Nipate
Forum => Kenya Discussion => Topic started by: gout on April 18, 2016, 01:15:17 PM
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Mail and Guardian sees the fading of Africa Rising narrative after commodities market slump and the soft loans from IMF, WB which have been key proponents of the Africa Rising outlook
http://mgafrica.com/article/2016-04-16-two-years-after-big-praise-some-of-africas-former-brightest-economic-stars-are-seeking-bailouts-what-went-wrong?fb_ref=c7030f5a55414f70ab98ac1df4deae92-Facebook
CNN singles negative vibes out of banking sector to indicate trouble in the Kenya's economy...
http://money.cnn.com/2016/04/15/news/economy/africa-economy-south-africa-nigeria-kenya-angola/index.html
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Exclude kenya. Kenya has one of the most diversified economy thanks to vibrant private and informal sector ---and cannot go under easily.
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Meanwhile corruption has killed Brazil's dreams. Legislators are more corrupt than the executive.
Zuma strangled SA.
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Right. Kenya apart from chronic corruption is grand story. Unlike Angola oil economy, Kenya is agriculture (multiple commodities), banks/financial services/BPOs , real estate/roads/infrastructure devpt, tourism, manufacturing -- with impressive human capital. This service + commodity mix balances export and domestic consumer markets. In short we have divested our eggs. The thing for us is to ensure faster growth and efficiency. Down the road we will not need cumbersome restructuring ala China. If we make good on oil boom it's a great thing the money will finance a diversified system and largely escape overdependence syndrome. Corruption is the real demon to be exorcised.
Chinese slowdown will hurt commodity exporters -- oil, metals, cement, etc. Agricultural/food exports to EU have not slowed down because feeding is not impacted by economic slowdown. Nor dressing and fragrances (fashion). Ours are safe commodities. Look at the 6% growth projection viz 3% overall.
I may add that this fair economy is simply good luck, not wisdom of foresight or planning.
Exclude kenya. Kenya has one of the most diversified economy thanks to vibrant private and informal sector ---and cannot go under easily.
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The only sector that has never grown for a while is manufacturing...but I think with formalization of the retail & wholesale sector we might see growth. The other sector that we have never got right is mining....this need to change..it can be another engine of growth. Also livestock sector outside dairy we can do better...exporting beef worldwide.
Right. Kenya apart from chronic corruption is grand story. Unlike Angola oil economy, Kenya is agriculture (multiple commodities), banks/financial services/BPOs , real estate/roads/infrastructure devpt, tourism, manufacturing -- with impressive human capital. This service + commodity mix balances export and domestic consumer markets. In short we have divested our eggs. The thing for us is to ensure faster growth and efficiency. Down the road we will not need cumbersome restructuring ala China. If we make good on oil boom it's a great thing the money will finance a diversified system and largely escape overdependence syndrome. Corruption is the real demon to be exorcised.
Chinese slowdown will hurt commodity exporters -- oil, metals, cement, etc. Agricultural/food exports to EU have not slowed down because feeding is not impacted by economic slowdown. Nor dressing and fragrances (fashion). Ours are safe commodities. Look at the 6% growth projection viz 3% overall.
I may add that this fair economy is simply good luck, not wisdom of foresight or planning.
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The only sector that has never grown for a while is manufacturing...but I think with formalization of the retail & wholesale sector we might see growth.
The first part of that seems to be a rather mild way of putting things. In terms of its % contribution to the GDP, there has been barely any change in Kenyan manufacturing since independence; and I don't see how "formalization of the retail & wholesale sector" will change that. Of particular concern are (a) the continued importation of cheap junk from China, and (b) the apparent lack of real government efforts to change things.
The context is in (a) the Grand Vision 2030 plan to be an industrialized country by 2030, and (b) how to lift the economy from the bottom ranks of the "middle". For (a), it's hard to see how Kenya intends to be an industrialized country with hardly any real manufacturing. For (b), looking at the countries that have most improved their lot rapidly---and especially those without substantial natural resources---it appears that the general path is "manufacturing ---> industrialization ---> services and consumerism". (With the rare exception, improvements in agriculture seems to precede the manufacturing phase.)
And Kenya is not particularly helped with a culture of virulent corruption, in which theft, rather than production, is seen as the "best" way to improve one's lot.
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I think kenya is putting in place the building blocks for a successfully manufacturing sector.
1) Infrastructure..our transport cost are some of world worse/most expensive..SGR will bring down to half that and better roads will generall reduce the cost of moving goods & raw materials.
2) Power...our power has been unreliable, expensive & coverage been spotty..there has been tremendous improvement the last 10 years...12% electricity rate to nearly 50% now...Jubilee want to makes this 75% in few years from now...and soon nearly everyone will live 600m from a transformer.
3) Informal retail sector..small dukas...is giving way to supermakets and malls..kenya is now second only to South Africa in that aspect. It easy now for a manufacturer to approach Nakumatt or Tusky or Uchumi sign 1B kshs deal to supplier xyz, approach a bank and get going...than dealing with gazillion of small time dukas.
4) Our labour is still expensive but has some best productivity levels in Africa..a kenyan worker is 3 times more productive than a TZ for example.
5) Our finance sector is already world class in my view. There are issue around cost of borrowing...but generally our financial & inter-mediation is one of best outside South Africa.
Warehouses/Godowns are now competing with Malls/Supermarkets as the best investment.
As you can see we are nearly turning the corner and voila we will have all ingredient for manufacturing to take off. One best harbinger of things to come is cement industry in Kenya.
Just a matter of less than 10yrs in my opinion.
The first part of that seems to be a rather mild way of putting things. In terms of its % contribution to the GDP, there has been barely any change in Kenyan manufacturing since independence; and I don't see how "formalization of the retail & wholesale sector" will change that. Of particular concern are (a) the continued importation of cheap junk from China, and (b) the apparent lack of real government efforts to change things.
The context is in (a) the Grand Vision 2030 plan to be an industrialized country by 2030, and (b) how to lift the economy from the bottom ranks of the "middle". For (a), it's hard to see how Kenya intends to be an industrialized country with hardly any real manufacturing. For (b), looking at the countries that have most improved their lot rapidly---and especially those without substantial natural resources---it appears that the general path is "manufacturing ---> industrialization ---> services and consumerism". (With the rare exception, improvements in agriculture seems to precede the manufacturing phase.)
And Kenya is not particularly helped with a culture of virulent corruption, in which theft, rather than production, is seen as the "best" way to improve one's lot.
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I think kenya is putting in place the building blocks for a successfully manufacturing sector.
1) Infrastructure..our transport cost are some of world worse/most expensive..SGR will bring down to half that and better roads will generall reduce the cost of moving goods & raw materials.
2) Power...our power has been unreliable, expensive & coverage been spotty..there has been tremendous improvement the last 10 years...12% electricity rate to nearly 50% now...Jubilee want to makes this 75% in few years from now...and soon nearly everyone will live 600m from a transformer.
3) Informal retail sector..small dukas...is giving way to supermakets and malls..kenya is now second only to South Africa in that aspect. It easy now for a manufacturer to approach Nakumatt or Tusky or Uchumi sign 1B kshs deal to supplier xyz, approach a bank and get going...than dealing with gazillion of small time dukas.
(1) and (2) will certainly help. But manufacturing is about making things. What sorts of things are to be produced that will be snapped up in the face of cheap Chinese junk? What is the xyz that Nakumatt etc. will be jumping at in Sh. 1B deals?
4) Our labour is still expensive but has some best productivity levels in Africa..a kenyan worker is 3 times more productive than a TZ for example.
That's like saying that a D+ student is so many times better than an F student. There might be some comfort there, but what is the practical significance? Are manufacturers rushing in from elsewhere to set up in Kenya? On the contrary, the standard story seems to be like this:
http://www.standardmedia.co.ke/business/article/2000193411/manufacturing-nightmare-that-is-turning-kenya-into-graveyard-for-companies?articleID=2000193411&story_title=manufacturing-nightmare-that-is-turning-kenya-into-graveyard-for-companies&pageNo=2
5) Our finance sector is already world class in my view. There are issue around cost of borrowing...but generally our financial & inter-mediation is one of best outside South Africa.
I'm glad you qualified the first statement. But what's its relevance? Is the idea that Kenya will suddenly become a major manufacturer if the cost of borrowing goes down?
Warehouses/Godowns are now competing with Malls/Supermarkets as the best investment.
That does not necessarily say much about manufacturing in Kenya What's in the warehouses/godowns? What's being sold in the malls/supermarkets? Tons of Kenyan products?
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First visit a supermarket in kenya and then we can continue with debate. You've this wrong impression that it full of chinese stuff. It is not. Kenya manufacturing best times are coming....as we are dealing with fundamentals....infrastructure...supply chains...labor..financing.
I think kenya is putting in place the building blocks for a successfully manufacturing sector.
1) Infrastructure..our transport cost are some of world worse/most expensive..SGR will bring down to half that and better roads will generall reduce the cost of moving goods & raw materials.
2) Power...our power has been unreliable, expensive & coverage been spotty..there has been tremendous improvement the last 10 years...12% electricity rate to nearly 50% now...Jubilee want to makes this 75% in few years from now...and soon nearly everyone will live 600m from a transformer.
3) Informal retail sector..small dukas...is giving way to supermakets and malls..kenya is now second only to South Africa in that aspect. It easy now for a manufacturer to approach Nakumatt or Tusky or Uchumi sign 1B kshs deal to supplier xyz, approach a bank and get going...than dealing with gazillion of small time dukas.
(1) and (2) will certainly help. But manufacturing is about making things. What sorts of things are to be produced that will be snapped up in the face of cheap Chinese junk? What is the xyz that Nakumatt etc. will be jumping at in Sh. 1B deals?
4) Our labour is still expensive but has some best productivity levels in Africa..a kenyan worker is 3 times more productive than a TZ for example.
That's like saying that a D+ student is so many times better than an F student. There might be some comfort there, but what is the practical significance? Are manufacturers rushing in from elsewhere to set up in Kenya? On the contrary, the story seems to be like this:
http://www.standardmedia.co.ke/business/article/2000193411/manufacturing-nightmare-that-is-turning-kenya-into-graveyard-for-companies
5) Our finance sector is already world class in my view. There are issue around cost of borrowing...but generally our financial & inter-mediation is one of best outside South Africa.
I'm glad you qualified the first statement. But what's its relevance? Is the idea that Kenya will suddenly become a major manufacturer if the cost of borrowing goes down?
Warehouses/Godowns are now competing with Malls/Supermarkets as the best investment.
That does not necessarily say much about manufacturing in Kenya What's in the warehouses/godowns? What's being sold in the malls/supermarkets? Tons of Kenyan products?
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First visit a supermarket in kenya and then we can continue with debate.
I was in one in Eldoret not too long ago. Part of a major chain, and I have no reason to believe that their outpost in Eldoret is a special case. (Of course, you could always tell me about all the Kenya-manufactured products that supermarkets stock.)
But we need not dwell on supermarkets. While we await my trip-reports from visits to other places, there is no reason why we should not debate this:
http://www.standardmedia.co.ke/business/article/2000193411/manufacturing-nightmare-that-is-turning-kenya-into-graveyard-for-companies?articleID=2000193411&story_title=manufacturing-nightmare-that-is-turning-kenya-into-graveyard-for-companies&pageNo=2
as we are dealing with fundamentals....infrastructure...supply chains...labor..financing.
And the stuff to be made? What are the plans for those?
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There are no incentives to manufacture locally. Besides, land has become so expensive and the recent devolution has brought in a lot of red tape. So big manufacturers will shift to TZ and ship products across border.
Besides why manufacture when you can quickly flip land?
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Economy comes down to production, which makes productivity a very big deal. Growth and efficiency is what will cause expansion of already well balanced Kenyan economic structure.
The agriculture -> manufacturing -> services model is old school organic growth. Agriculture is based on natural land and weather. Anyone can grow stuff, only efficiency is needed to compete for the market. Our zebu beef needs to go largescale to compete with Brazil in Saudi Arabia... same as coffee, tea, pyrethrum, etc. Peasant farming is inefficient. Besides that, smart manufacturing (value add coffee, fish, beef processing) will increase revenues. This is bottom-pyramid sector that 3rd world economies need to get straight.
Manufacturing is next easy thing but more complex. It requires raw materials, high capital and technology / knowhow. Economies of scale play up here. You need smart planning. Our biggest import bill comes from everyday items like clothes, agricultural inputs, industrial equipment, household electronics, cars, etc. We can't compete on cars and machineries but we can make low-level items - wheelbarrows, toothpaste, cement, fertilizer, cookers, fridges. Don't bother with cars and earth movers. It comes down again to knowhow and efficiency. It's a free market so you can't ban the "cheap Chinese junk" otherwise Beijing will ban your leather and cut lending. Specialize and compete.
This brings us to services, which includes solid sectors on their own (tourism, BPOs, ICT products) but more so this is the driver of innovation and efficiency needed to increase competitiveness of agriculture and manufacturing. With high efficiency, our agricultural exports can expand actual market size and value add revenues. By this I mean the coffee grams per acre viz cost per gram. That is why Ndii talks of rural murram roads (cost).
Manufacturing needs to supply domestic market and cut import bill. This needs cheaper power, labor, capital, roads, housing and efficient retail/wholesale sector with few middlemen and redtape. Services come in here to ensure efficiency - ICT, iTax, e-commerce, etc.
Efficiency - this is driven by services and innovation. Note the MoonKi story's emphasis on the cost of doing business. To cheapen labor you need more skilled manpower in high supply. Technical colleges and e-learning can enable this by expanding education. Mobile banking expands access to cash for consumers and micro businesses. Internet connectivity (telcoms) makes market reach & advertising easy and cheap.
Enterprise... the more smart businesspeople and risktakers you have the better. Services sector drives efficiency which drives growth. But this needs manpower which is why Ndii talks of education/human capital while Ndemo sings infrastructure. Well they are not mutually exclusive. SMEs are how all business starts and economies grow.
The iHubs, BPOs, economic zones, power plants, rail, roads, etc that government is doing are good. They need to encourage more big business tourism workshops like Obama visit last year; focus on smart manufacturing (value adds); reduce business redtape; partner with business to solve problems (look for market, formulate policies, source capital/reduce borrowing, etc); STOP corruption. Target a constant 10+% growth instead of the World Bank big brother oversight. Strategic planning and self determination is what works not paternalism.
We are OK - you MoonKi pessimist. When I see Uhuru promoting FDI in Germany and meeting SMEs in Nairobi I smile. Still individual Kenyans have a big role to play not just government. Ask what you can do for your country...
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Nice read Robina.
Economy comes down to production, which makes productivity a very big deal. Growth and efficiency is what will cause expansion of already well balanced Kenyan economic structure.
The agriculture -> manufacturing -> services model is old school organic growth. Agriculture is based on natural land and weather. Anyone can grow stuff, only efficiency is needed to compete for the market. Our zebu beef needs to go largescale to compete with Brazil in Saudi Arabia... same as coffee, tea, pyrethrum, etc. Peasant farming is inefficient. Besides that, smart manufacturing (value add coffee, fish, beef processing) will increase revenues. This is bottom-pyramid sector that 3rd world economies need to get straight.
Manufacturing is next easy thing but more complex. It requires raw materials, high capital and technology / knowhow. Economies of scale play up here. You need smart planning. Our biggest import bill comes from everyday items like clothes, agricultural inputs, industrial equipment, household electronics, cars, etc. We can't compete on cars and machineries but we can make low-level items - wheelbarrows, toothpaste, cement, fertilizer, cookers, fridges. Don't bother with cars and earth movers. It comes down again to knowhow and efficiency. It's a free market so you can't ban the "cheap Chinese junk" otherwise Beijing will ban your leather and cut lending. Specialize and compete.
This brings us to services, which includes solid sectors on their own (tourism, BPOs, ICT products) but more so this is the driver of innovation and efficiency needed to increase competitiveness of agriculture and manufacturing. With high efficiency, our agricultural exports can expand actual market size and value add revenues. By this I mean the coffee grams per acre viz cost per gram. That is why Ndii talks of rural murram roads (cost).
