage in the media, not least in a presidential roundtable with the press on December 28th, 2018. In my opinion, our nation is grossly indebted, and in fact we are in a de facto state of emergency as far as our nation’s finances are concerned. I hope to demonstrate this fact below, and to suggest what options we have for dealing with our indebtedness.

Several indicators for measuring national indebtedness exist, such as Debt-to-Gross Domestic Product (Debt:GDP), debt per capita, etc. Probably the most widely-used indicator is the Debt:GDP ratio. This particular metric is so obfuscatory and misleading that it is not inconceivable that it was actually developed to mask the truth about national indebtedness the world over.

When we as individuals want to borrow salary-backed loans from banks, the banks attempt to assess our ability to pay off these loans by reviewing our payslips, sometimes going back 3 to 6 months. This effort is calculated to answer just one question: what is our take-home pay? In doing this, the banks are assessing our credit-worthiness, which helps to reduce the risk of default.

At the national level, however, this abundance of caution is thrown to the wind. The use of the Debt:GDP ratio to measure national indebtedness means that a country’s ability to take on more debt is assessed on the basis of its GDP. At an individual level, such an assessment would approximate assessing our ability to pay off salary-backed loans based on our gross pay. In fact, it is much worse: it is more like assessing an individual’s ability to pay off a loan based on how much revenue he generates for his employer. Even if such a company is just breaking even, the revenue an employee earns his employer must necessarily exceed his salary, or else that organisation would be unable to meet its operational costs, such as rent, electricity and other office expenses. Put another way, the revenue an employee generates pays a lot more than his salary). Since GDP attempts (poorly) to measure the total value generated by all the economic activity in a nation, to use it as a basis for measuring whether a country has room to borrow is patently unwise simply because not all the value created in a nation’s economy is available to pay a nation’s debt.

The revenue employees generate and the value an economy generates (GDP) are analogous in that both are measures of value created. However, whereas the revenue produced by employees accrues directly to their employers’ GDP, it does not so directly accrue to a nation. For example, after a loaf of bread has been produced in a country, that loaf is not submitted to the government, yet its production adds to the nation’s GDP. For this reason, even a revenue-based definition of employees’ income does not properly approximate the absurdity of using GDP as a measure of national income on which to assess indebtedness because not all of GDP accrues to the nation as income.

By masking true indebtedness, therefore, the Debt:GDP ratio encourages wanton borrowing. This works in favour both of fiscally irresponsible (or worse, corrupt) governments and of predatory lenders…

What is the net effect of all this? The more broadly a lender can define a borrower’s income, the larger the proportion of that borrower’s true income that will flow out as loan repayments, and the more the borrower’s assets stand at risk of repossession as collateral. This is what has happened to us as a nation. When we consider further stratagems like rebasing our GDP, which had the effect of increasing our GDP by 25% at a stroke, it can be seen that by nominally increasing our GDP the illusion was given that our nation was able to take on even more borrowing than before, opening the gates to yet more lending.

By masking true indebtedness, therefore, the Debt:GDP ratio encourages wanton borrowing. This works in favour both of fiscally irresponsible (or worse, corrupt) governments and of predatory lenders, both private and multilateral (the line between private and multilateral lenders is far thinner than is generally believed). We do not pay debt out of GDP. We pay debt out of our national revenues. The more revealing and honest measure would be debt-to-national revenue. For the same reasons of honesty and clarity, it is prudent to narrow the definition of national revenue down further to tax revenue, thereby eliminating grants, donations, monies realised from the sale of public assets, and other incidentals from the discussion.

The problem – from the viewpoint of irresponsible governments and predatory lenders, of course – is that once we do so, the scales will fall off our eyes and it becomes apparent just how much of our nation’s money is going towards servicing our debt. According to the national Treasury, our national debt, which stood at Sh1.894 trillion in the financial year (FY) 2013, had grown to Sh5.047 trillion by the end of FY 2018, a growth of 269 per cent.

In 2013, however, the government collected a total of Sh754.2 billion in taxes. The implication is that our Debt:Tax ratio stood at a whopping 251 per cent in that year. By 2018, although revenue collections had grown to Sh1.47 trillion, our debt had grown much faster, so much so that our Debt:Tax ratio in the FY 2018 stood at 343 per cent.

Our GDP in 2013, according to the same report, was Sh4.496 trillion, meaning our Debt:GDP ratio was 42.1 per cent in 2013. In 2018, our GDP was Sh8.845 trillion. (This suggests that our GDP has been growing at a compounded annual growth rate of 14.49 per cent, which would be news to most Kenyans; the effect of rebasing our GDP can now more clearly be seen.) These figures imply our Debt:GDP ratio in FY 2018 was 57 per cent.

In 2013, however, the government collected a total of Sh754.2 billion in taxes. The implication is that our Debt:Tax ratio stood at a whopping 251 per cent in that year. By 2018, although revenue collections had grown to Sh1.47 trillion, our debt had grown much faster, so much so that our Debt:Tax ratio in the FY 2018 stood at 343 per cent. In other words, if the Government did nothing else but pay off our national debt – if it did not pay teachers, doctors, nurses, the army, and the police; if it did not provide medical supplies; if it bought no textbooks; if it did not construct one metre of road or railway; if it did not construct one hospital room or classroom or police post – it would take us about three and a half years to pay off the national debt.