Manufacturing needs to supply domestic market and cut import bill. This needs cheaper power, labor, capital, roads, housing and efficient retail/wholesale sector with few middlemen and redtape. Services come in here to ensure efficiency - ICT, iTax, e-commerce, etc.
Efficiency - this is driven by services and innovation. Note the MoonKi story's emphasis on the cost of doing business. To cheapen labor you need more skilled manpower in high supply. Technical colleges and e-learning can enable this by expanding education. Mobile banking expands access to cash for consumers and micro businesses. Internet connectivity (telcoms) makes market reach & advertising easy and cheap.
Enterprise... the more smart businesspeople and risktakers you have the better. Services sector drives efficiency which drives growth. But this needs manpower which is why Ndii talks of education/human capital while Ndemo sings infrastructure. Well they are not mutually exclusive. SMEs are how all business starts and economies grow.
The iHubs, BPOs, economic zones, power plants, rail, roads, etc that government is doing are good. They need to encourage more big business tourism workshops like Obama visit last year; focus on smart manufacturing (value adds); reduce business redtape; partner with business to solve problems (look for market, formulate policies, source capital/reduce borrowing, etc); STOP corruption. Target a constant 10+% growth instead of the World Bank big brother oversight. Strategic planning and self determination is what works not paternalism.
We are OK - you MoonKi pessimist. When I see Uhuru promoting FDI in Germany and meeting SMEs in Nairobi I smile. Still individual Kenyans have a big role to play not just government. Ask what you can do for your country...
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Manufacturing is next easy thing but more complex. It requires raw materials, high capital and technology / knowhow. Economies of scale play up here. You need smart planning. Our biggest import bill comes from everyday items like clothes, agricultural inputs, industrial equipment, household electronics, cars, etc. We can't compete on cars and machineries but we can make low-level items - wheelbarrows, toothpaste, cement, fertilizer, cookers, fridges. Don't bother with cars and earth movers. It comes down again to knowhow and efficiency. It's a free market so you can't ban the "cheap Chinese junk" otherwise Beijing will ban your leather and cut lending. Specialize and compete.
The idea is not to ban them but to start replacing them with cheap Kenyan junk; in our times that (in most cases) is the path that has been taken to building a solid manufacturing base, with different countries taking their "turn". On that basis, I would say the next countries to industrialize will be Vietnam, Indonesia, and the like (and not Kenya, Tanzania, Burundi and the like). Why do I say that?
As labour costs have increased in China, people who used to "outsource" to Kung Fu (and Kung Fu itself!) are "outsourcing" and those other Asian countries are jumping on it. And I don't mean shoes (as in Ethiopia), I mean everything from little bits of plastic to automotive parts and consumer electronics. Where are Kenya and the like? Rather than jump at Kung Fu's problems, they instead take great delight on how Kung Fu is "helping" them. (That largely means lending them money without too many questions---as long as they also pay for insurance on the loans---or buying their raw materials, "value-adding" to produce crap, and then making a huge profit in selling the crap right back to the Africans!)
It's all very well to say that manufacturing is the next easy thing. But it means making stuff. How is Kenya doing in that? Where are the cookers and fridges and even less demanding items? When do we start on them.*** It's not as though we will suddenly wake up one day and start mass-producing these things. Compared to the Asian countries (such as those I have mentioned), what particular steps are Kenya (and most of Africa) taking to ensure that will be in the next manufacturing boom?
***A memory: When I was a kid, someone was making (or perhaps just selling) fridges in Kenya. They looked like a "regular" fridge but used kerosene instead of electricity. Neat devices that one could have even in the "reserves". Then we "advanced".
The red is especially significant; I'll get back to it.
Manufacturing needs to supply domestic market and cut import bill. This needs cheaper power, labor, capital, roads, housing and efficient retail/wholesale sector with few middlemen and redtape. Services come in here to ensure efficiency - ICT, iTax, e-commerce, etc.
Indeed. But that is only part of it. Here is a key point (red below connecting red above):
Efficiency - this is driven by services and innovation. Note the MoonKi story's emphasis on the cost of doing business. To cheapen labor you need more skilled manpower in high supply. Technical colleges and e-learning can enable this by expanding education. Mobile banking expands access to cash for consumers and micro businesses. Internet connectivity (telecoms) makes market reach & advertising easy and cheap.
Workforce development: We used to have polytechnics and the like that supplemented the universities in STEM (and related areas) and also covered the lower levels that do not demand much use of the head. We got rid of them, in favour of "universities", of which we now have a large number. Almost every large building in every town/city in Kenya, has a "university" on its upper floors, sandwiched between bars and shopping areas, churning out graduates in humanities and the like. That is not the labour force that will industrialize Kenya, and that (proper workforce development) is what GoK needs to work on before propagating foolish dreams of industrialization by 2030. How do we talk about knowhow when there are not enough people who know how?
(It's all very well to talk about e-learning, "M-PESA education", and the like. None of it ---"e-books", digital curriculum", ... whatever--- will be a substitute for a proper educational system that takes care of the technical areas.)
The iHubs, BPOs, economic zones, power plants, rail, roads, etc that government is doing are good. They need to encourage more big business tourism workshops like Obama visit last year; focus on smart manufacturing (value adds); reduce business redtape; partner with business to solve problems (look for market, formulate policies, source capital/reduce borrowing, etc); STOP corruption. Target a constant 10+% growth instead of the World Bank big brother oversight. Strategic planning and self determination is what works not paternalism.
Of course, all that is great and helpful. But at the end of the day, manufacturing is about making things, and, at a minimum it requires (a) that things actually be made and, by implication, (b) people skilled enough to do the making. Just having "economic zones, power plants, rail, roads" can, with judicious choices, help with (a), but none of it does anything for (b). And without (b), ...
On the red: Africa is still largely a place where people dig stuff out of the ground, send it overseas for "value adding", and then pay through the nose for the final product. (It is no surprise that many tears are being shed as Kung Fu moves away from mass manufacturing of junk.) In Kenya, we don't have much in-the-ground stuff, so we just buy Kung Fu's junk outright and run a huge deficit in his favour. What do we do with what we have----sisal, cotton, ...?
I'm sure we are OK. Or perhaps OKish. (In Africa, Kenya has always been near the top of the class, even if it has generally been a D-/F class.) But Vision 2030? In light of the reality, I couldn't think of wilder dreams. Industrialization is not like sending money from A to B. Kenya is not suddenly going to do it on a path that has never been taken before or which has never occurred to anyone else.
We are OK - you MoonKi pessimist. When I see Uhuru promoting FDI in Germany and meeting SMEs in Nairobi I smile.
And the fruits of all the promoting and meeting? What would make me smile about Uhuru's trip to Germany if he said that he had learned something about their educational system (especially the two-track aspect in technical education) and that he would be doing his best to push Kenya in a similarly helpful graduation. (Red above.) Instead, we are (apparently) told that we will industrialize by 2030, and that the revolution will be led by a "greatly educated" workforce that consists of B.A. (Humanities) from Above-Bar University and young stalwarts who have mostly devoted their time to idling by the roadside during the day and committing petty crimes at night. (Still, given that we are apparently to industrialize without manufacturing much of anything, it may be argued that we have the "right" workforce.)
The other thing is the corruption. One can simply say that we need to get rid of it, but where is the progress? As a rule, not many people will rush to do business in a den of thieves. (If you see willing people, you can be sure that they probably plan to steal ore than is likely to get stolen from them. Naïve patriots excluded.)
Blue: I have read books, listened to "motivational speakers", ... on "the power of positive thinking"---that if one thinks positively, then one can achieve anything. True enough as far as it goes, which is not very far. From what I have observed on Planet Earth so far, one can be "positive" 24/7, 365 per, but that is not enough. Sensible thinking, good planning, sheer hard work, ... are necessary; in fact, a pessimist can achieve a lot with these even as his head is covered in the darkest cloud of gloom.
Still individual Kenyans have a big role to play not just government. Ask what you can do for your country...
Yes. Indeed. Precisely so. Ask not what your country can do for you. I have asked what I can do for my country. As far as industrialization goes, whatever I do can is of very limited value, given a bone-headed government. Kenya's dreams require more that just individuals asking ... and even doing ....
On a purely personal level, my attempts to "do for my country" has led to losses of money (the usual eating), lawsuits (one still ongoing, with lawyers and the judiciary eating), and all sorts of unpleasantness from the aforementioned. And I doubt that my experience is unique; The Beloved Country just seems to be one heck of a place. So now I'd rather first ask what my country plans to do for itself; we can return to MOON Ki later.
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Economy comes down to production, which makes productivity a very big deal. Growth and efficiency is what will cause expansion of already well balanced Kenyan economic structure.
The agriculture -> manufacturing -> services model is old school organic growth. Agriculture is based on natural land and weather. Anyone can grow stuff, only efficiency is needed to compete for the market. Our zebu beef needs to go largescale to compete with Brazil in Saudi Arabia... same as coffee, tea, pyrethrum, etc. Peasant farming is inefficient. Besides that, smart manufacturing (value add coffee, fish, beef processing) will increase revenues. This is bottom-pyramid sector that 3rd world economies need to get straight.
Manufacturing is next easy thing but more complex. It requires raw materials, high capital and technology / knowhow. Economies of scale play up here. You need smart planning. Our biggest import bill comes from everyday items like clothes, agricultural inputs, industrial equipment, household electronics, cars, etc. We can't compete on cars and machineries but we can make low-level items - wheelbarrows, toothpaste, cement, fertilizer, cookers, fridges. Don't bother with cars and earth movers. It comes down again to knowhow and efficiency. It's a free market so you can't ban the "cheap Chinese junk" otherwise Beijing will ban your leather and cut lending. Specialize and compete.
This brings us to services, which includes solid sectors on their own (tourism, BPOs, ICT products) but more so this is the driver of innovation and efficiency needed to increase competitiveness of agriculture and manufacturing. With high efficiency, our agricultural exports can expand actual market size and value add revenues. By this I mean the coffee grams per acre viz cost per gram. That is why Ndii talks of rural murram roads (cost).
Manufacturing needs to supply domestic market and cut import bill. This needs cheaper power, labor, capital, roads, housing and efficient retail/wholesale sector with few middlemen and redtape. Services come in here to ensure efficiency - ICT, iTax, e-commerce, etc.
Efficiency - this is driven by services and innovation. Note the MoonKi story's emphasis on the cost of doing business. To cheapen labor you need more skilled manpower in high supply. Technical colleges and e-learning can enable this by expanding education. Mobile banking expands access to cash for consumers and micro businesses. Internet connectivity (telcoms) makes market reach & advertising easy and cheap.
Enterprise... the more smart businesspeople and risktakers you have the better. Services sector drives efficiency which drives growth. But this needs manpower which is why Ndii talks of education/human capital while Ndemo sings infrastructure. Well they are not mutually exclusive. SMEs are how all business starts and economies grow.
The iHubs, BPOs, economic zones, power plants, rail, roads, etc that government is doing are good. They need to encourage more big business tourism workshops like Obama visit last year; focus on smart manufacturing (value adds); reduce business redtape; partner with business to solve problems (look for market, formulate policies, source capital/reduce borrowing, etc); STOP corruption. Target a constant 10+% growth instead of the World Bank big brother oversight. Strategic planning and self determination is what works not paternalism.
We are OK - you MoonKi pessimist. When I see Uhuru promoting FDI in Germany and meeting SMEs in Nairobi I smile. Still individual Kenyans have a big role to play not just government. Ask what you can do for your country...
Agriculture and/or self-sufficiency in guaranteed food seems like a must. Where the food is coming from must be a completely settled question before a country can develop. Manufacturing/Services can be interchangeable; what pundit likes calling leapfrogging. Kenya's ultimate opportunity, in my opinion, seems to lie in information technology, initially of the software variety, and eventually manufacturing microchips and semiconductors. The strategy of any serious government should be investing in the kind of infrastructure that can make Kenya a reliable destination of investments in that industry.
After establishing the core industry, the rest, such as manufacturing fridges, stoves, washing machines etc, can ride in on the windfall. Because there will be sufficient people to buy those things. Without the South African market, Swaziland's fridge manufacturing industry makes no sense. The average Swazi has no electricity.
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Actually manufacturing as a percentage of overall economy hasn't been declining but has held the same percentage meaning its growing at the same pace as the rest of the economy ndii had a good article about it here http://www.nation.co.ke/news/specials/How-scholars-miss-the-point-on-Africa-economy/-/2101466/2127168/-/3qnfr1z/-/index.html . Kenya primary manufacturing is in mainly cement,metal, and food manufacturing. Nowadays it makes more sense to setup factories in rural areas because rds are relatively good, electricity is readily available (and kplc is putting up substations everywhere cutting down on blackouts), land and labour is cheap in rural areas. Kenya might not be producing fridges or cookers soon but agri processing and food manufacturing will be a big part of the economy. In that way kenya is going to be more like Thailand than china or korea. And yes formalisation of retail sector is playing a big part in growth of light manufacturing.
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Manufacturing is next easy thing but more complex. It requires raw materials, high capital and technology / knowhow. Economies of scale play up here. You need smart planning. Our biggest import bill comes from everyday items like clothes, agricultural inputs, industrial equipment, household electronics, cars, etc. We can't compete on cars and machineries but we can make low-level items - wheelbarrows, toothpaste, cement, fertilizer, cookers, fridges. Don't bother with cars and earth movers. It comes down again to knowhow and efficiency. It's a free market so you can't ban the "cheap Chinese junk" otherwise Beijing will ban your leather and cut lending. Specialize and compete.
The idea is not to ban them but to start replacing them with cheap Kenyan junk; in our times that (in most cases) is the path that has been taken to building a solid manufacturing base, with different countries taking their "turn". On that basis, I would say the next countries to industrialize will be Vietnam, Indonesia, and the like (and not Kenya, Tanzania, Burundi and the like). Why do I say that?
As labour costs have increased in China, people who used to "outsource" to Kung Fu (and Kung Fu itself!) are "outsourcing" and those other Asian countries are jumping on it. And I don't mean shoes (as in Ethiopia), I mean everything from little bits of plastic to automotive parts and consumer electronics. Where are Kenya and the like? Rather than jump at Kung Fu's problems, they instead take great delight on how Kung Fu is "helping" them. (That largely means lending them money without too many questions---as long as they also pay for insurance on the loans---or buying their raw materials, "value-adding" to produce crap, and then making a huge profit in selling the crap right back to the Africans!)
I think we are agreed with some effort agriculture can be improved greatly. It is bottom-pyramid in terms of income and this is why it is a dismal % of developed economies. Even at its optimum the other sectors earn more.
Now, smart manufacturing aka value addition is not advanced to industrial manufacturing level. Since we have raw materials (agric, metals, etc) it requires processeing plants to purify coffee, make cod liver oil from fish, etc. Baby step ;) Instead of exporting pure hides and skins that we do at present. Doing this efficiently will a)increase revenues without being uncompetitive to market b)fulfill local demand and cut import bill.
It's all very well to say that manufacturing is the next easy thing. But it means making stuff. How is Kenya doing in that? Where are the cookers and fridges and even less demanding items? When do we start on them.*** It's not as though we will suddenly wake up one day and start mass-producing these things. Compared to the Asian countries (such as those I have mentioned), what particular steps are Kenya (and most of Africa) taking to ensure that will be in the next manufacturing boom?
***A memory: When I was a kid, someone was making (or perhaps just selling) fridges in Kenya. They looked like a "regular" fridge but used kerosene instead of electricity. Neat devices that one could have even in the "reserves". Then we "advanced".
The red is especially significant; I'll get back to it.
Manufacturing needs to supply domestic market and cut import bill. This needs cheaper power, labor, capital, roads, housing and efficient retail/wholesale sector with few middlemen and redtape. Services come in here to ensure efficiency - ICT, iTax, e-commerce, etc.
Indeed. But that is only part of it. Here is a key point (red below connecting red above):
Efficiency - this is driven by services and innovation. Note the MoonKi story's emphasis on the cost of doing business. To cheapen labor you need more skilled manpower in high supply. Technical colleges and e-learning can enable this by expanding education. Mobile banking expands access to cash for consumers and micro businesses. Internet connectivity (telecoms) makes market reach & advertising easy and cheap.
Industrial manufacturing is actually making stuff. Yes, but it's a spectrum of complexity in skill/knowhow and economics. We had Everyday Battery. We have Firestone, EA Cables, Eldoret Fertilizer Co, etc. This is low-tech manufacturing with attendant low revenues, mostly for domestic.
Note, China does not compete with us on the low revenue stuff like fertilizer but higher volume consumables (electronics) and expensive machineries. China has beat US/western companies in cheap consumer products. They have done this with cheap labor and capital supply advantage which we (Kenya, Africa) cannot match because a)lack of knowhow b)lack of planning c)poor infrastructure d)etc
Planning determines most starts and outcomes. Once we have agriculture basics in place, the value adds in place, what part of industrial manufacturing can we take on and compete with the Chinese? Do we sit and wait for our "turn"? The SEZs being done are mostly to encourage low-tech industry (value adds) in textiles, leather, fragrance industry and such. Nothing earth shaking. Cheap low-tech manufacturing for domestic and export market where there is low competition and low revenues.
Then a step further, you have electronics, solar panels, motorbikes,? -- slightly advanced mass market goods that cost big imports. As you go up to MORE MONEY you need advanced knowhow with stiffer competition. Where do you start and stop?
All these "levels" can be ventured with the right planning and facilitation. This is the manpower, infrastructure, capital, services -- business environment. Things are not perfect and we have to work with what we have. Visions 2000, 2020, 2030... A plan is better than nothing, yet execution is everything. Your concerned sentiment on execution is shared here.
Workforce development: We used to have polytechnics and the like that supplemented the universities in STEM (and related areas) and also covered the lower levels that do not demand much use of the head. We got rid of them, in favour of "universities", of which we now have a large number. Almost every large building in every town/city in Kenya, has a "university" on its upper floors, sandwiched between bars and shopping areas, churning out graduates in humanities and the like. That is not the labour force that will industrialize Kenya, and that (proper workforce development) is what GoK needs to work on before propagating foolish dreams of industrialization by 2030. How do we talk about knowhow when there are not enough people who know how?
(It's all very well to talk about e-learning, "M-PESA education", and the like. None of it ---"e-books", digital curriculum", ... whatever--- will be a substitute for a proper educational system that takes care of the technical areas.)
Manpower. Many things matter but manpower is a key factor. It is true we had polytechnics before that were upgraded to universities. The mushrooming degree culture is driven by the burgeoning services sector with our liberalized education. Universities are offering what is marketable. This is where planning comes in, and not just education. Do you build the environment first for investors to come or vice versa? Reality dictates abit of both. To ensure two-stream system with emphasis on STEM (ala Germany) state can subsidize technical faculties to be cheap with guaranteed placements in state business. Incentives are one method. Remember for actual growth you need mass supply for cheaper cost. The tech MNCs in the country are attracted by the existing education system, give it some credit. If strategically we must manufacture on some level to industrialize, let us create the manpower for that. A good place to start is replace the humanities faculties with technical ones. The ICT, etc faculties supplying the services industry should be maintained.
E-Learning... you should imagine the ridiculous amounts doled out to EU internet colleges. This is a sizeable service import bill. Besides raising standards, we need our own online university model.
The iHubs, BPOs, economic zones, power plants, rail, roads, etc that government is doing are good. They need to encourage more big business tourism workshops like Obama visit last year; focus on smart manufacturing (value adds); reduce business redtape; partner with business to solve problems (look for market, formulate policies, source capital/reduce borrowing, etc); STOP corruption. Target a constant 10+% growth instead of the World Bank big brother oversight. Strategic planning and self determination is what works not paternalism.
Of course, all that is great and helpful. But at the end of the day, manufacturing is about making things, and, at a minimum it requires (a) that things actually be made and, by implication, (b) people skilled enough to do the making. Just having "economic zones, power plants, rail, roads" can, with judicious choices, help with (a), but none of it does anything for (b). And without (b), ...
On the red: Africa is still largely a place where people dig stuff out of the ground, send it overseas for "value adding", and then pay through the nose for the final product. (It is no surprise that many tears are being shed as Kung Fu moves away from mass manufacturing of junk.) In Kenya, we don't have much in-the-ground stuff, so we just buy Kung Fu's junk outright and run a huge deficit in his favour. What do we do with what we have----sisal, cotton, ...?
I'm sure we are OK. Or perhaps OKish. (In Africa, Kenya has always been near the top of the class, even if it has generally been a D-/F class.) But Vision 2030? In light of the reality, I couldn't think of wilder dreams. Industrialization is not like sending money from A to B. Kenya is not suddenly going to do it on a path that has never been taken before or which has never occurred to anyone else.
In the end, services industry is more sustainable once the economy is developed. The agriculture and manufacturing bases are needed for muscle to rise up there. Noone has discounted a different path like the one we are on as unwise or impossible. Sadly I cannot argue for its infallibility especially in the face of our wanting execution. China is working hard to woo her skilled diaspora to return home and assist fulfill this final stretch of the Chinese dream. The polytechnic factory workers are no longer enough. Kenya needs to stymie the brain-drain too to achieve our development plans.
We are OK - you MoonKi pessimist. When I see Uhuru promoting FDI in Germany and meeting SMEs in Nairobi I smile.
And the fruits of all the promoting and meeting? What would make me smile about Uhuru's trip to Germany if he said that he had learned something about their educational system (especially the two-track aspect in technical education) and that he would be doing his best to push Kenya in a similarly helpful graduation. (Red above.) Instead, we are (apparently) told that we will industrialize by 2030, and that the revolution will be led by a "greatly educated" workforce that consists of B.A. (Humanities) from Above-Bar University and young stalwarts who have mostly devoted their time to idling by the roadside during the day and committing petty crimes at night. (Still, given that we are apparently to industrialize without manufacturing much of anything, it may be argued that we have the "right" workforce.)
The other thing is the corruption. One can simply say that we need to get rid of it, but where is the progress? As a rule, not many people will rush to do business in a den of thieves. (If you see willing people, you can be sure that they probably plan to steal ore than is likely to get stolen from them. Naïve patriots excluded.)
Blue: I have read books, listened to "motivational speakers", ... on "the power of positive thinking"---that if one thinks positively, then one can achieve anything. True enough as far as it goes, which is not very far. From what I have observed on Planet Earth so far, one can be "positive" 24/7, 365 per, but that is not enough. Sensible thinking, good planning, sheer hard work, ... are necessary; in fact, a pessimist can achieve a lot with these even as his head is covered in the darkest cloud of gloom.
Still individual Kenyans have a big role to play not just government. Ask what you can do for your country...
Yes. Indeed. Precisely so. Ask not what your country can do for you. I have asked what I can do for my country. As far as industrialization goes, whatever I do can is of very limited value, given a bone-headed government. Kenya's dreams require more that just individuals asking ... and even doing ....
On a purely personal level, my attempts to "do for my country" has led to losses of money (the usual eating), lawsuits (one still ongoing, with lawyers and the judiciary eating), and all sorts of unpleasantness from the aforementioned. And I doubt that my experience is unique; The Beloved Country just seems to be one heck of a place. So now I'd rather first ask what my country plans to do for itself; we can return to MOON Ki later.
This is the story of many. We are beginning to see diaspora products in banks and asset management. Take heart brother, someday (soon) we will be able to sing the patriotic song like the Chinese.
Ps - About Jubilee / Uhuru... these are subjectives and cannot be argued upon. Patriotism lacks sorely at the national and individual levels. Corruption is a blight that scuttles plans to be dusted at the next campaign. Chinese internal stumping efforts and the western intolerance of it should tell us something. With our brilliant paperwork, mediocre leadership is the reason we crawl rather than braze on this road to civilization.
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Actually manufacturing as a percentage of overall economy hasn't been declining but has held the same percentage meaning its growing at the same pace as the rest of the economy ndii had a good article about it here http://www.nation.co.ke/news/specials/How-scholars-miss-the-point-on-Africa-economy/-/2101466/2127168/-/3qnfr1z/-/index.html . Kenya primary manufacturing is in mainly cement,metal, and food manufacturing. Nowadays it makes more sense to setup factories in rural areas because rds are relatively good, electricity is readily available (and kplc is putting up substations everywhere cutting down on blackouts), land and labour is cheap in rural areas. Kenya might not be producing fridges or cookers soon but agri processing and food manufacturing will be a big part of the economy. In that way kenya is going to be more like Thailand than china or korea. And yes formalisation of retail sector is playing a big part in growth of light manufacturing.
I don't recall anyone saying that it has been declining. The statement I made is that as a % of GDP it has remained largely unchanged since independence---mostly hovering around 10% with a few flourishes above and below that.
You say that "kenya is going to be more like Thailand than china or korea". Really? How much of Japanese, Korea and Chinese manufacturing is now being "outsourced" to Thailand? And Kenya?
Here are the real questions: (a) What countries in modern times have industrialized with manufacturing at staying at that level over such a long period. (b) If Kenya is supposed to be an exception, on what basis is that to be so?
it makes more sense to setup factories in rural areas because roads are relatively good, electricity is readily available
I'll skip questions about how much electricity it takes to power a factory, as opposed to a small homestead in Nyalgunaga. Instead, I will ask this: How many factories are being set up in rural Kenya? If none, what are the plans to set up any? (We'll do the workforce aspect later.)
I think we should be clear in noting the difference between "what makes sense"/"what we dream of" and "what is real"/"what we are working towards".
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Economy comes down to production, which makes productivity a very big deal. Growth and efficiency is what will cause expansion of already well balanced Kenyan economic structure.
The agriculture -> manufacturing -> services model is old school organic growth. Agriculture is based on natural land and weather. Anyone can grow stuff, only efficiency is needed to compete for the market. Our zebu beef needs to go largescale to compete with Brazil in Saudi Arabia... same as coffee, tea, pyrethrum, etc. Peasant farming is inefficient. Besides that, smart manufacturing (value add coffee, fish, beef processing) will increase revenues. This is bottom-pyramid sector that 3rd world economies need to get straight.
Manufacturing is next easy thing but more complex. It requires raw materials, high capital and technology / knowhow. Economies of scale play up here. You need smart planning. Our biggest import bill comes from everyday items like clothes, agricultural inputs, industrial equipment, household electronics, cars, etc. We can't compete on cars and machineries but we can make low-level items - wheelbarrows, toothpaste, cement, fertilizer, cookers, fridges. Don't bother with cars and earth movers. It comes down again to knowhow and efficiency. It's a free market so you can't ban the "cheap Chinese junk" otherwise Beijing will ban your leather and cut lending. Specialize and compete.
This brings us to services, which includes solid sectors on their own (tourism, BPOs, ICT products) but more so this is the driver of innovation and efficiency needed to increase competitiveness of agriculture and manufacturing. With high efficiency, our agricultural exports can expand actual market size and value add revenues. By this I mean the coffee grams per acre viz cost per gram. That is why Ndii talks of rural murram roads (cost).
Manufacturing needs to supply domestic market and cut import bill. This needs cheaper power, labor, capital, roads, housing and efficient retail/wholesale sector with few middlemen and redtape. Services come in here to ensure efficiency - ICT, iTax, e-commerce, etc.
Efficiency - this is driven by services and innovation. Note the MoonKi story's emphasis on the cost of doing business. To cheapen labor you need more skilled manpower in high supply. Technical colleges and e-learning can enable this by expanding education. Mobile banking expands access to cash for consumers and micro businesses. Internet connectivity (telcoms) makes market reach & advertising easy and cheap.
Enterprise... the more smart businesspeople and risktakers you have the better. Services sector drives efficiency which drives growth. But this needs manpower which is why Ndii talks of education/human capital while Ndemo sings infrastructure. Well they are not mutually exclusive. SMEs are how all business starts and economies grow.
The iHubs, BPOs, economic zones, power plants, rail, roads, etc that government is doing are good. They need to encourage more big business tourism workshops like Obama visit last year; focus on smart manufacturing (value adds); reduce business redtape; partner with business to solve problems (look for market, formulate policies, source capital/reduce borrowing, etc); STOP corruption. Target a constant 10+% growth instead of the World Bank big brother oversight. Strategic planning and self determination is what works not paternalism.
We are OK - you MoonKi pessimist. When I see Uhuru promoting FDI in Germany and meeting SMEs in Nairobi I smile. Still individual Kenyans have a big role to play not just government. Ask what you can do for your country...
Agriculture and/or self-sufficiency in guaranteed food seems like a must. Where the food is coming from must be a completely settled question before a country can develop. Manufacturing/Services can be interchangeable; what pundit likes calling leapfrogging. Kenya's ultimate opportunity, in my opinion, seems to lie in information technology, initially of the software variety, and eventually manufacturing microchips and semiconductors. The strategy of any serious government should be investing in the kind of infrastructure that can make Kenya a reliable destination of investments in that industry.
After establishing the core industry, the rest, such as manufacturing fridges, stoves, washing machines etc, can ride in on the windfall. Because there will be sufficient people to buy those things. Without the South African market, Swaziland's fridge manufacturing industry makes no sense. The average Swazi has no electricity.
LEAPFROG by Pundit (c) yes. Brilliant man but abit incoherent with poor English :D :D
Manufacturing vs services whence to start. It is the chicken and the egg.
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Totally agree. It kept pace with the growing economy. It just need to grow it share...sort of double...from 9-10%...to 20-30%...so it can rival agriculture...as main source of employment for starters.
There have been some really bright sparks recently. One of them is cement industry. From less than 2M tonnes 10yrs ago...we are now doing 6m...and price of cement has remained constant for some years now...if the cement industry continues like this for another 10yrs...then we will be nearly there.
Another is the agri-business industry...tea manufacturing has been doing well..although we still sell our tea in bulk...and you have all these kenyan brands in our selves...from maize flour, juices, milk products (another success story) and other kenyan products sitting proudly on supermarket shelves.
I can think about many missing links of the really basic industry...but we need to do something about our textile and leather industry...these are low hanging fruits. We should at very least be able to manufacture our clothes and shoes.
Actually manufacturing as a percentage of overall economy hasn't been declining but has held the same percentage meaning its growing at the same pace as the rest of the economy ndii had a good article about it here http://www.nation.co.ke/news/specials/How-scholars-miss-the-point-on-Africa-economy/-/2101466/2127168/-/3qnfr1z/-/index.html . Kenya primary manufacturing is in mainly cement,metal, and food manufacturing. Nowadays it makes more sense to setup factories in rural areas because rds are relatively good, electricity is readily available (and kplc is putting up substations everywhere cutting down on blackouts), land and labour is cheap in rural areas. Kenya might not be producing fridges or cookers soon but agri processing and food manufacturing will be a big part of the economy. In that way kenya is going to be more like Thailand than china or korea. And yes formalisation of retail sector is playing a big part in growth of light manufacturing.
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Totally agree. It kept pace with the growing economy. It just need to grow it share...sort of double...from 9-10%...
And in modern times, how many countries have industrialized with that level of manufacturing?
to 20-30%...so it can rival agriculture...as main source of employment for starters.
Kenya has been around the 10%, +/- a little bit, for the last 50 years. I won't say it's impossible, but what exactly is the path to 20-30%? (And, no, I don't take Vision 2030 seriously.)
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The path to doubling our manufacturing capacity is simple & hard. Hard because you've Chinese and other global industrials power exporting cheap products here. The simple part is to study where we've done well...which sub-sector of the manufacturing are we okay....and which ones have we done very little. Learn from it. We are not South Sudan with no industry to talk about..we got a good base to begin with.