Table 1: Kenya's Debt:GDP vs Debt:Tax ratio, FYs 2013 - 2018

Table 1: Kenya’s Debt:GDP vs Debt:Tax ratio, FYs 2013 – 2018

This situation is untenable. National Treasury data indicates that in FY 2018 we spent Sh459.4 billion servicing our debt. By that measure, debt repayment was the single largest item in our nation’s expenditure, exceeding our expenditure on transport infrastructure (Sh225 billion), health (Sh65.5 billion) or education (Sh415.3 billion). In other words, we are spending more paying off our debt than we are spending providing good transport for our people and good treatment for our sick – combined.

A day of reckoning is soon coming for our beloved country, on which day we shall realise that indeed, as per the Holy Writ, “…the borrower is slave to the lender”, and that debt (even if the money is used well, let alone if it is actively misused as we have done) is the tool of the neo-colonialist. It will become starkly apparent that by a system of multilateral and international debt, there is a sense in which foreign powers have been able to be perhaps as extractive of our nation’s wealth as they were when they were in power as our colonial masters. There is in fact a very real sense in which the colonial powers never really left. The only major change is that China is now on the list of our foreign masters.

We have already seen multilateral lenders like the International Monetary Fund (IMF) force our government to impose VAT on fuel. This is not the first time this happened. In 2013, when our debt was less than half what it is now, the IMF backed changes in our VAT law that would have imposed VAT on milk and medicines, claiming that “…the changes in the law [would] put Kenya in line with other modern VAT regimes in the world by simplifying the way it operates while reducing the number of exempt items.” Although the Cabinet did not impose VAT on milk and medicines, other items, such as textbooks, periodicals and magazines, did not escape the taxman’s levy. The press reported that our national port in Mombasa was used as a security for the loan that was used to construct the Standard Gauge Railway (SGR). These are not isolated bellwethers of the dire situation our country finds herself in: the Daily Nation recently reported that we will require Sh1.04 trillion to service our debt in FY 2020. Where will it come from?

We must now examine possible solutions to what is clearly a monumental problem. The truth is this: debt can be dealt with either by paying it, or by not paying it. National debt can be repaid through austerity programmes and/or by the realisation of collateral. A nation may avoid repayment by pursuing debt forgiveness; defaulting on our sovereign debt; and/or overseeing a managed default on our sovereign debt.

Options for paying our national debt

Austerity programmes

Since the national debt can only be paid out of taxes, an escalation of the national debt can only result in an austerity programme. Austerity is a term that follows a very well-worn path of giving nasty, anti-common man policies honourable names (this is what is called “Economese”). Simply put, austerity necessitates the redirection of large portions of tax receipts away from normal government expenditure (including mission-critical social expenditure like health and education, and away from development expenditure) in an effort to pay off the debt. The Merriam-Webster dictionary describes austerity as “enforced or extreme economy”.

The fact that Kenya is – whether it has publicly announced it or not – well up the austerity road is evidenced by the earlier observation that debt repayment is the single largest item in our nation’s budget. By the time our lenders and leaders decide to announce that we are in an austerity programme, we will have been in one for years.

To examine where this road leads, we must turn to Greece. That nation has been locked in austerity’s deathly embrace for the better part of a decade. An Al Jazeera article notes that the austerity programme in Greece was occasioned by over-borrowing (sound familiar?) in the years leading up to the global financial crisis, which was exacerbated by a rise in rates occasioned by that crisis. In order to keep paying government salaries and finance public services, Greece had to accept an initial loan of EUR110 billion from its Eurozone partners and the IMF. To pay off this loan, the country was compelled to institute radical austerity measures. How did that go?

In August 2018, the Guardian summarized Greece’s experience thus:

The European Union, the European Central Bank and the International Monetary Fund loaned Greece a total of €289bn ($330bn) in three programmes, in 2010, 2012 and 2015.

The economic reforms the creditors demanded in return brought the country to its knees with a quarter of its gross domestic product (GDP) evaporating over eight years and unemployment soaring to more than 27%.

The fundamental contradictions between the envisaged outcomes of austerity and its outcomes in reality are also the reason we find multilateral lenders talking out of both sides of their mouths, first imposing these programmes, and then sheepishly admitting that they have not worked. The IMF, for example, actually produced a report stating that it made notable failures on its first rescue package to Greece.

Greece teaches us, if we will listen, that the time is likely to come when Kenya will be unable to pay government workers’ salaries and will not be able to fund essential public services, such as security. At this point, the Government of Kenya will be forced to take on yet more borrowing to prevent a mass uprising. These “rescue packages” will be offered on grossly usurious terms, terms that the government will have no choice but to accept. Then, in a strange twist of irony, the very people upon whom the initial injustices were visited will do the lenders’ marketing for them by way of a civil uprising. From then on, our nation’s expenditure will be “supervised” by these lenders, not to help the Kenyan people, but to ensure that these lenders are paid. These are doomsday scenarios, and I find it difficult to even write them. Yet it can get worse – and has, elsewhere in the world.

Realisation of collateral

Realisation of collateral is a method of debt payment that is as old and as basic as Shylocks. It is difficult to recall a time when national debt was collateralised to the extent that has happened in the recent past. It appears that the realisation of collateral appears to be the favoured method of China for collecting debt. For our case study on this, we must turn to the nation of Sri Lanka, as the New York Times reported:

Every time Sri Lanka’s president, Mahinda Rajapaksa, turned to his Chinese allies for loans and assistance with an ambitious port project, the answer was yes.