For example, look at tea sector, accounting for 20% of all our export value & volume from very little 20yrs ago. What has tea sector done well? It has grown annually at 10% or more bar a few years. Where I come from this has meant there are tea factories nearly every location. That right there is a success story of agri-business manufacturing. And yet it can grow even more if we focussed on blending and selling really finished tea complete with packing worldwide.
Then take a look at the laggards. For example the textile industry. Sort of acknowledged as the initiation to industralization worldwide.We have done totally zero except for EPZ. We have to think about banning Mitumba and making our own cheap clothes for starters. We have to be thinking about growing cotton in really large plantations. This really is the job of gov policy wonks. Ban this, give tax incentive here, start industrial companies, etc.
Regardless I am celebrating private initiatives such as more formalisation of retail sector spurring manufacturing.
Kenya has been around the 10% +/ for the last 50 years. I won't say it's impossible, but what exactly is the path to 20-30%? (And, no, I don't take Vision 2030 seriously.)
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Pundit, Robina, Terminator, et. al:
A lot on interesting observations and comments. "To be continued", as I must go to sleep ... But for now: We can have debates on what we should be doing; in fact, we could even agree on most of that. To my mind the serious questions are about why we aren't doing whatever, when do we plan to start the doing, how to do the doing, etc. Example (Robina):
Now, smart manufacturing aka value addition is not advanced to industrial manufacturing level. Since we have raw materials (agric, metals, etc) it requires processing plants to purify coffee, make cod liver oil from fish, etc. Baby step ;) Instead of exporting pure hides and skins that we do at present. Doing this efficiently will a)increase revenues without being uncompetitive to market b)fulfill local demand and cut import bill.
So, where are we with respect to such basic "smart manufacturing"? And where are the signs that we are about to make a "dramatic" change? (Keep in mind that Terminator would have us leap from animal skins to semiconductors :D)
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Pundit, Robina, Terminator, et. al:
A lot on interesting observations and comments. "To be continued", as I must go to sleep ... But for now: We can have debates on what we should be doing; in fact, we could even agree on most of that. To my mind the serious questions are about why we aren't doing whatever, when do we plan to start the doing, how to do the doing, etc. Example (Robina):
Now, smart manufacturing aka value addition is not advanced to industrial manufacturing level. Since we have raw materials (agric, metals, etc) it requires processing plants to purify coffee, make cod liver oil from fish, etc. Baby step ;) Instead of exporting pure hides and skins that we do at present. Doing this efficiently will a)increase revenues without being uncompetitive to market b)fulfill local demand and cut import bill.
So, where are we with respect to such basic "smart manufacturing"? And where are the signs that we are about to make a "dramatic" change? (Keep in mind that Terminator would have us leap from animal skins to semiconductors :D)
Very well. "Industrialization" is conflated with manufacturing. It means modernization. We could have steel as well as weetabix or computer factories. The bottom-line is sufficient incomes to contain poverty and prosper. What is the best path for development i.e. expansion/growth, you ask. Are we really on the right path?
The what - Vision 2030 suffices. Plans evolve so 2000 to 2020... 2060 is our equivalent of Chinese 5-Year Plans.
The doing - Vision 2030 Delivery Board has the best of breed in James Mwangi, Kibatis and the likes. The laptop-for-kids, Tana River* power plant, irrigation schemes, SGR, etc are steered by Vision 2030 boards such as the IT Authority. We can argue the efficacies but most state programs are reading from the agreed script with technocrats/PSs borrowing from these policy bodies.
Our strength is we have a working plan. Our weakness is execution. There are opportunities (global pool of expertise, technologies, capital) and threats (competition, corruption, etc). Pundit is right to say manufacturing should grow at 20-30% to catch up. This high, consistent growth is infact mandatory if the industrial dreams in Vision 2030 are to be realized. The roadmap says as much.
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I am surprised you didn't include the relevant examples here. Naivasha proposed industrial park...SGR is going there...and then we have Kundu (sp) in Mombasa. Then we have proposed leather industrial park in Athi river. We have to copy what Ethiopian are doing in shoe industry. I have seen Ethiopian leather shoes been hawked in the street. Who knows maybe in years to come Ethiopian or Kenyan shoes will compete with Italian shoes, bags, belts & etc. We have 20m plus cattle and ships.
To grow the share of our manufacturing sector....gov has to invest in low hanging fruits with potential multiplier effect that are missing....leather & textile for starters...then we have to start doing even simplest of phones/transformers/computers.
Gov has to invest in really large industries and slowly divest. They are only ones with enough money to risk.
Very well. "Industrialization" is conflated with manufacturing. It means modernization. We could have steel as well as weetabix or computer factories. The bottom-line is sufficient incomes to contain poverty and prosper. What is the best path for development i.e. expansion/growth, you ask. Are we really on the right path?
The what - Vision 2030 suffices. Plans evolve so 2000 to 2020... 2060 is our equivalent of Chinese 5-Year Plans.
The doing - Vision 2030 Delivery Board has the best of breed in James Mwangi, Kibatis and the likes. The laptop-for-kids, Tana River* power plant, irrigation schemes, SGR, etc are steered by Vision 2030 boards such as the IT Authority. We can argue the efficacies but most state programs are reading from the agreed script with technocrats/PSs borrowing from these policy bodies.
Our strength is we have a working plan. Our weakness is execution. There are opportunities (global pool of expertise, technologies, capital) and threats (competition, corruption, etc). Pundit is right to say manufacturing should grow at 20-30% to catch up. This high, consistent growth is infact mandatory if the industrial dreams in Vision 2030 are to be realized. The roadmap says as much.
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You are right. The flagship projects. 90% of what NARC/NARA and now Jubilee are running with is Vision 2030 material. Does it suffice for you?
MOON Ki's what is on paper, the doing is here now and after for all to see.
I am surprised you didn't include the relevant examples here. Naivasha proposed industrial park...SGR is going there...and then we have Kundu (sp) in Mombasa. Then we have proposed leather industrial park in Athi river. We have to copy what Ethiopian are doing in shoe industry. I have seen Ethiopian leather shoes been hawked in the street. Who knows maybe in years to come Ethiopian or Kenyan shoes will compete with Italian shoes, bags, belts & etc. We have 20m plus cattle and ships.
To grow the share of our manufacturing sector....gov has to invest in low hanging fruits with potential multiplier effect that are missing....leather & textile for starters...then we have to start doing even simplest of phones/transformers/computers.
Gov has to invest in really large industries and slowly divest. They are only ones with enough money to risk.
The what - Vision 2030 suffices. Plans evolve so 2000 to 2020... 2060 is our equivalent of Chinese 5-Year Plans.
The doing - Vision 2030 Delivery Board has the best of breed in James Mwangi, Kibatis and the likes. The laptop-for-kids, Tana River* power plant, irrigation schemes, SGR, etc are steered by Vision 2030 boards such as the IT Authority. We can argue the efficacies but most state programs are reading from the agreed script with technocrats/PSs borrowing from these policy bodies.
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Pundit is right to say manufacturing should grow at 20-30% to catch up. This high, consistent growth is infact mandatory if the industrial dreams in Vision 2030 are to be realized. The roadmap says as much.
I don't dispute that. What I say is that GoK's present path is not going to achieve the dreams in Vision 2030. Perhaps people can explain it to me with concrete examples and figures, but I don't see present Kenya achieving those levels of growth in short order. Shoes and dresses just won't cut it; come to think of it, with regard to the textiles, last I looked Kenya was not even making full use of its AGOA quotas.
The present discussion has brought to mind another one elsewhere. Some time ago we had a long-running thread on Jukwaa, on economics in general (rather than just third-world industrialization). That discussion mentioned one book that I think is a great read:
I recently read a very interesting book that has some relevance here:
How Asia Works: Success and Failure in the World's Most Dynamic Region, by J. Studwell.
http://www.amazon.com/How-Asia-Works-Success-Failure/dp/080211959X/ref=cm_rdp_product
One of the Amazon reviews gives a good summary:
Author Studwell argues that there are three critical interventions that governments can use to speed up economic development. Used in Japan, South Korea, Taiwan, and now China, they have produced the quickest progressions from poverty to wealth that the world has seen.
The first and most overlooked is to maximize output from agriculture. The second is to direct investment and entrepreneurs towards manufacturing exports. Machines can easily be purchased on the world market, and successful east-Asian governments promoted technological upgrading through subsidies conditioned on export performance. (Exporters were almost invariably better businesses than firms that sold only at home.) The third is to focus capital on the fastest possible technology learning and the promise of high long-term profits, not short-term returns and individual consumption. This tends to pit the state against many businessmen and consumers with shorter-term horizons.
If he is right, and he makes a convincing argument for his case, then things don't look that great for Africa:
* What should be done in agriculture is not being done. This is one place where all the "surplus labour" (strong, idle youth) could be put to good use. (I note that even in Kenya, the "economic powerhouse of Eastern Africa", unemployment is probably something like 40% and mostly of young energetic people.)
* Cheap junk from China et al continue to erode manufacturing capacity. (Currently Africa--all of Africa--- contributes something like 1.2% or so of global manufacturing output and with few prospects of improving on the present paths.)
* As a consequence, the sort of "technological learning" that Stidwell refers to is not taking place.
Schact's achievements were certainly very impressive, especially with regard to employment, but could they work in today's world? I think only partially at best. To my mind, a better study today would be South Korea.
http://jukwaa.proboards.com/post/124830/quote/8607
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I don't dispute that. What I say is that GoK's present path is not going to achieve the dreams in Vision 2030. Perhaps people can explain it to me with concrete examples and figures, but I don't see present Kenya achieving those levels of growth in short order. Shoes and dresses just won't cut it; come to think of it, with regard to the textiles, last I looked Kenya was not even making full use of its AGOA quotas.
We agree on the diagnosis and prescription -- and the erratic administration. But we have no Rockefeller or Communist Party discipline here to steer the sustained growth needed to reach middle income status. Until that happens we are stuck with 5% snail progress -- and Vision 2030 pipedream.
Pundit prolly differs, that we can make it if we really try. All is not lost.
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I differ of course with MoonKi. Moonki is least interested or bothered by details. He just wants to wake up and find we've reached this goal. Until then for him it not happening. Personally I don't care about the discrete state of things...I care about the trends...about the little details. And I celebrate any small success knowing it not easy. I also mourn every little setback.Kenya industrial scene is a mix bag...some success stories here and there...some really breathtaking...and some huge dissappointment...such as dead as dodo webuye paper mill/everyready/firestones.
There is a lot that is happening that is slowly setting the stage for us to leapfrog.I see the financial sector is ready for take off -already world class. I see some areas of agriculture we are already world leaders (horticulture, tea & even dairy farming). I see retail & real estate sector that is on fire. I see ICT sector that is starting to kick ass. I see kenya has already move to middle income country with nearly 1500 per capita. I see us opening up borders and doing more trade with our neighbours. I see huge infrastructure projects on the horizon...kenya leading the way with more than 20 of such....SGR -now signed all the way to Malaba -10BUSD worth of project!!/turkana wind power/ketraco laying lines/KPLC last miles/Jubilee road's annuity programme/900MW project in Lamu. I see in many parts of country population starting to mature....people starting to have less kids & more people are living longer. I see us having reign on killer diseases like HIV/Malaria. I see devolution & good governance spreading the fruits of leadership around the country. I see 90% of kids going to school & 80% of them transitioning to high schools. I see our universities with more than 1/2 million students. I see them starting to admit 150-200K student annually. I see every std 1 Kid getting a laptop next year..amazing stuff. I see soon nearly everyone connected to electricity. We already have nearly everyone connected to telecommunication bar few areas in Northern Kenya. I see more gov services being offfered online, cutting redtape and corruption.
All these things may appear to be "nothing"..but if you compare say this to 3yrs ago....5yrs ago...10yrs ago....then you see a society undergoing massive transformation. The 5-6% when rebased later on will be nearly 10%--coz even stats bodies cannot keep up with growth. So are doing okay....we could do great..but this is not "easy" task.
Yeah I also see setbacks..corruption & insecurity...regional inequality (northern parts of kenya post some worst figures in anything)...but I don't share the view that dealing with say corruption..is nirvana we need!. It aint. There is probably zero corruption in Mandera but there are so many other things holding back people there!
All these things have to come together....over time.
Once all these "ingredients" are set....then we will start to quickly industralize and modernize...however we will have Moonki attribute all these ground work to guy in charge then...and some smart alec will probably write a book about this " Kenyan" miracle...unaware that there is no "Asian or whatever" miracle...but many years of painstaking progress that eventually all come together..and voila...everything start "happening".
(http://bit-player.org/wp-content/uploads/2015/12/first-derivative-tanh-growth-curve.png)
We agree on the diagnosis and prescription -- and the erratic administration. But we have no Rockefeller or Communist Party discipline here to steer the sustained growth needed to reach middle income status. Until that happens we are stuck with 5% snail progress -- and Vision 2030 pipedream.
Pundit prolly differs, that we can make it if we really try. All is not lost.
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Once all these "ingredients" are set....then we will start to quickly industralize and modernize...however we will have Moonki attribute all these ground work to guy in charge then...and some smart alec will probably write a book about this " Kenyan" miracle...unaware that there is no "Asian or whatever" miracle...but many years of painstaking progress that eventually all come together..and voila...everything start "happening".
Perhaps such views explain the hopelessly slow progress. I'm afraid it's not a matter of people mindlessly slogging away and things suddenly coming together some day. In all those East Asian countries, the governments, under the right sort of leadership, have devised policies for what they needed and then aggressively seen them through.
I have no doubt that there has been some progress of sorts made in Kenya. My main points are largely around funny illusions, such as Vision 2030. The simple fact is that Kenya, especially under its current government, simply doesn't have what it would take to industrialize at that rate.
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You cannot command a complex thing like development or industrialization. Unless you're GOD. Gov can plan and try to execute whatever vision. But they are not in charge of everything. These are best case scenarios. There will be risk..both internal and exogenous. They'll will be setbacks. Time & Money & other resources will always be scarce.Everyone wants to have what you desire.So competition is always going to undo your best plans.
I don't share this simplistic idea that China or Taiwan or Singapore or name any Asia tiger simply grew quickly in 20-30 yrs. If this was true...Rwanda under Kagame...now going nearly 25yrs...should already be on it's way there. And yet it far behind the "corrupt" kenya in nearly every metric that matters. Kagame I bet see himself as Lee guy of Singapore and probably has all those books & masterplan in his Kigali office..but nothing is happenning that quickly. He was lied to. He need to go slow for his own health and hand over power aware that the task before Rwandese will take 50-100yrs.
Those socieities or nation had years if not centuries of preparation for take off..lots of things were happening..but nobody was noticing..because most people are lazy and too stupid to dig deeper.
Perhaps such views explain the hopelessly slow progress. I'm afraid it's not a matter of people mindlessly slogging away and things suddenly coming together some day. In all those East Asian countries, the governments, under the right sort of leadership, have devised policies for what they needed and then aggressively seen them through.
I have no doubt that there has been some progress of sorts made in Kenya. My main points are largely around funny illusions, such as Vision 2030. The simple fact is that Kenya, especially under its current government, simply doesn't have what it would take to industrialize at that rate.
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You cannot command a complex thing like development or industrialization. Unless you're GOD. Gov can plan and try to execute whatever vision. But they are not in charge of everything. These are best case scenarios. There will be risk..both internal and exogenous. They'll will be setbacks.
It's not a matter of commanding. It's one of taking the right steps; development and industrialization don't simply fall out of the sky or magically happen after decades of mindlessly slogging away. And in these matters, governments play the largest roles.
I don't share this simplistic idea that China or Taiwan or Singapore or name any Asia tiger simply grew quickly in 20-30 yrs. If this was true...Rwanda under Kagame...now going nearly 25yrs...should already be on it's way there. And yet it far behind the "corrupt" kenya in nearly every metric that matters. Kagame I bet see himself as Lee guy of Singapore and probably has all those books & masterplan in his Kigali office..but nothing is happen that quickly. He was lied to.
I don't follow the logic: If those countries grew quickly in 20-30 years, then that too should be the case for Rwanda? On what basis? How Kagame sees himself? I think it takes more than that.
It really doesn't matter whether or not you believe that those countries grew that quickly; the simple fact, known to all who are wide-awake, is that they did. Rather than misplaced denial, I think a more useful approach would be to try and learn from them.
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It quite simple [but not simplistic]. The fate of country is similar to fate of our families or our villages or companies we form. If you apply Lee or whichever Asian model you like on your own family and come back 20yrs late; chance are you may slight ahead but not far off your neighbour. There are misfortunes, setbacks and as they say best plans soon unravel. The same can be said if today your opened your shop and had all these great plans...5yrs down the line...90% of all start ups go under.
That Asian tigers "quickly" developed is true. That is the visible part. Naked truth. Everyone saw it. If you went to China 20yrs ago..you'd see bicycles and rice paddies..now it as developed as any country. But the real truth I reckon is that these countries took far long than that. So you can learn the wrong lesson. If it was that simplistic..bottle this Asian miracle and sell it already. That would be quickest way to get 3-4 billion human being out of poverty. People go to best universities, research institutions and spend gazillion of money trying to solve this puzzle...and voila we got this "Asian" miracle in a little book. Written by this guy who was there when it was happening :)
Development I repeat is a very COMPLEX thing.
I don't follow the logic: If those countries grew quickly in 20-30 years, then that too should be the case for Rwanda? On what basis? How Kagame sees himself? I think it takes more than that.
It really doesn't matter whether or not you believe that those countries grew that quickly; the simple fact, known to all who are wide-awake, is that they did. Rather than misplaced denial, I think a more useful approach would be to try and learn from them.
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That Asian tigers "quickly" developed is true. That is the visible part. Naked truth. Everyone saw it. If you went to China 20yrs ago..you'd see bicycles and rice paddies..now it as developed as any country. But the real truth I reckon is that these countries took far long than that.
I'm getting confused now. A little while ago, it was:
I don't share this simplistic idea that China or Taiwan or Singapore or name any Asia tiger simply grew quickly in 20-30 yrs.
Now it's the "naked truth". I'm interested to hear this "real truth" that you have. The "invisible part". Once we have that, I think we'll make better progress in our discussion, because when some of us talk about development, we mean what is visible.
(By the way, you have a very peculiar view of current China.)
If it was that simplistic..bottle this Asian miracle and sell it already. That would be quickest way to get 3-4 billion human being out of poverty. People go to best universities, research institutions and spend gazillion of money trying to solve this puzzle...and voila we got this "Asian" miracle in a little book. Written by this guy who was there when it was happening :)
It would be the quickest if people actually wanted to that and were focused on doing to. If, say, people, would rather engage in mass slaughter than feed themselves, keep reproducing like rabbits even as they starve ... if those who lead governments see their role as just an opportunity to engage in large-scale theft, .... then it can hardly be said that they are serious about getting out of poverty.
If you wish to argue that people like Studwell are wrong, then the best way to do so if to put forward concrete arguments as to why?
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First so we can move forward, please stop nitpicking. China is now a developed country. There are poor desperate people everywhere. China has per capita ppp of 13kUSD. Kenya that is now low-middle income country has per capita ppp of 1500. We have backwater countries with less than that..Rwanda for example.
Yeah I think Studwell is wrong. The Asian miracle is a myth. I don't think you can come with short list of what a country need to do to developed/industralize and it can be applied everywhere. I think those countries started from a good base unlike say Kenya that started from bottom.
I'm getting confused now. A little while ago, it was
I don't share this simplistic idea that China or Taiwan or Singapore or name any Asia tiger simply grew quickly in 20-30 yrs.
Now it's the "naked truth". I'm interested to hear this "real truth" that you have. The "invisible part". Once we have that, I think we'll make better progress in our discussion, because when some of us talk about development, we mean what is visible.
If it was that simplistic..bottle this Asian miracle and sell it already. That would be quickest way to get 3-4 billion human being out of poverty. People go to best universities, research institutions and spend gazillion of money trying to solve this puzzle...and voila we got this "Asian" miracle in a little book. Written by this guy who was there when it was happening :)
It would be the quickest if people actually wanted to that and were focused on doing to. If, say, people, would rather engage in mass slaughter than feed themselves, keep reproducing like rabbits even as they starve ... if those who lead governments see their role as just an opportunity to engage in large-scale theft, .... then it can hardly be said that they are serious about getting out of poverty.
If you wish to argue that people like Studwell are wrong, then the best way to do so if to put forward concrete arguments as to why?
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First so we can move forward, please stop nitpicking. China is now a developed country. There are poor desperate people everywhere. China has per capita ppp of 13kUSD. Kenya that is now low-middle income country has per capita ppp of 1500. We have backwater countries with less than that..Rwanda for example.
I wasn't nitpicking; I was simply amused by the statement that "now it as developed as any country". I take it that what you mean is that it is much better than places like Kenya and Rwanda. I won't argue with that.
By the way, do the Chinese too know that China is now a "developed country"?
Yeah I think Studwell is wrong. The Asian miracle is a myth. I don't think you can come with short list of what a country need to do to developed/industralize and it can be applied everywhere. I think those countries started from a good base unlike say Kenya that started from bottom.
I was hoping to read a more solid argument than a one-line "I think" in response to the likes of Studwell. He has come up with a list---so the first "can" has been taken care of---and if you have anything to the contrary, let's have it.
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Start reading backwards. I already gave you some background. Start for example from DEMOGRAPHIC DIVIDEND. What was the nature & structure of their population before "take" off. Kenya pop wise is equal to South Korea....Ethiopia at 90m is even bigger...but when you dig deeper...you'll find out that...out of 50M kenyans....more than 25M are under 18yrs!....and our working population is maybe 12-13m strong. Now South Korea then...the story was different...or China a few years ago. You have 50m folks...with 40m working population. On average the South Korea had maybe 1 or no person to support. Now 12-13m working kenyans are supporting on average maybe 4-5 kenyans...kids & old people. These 40m are able to work & buy stuff. There is 40M market there for many things. In kenya you have 25M folks that are draining the gov (education budget takes the lion share), their parents and the economy...and now add over 60yrs...who are too old to work & function.
Kenya is not ready for take off--maybe for another 30 yrs. However things are starting to change. In Central [and Nyanza minus hiv effect]...their population structure is starting to look good. That is worth noticing.Northern kenya on other hand are in big baby boom..Somalis now has on average 13-14 kids...they will be ready for take off...in 60yrs from now.
Kenya will be ready for take off when on average people will start marrying at 28-30yrs and having 1-2 kids.Then folks will start having more purchasing power, more working people than eating mouths, etc etc. Right now the marriage age is 21yrs --it was worse than this---and people have 5 kids on average. It worse if you look at some region/counties.
I was hoping to read a more solid argument than a one-line "I think".
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Start reading backwards. I already gave you some background. Start for example from DEMOGRAPHIC DIVIDEND. Kenya pop wise is equal to South Korea....Ethiopia at 90m is even bigger...but when you dig deeper...you'll find out that...out of 50M kenyans....more than 25M are under 18yrs!....
Places like Kenya have no "demographic dividend"; what they have is a demographic ticking time-bomb. I'm afraid it's not just a matter of having so many people; what really matters is that they are put to good use. (See my earlier remarks on "labour surplus".) So, what are all those young Kenyans doing other than idling during the and committing petty crimes at night? Kenya has the same population as South Korea? And the percentage of Kenyans (especially the youth) engaged in productive activities is?
In any case, how exactly does your demographic theory counter the arguments put forth by Studwell?
...in 60yrs from now.
That's an awfully long time, but I have no basis on which to disagree with it. A pity some things can't be done sooner. But f we don't have it in 60 years, I'm sure we'll get it in Heaven.
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Pundit, Robina, Terminator, et. al:
A lot on interesting observations and comments. "To be continued", as I must go to sleep ... But for now: We can have debates on what we should be doing; in fact, we could even agree on most of that. To my mind the serious questions are about why we aren't doing whatever, when do we plan to start the doing, how to do the doing, etc. Example (Robina):
Now, smart manufacturing aka value addition is not advanced to industrial manufacturing level. Since we have raw materials (agric, metals, etc) it requires processing plants to purify coffee, make cod liver oil from fish, etc. Baby step ;) Instead of exporting pure hides and skins that we do at present. Doing this efficiently will a)increase revenues without being uncompetitive to market b)fulfill local demand and cut import bill.
So, where are we with respect to such basic "smart manufacturing"? And where are the signs that we are about to make a "dramatic" change? (Keep in mind that Terminator would have us leap from animal skins to semiconductors :D )
Semiconductors come much later after the core industry is established. I believe Kenya should aim to establish itself on a world class level in one field, at least initially. That way when someone in DC or Paris or wherever wants a service/product he should think Kenya. That way Kenya and that particular niche become like Google and web search. I see information technology as the low hanging fruit. Because Kenya has no serious capital and an IT industry today is not as capital intensive as setting up factories and other brick and mortar ideas.
About the doing, it seems to me that the government ,when it's not busy covering up for a thief or celebrating impunity, is just all over the place. I am not saying they should ignore other things; food security is a must; but they should be laser focused on IT. Kamwana should only make trips abroad related to selling Kenya as an IT hub; everyone already knows the country has lions, some even roaming in residential areas, and other endangered animals; enough of that.
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The Asian miracle that Studwell & you are so focused happened post 1950-1960s. This is the period when things start to happen. The demographic transition in East Asia happens before the miracle. And quick google tell me some attribute 1/4 to 2/5 of the Asian miracle to this demographic "theory" reality.
Africa has a problem with it's population not to disimilar to kenya. Africa has maybe about 13% of world population but it's working population I can bet is 3-4%--and its economic output is similar 3-4%. The inflex point is when Africa stop producing kids and you have those working adults exceed the kids. If we start today that inflex point would maybe be 20yrs.
So you may argue that Asian tigers had all these great policies; but reality from data shows this was case of more inputs (more working people) producing more outputs. CHina started it one child policy in 70s when Asian tigers were already on high pedestal....so they had to wait till 90s...when the boom time comes.
Kenya workforce is very small. I think 15M (max). Active ones are 12m (10m in juakali & farming -2m in formal sector). It cannot compete with say South Africa....even if our population is not far off..or Singapore or China.
When you say Kenya doesn't utilize it's workforce..how do you propose it do it....have kazi kwa vijana? It economy that has to grow to absorb its population..it cannot grow because it still a tiny population (see 15m instead of 50M) and because every kenya is feeding kids & relatives...no money is left for investment or savings....to spur the growth.
This is hard. Complex. I know. So stick with simplistic theories. Find a politician or gov. And lay all the blame on them.
Now how do you enforce say 1 child policy in Africa?
In any case, how exactly does your demographic theory counter the arguments put forth by Studwell?
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It cannot compete with say South Africa....even if our population is not far off..or Singapore or China
Singapore has a very small workforce (and population). But a GDP near ten times that of Kenya.
So you may argue that Asian tigers had all these great policies; but reality from data shows this was case of more inputs (more working people) producing more outputs.
I think you are confusing cause and effect. Even if indeed the Asians had more "inputs" at the time, it does not necessarily follow that that was the main factor in their growth. A simple way to see that is to look at why some East Asian countries have, in the same period, been more successful while others have not been. And if you want to talk about "reproductive factors" have you looked at Malaysia? The notion that good policies, pushed properly are not the main factors is simply not supported by the evidence.
Interestingly, the Chinese government has now decided that it needs to quickly reform state-owned industries because simply having more people ("inputs" as you call them) beavering away is counter-productive---more inputs does not necessarily imply more outputs. Instead, as they see it, the focus should be on efficiency.
CHina started it one child policy in 50s when Asian tigers were already on high pedestal....
Really? Which Asian tigers "tigers were already on high pedestal" in the 1950s?
so they had to wait till 70s and 80s...when the boom time comes.
I didn't know that ... all the population stuff. Most Chinese people seem to mark the change from when Deng Xiaoping and did aggressively started complete turn-around.
When you say Kenya doesn't utilize it's workforce..how do you propose it do it....
That's the sort of thing governments exist for and which is why I say the current GoK is failing miserably. But here's a quick thought: Suppose those who run the government stopped seeing it as just a vehicle to use in robbing the country and, instead, money went into doing the right sorts of things. I'm sure that would make a difference.
This is hard. Complex. I know. So stick with simplistic theories.
I appreciate the spirit of the advice, but I like to challenge myself. Try to improve my lot. See if I can handle some complex theories the way you can. Shouldn't you therefore be encouraging me on the onward-and-upwards path?
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Those simplistic theories were famoulsy debunked by Nobel Paul Krugman.
http://econ.sciences-po.fr/sites/default/files/file/myth_of_asias-miracle.pdf
Asian miracle came down to two things more inputs (more labour) +investments (in roads, rails, etc) leading to growth. During the Asian miracle...Uganda productivity even beat those Asian tigers. Meaning it wasn't the case of working smarter or harder...but rather the case of a country having so many working population [thanks to previous policies that reduced their dependant population] and their gov throwing money to finance huge infrastructure (like Kenya is doing). Then later on you have FDI coming in from US & Europe.
You cannot expect Kenya which has working population of 15-20M (18-65 yrs] to compete say with South Korea of then that maybe had 30 or 40M working population.
So you may argue that Asian tigers had all these great policies; but reality from data shows this was case of more inputs (more working people) producing more outputs.
I think you are confusing cause and effect. Even if indeed the Asians had more "inputs" at the time, it does not necessarily follow that that was the main factor in their growth. A simple way to see that is to look at why some East Asian countries have, in the same period, been more successful while others have not been. And if you want to talk about "reproductive factors" have you looked at Malaysia? The notion that good policies, pushed properly are not the main factors is simply not supported by the evidence.
Interestingly, the Chinese government has now decided that it needs to quickly reform state-owned industries because simply having more people ("inputs" as you call them) is counter-productive because more inputs does not necessarily imply more outputs. Instead, as they see it, the focus should be on efficiency.
CHina started it one child policy in 50s when Asian tigers were already on high pedestal....
Really? Which Asian tigers "tigers were already on high pedestal" in the 1950s?
so they had to wait till 70s and 80s...when the boom time comes.
I didn't know that ... all the population stuff. Most Chinese people seem to mark the change from when Deng Xiaoping and did aggressively started complete turn-around.
When you say Kenya doesn't utilize it's workforce..how do you propose it do it....
That's the sort of thing governments exist for and which is why I say the current GoK is failing miserably. But here's a quick thought: Suppose those who run the government stopped seeing it as just a vehicle to use in robbing the country and, instead, money went into doing the right sorts of things. I'm sure that would make a difference.
This is hard. Complex. I know. So stick with simplistic theories.
I appreciate the spirit of the advice, but I like to challenge myself. Try to improve my lot. See if I can handle some complex theories the way you can. Shouldn't you therefore be encouraging me on the onward-and-upwards path?
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Once all these "ingredients" are set....then we will start to quickly industralize and modernize...however we will have Moonki attribute all these ground work to guy in charge then...and some smart alec will probably write a book about this " Kenyan" miracle...unaware that there is no "Asian or whatever" miracle...but many years of painstaking progress that eventually all come together..and voila...everything start "happening".
Perhaps such views explain the hopelessly slow progress. I'm afraid it's not a matter of people mindlessly slogging away and things suddenly coming together some day. In all those East Asian countries, the governments, under the right sort of leadership, have devised policies for what they needed and then aggressively seen them through.
I have no doubt that there has been some progress of sorts made in Kenya. My main points are largely around funny illusions, such as Vision 2030. The simple fact is that Kenya, especially under its current government, simply doesn't have what it would take to industrialize at that rate.
Leadership matters simply because they provide the overall direction. I am not sure how anyone can argue against that.
Every five years, the economy in Kenya takes a dive to wait out the elections. Elections are nothing short of a threat to national security. The question should be why? I believe the answer to that also says a lot about why the country is still turning a corner, to borrow pundit's phrase.