Yes, though feasibility studies said the port wouldn’t work. Yes, though other frequent lenders like India had refused. Yes, though Sri Lanka’s debt was ballooning rapidly under Mr. Rajapaksa.

…Mr. Rajapaksa was voted out of office in 2015, but Sri Lanka’s new government struggled to make payments on the debt he had taken on. Under heavy pressure and after months of negotiations with the Chinese, the government handed over the port and 15,000 acres of land around it for 99 years in December [2017].

There are examples closer to home. In December 2018, the US National Security Advisor, John Bolton, sensationally claimed that China was about to take over the Zambia Electricity Supply Corporation (ZESCO), which is Zambia’s version of Kenya Power & Lighting Company, before KenGen and Ketraco were hived off. Although this rumour was strongly refuted by Zambia’s presidential spokesman, Mr Amos Chanda, Mr Chanda did admit that Zambia owes China US$3.1 billion in debt. In Africa that kind of statement from that kind of person often means the figure is much higher; indeed, some sources have placed the figure at US$6.4 billion.

In 2017, Zambia’s police force had to scrap plans to hire eight Chinese nationals following a public outcry. Zambians were concerned about having to salute a Chinese national in their own country. It is also true that in November 2018 police arrested over 100 residents in Kitwe (the country’s second-largest city) who were protesting the alleged sale of the Zambia Forestry and Forest Industries Corporation (ZAFFICO). There is a possible sub-plot here: Mr Bolton’s claim may mean that the IMF and Western allies are worried that they are losing their grip on the Zambian nation to China.

Options for not paying our national debt

In advocating for the non-payment of national debt I am not advocating injustice or dishonesty for this reason: “The government” is not a nebulous entity separate from the people. The government is the people. When the government borrows, it is the people who are borrowing; when the government pays, it is the people who must pay; indeed, it is their taxes that are used to pay.

As can be seen from the foregoing, over-borrowing, poor governance and/or the mismanagement of public funds can lead to adverse effects, not on “the government”, not on the lenders – even private lenders – but on the people. The stark truth is that austerity rarely, if ever, aids recovery – unless by recovery we mean the recovery of lenders’ money.

As can be seen from the foregoing, over-borrowing, poor governance and/or the mismanagement of public funds can lead to adverse effects, not on “the government”, not on the lenders – even private lenders – but on the people. The stark truth is that austerity rarely, if ever, aids recovery – unless by recovery we mean the recovery of lenders’ money. Austerity is a creditor-oriented policy, not a people-oriented policy, and it fails because cuts in government spending result in reduced consumption, unemployment and lower tax receipts. Yet tax receipts are what are needed in order to pay off the debt. The realisation of collateral (the other solution) is nothing but the seizure of a people’s land

There exists, therefore, a moral case for non-payment, which is this: that the betrayal of a people by its ruling class through the accumulation of a debt whose benefits the people never realised should not be visited upon the class of the ruled, who pay the debt. On this point, therefore, I am advocating for justice, not injustice; and for honesty, not dishonesty.

Debt forgiveness

Debt forgiveness is not a new concept; it is in fact a biblical concept. The concept of Jubilee meant that every 50 years, during the eponymously-named Jubilee year, all debts were written off, all enslavement ended, and everyone was allowed to return to whatever ancestral lands that they might have had to give up because of an inability to pay back debt. A thorough examination of the wisdom and justice of this law would take up a solid chapter in a good book; suffice it to say that it acted like a legislated revolution, resetting the kind of gross national inequalities that US Senator Bernie Sanders is grappling with – for the price of a trumpet blast.

Our gross national indebtedness means – or rather, dictates – that we pursue debt forgiveness, because we simply cannot pay back everything we have borrowed. The problem is that we are not considered a poor country any more – not even a low-income country. We are now a middle income nation, and precedent shows that debt forgiveness is the preserve of highly indebted poor countries. Our pleas for debt forgiveness, therefore, are quite likely to fall on deaf ears. Further, a significant portion of our national debt is owed to China and China, Sri Lanka might whisper, is not a nation one asks for forgiveness.

A note of caution must here be sounded: only 15 or so years ago, Zambia had its debts wiped clean under the IMF’s Heavily Indebted Poor Countries scheme. The same country then took “less than a decade” to run up fresh debt of 59 per cent of GDP, buying million-dollar fire engines and constructing roads twice as expensive as those of her neighbours.

A strategy of debt forgiveness is, therefore, useless in the absence of enforced legislation to ensure that future over-indebtedness and/or wastage is prevented. A law preventing the government from tying up more than 10 per cent to 15 per cent of the average tax collected in the previous five years on debt servicing would be a very good place to start. The laws preventing wastage and theft of what we actually do borrow do exist, but require radical enforcement.

Default on sovereign debt

There exist exceptional circumstances in which nations default on their national debt. These times are usually presaged by significant external shocks or political ones, such as when Fidel Castro took over in Cuba in 1959, and simply defaulted on outstanding Cuban debt. The bonds on which he defaulted are in default to date.