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Those simplistic theories were famoulsy debunked by Nobel Paul Krugman.
http://econ.sciences-po.fr/sites/default/files/file/myth_of_asias-miracle.pdf
Being somewhat slow, I was hoping for something along the lines of "Mr. Studwell says this", "but right here, Mr. Krugman shows that to be wrong". Can do? (We can start at the "high level " of Mr. Studwell's "Big Three": do Africans, with Krugman's help, have an alternative path that they can argue is sufficiently promising?)
Otherwise:
I am aware of that paper. I also know that it was written 20+ years ago---data up to 1990---and we now have much better analysis and insights into these things. (Don't you have anything more recent?) One of the ways in which it is easy to see how dated it: look at some of the "predictions". For example, take a look at the prediction on Singapore's subsequent growth relative to the post-1990 reality. Or, if you prefer bigger things, take a look at what he says on China---how fast it will grow, when the size of its economy might overtake that of the USA, etc.----and then look at the figures that we now have.
Asian miracle came down to two things more inputs (more labour) +investments (in roads, rails, etc) leading to growth. During the Asian miracle...Uganda productivity even beat those Asian tigers. Meaning it wasn't the case of working smarter or harder...but rather the case of a country having so many working population [thanks to previous policies that reduced their dependant population] and their gov throwing money to finance huge infrastructure (like Kenya is doing). Then later on you have FDI coming in from US & Europe.
Uganda, huh? Is that so? And today Uganda is where? And why is that? In the answer lies Africa in a nutshell.
But let's take a look at the red above. Just taking Singapore, as an example, the paper you have submitted does in fact tell us that it was (at the time) at the time a matter or working harder! The fellow refers to it as "perspiration rather than inspiration". The second point he refers to is the mobilization of resources----getting people to stop idling and start working. (Note that again: it's not just a matter of having the people; it's about getting them to do real work.) And the third is the major changes in their educational system. Do you need an explanation of how the right government policies, pushed properly have a role to play in all that? (By the time I moved to Singapore, sheer grunt-work was at its tail end, and the second phase hard started----smarter: ICT, financial services, etc.)
Beyond that, I can only look at what the evidence says. More inputs is what makes the difference? Compare Singapore and Kenya. Look at China's current view on "just have more inputs". In general, on "inputs" (and your own theory), even your supporting paper tells us that it is all not just a matter of "inputs".
The FDI aspect is definitely interesting: Did the Asian Tigers have governments that put in place policies that attracted all that FDI, or was it just a matter of luck? Kenya attracts (by African standards) fair amount of FDI, but a trivial amount by global standards. How much better could it do if the government wasn't a den of thieves?
You cannot expect Kenya which has working population of 15-20M (18-65 yrs] to compete say with South Korea of then that maybe had 30 or 40M working population.
A working population of 30-40M at a time when the total population was in that range. And the entire country was emerging from the total devastation of a long war? Looks like Kenya has it quite good right now. And its growth rates compared to the Asian Tigers when they got going?
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So many divergent threads on a simple easy to understand concept. General thesis of Asian myth is that Gov policies are small part of the theory.Nobody is disputing that Gov plays a role.
Now that I think you've understood that demographic transition in East Asia meant more workers coming out as opposed to situation we find ourselves in..with more kids in school than working population..which we can't blame anyone...then you need go back to my earlier responses...where I tell you that behind the scenes...there are stuff happening. We are getting more working population, we have 80% high school transition, we have more going to universities, we are investing in infra, more FDI is flowing in, et etc.
In short there are lots of "background" work that is been done and you with you bare naked eye cannot see. You only see this when it manifest itself. Unless you look deeper.
We are few years from that happening....first we need to move from 5-6%...to 10% growth..like Ethiopia has been doing. I belief this will be possibly once Oil & minning sector start kicking in...this will be second engine of growth...the rest of sector par a few....we are on marginal gains already....but stuff are happening underground...that will fire this growth for longhaul.
But knowing some of you..even 10% Ethiopia has been doing for 10yrs plus...won't be good enough :(
Those simplistic theories were famoulsy debunked by Nobel Paul Krugman.
http://econ.sciences-po.fr/sites/default/files/file/myth_of_asias-miracle.pdf
Being somewhat slow, I was hoping for something along the lines of "Mr. Studwell says this", "but right here, Mr. Krugman shows that to be wrong". Can do? (We can start at the "high level " of Mr. Studwell's "Big Three": do Africans, with Krugman's help, have an alternative path that they can argue is sufficiently promising?)
Otherwise:
I am aware of that paper. I also know that it was written 20+ years ago---data up to 1990---and we now have much better analysis and insights into these things. (Don't you have anything more recent?) One of the ways in which it is easy to see how dated it: look at some of the "predictions". For example, take a look at the prediction on Singapore's subsequent growth relative to the post-1990 reality. Or, if you prefer bigger things, take a look at what he says on China---how fast it will grow, when the size of its economy might overtake that of the USA, etc.----and then look at the figures that we now have.
Asian miracle came down to two things more inputs (more labour) +investments (in roads, rails, etc) leading to growth. During the Asian miracle...Uganda productivity even beat those Asian tigers. Meaning it wasn't the case of working smarter or harder...but rather the case of a country having so many working population [thanks to previous policies that reduced their dependant population] and their gov throwing money to finance huge infrastructure (like Kenya is doing). Then later on you have FDI coming in from US & Europe.
Uganda, huh? Is that so? And today Uganda is where? And why is that? In the answer lies Africa in a nutshell.
But let's take a look at the red above. Just taking Singapore, as an example, the paper you have submitted does in fact tell us that it was (at the time) at the time a matter or working harder! The fellow refers to it as "perspiration rather than inspiration". The second point he refers to is the mobilization of resources----getting people to stop idling and start working. And the third is the major changes in their educational system. Do you need an explanation of how the right government policies, pushed properly have a role to play in all that? (By the time I moved to Singapore, sheer grunt-work was at its tail end, and the second phase hard started----smarter: ICT, financial services, etc.)
Beyond that, I can only look at what the evidence says. More inputs is what makes the difference? Compare Singapore and Kenya. Look at China's current view on "just have more inputs". In general, on "inputs" (and your own theory), even your supporting paper tells us that it is all not just a matter of "inputs".
The FDI aspect is definitely interesting: Did the Asian Tigers have governments that put in place policies that attracted all that FDI, or was it just a matter of luck? Kenya attracts (by African standards) fair amount of FDI, but a trivial amount by global standards. How much better could it do if the government wasn't a den of thieves?
You cannot expect Kenya which has working population of 15-20M (18-65 yrs] to compete say with South Korea of then that maybe had 30 or 40M working population.
A working population of 30-40M at a time when the total population was in that range. And the entire country was emerging from the total devastation of a long war? Looks like Kenya has it quite good right now. And its growth rates compared to the Asian Tigers when they got going?
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Now that I think you've understood that demographic transition in East Asia meant more workers coming out as opposed to situation we find ourselves in..
Sorry, I have not "understood" any such thing. Please explain it to me again. What is the "coming out"? Part of the transition in Asia to get more of the available people working. How is that "opposed to the situation we find ourselves in"? We don't have people who should be working? Not enough of them? What?
with more kids in school than working population..which we can't blame anyone...then you need go back to my earlier responses...where I tell you that behind the scenes...there are stuff happening. We are getting more working population, we have 80% high school transition, we have more going to universities, we are investing in infra, more FDI is flowing in, et etc.
I am aware of all that. What are the plans for all those muscular men who are idling at roadsides every day? They are hardly kids in school ... Great going with the universities. But how will the country industrialize with B.A. (English Literature) from Nyalguna Above-Bar University? (Take a look at the East Asian countries that have done really well.)
In short there are lots of "background" work that is been done and you with you bare naked eye cannot see. You only see this when it manifest itself. Unless you look deeper.
How about we just work on the basis that I cannot see deeper. So, just show it to me.
We are few years from that happening....first we need to move from 5-6%...to 10% growth..like Ethiopia has been doing. .... But knowing some of you..even 10% Ethiopia has been doing for 10yrs plus...won't be good enough :(
Would that be the Ethiopia that is in Africa? The one of wazungu rock musicians saying "let's take a break from getting high and save these starving f**kers"? If so, then it would be the same one that is now desperately begging for food, to keep its people alive, just as it as been doing for much of the last 50 years. So, what have they been doing 10% of? Their appetites? (Studwell's remark on agriculture is actually two-pronged, the first being in the most basic sense.)
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Pretty much summarize why it waste of time debating you. No set parameters. You'll just go off tangent forever.
Would that be the Ethiopia that is in Africa? The one of wazungu rock musicians saying "let's take a break from getting high and save these starving f**kers"? If so, then it would be the same one that is now desperately begging for food, to keep its people alive, just as it as been doing for much of the last 50 years. So, what have they been doing 10% of? Their appetites? (Studwell's remark on agriculture is actually two-pronged, the first being in the most basic sense.)
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Pretty much summarize why it waste of time debating you. No set parameters. You'll just go off tangent forever.
How is that off-tangent? You brought up Ethiopia as some sort of example of a good job, and I am simply pointing out that it is not----that the first thing they need to do is get their priorities right and learn to feed themselves. Economic growth should not be seen as and end to itself, to be pursued for its own sake; it should be something that improves the well being of people.
By the way, I should let you know that I agree with you on one thing: the idea of an Asian economic miracle is indeed a myth, which is why I never use such terminology. There is no miracle---just the right policies, seen through, and plenty of hard focused work.
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Semiconductors come much later after the core industry is established. I believe Kenya should aim to establish itself on a world class level in one field, at least initially. That way when someone in DC or Paris or wherever wants a service/product he should think Kenya. That way Kenya and that particular niche become like Google and web search. I see information technology as the low hanging fruit. Because Kenya has no serious capital and an IT industry today is not as capital intensive as setting up factories and other brick and mortar ideas.
About the doing, it seems to me that the government ,when it's not busy covering up for a thief or celebrating impunity, is just all over the place. I am not saying they should ignore other things; food security is a must; but they should be laser focused on IT. Kamwana should only make trips abroad related to selling Kenya as an IT hub; everyone already knows the country has lions, some even roaming in residential areas, and other endangered animals; enough of that.
One of the points that people like Studwell are trying to make is that that of agriculture as the source of initial capital: farmers deposit their money in the banks, the government borrows it very cheaply and uses it for infrastructure, low-cost lending to export-driven businesses, etc.
On IT in Kenya: Has there been much progress on Konza City (or the Silicon Savannah)? The Legoland images certainly look very nice.
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So you think the agrarian economy like Ethiopia can grow at 10% for more than decade without getting right it's prioriities including food production. This doesn't mean Ethiopia is immune from natural disaster like drought once in a while.Asian tigers similarly followed the path...but definitely growing at 10%...is impressive now, then and in the future.
Ethiopia has done very well. Kenya is doing good.
How is that off-tangent? You brought up Ethiopia as some sort of example of a good job, and I am simply pointing out that it is not----that the first thing they need to do is get their priorities right and learn to feed themselves. Economic growth should not be seen as and end to itself, to be pursued for its own sake; it should be something that improves the well being of people.
By the way, I should let you know that I agree with you on one thing: the idea of an Asian economic miracle is indeed a myth, which is why I never use such terminology. There is no miracle---just the right policies, seen through, and plenty of hard focused work.
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So you think the agrarian economy like Ethiopia can grow at 10% for more than decade without getting right it's prioriities including food production. This doesn't mean Ethiopia is immune from natural disaster like drought once in a while.Asian tigers similarly followed the path...but definitely growing at 10%...is impressive now, then and in the future.
It has nothing to do with what I think. It is the simple and unpleasant hard facts.
What once in a while? This is a perpetually starving place! It has got food production right? When has it not required food aid? And that includes years when it cannot claim "natural disaster". How is it that other countries can grow food on Ethiopian land and then turn around and give Ethiopia food aid?!?
Ethiopia has done very well.
They are starving and begging for food. As usual. That's not my idea of "very well". Apparently, one can't eat economic percentages ...
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Nonsense. Ethiopia have come a long way from famines to occasional droughts.It been a while since an Ethiopian starved to death. When was last famine we had in Ethiopia? This is a country that was rock-bottom in every indicator;and has done very well recently; although their GDP per capita is still not even half of kenya's. Again for stupid people ..their incredible efforts the last two decade are not visible..until every Ethiopia is living the America style middle class life.
It has nothing to do with what I think. It is the simple and unpleasant hard facts.
What once in a while? This is a perpetually starving place! It has got food production right? When has it not required food aid? And that includes years when it cannot claim "natural disaster". How is it that other countries can grow food on Ethiopian land and then turn around and give Ethiopia food aid?!?
Ethiopia has done very well.
They are starving and begging for food. As usual. That's not my idea of "very well". Apparently, one can't eat economic percentages.
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Nonsense. Ethiopia have come a long way from famines to occasional droughts.It been a while since an Ethiopian starved to death. When was last famine we had in Ethiopia?
Please note the question that I asked and try to answer it: In which years has Ethiopia not required food aid? You could, for example, just list the years, and then we'd take a closer look. Straightforward, simple facts like that would make for a better case than "nonsense" and "stupid people".
Once you have an answer to that, you will also see why they no longer starve to death. But note that I did not state that they were starving to death; I merely stated that they are starving. (Massive food aid from the likes of Uncle Sam has prevented the worst.)
Again for stupid people ..their incredible efforts the last two decade are not visible..until every Ethiopia is living the America style middle class life.
The main concern is food. They don't have to live the "America style middle class life", but I''m sure that even they think a bit of food would be nice.
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Food aid is a business that I know very much having worked for world biggest food aid distributor.China was receiving food aid 15-20yrs ago and quickly became food donor. And 15 yrs ago -China had been growing for decades at dizzy levels. Ethiopia, Kenya and many countries receive food aid but numbers of those receiving food aid & intensity of their needs are reducing year in & year out.
So once again focus on the trend....how many Ethiopia received food Aid 10yrs ago...maybe 50% or more...and now it down to maybe 2%. Meaning in those few years Ethiopia have lifted millions out of absolute poverty to say "normal" poverty.
Should a country like Kenya throws 20B every year to feed it's northern citizen....that doesn't make economic & political sense to collect taxes & borrow debt to feed a few citizens...so it appeals for food aid from richer nations. If US or Japan were to be hit by huge catastrophe...they will do the same.
Nonsense. Ethiopia have come a long way from famines to occasional droughts.It been a while since an Ethiopian starved to death. When was last famine we had in Ethiopia?
Please note the question that I asked and try to answer it: In which years has Ethiopia not required food aid? You could, for example, just list the years, and then we'd take a closer look. Straightforward, simple facts like that would make for a better case than "nonsense" and "stupid people".
Once you have an answer to that, you will also see why they no longer starve to death. But note that I did not state that they were starving to death; I merely stated that they are starving. (Massive food aid from the likes of Uncle Sam has prevented the worst.)
Again for stupid people ..their incredible efforts the last two decade are not visible..until every Ethiopia is living the America style middle class life.
The main concern is food. They don't have to live the "America style middle class life", but I''m sure that even they think a bit of food would be nice.
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MOON Ki,
Details matter and numbers have a real meaning.
Ethiopia's sustained GDP growth reduced poverty from 44% in 2000 to 30 percent in 2011, according to the World Bank. The emergent food processing industry has unfortunately pushed food prices out of reach for a marginal bottom-poor minority. Collateral effect. In Rwanda, 8% growth 2006-11 reduced poverty from 57% to 45%.
http://www.worldbank.org/en/topic/poverty/publication/ethiopia-poverty-assessment
The question of the "demographic dividend" -- whether it is orchestrated by state actors or is a natural phenomenon like the weather? Clearly the state has a significant role to play but is not fully in control. In the Chinese case, the Communist totalitarian state utilized the party apparatus to mandate a one-child policy, eminent domain, among other things. Whereas democratic India is shackled. In Singapore the state's education and immigration policies had a significant role in the subsequent impressive growth.