Reference is often made to the Argentinian default (and one must be specific) of 2001. In 1998, Argentina’s economy entered a deep recession. The IMF’s by now predictable solution, of course, was austerity. Over the course of the following two years, it became increasingly clear that the toxic mix of an artificially fixed exchange rate, a steadily worsening balance of payments deficit (imports exceeding exports) and mounting debt, among other factors, meant that Argentina would never be able to pay off its debt.

Then the people began to protest, with increasing vociferousness, against austerity. When in December 2001 the IMF realised that default could not be avoided, it held back previously promised “support” so that the government was left without any external funding. Bank runs and riots followed: at one point the country had five presidents in ten days. Finally, on December 24, the country defaulted on a US$ 100 billion debt. This led to a social crisis of epic proportions, characterised not least by rampant unemployment.

Sovereign defaults of this nature tend to be devastating and ought to be avoided. The social cost ends up being far too high, even if one is a Castro leading a non-conformist Cuba. Firstly, in order to teach other would-be defaulters a lesson, lenders make an example out of one. Secondly, the world has become too interconnected for us to make ourselves a pariah state for any length of time: globalisation is a source of many ills, but it can help us as well, for we have a surplus of labour that we can offer the world (among other competitive advantages).

Managed default on sovereign debt

The way we might want to do it is the way Ecuador did it between 2007 and 2009. The then President Rafael Correa stopped payments on bonds that the country had taken out, and established a “debt audit commission” to conduct an audit on the country’s debt, which at the time was using up 38 per cent of the government’s budget. The purpose of this audit was to establish the “legitimacy” of the debt.

This was a brilliant first step. Firstly, it brought to the forefront the moral injustice of a people’s having to pay loans from which they never benefitted. Secondly, the reason given for the initial default was a moral one, as opposed to a financial one (even though the financial reasons lurk menacingly in the background). The genius behind the debt audit was that it was for establishing the morality (and not merely the affordability) of the public debt. Such a debt audit commission in Kenya – objective, apolitical (in a local sense), staffed with technically qualified, patriotic individuals and with an ability to trace the flows of borrowed funds – would likely produce spectacular results.

The way we might want to do it is the way Ecuador did it between 2007 and 2009. The then President Rafael Correa stopped payments on bonds that the country had taken out, and established a “debt audit commission” to conduct an audit on the country’s debt, which at the time was using up 38 per cent of the government’s budget. The purpose of this audit was to establish the “legitimacy” of the debt.

Ecuador’s debt audit commission found that the debt was illegitimate based on the manner in which negotiations were conducted. (The reasons for which debt can be illegitimate are myriad: here in Kenya, the factors would range from non-existence of the assets ostensibly purchased with the debt, overpricing of assets that do exist, payment of bribes and kickbacks, and lack of public participation and parliamentary approval, etc.) Arising from the stopped payments, and from the public establishment of the illegitimacy of the debt, the value of the bonds on the open market plunged. The Government of Ecuador then tendered to repurchase the bonds at 30 cents on the dollar. On the basis of the auction results, the government then offered to buy back the bonds at 35 cents on the dollar, expecting to retire at least 75 per cent of the bonds. Ninety-one per cent of the bonds were so retired in June 2009, that the government paid off its public debt for about a third of what it was worth and, according to President Correa, saved US$ 300M (Sh30 billion) per year in interest payments.

The Ecuadorian solution has an elegance that only simplicity gives. However, its success needs to be assessed against the backdrop of an important contextual factor: the retirement of the country’s debt happened at a time when markets were in the throes of the global financial crisis. Investors, therefore, were under pressure to liquidate their assets. Further, how successful this method would be as regards Chinese debt is anyone’s guess: simple and easy are vastly different things.

That said, the process presents a blueprint for any government that is ready and willing to ease the burden of over-indebtedness and is an option and a strategy this country should pursue – before it’s too late.

Support The Elephant.

The Elephant is helping to build a truly public platform, while producing consistent, quality investigations, opinions and analysis. The Elephant cannot survive and grow without your participation. Now, more than ever, it is vital for The Elephant to reach as many people as possible.

Your support helps protect The Elephant's independence and it means we can continue keeping the democratic space free, open and robust. Every contribution, however big or small, is so valuable for our collective future.

By

The author is a Christian, a patriot and a financial professional. He tweets at @Chrenyan

Continue Reading

Politics

Who Won Kenya’s “Nominations”?

Being nominated rather than selected by party members may undermine grass-roots legitimacy but it is hard not to suspect that some of the losers in the nominations process might feel a little bit relieved at this out-turn.

Published

on

Who Won Kenya’s “Nominations”?
Download PDFPrint Article

Who won Kenya’s “nominations”, the tense and often unpredictable political process through which parties select which candidates they want to represent them in the general election scheduled for 9 August? That may sound like a silly question. Social media is full of photographs of smiling candidate clutching their certificates of nomination—surely we need to look no further for the winners?

But maybe we do. Beyond the individual candidates in the contests for nominations, there are other winners. One may be obvious: it seems the general feeling is that Deputy President William Ruto came out better from the nominations than did his principal rival in the presidential race, former opposition leader Raila Odinga—about which more below. However, for some, coming out on top in the nominations may prove a poisoned chalice. Where nominations are seen to have been illegitimate, candidates are likely to find that losing rivals who stand as independents may be locally popular and may gain sympathy votes, making it harder for party candidates to win the general election. This means that there are often some less obvious winners and losers.

One reason for this is that nominations shape how voters think about the parties and who they want to give their vote to, come the general election. Research that we conducted in 2017, including a nationally representative survey of public opinion on these issues, found that citizens who felt that their party’s nomination process had not been legitimate were less likely to say that they would vote in the general election. In other words, disputed and controversial nomination processes can encourage voters to stay away from the general election, making it harder for leaders to get their vote out. In 2017, this appeared to disadvantage Odinga and his Orange Democratic Movement (ODM), whose nomination process was generally seen to have been more problematic—although whether this is because they were, or rather because this is how they were depicted by the media, is hard to say.

In the context of a tight election in 2022, popular perceptions of how the nominations were managed may therefore be as significant for who “wins” and “loses” as the question of which individuals secured the party ticket.

Why do parties dread nominations?

The major parties dreaded the nominations process—dreaded it so much, in fact, that despite all their bold words early on about democracy and the popular choice (and despite investments in digital technology and polling staff), most of the parties tried pretty hard to avoid primary elections as a way of deciding on their candidates. In some cases that avoidance was complete: the Jubilee party gave direct nominations to all those who will stand in its name. Other parties held some primaries—Ruto’s United Democratic Alliance (UDA) seems to have managed most—but in many cases they turned to other methods.

That is because of a complicated thing about parties and elections in Kenya. It is widely assumed—and a recent opinion poll commissioned by South Consulting confirms this—that when it comes to 9 August most voters will decide how to cast their ballot on the basis of individual candidates and not which party they are standing for. Political parties in Kenya are often ephemeral, and people readily move from one to another. But that does not mean that political parties are irrelevant. They are symbolic markers with emotive associations – sometimes to particular ideas, sometimes to a particular regional base. ODM, for example, has been linked both with a commitment to constitutional reform and with the Luo community, most notably in Nyanza. So the local politician who wants to be a member of a county assembly will be relying mostly on their personal influence and popularity—but they know that if they get a nomination for a party which has that kind of emotive association, it will smoothen their path.

Disputed and controversial nomination processes can encourage voters to stay away from the general election, making it harder for leaders to get their vote out.

This means that multiple candidates vie for each possible nomination slot. In the past, that competition has always been expensive, as rival aspirants wooed voters with gifts. It occasionally turned violent, and often involved cheating. Primary elections in 2013 and 2017 were messy and chaotic, and were not certain to result in the selection of the candidate most likely to win the general election. From the point of view of the presidential candidates, there are real risks to the primary elections their parties or coalitions oversee: the reputational damage due to chaos and the awareness that local support might be lost if a disgruntled aspirant turns against the party.

This helps to explain why in 2022 many parties made use of direct nominations—variously dressed up as the operation of consensus or the result of mysterious “opinion polls” to identify the strongest candidate. What that really meant was an intensive process of promise-making and/or pressure to persuade some candidates to stand down. Where that did not work, and primaries still took place, the promise-making and bullying came afterwards—to stop disappointed aspirants from turning against the party and standing as independents. The consequence of all that top-down management was that the nominations saw much less open violence than in previous years.

So who won, and who lost, at the national level?

Despite all the back-room deal-making, top-down political management was not especially successful in soothing the feelings of those who did not come out holding certificates. That brings us to the big national winners and losers of the process. Odinga—and his ODM party—have come out rather bruised. They have been accused of nepotism, bribery and of ignoring local wishes. This is a particularly dangerous accusation for Odinga, as it plays into popular concerns that, following his “handshake” with President Kenyatta and his adoption as the candidate of the “establishment”, he is a “project” of wealthy and powerful individuals who wish to retain power through the backdoor after Kenyatta stands down having served two-terms in office. In the face of well-publicised claims that Odinga would be a “remote controlled president” doing the bidding of the Kenyatta family and their allies, the impression that the nominations were stage-managed from on high in an undemocratic process was the last thing Azimio needed.

Moreover, perhaps because Odinga seems to have been less active than his rival in personally intervening to mollify aggrieved local politicians, the ODM nominations process seems to have left more of a mess. That was compounded by complications in the Azimio la Umoja/One Kenya Alliance Coalition Party (we’ll call it Azimio from now on, for convenience). Where Azimio “zoned”—that is, agreed on a single candidate from all its constituent parties—disappointed aspirants complained. Where it did not zone, and agreed to let each party nominate its own candidate for governor, MP and so on, then smaller parties in the coalition complained that they would face unfair competition come the general election. That is why the leaders of some of these smaller groups such as Machakos Governor Alfred Mutua made dramatic (or theatrical, depending on your view) announcements of their decision to leave Azimio and support Ruto.

Despite all the back-room deal-making, top-down political management was not especially successful in soothing the feelings of those who did not come out holding certificates.

So Ruto looks like a nomination winner. But his success comes with a big price tag. His interventions to placate disgruntled aspirants involved more than soothing words. A new government will have lots of goodies to distribute to supporters—positions in the civil service and parastatals, diplomatic roles, not to mention business opportunities of many kinds. But the bag of goodies is not bottomless, and it seems likely that a lot of promises have been made. Ruto’s undoubted talents as an organizer and deal-maker have been useful to him through the nominations—but those deals may prove expensive for him, and for Kenya, if he wins the presidential poll.