For Kenya the more educated and employed people are the less likely they are to get big families. The Health ministry, medics, counties, NGOs and CBOs are crucial players in dissemination of family planning services. Customs and traditions e.g. polygamy, early marriage, etc also play a part in people's behavior. See? -- state, non-state, culture -- many players.
So the answer is somewhere between Pundit's and your argument. Development is a complex process but has visible indicators like GDP, driven by less visible factors like demographics. How much part government vs extragenous factors play is debatable. As well, whether these invisible trends are positive enough for Kenya to attain Vision 2030 despite present reality of slow progress? I am pessimistic.
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I think we achieved vision 2030 in 2015 when the economy was re-based and we found ourselves a middle -income economy. Maybe I should re-read the vision again but that was the goal.
As well, whether these invisible trends are positive enough for Kenya to attain Vision 2030 despite present reality of slow progress? I am pessimistic.
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MOON Ki,
Details matter and numbers have a real meaning.
Ethiopia's sustained GDP growth reduced poverty from 44% in 2000 to 30 percent in 2011, according to the World Bank. The emergent food processing industry has unfortunately pushed food prices out of reach for a marginal bottom-poor minority. Collateral effect. In Rwanda, 8% growth 2006-11 reduced poverty from 57% to 45%.
http://www.worldbank.org/en/topic/poverty/publication/ethiopia-poverty-assessment
The question of the "demographic dividend" -- whether it is orchestrated by state actors or is a natural phenomenon like the weather? Clearly the state has a significant role to play but is not fully in control. In the Chinese case, the Communist totalitarian state utilized the party apparatus to mandate a one-child policy, eminent domain, among other things. Whereas democratic India is shackled. In Singapore the state's education and immigration policies had a significant role in the subsequent impressive growth.
For Kenya the more educated and employed people are the less likely they are to get big families. The Health ministry, medics, counties, NGOs and CBOs are crucial players in dissemination of family planning services. Customs and traditions e.g. polygamy, early marriage, etc also play a part in people's behavior. See? -- state, non-state, culture -- many players.
So the answer is somewhere between Pundit's and your argument. Development is a complex process but has visible indicators like GDP, driven by less visible factors like demographics. How much part government vs extragenous factors play is debatable. As well, whether these invisible trends are positive enough for Kenya to attain Vision 2030 despite present reality of slow progress? I am pessimistic.
I have always seen India as shackled, not because of democracy, but corruption. Corruption not in the sense of looting 30% or more of revenue, but in terms of integrity in general.
The institutions do not do what they promise to do. It is a situation akin to legal lawlessness. This also Philipines, Cambodia, Bangladesh, Pakistan. Malaysia and Indonesia to some extent. There is a limit to the kinds of risks external investors will make in that environment.
In China and Far East, the instititutions do what they say they will do. There is a ruthless application of the law across the board, good or bad. If they have to cut your head off they will. The environment is predictable.
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Yes we are officially middle income country -- biggest economic goal. We have met income and extreme poverty targets. Relative/normal poverty is still there due to economic inequality.
Middle income - Target $1,045; Actual $1,587
Normal poverty - Target 22%; Actual 42%
For the current 2016 fiscal year, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,045 or less in 2014; middle-income economies are those with a GNI per capita of more than $1,045 but less than $12,736; high-income economies are those with a GNI per capita of $12,736 or more. Lower-middle-income and upper-middle-income economies are separated at a GNI per capita of $4,125.
http://data.worldbank.org/about/country-and-lending-groups
I think we achieved vision 2030 in 2015 when the economy was re-based and we found ourselves a middle -income economy. Maybe I should re-read the vision again but that was the goal.
As well, whether these invisible trends are positive enough for Kenya to attain Vision 2030 despite present reality of slow progress? I am pessimistic.
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I have always seen India as shackled, not because of democracy, but corruption. Corruption not in the sense of looting 30% or more of revenue, but in terms of integrity in general.
The institutions do not do what they promise to do. It is a situation akin to legal lawlessness. This also Philipines, Cambodia, Bangladesh, Pakistan. Malaysia and Indonesia to some extent. There is a limit to the kinds of risks external investors will make in that environment.
In China and Far East, the instititutions do what they say they will do. There is a ruthless application of the law across the board, good or bad. If they have to cut your head off they will. The environment is predictable.
Corruption (budget theft) is less important to investors than integrity (e.g. judicial independence and efficiency). Both have a big impact on the economy in the longterm.
Demographics as a macroeconomic is way bigger. Political inability to control population in India's case has had a big negative impact compared to China.
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I have always seen India as shackled, not because of democracy, but corruption. Corruption not in the sense of looting 30% or more of revenue, but in terms of integrity in general.
The institutions do not do what they promise to do. It is a situation akin to legal lawlessness. This also Philipines, Cambodia, Bangladesh, Pakistan. Malaysia and Indonesia to some extent. There is a limit to the kinds of risks external investors will make in that environment.
In China and Far East, the instititutions do what they say they will do. There is a ruthless application of the law across the board, good or bad. If they have to cut your head off they will. The environment is predictable.
Corruption (budget theft) is less important to investors than integrity (e.g. judicial independence and efficiency). Both have a big impact on the economy in the longterm.
Demographics as a macroeconomic is way bigger. Political inability to control population in India's case has had a big negative impact compared to China.
The way I understand what you mean by demographics. A population with a large working age component. Preferably healthy and skilled. And a smaller dependent component. It is one of many factors, if the most important if I understand you right.
If one can borrow Raila's lyrical flourish. The country is like a soccer team. A good demographic and other useful factors like minerals, location etc are like players on this team. The demographic is like Leonel Messi.
The question arises. Is it enough to assemble a group of talented individuals and put them on the field and expect them to bring back the champions cup or whatever it is that good soccer teams normally bring back? If not, what is the missing aspect of this team?
Have there been instances when such a talented group has lost to teams with less gifted players? If yes, what did the less talented team have over the group of gifted individuals?
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The way I understand what you mean by demographics. A population with a large working age component. Preferably healthy and skilled. And a smaller dependent component. It is one of many factors, if the most important if I understand you right.
If one can borrow Raila's lyrical flourish. The country is like a soccer team. A good demographic and other useful factors like minerals, location etc are like players on this team. The demographic is like Leonel Messi.
The question arises. Is it enough to assemble a group of talented individuals and put them on the field and expect them to bring back the champions cup or whatever it is that good soccer teams normally bring back? If not, what is the missing aspect of this team?
Have there been instances when such a talented group has lost to teams with less gifted players? If yes, what did the less talented team have over the group of gifted individuals?
There is limitation in ability to assemble the soccer team. Picture Harambee Stars. Ad hoc assembly, little joint training, poor pay, etc. It reflects "Team Kenya" perfectly. It is an investment -- time, effort, money, etc. At maturity you get good payoff.
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Actually manufacturing as a percentage of overall economy hasn't been declining but has held the same percentage meaning its growing at the same pace as the rest of the economy ndii had a good article about it here http://www.nation.co.ke/news/specials/How-scholars-miss-the-point-on-Africa-economy/-/2101466/2127168/-/3qnfr1z/-/index.html . Kenya primary manufacturing is in mainly cement,metal, and food manufacturing. Nowadays it makes more sense to setup factories in rural areas because rds are relatively good, electricity is readily available (and kplc is putting up substations everywhere cutting down on blackouts), land and labour is cheap in rural areas. Kenya might not be producing fridges or cookers soon but agri processing and food manufacturing will be a big part of the economy. In that way kenya is going to be more like Thailand than china or korea. And yes formalisation of retail sector is playing a big part in growth of light manufacturing.
I don't recall anyone saying that it has been declining. The statement I made is that as a % of GDP it has remained largely unchanged since independence---mostly hovering around 10% with a few flourishes above and below that.
You say that "kenya is going to be more like Thailand than china or korea". Really? How much of Japanese, Korea and Chinese manufacturing is now being "outsourced" to Thailand? And Kenya?
Here are the real questions: (a) What countries in modern times have industrialized with manufacturing at staying at that level over such a long period. (b) If Kenya is supposed to be an exception, on what basis is that to be so?
it makes more sense to setup factories in rural areas because roads are relatively good, electricity is readily available
I'll skip questions about how much electricity it takes to power a factory, as opposed to a small homestead in Nyalgunaga. Instead, I will ask this: How many factories are being set up in rural Kenya? If none, what are the plans to set up any? (We'll do the workforce aspect later.)
I think we should be clear in noting the difference between "what makes sense"/"what we dream of" and "what is real"/"what we are working towards".
Agri-processing is the first step which is what is happening in kenya now. There're numerous agri-processing companies being setup in rural areas. Case in point ENP in maragua http://www.equatorialnut.com/ .Previously such a factory would have been in either Thika or Nairobi or another in njoro http://www.njorocanning.co.ke/ setup to process the abundant fresh produce in rural Nakuru county. Kenya like Thailand is starting with agri-processing manufacturing http://www.investopedia.com/articles/investing/081815/emerging-markets-analyzing-thailands-gdp.asp then hopefully it will graduate to more complex manufacturing.
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We are doing fine in that sub-sector. You just need to visit any supermarket and you'll find so many kenyan brands. Now I hear Shah's Bidco are also going big in the same sector. I wish we could replicate the same in other sectors...esp I repeat leather & textile...these are very low hanging fruits. Then we can next go big in steel industries.
Agri-processing is the first step which is what is happening in kenya now. There're numerous agri-processing companies being setup in rural areas. Case in point ENP in maragua http://www.equatorialnut.com/ .Previously such a factory would have been in either Thika or Nairobi or another in njoro http://www.njorocanning.co.ke/ setup to process the abundant fresh produce in rural Nakuru county. Kenya like Thailand is starting with agri-processing manufacturing http://www.investopedia.com/articles/investing/081815/emerging-markets-analyzing-thailands-gdp.asp then hopefully it will graduate to more complex manufacturing.
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I think you're alluding to leadership. But in this case national leadership. I think leadership & governorship need to be looked wholesomely. What sort of leaders you have accross all levels and strata. Are we producing better leaders. The same with Harambee star. Without a steady pipeline of footballers from primary school to national team...it a pipe dream. The same with kenyan. You should take as much keen interest on the quality of leadership in the local DIP or Primary Board of Governors as you would take of Mps, Senators, Governors and PORK. Most of our leaders begin small...chairmen of cattle dips...BOG of a certain school...a councillor..then mayor..then MP..then governor..and the PORK. Those in proffesional career do the same...chairmen of xyc associaiton...then sacco...then maybe PS..then politics.
So leadership & governorship has to be looked at as a WHOLE. We need to stop obsessing with Uhuru or Raila.
The question arises. Is it enough to assemble a group of talented individuals and put them on the field and expect them to bring back the champions cup or whatever it is that good soccer teams normally bring back? If not, what is the missing aspect of this team?
Have there been instances when such a talented group has lost to teams with less gifted players? If yes, what did the less talented team have over the group of gifted individuals?
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I think you're alluding to leadership. But in this case national leadership. I think leadership & governorship need to be looked wholesomely. What sort of leaders you have accross all levels and strata. Are we producing better leaders. The same with Harambee star. Without a steady pipeline of footballers from primary school to national team...it a pipe dream. The same with kenyan. You should take as much keen interest on the quality of leadership in the local DIP or Primary Board of Governors as you would take of Mps, Senators, Governors and PORK. Most of our leaders begin small...chairmen of cattle dips...BOG of a certain school...a councillor..then mayor..then MP..then governor..and the PORK. Those in proffesional career do the same...chairmen of xyc associaiton...then sacco...then maybe PS..then politics.
So leadership & governorship has to be looked at as a WHOLE. We need to stop obsessing with Uhuru or Raila.
The question arises. Is it enough to assemble a group of talented individuals and put them on the field and expect them to bring back the champions cup or whatever it is that good soccer teams normally bring back? If not, what is the missing aspect of this team?
Have there been instances when such a talented group has lost to teams with less gifted players? If yes, what did the less talented team have over the group of gifted individuals?
Leadership is part of it. The most important is synergy. The trust in the steps. Institutions have to work for everyone whether Raila or kamwana is in power. Politics should be an afterthought. Failure is easy. Success depends on many things going right. All it takes for the local dip to fail is some asshole deciding to replace the requisite amount or type of chemicals with some useless placebo and keep the money.
The analogy came up because of what recently happened with Harambee Stars when they had issues securing a flight to some West African destination. This team, at least on paper, is the best talent Kenya has been able to muster. Yet it was easy to see they are going nowhere. The few incentives they get are just pocketed straight up. The team could not count on optimal contributions from unmotivated players.
The analogy also works with projects such as software development and others. You have this world class developer working on a project. Ownership has decided to sit on his bonus. Big plans must be put on hold. His young son must be pulled from the kids league, swim club, no Disneyland vacation etc. And the problem is replicated across the team.
On the ground in Kenya, get rich quick schemes. Youth employment initiatives, end up in basements of banks and sacks of cash exchanging hands. The same entity that gave the country Huduma centers, is the same one giving Raila and kamwana the next Baghdad Boys and Mungiki for the next cycle. It's not so much the money that is lost than the message that everybody gets that is the real problem; hard work does not pay.
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I agree but I suspect you buy this top-down approach. You think if we fix the top....then it will cascade. If we get this Lee or Kagame or Magafuli..you can fix the society. I say you cannot fix the top if you cannot fix the bottom. The bottom feeds the top. That is why for me..it doesn't interest me that we have good leaders here and there. Therefore me if there was indicator that we were doing well leadership wise...then it has to come from national data cutting across all levels.That leadership will come from general populace....and therefore if general populace mostly never reached high school..then that is reflected. If they are corrupt..that is reflected. If they are poor...that is reflected.
Leadership is part of it. The most important is synergy. The trust in the steps. Institutions have to work for everyone whether Raila or kamwana is in power. Politics should be an afterthought. Failure is easy. Success depends on many things going right. All it takes for the local dip to fail is some asshole deciding to replace the requisite amount or type of chemicals with some useless placebo and keep the money.
The analogy came up because of what recently happened with Harambee Stars when they had issues securing a flight to some West African destination. This team, at least on paper, is the best talent Kenya has been able to muster. Yet it was easy to see they are going nowhere. The few incentives they get are just pocketed straight up. The team could not count on optimal contributions from unmotivated players.
The analogy also works with projects such as software development and others. You have this world class developer working on a project. Ownership has decided to sit on his bonus. Big plans must be put on hold. His young son must be pulled from the kids league, swim club, no Disneyland vacation etc. And the problem is replicated across the team.
On the ground in Kenya, get rich quick schemes. Youth employment initiatives, end up in basements of banks and sacks of cash exchanging hands. The same entity that gave the country Huduma centers, is the same one giving Raila and kamwana the next Baghdad Boys and Mungiki for the next cycle. It's not so much the money that is lost than the message that everybody gets that is the real problem; hard work does not pay.
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I agree but I suspect you buy this top-down approach. You think if we fix the top....then it will cascade. If we get this Lee or Kagame or Magafuli..you can fix the society. I say you cannot fix the top if you cannot fix the bottom. The bottom feeds the top. That is why for me..it doesn't interest me that we have good leaders here and there. Therefore me if there was indicator that we were doing well leadership wise...then it has to come from national data cutting across all levels.That leadership will come from general populace....and therefore if general populace mostly never reached high school..then that is reflected. If they are corrupt..that is reflected. If they are poor...that is reflected.
Leadership is part of it. The most important is synergy. The trust in the steps. Institutions have to work for everyone whether Raila or kamwana is in power. Politics should be an afterthought. Failure is easy. Success depends on many things going right. All it takes for the local dip to fail is some asshole deciding to replace the requisite amount or type of chemicals with some useless placebo and keep the money.
The analogy came up because of what recently happened with Harambee Stars when they had issues securing a flight to some West African destination. This team, at least on paper, is the best talent Kenya has been able to muster. Yet it was easy to see they are going nowhere. The few incentives they get are just pocketed straight up. The team could not count on optimal contributions from unmotivated players.