Money, politics, and the cost of campaigns

Those who “won” by being directly nominated to their desired positions may also come to see this process as something of a double-edged sword. In the short term, many of them will have saved considerable money: depending on exactly when the deal was done, they will have been spared some days of campaign expenses—no need to fuel cars, buy airtime for bloggers, pay for t-shirts and posters, and hand out cash. But that will be a brief respite. The disappointed rivals who have gone independent will make the campaigns harder for them—and likely more expensive. The belief that they were favoured by the party machinery may mean that voter expectations are higher when it comes to handouts and donations on the campaign trail. And the fact they were nominated rather than selected by party members may undermine their grass-roots legitimacy.

Others may experience a similar delayed effect. Among the short-term losers of the nominations will have been some of the “goons” who have played a prominent physical role in previous nominations: their muscular services were largely not required (although there were exceptions). The printers of posters and t-shirts will similarly have seen a disappointing nominations period (although surely they will have received enough early orders to keep them happy, especially where uncertainty over the nomination was very prolonged). The providers of billboard advertising may have seen a little less demand than they had hoped for, although they too seem to have done quite well from selling space to aspirants who—willingly or not—did not make it to the primaries. But where the general election will be fiercely contested, entrepreneurs will likely make up any lost ground as the campaigns get going. In these cases, competition has been postponed, not avoided.

Those in less competitive wards, constituencies or counties—the kind in which one party tends to dominate in the general election—are unlikely to be able to make up for lost time. These “one-party” areas may be in shorter supply in 2022 than in the past, due to the way that the control of specific leaders and alliances over the country’s former provinces has fragmented, but there will still be some races in which it is obvious who will win, and so the campaigns will be less heated.

Those who “won” by being directly nominated to their desired positions may also come to see this process as something of a double-edged sword.

More definite losers are the parties themselves. In some ways, we could say they did well as institutions, because they were spared the embarrassment of violent primaries. But the settling of many nominations without primaries meant not collecting nomination fees from aspirants in some cases, and refunding them in others. That will have cost parties a chunk of money, which they won’t get back. That may not affect the campaigns much—the money for campaigns flows in opaque and complex ways that may not touch the parties themselves. But it will affect the finances of the parties as organizations, which are often more than a little fragile.

Are the losers actually the biggest winners?

Some losers, however, are really big winners. Think about those candidates who would not have won competitive primaries but were strong enough to be able to credibly complain that they had been hard done by due to the decision to select a rival in a direct process. In many cases, these individuals were able to extract considerable concessions in return for the promise not to contest as independents, and so disrupt their coalition’s best laid plans. This means that many of the losers—who may well have been defeated anyway—walked away with the promise of a post-election reward without the expense and bother of having to campaign up until the polls.

It is hard not to suspect that some of them might feel a little bit relieved at this out-turn. In fact, some of them may have been aiming at this all along. For those with limited resources and uncertain prospects at the ballot, the opportunity to stand down in favour of another candidate may have been pretty welcome. Instead of spending the next three months in an exhausting round of funerals, fund-raisers and rallies, constantly worrying about whether they have enough fifty (or larger) shilling notes to hand out and avoiding answering their phones, they can sit back and wait for their parastatal appointment, ambassadorship, or business opportunity.

For those with limited resources and uncertain prospects at the ballot, the opportunity to stand down in favour of another candidate may have been pretty welcome.

For these individuals, the biggest worry now is not their popularity or campaign, but simply the risk that their coalition might not win the presidential election, rendering the promises they have received worthless. Those whose wishes come true will be considerably more fortunate—and financially better off—than their colleagues who made it through the nominations but fall at the final hurdle of the general election.

Separating the winners of the nominations process from the losers may therefore be harder than it seems.

Continue Reading

Politics

Asylum Pact: Rwanda Must Do Some Political Housecleaning

Rwandans are welcoming, but the government’s priority must be to solve the internal political problems which produce refugees.

Published

on

Asylum Pact: Rwanda Must Do Some Political Housecleaning
Download PDFPrint Article

The governments of the United Kingdom and Rwanda have signed an agreement to move asylum seekers from the UK to Rwanda for processing. This partnership has been heavily criticized and has been referred to as unethical and inhumane. It has also been opposed by the United Nations Refugee Agency on the grounds that it is contrary to the spirit of the Refugee Convention.

Here in Rwanda, we heard the news of the partnership on the day it was signed. The subject has never been debated in the Rwandan parliament and neither had it been canvassed in the local media prior to the announcement.

According to the government’s official press release, the partnership reflects Rwanda’s commitment to protect vulnerable people around the world. It is argued that by relocating migrants to Rwanda, their dignity and rights will be respected and they will be provided with a range of opportunities, including for personal development and employment, in a country that has consistently been ranked among the safest in the world.

A considerable number of Rwandans have been refugees and therefore understand the struggle that comes with being an asylum seeker and what it means to receive help from host countries to rebuild lives. Therefore, most Rwandans are sensitive to the plight of those forced to leave their home countries and would be more than willing to make them feel welcome. However, the decision to relocate the migrants to Rwanda raises a number of questions.

The government argues that relocating migrants to Rwanda will address the inequalities in opportunity that push economic migrants to leave their homes. It is not clear how this will work considering that Rwanda is already the most unequal country in the East African region. And while it is indeed seen as among the safest countries in the world, it was however ranked among the bottom five globally in the recently released 2022 World Happiness Index. How would migrants, who may have suffered psychological trauma fare in such an environment, and in a country that is still rebuilding itself?

A considerable number of Rwandans have been refugees and therefore understand the struggle that comes with being an asylum seeker and what it means to receive help from host countries to rebuild lives.

What opportunities can Rwanda provide to the migrants? Between 2018—the year the index was first published—and 2020, Rwanda’s ranking on the Human Capital Index (HCI) has been consistently low. Published by the World Bank, HCI measures which countries are best at mobilising the economic and professional potential of their citizens. Rwanda’s score is lower than the average for sub-Saharan Africa and it is partly due to this that the government had found it difficult to attract private investment that would create significant levels of employment prior to the COVID-19 pandemic. Unemployment, particularly among the youth, has since worsened.

Despite the accolades Rwanda has received internationally for its development record, Rwanda’s economy has never been driven by a dynamic private or trade sector; it has been driven by aid. The country’s debt reached 73 per cent of GDP in 2021 while its economy has not developed the key areas needed to achieve and secure genuine social and economic transformation for its entire population. In addition to human capital development, these include social capital development, especially mutual trust among citizens considering the country’s unfortunate historical past, establishing good relations with neighbouring states, respect for human rights, and guaranteeing the accountability of public officials.

Rwanda aspires to become an upper middle-income country by 2035 and a high-income country by 2050. In 2000, the country launched a development plan that aimed to transform it into a middle-income country by 2020 on the back on a knowledge economy. That development plan, which has received financial support from various development partners including the UK which contributed over £1 billion, did not deliver the anticipated outcomes. Today the country remains stuck in the category of low-income states. Its structural constraints as a small land-locked country with few natural resources are often cited as an obstacle to development. However, this is exacerbated by current governance in Rwanda, which limits the political space, lacks separation of powers, impedes freedom of expression and represses government critics, making it even harder for Rwanda to reach the desired developmental goals.

Rwanda’s structural constraints as a small land-locked country with no natural resources are often viewed as an obstacle to achieving the anticipated development.

As a result of the foregoing, Rwanda has been producing its own share of refugees, who have sought political and economic asylum in other countries. The UK alone took in 250 Rwandese last year. There are others around the world, the majority of whom have found refuge in different countries in Africa, including countries neighbouring Rwanda. The presence of these refugees has been a source of tension in the region with Kigali accusing neighbouring states of supporting those who want to overthrow the government by force. Some Rwandans have indeed taken up armed struggle, a situation that, if not resolved, threatens long-term security in Rwanda and the Great Lakes region. In fact, the UK government’s advice on travel to Rwanda has consistently warned of the unstable security situation near the border with the Democratic Republic of Congo (DRC) and Burundi.

While Rwanda’s intention to help address the global imbalance of opportunity that fuels illegal immigration is laudable, I would recommend that charity start at home. As host of the 26th Commonwealth Heads of Government Meeting scheduled for June 2022, and Commonwealth Chair-in-Office for the next two years, the government should seize the opportunity to implement the core values and principles of the Commonwealth, particularly the promotion of democracy, the rule of law, freedom of expression, political and civil rights, and a vibrant civil society. This would enable Rwanda to address its internal social, economic and political challenges, creating a conducive environment for long-term economic development, and durable peace that will not only stop Rwanda from producing refugees but will also render the country ready and capable of economically and socially integrating refugees from less fortunate countries in the future.

Continue Reading

Politics

Beyond Borders: Why We Need a Truly Internationalist Climate Justice Movement

The elite’s ‘solution’ to the climate crisis is to turn the displaced into exploitable migrant labour. We need a truly internationalist alternative.

Published

on

Beyond Borders: Why We Need a Truly Internationalist Climate Justice Movement
Download PDFPrint Article

“We are not drowning, we are fighting” has become the rallying call for the Pacific Climate Warriors. From UN climate meetings to blockades of Australian coal ports, these young Indigenous defenders from twenty Pacific Island states are raising the alarm of global warming for low-lying atoll nations. Rejecting the narrative of victimisation – “you don’t need my pain or tears to know that we’re in a crisis,” as Samoan Brianna Fruean puts it – they are challenging the fossil fuel industry and colonial giants such as Australia, responsible for the world’s highest per-capita carbon emissions.

Around the world, climate disasters displace around 25.3 million people annually – one person every one to two seconds. In 2016, new displacements caused by climate disasters outnumbered new displacements as a result of persecution by a ratio of three to one. By 2050, an estimated 143 million people will be displaced in just three regions: Africa, South Asia, and Latin America. Some projections for global climate displacement are as high as one billion people.

Mapping who is most vulnerable to displacement reveals the fault lines between rich and poor, between the global North and South, and between whiteness and its Black, Indigenous and racialised others.

Globalised asymmetries of power create migration but constrict mobility. Displaced people – the least responsible for global warming – face militarised borders. While climate change is itself ignored by the political elite, climate migration is presented as a border security issue and the latest excuse for wealthy states to fortify their borders. In 2019, the Australian Defence Forces announced military patrols around Australia’s waters to intercept climate refugees.

The burgeoning terrain of “climate security” prioritises militarised borders, dovetailing perfectly into eco-apartheid. “Borders are the environment’s greatest ally; it is through them that we will save the planet,” declares the party of French far-Right politician Marine Le Pen. A US Pentagon-commissioned report on the security implications of climate change encapsulates the hostility to climate refugees: “Borders will be strengthened around the country to hold back unwanted starving immigrants from the Caribbean islands (an especially severe problem), Mexico, and South America.” The US has now launched Operation Vigilant Sentry off the Florida coast and created Homeland Security Task Force Southeast to enforce marine interdiction and deportation in the aftermath of disasters in the Caribbean.

Labour migration as climate mitigation

you broke the ocean in
half to be here.
only to meet nothing that wants you
– Nayyirah Waheed

Parallel to increasing border controls, temporary labour migration is increasingly touted as a climate adaptation strategy. As part of the ‘Nansen Initiative’, a multilateral, state-led project to address climate-induced displacement, the Australian government has put forward its temporary seasonal worker program as a key solution to building climate resilience in the Pacific region. The Australian statement to the Nansen Initiative Intergovernmental Global Consultation was, in fact, delivered not by the environment minister but by the Department of Immigration and Border Protection.

Beginning in April 2022, the new Pacific Australia Labour Mobility scheme will make it easier for Australian businesses to temporarily insource low-wage workers (what the scheme calls “low-skilled” and “unskilled” workers) from small Pacific island countries including Nauru, Papua New Guinea, Kiribati, Samoa, Tonga, and Tuvalu. Not coincidentally, many of these countries’ ecologies and economies have already been ravaged by Australian colonialism for over one hundred years.

It is not an anomaly that Australia is turning displaced climate refugees into a funnel of temporary labour migration. With growing ungovernable and irregular migration, including climate migration, temporary labour migration programs have become the worldwide template for “well-managed migration.” Elites present labour migration as a double win because high-income countries fill their labour shortage needs without providing job security or citizenship, while low-income countries alleviate structural impoverishment through migrants’ remittances.

Dangerous, low-wage jobs like farm, domestic, and service work that cannot be outsourced are now almost entirely insourced in this way. Insourcing and outsourcing represent two sides of the same neoliberal coin: deliberately deflated labour and political power. Not to be confused with free mobility, temporary labour migration represents an extreme neoliberal approach to the quartet of foreign, climate, immigration, and labour policy, all structured to expand networks of capital accumulation through the creation and disciplining of surplus populations.

The International Labour Organization recognises that temporary migrant workers face forced labour, low wages, poor working conditions, virtual absence of social protection, denial of freedom association and union rights, discrimination and xenophobia, as well as social exclusion. Under these state-sanctioned programs of indentureship, workers are legally tied to an employer and deportable. Temporary migrant workers are kept compliant through the threats of both termination and deportation, revealing the crucial connection between immigration status and precarious labour.

Through temporary labour migration programs, workers’ labour power is first captured by the border and this pliable labour is then exploited by the employer. Denying migrant workers permanent immigration status ensures a steady supply of cheapened labour. Borders are not intended to exclude all people, but to create conditions of ‘deportability’, which increases social and labour precarity. These workers are labelled as ‘foreign’ workers, furthering racist xenophobia against them, including by other workers. While migrant workers are temporary, temporary migration is becoming the permanent neoliberal, state-led model of migration.

Reparations include No Borders

“It’s immoral for the rich to talk about their future children and grandchildren when the children of the Global South are dying now.” – Asad Rehman

Discussions about building fairer and more sustainable political-economic systems have coalesced around a Green New Deal. Most public policy proposals for a Green New Deal in the US, Canada, UK and the EU articulate the need to simultaneously tackle economic inequality, social injustice, and the climate crisis by transforming our extractive and exploitative system towards a low-carbon, feminist, worker and community-controlled care-based society. While a Green New Deal necessarily understands the climate crisis and the crisis of capitalism as interconnected — and not a dichotomy of ‘the environment versus the economy’ — one of its main shortcomings is its bordered scope. As Harpreet Kaur Paul and Dalia Gebrial write: “the Green New Deal has largely been trapped in national imaginations.”

Any Green New Deal that is not internationalist runs the risk of perpetuating climate apartheid and imperialist domination in our warming world. Rich countries must redress the global and asymmetrical dimensions of climate debtunfair trade and financial agreements, military subjugation, vaccine apartheidlabour exploitation, and border securitisation.

It is impossible to think about borders outside the modern nation-state and its entanglements with empire, capitalism, race, caste, gender, sexuality, and ability. Borders are not even fixed lines demarcating territory. Bordering regimes are increasingly layered with drone surveillance, interception of migrant boats, and security controls far beyond states’ territorial limits. From Australia offshoring migrant detention around Oceania to Fortress Europe outsourcing surveillance and interdiction to the Sahel and Middle East, shifting cartographies demarcate our colonial present.

Perhaps most offensively, when colonial countries panic about ‘border crises’ they position themselves as victims. But the genocide, displacement, and movement of millions of people were unequally structured by colonialism for three centuries, with European settlers in the Americas and Oceania, the transatlantic slave trade from Africa, and imported indentured labourers from Asia. Empire, enslavement, and indentureship are the bedrock of global apartheid today, determining who can live where and under what conditions. Borders are structured to uphold this apartheid.

The freedom to stay and the freedom to move, which is to say no borders, is decolonial reparations and redistribution long due.

Continue Reading

Trending