The analogy also works with projects such as software development and others. You have this world class developer working on a project. Ownership has decided to sit on his bonus. Big plans must be put on hold. His young son must be pulled from the kids league, swim club, no Disneyland vacation etc. And the problem is replicated across the team.
On the ground in Kenya, get rich quick schemes. Youth employment initiatives, end up in basements of banks and sacks of cash exchanging hands. The same entity that gave the country Huduma centers, is the same one giving Raila and kamwana the next Baghdad Boys and Mungiki for the next cycle. It's not so much the money that is lost than the message that everybody gets that is the real problem; hard work does not pay.
I do. In the same sense that a project needs a good project manager. It's a big deal who leads a company. For the same reason, it's a big deal who leads the country. George W. Bush walked the US into a recession and huge deficit after inheriting a record surplus.
I agree in a country's case that the leadership is a reflection of the society. That is really the biggest problem. Even the most educated Kenyans, are for the most part not immune to the Raila/kamwana dichotomy; whether they are in teaching at the University of Chicago or Mount Kenya University.
When Raila jumps on some new vehicle to mayhem, he can count on the best of society to be by his side; same with kamwana. It is an egg/chicken kind of problem.
No magic bullet. But if you increase devolution, I feel like 47 units provide an opportunity for some outlier leadership to emerge.
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I disagree. US can survive G. Bush because it has layers of leadership that is solid. Our leadership quality is indeed a reflection of the state we are. I have seen a lot of improvement. Across board. You have seen nothing because you focus on the top dog. When I look, I see better Cattle Dip chairperson, I see better nursery school chairladies, I see better youth leaders, I see better tea factory director, I see better guys running rural farmers saccos, I see better calibre of Mps, I see better calibre of govenors. You see nothing because the top leadership we have are going to be here for another 40yrs. Your see darkness. I see hope. I see people in my village electing someone who can read and write as Cattle DIP chairperson as opposed to illiterate fool few years ago. I see in few years if we keep improving, our leadership, our governorship, our governances and all that will manifest. I see better leaders emerging in private sector. I see better managers emerging from public institutions. The same can be said of corruption.
In short you need to look deeper.
I do. In the same sense that a project needs a good project manager. It's a big deal who leads a company. For the same reason, it's a big deal who leads the country. George W. Bush walked the US into a recession and huge deficit after inheriting a record surplus.
I agree in a country's case that the leadership is a reflection of the society. That is really the biggest problem. Even the most educated Kenyans, are for the most part not immune to the Raila/kamwana dichotomy; whether they are in teaching at the University of Chicago or Mount Kenya University.
When Raila jumps on some new vehicle to mayhem, he can count on the best of society to be by his side; same with kamwana. It is an egg/chicken kind of problem.
No magic bullet. But if you increase devolution, I feel like 47 units provide an opportunity for some outlier leadership to emerge.
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It will take time indeed. Looking even at the number of leaders -- 4 presidents. 1st time governors, 5 - 10 year old parties. With time we will even grow past tribe into ideology -- Left, Right, Nationalist, Socialist, etc. Consider US has had 44 presidents, countless governors and mayors. Chinese Communist Party is 100+ years old.
I have seen World Bank and other sources project African economic growth to US$20Trillion+ by 2050. Do you buy into that?
Basic math disagrees with that prospect
$2.4T x (1 + 5%) ^ 35 years = $15 to $16T
15T for 1.5B folks is $10K per capita. Upper middle income. This is more realistic worst case scenario. Which is the current global gdp (GWP) per capita. Romania, Mexico living std.
The lofty World Bank 2050 projection of 29T gives us 20K per capita. Czech / Saudi Arabia falls close. We are talking nominal GDP. It's not likely we will ever be Europe... maybe Carribean or Latin America lifestyle.
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Any renaissance men in the house? Elon Musk (Paypal, Falcon) is an SA-born American... the brain-drain we suffer has real consequence.
Elon Musk is setting himself up for an epic failure
Matthew DeBord May 7, 2016, 1:17 PM 96,312 views 67 comments
...
Tesla, which delivered about 50,000 vehicles last year, is aiming to deliver 500,000 in 2018. The production target isn't new, but the timeline is. Tesla had previously said it would build half a million cars a year by 2020.
...
Prior to last week, if you'd asked me if Tesla could hit 500,000 by 2020, I would have said that the goal was ambitious given Tesla track record, but not impossible. After all, GM can build that many cars in a few months without breaking a sweat.
Accelerate the schedule by two years, however, and I have to predict that Tesla is going to run itself until it potentially breaks to make it happen. Even if we do give Tesla the generous benefit of the doubt that it can improve its manufacturing pace, there's still the question of whether the Model 3 can be assembly-line ready by 2018. So far, we've seen a very preproduction version, at its unveiling in California earlier this year. A prime-time car is a long ways off.
The skeptic in me does need to be reminded that I've underestimated Tesla before and been proven wrong. And we are talking about manufacturing here, not, say, landing a rocket on a floating platform in the Pacific Ocean. American companies have taken manufacturing from zero to 100 mph in very short time periods before — World War II leaps to mind. It can be done because it has been done.
But boy, has Musk ever set himself a humdinger of target with this one.
http://www.businessinsider.com/musk-epic-failure-2016-5 (http://www.businessinsider.com/musk-epic-failure-2016-5)
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Any renaissance men in the house? Elon Musk (Paypal, Falcon) is an SA-born American... the brain-drain we suffer has real consequence.
Elon Musk is setting himself up for an epic failure
Matthew DeBord May 7, 2016, 1:17 PM 96,312 views 67 comments
...
Tesla, which delivered about 50,000 vehicles last year, is aiming to deliver 500,000 in 2018. The production target isn't new, but the timeline is. Tesla had previously said it would build half a million cars a year by 2020.
...
Prior to last week, if you'd asked me if Tesla could hit 500,000 by 2020, I would have said that the goal was ambitious given Tesla track record, but not impossible. After all, GM can build that many cars in a few months without breaking a sweat.
Accelerate the schedule by two years, however, and I have to predict that Tesla is going to run itself until it potentially breaks to make it happen. Even if we do give Tesla the generous benefit of the doubt that it can improve its manufacturing pace, there's still the question of whether the Model 3 can be assembly-line ready by 2018. So far, we've seen a very preproduction version, at its unveiling in California earlier this year. A prime-time car is a long ways off.
The skeptic in me does need to be reminded that I've underestimated Tesla before and been proven wrong. And we are talking about manufacturing here, not, say, landing a rocket on a floating platform in the Pacific Ocean. American companies have taken manufacturing from zero to 100 mph in very short time periods before — World War II leaps to mind. It can be done because it has been done.
But boy, has Musk ever set himself a humdinger of target with this one.
http://www.businessinsider.com/musk-epic-failure-2016-5 (http://www.businessinsider.com/musk-epic-failure-2016-5)
Elon Musk is not so much brain drain as brain finding its level. In South Africa would in all likelihood not have SpaceX or Tesla for that matter; too many pieces of the jigsaw puzzle missing in South Africa.
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Any renaissance men in the house? Elon Musk (Paypal, Falcon) is an SA-born American... the brain-drain we suffer has real consequence.
Elon Musk is setting himself up for an epic failure
Matthew DeBord May 7, 2016, 1:17 PM 96,312 views 67 comments
...
Tesla, which delivered about 50,000 vehicles last year, is aiming to deliver 500,000 in 2018. The production target isn't new, but the timeline is. Tesla had previously said it would build half a million cars a year by 2020.
...
Prior to last week, if you'd asked me if Tesla could hit 500,000 by 2020, I would have said that the goal was ambitious given Tesla track record, but not impossible. After all, GM can build that many cars in a few months without breaking a sweat.
Accelerate the schedule by two years, however, and I have to predict that Tesla is going to run itself until it potentially breaks to make it happen. Even if we do give Tesla the generous benefit of the doubt that it can improve its manufacturing pace, there's still the question of whether the Model 3 can be assembly-line ready by 2018. So far, we've seen a very preproduction version, at its unveiling in California earlier this year. A prime-time car is a long ways off.
The skeptic in me does need to be reminded that I've underestimated Tesla before and been proven wrong. And we are talking about manufacturing here, not, say, landing a rocket on a floating platform in the Pacific Ocean. American companies have taken manufacturing from zero to 100 mph in very short time periods before — World War II leaps to mind. It can be done because it has been done.
But boy, has Musk ever set himself a humdinger of target with this one.
http://www.businessinsider.com/musk-epic-failure-2016-5 (http://www.businessinsider.com/musk-epic-failure-2016-5)
Elon Musk is not so much brain drain as brain finding its level. In South Africa would in all likelihood not have SpaceX or Tesla for that matter; too many pieces of the jigsaw puzzle missing in South Africa.
Really? Nothing in the US is unique anymore in a globalized market. Not even venture capital. One of the issues at play in Tesla's ambitions is the high cost of living in the Silicon Valley hq. For Space X, lots of raw materials, knowhow and manpower had to be sourced from Russia.
Look at the outsourcing trends in Apple and other MNCs... Tesla may actually have to open plants in the Far East to double down on the cheap operating environment. What the US has is a business innovation culture... with requisite investments and economies of scale that make smart folks love it there, especially California. It's leveling out now I think.
When the brain-sucking ability wanes US will be in trouble. Still the robber barons would make it anywhere.
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Any renaissance men in the house? Elon Musk (Paypal, Falcon) is an SA-born American... the brain-drain we suffer has real consequence.
Elon Musk is setting himself up for an epic failure
Matthew DeBord May 7, 2016, 1:17 PM 96,312 views 67 comments
...
Tesla, which delivered about 50,000 vehicles last year, is aiming to deliver 500,000 in 2018. The production target isn't new, but the timeline is. Tesla had previously said it would build half a million cars a year by 2020.
...
Prior to last week, if you'd asked me if Tesla could hit 500,000 by 2020, I would have said that the goal was ambitious given Tesla track record, but not impossible. After all, GM can build that many cars in a few months without breaking a sweat.
Accelerate the schedule by two years, however, and I have to predict that Tesla is going to run itself until it potentially breaks to make it happen. Even if we do give Tesla the generous benefit of the doubt that it can improve its manufacturing pace, there's still the question of whether the Model 3 can be assembly-line ready by 2018. So far, we've seen a very preproduction version, at its unveiling in California earlier this year. A prime-time car is a long ways off.
The skeptic in me does need to be reminded that I've underestimated Tesla before and been proven wrong. And we are talking about manufacturing here, not, say, landing a rocket on a floating platform in the Pacific Ocean. American companies have taken manufacturing from zero to 100 mph in very short time periods before — World War II leaps to mind. It can be done because it has been done.
But boy, has Musk ever set himself a humdinger of target with this one.
http://www.businessinsider.com/musk-epic-failure-2016-5 (http://www.businessinsider.com/musk-epic-failure-2016-5)
Elon Musk is not so much brain drain as brain finding its level. In South Africa would in all likelihood not have SpaceX or Tesla for that matter; too many pieces of the jigsaw puzzle missing in South Africa.
Really? Nothing in the US is unique anymore in a globalized market. Not even venture capital. One of the issues at play in Tesla's ambitions is the high cost of living in the Silicon Valley hq. For Space X, lots of raw materials, knowhow and manpower had to be sourced from Russia.
Look at the outsourcing trends in Apple and other MNCs... Tesla may actually have to open plants in the Far East to double down on the cheap operating environment. What the US has is a business innovation culture... with requisite investments and economies of scale that make smart folks love it there, especially California. It's leveling out now I think.
When the brain-sucking ability wanes US will be in trouble. Still the robber barons would make it anywhere.
You are putting words into my mouth indirectly. I am saying Elon Musk leaving South Africa is not brain drain, because he could not achieve the same things in South Africa. If he were a pediatrician who leaves South Africa and winds up treating American children instead of Zulu kids, that to me is brain drain.
But this guy left South Africa and he is creating the world's first reusable rocket boosters and Tesla; who seriously believes this is something he could have done in South Africa without some effort bordering on the miraculous?
I think the US has the pieces he needed to succeed in one convenient place. Most other places would have bits and pieces, here and there. Even, as you acknowledge, attracting the requisite foreign talent whenever it's needed, is just not as easy in other places.
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I disagree. You're making it appear that Elon Musk was always destined to launch rockets. If he was in RSA he might have invented something else.Maybe M-pesa that seem mundane for say US but is more apt for say Soweto. It still brain drain to me. US have the enviroment that is attracting those talents abroad and making them succeed. The challenge for other countries is to at very least attract these talents back to their country...to do something.
You are putting words into my mouth indirectly. I am saying Elon Musk leaving South Africa is not brain drain, because he could not achieve the same things in South Africa. If he were a pediatrician who leaves South Africa and winds up treating American children instead of Zulu kids, that to me is brain drain.
But this guy left South Africa and he is creating the world's first reusable rocket boosters and Tesla; who seriously believes this is something he could have done in South Africa without some effort bordering on the miraculous?
I think the US has the pieces he needed to succeed in one convenient place. Most other places would have bits and pieces, here and there. Even, as you acknowledge, attracting the requisite foreign talent whenever it's needed, is just not as easy in other places.
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I disagree. You're making it appear that Elon Musk was always destined to launch rockets. If he was in RSA he might have invented something else.Maybe M-pesa that seem mundane for say US but is more apt for say Soweto. It still brain drain to me. US have the enviroment that is attracting those talents abroad and making them succeed. The challenge for other countries is to at very least attract these talents back to their country...to do something.
You are putting words into my mouth indirectly. I am saying Elon Musk leaving South Africa is not brain drain, because he could not achieve the same things in South Africa. If he were a pediatrician who leaves South Africa and winds up treating American children instead of Zulu kids, that to me is brain drain.
But this guy left South Africa and he is creating the world's first reusable rocket boosters and Tesla; who seriously believes this is something he could have done in South Africa without some effort bordering on the miraculous?
I think the US has the pieces he needed to succeed in one convenient place. Most other places would have bits and pieces, here and there. Even, as you acknowledge, attracting the requisite foreign talent whenever it's needed, is just not as easy in other places.
I guess we have different notions of brain drain. To me, it's just the exit of know-how that is useful and needed(immediately) to the mother country.
A particle physicist leaving Nairobi to go work on the Large Hadron collider in Europe would not count as brain drain in my opinion. Admittedly this may not be the standard view of brain drain.
A medical doctor, leaving Nairobi to become a taxi driver(or even the same thing, a doctor) in New York is brain drain. A doctor of theology leaving Kenya to go preach in Alaska is NOT brain drain.
In South Africa Elon had ideas that were bigger than his environment could handle.
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More positive indicators for. ke
POSTED 7 HOURS AGO
Kenya emerges among prosperous countries in Africa
By PAUL REDFERN
IN SUMMARY
- The report places Kenya in 11th place, with its highest ranking for personal freedom, entrepreneurship and opportunity.
- Rwanda received high marks for its economy and governance and is the most improved country in Africa over the past 10 years.
- Tanzania received a less favourable rating and is ranked the least improved country since 2009.
http://mobile.nation.co.ke/business/Kenya-named-among-prosperous-countries/-/1950106/3227898/-/wpy16gz/-/index.html
A contrast to this Ndii narrative about. ke loosing regional shimmer to Tz:
Enter Magufuli, and Kenya’s control of region is now history
By DAVID NDII
In Summary
- The desperate helter-skelter we have been treated to since losing the Uganda oil-pipeline project to Tanzania now confirms that Jubilee administration has become the victim of its own propaganda.
- Land has been grabbed all along the LAPPSET corridor and the speculators, who are of course powerful people, are waiting patiently to reap big time on compensation.
- Investors can come to Tanzania with the confidence that when they encounter the corruption and bureaucratic obstacles, the man at the helm can be relied on to deal with it.”
http://www.nation.co.ke/oped/Opinion/-Enter-Magufuli-and-Kenyas-control-of-region-is-now-history/-/440808/3193422/-/ccossjz/-/index.html
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More positive indicators for. ke
POSTED 7 HOURS AGO
Kenya emerges among prosperous countries in Africa
By PAUL REDFERN
IN SUMMARY
- The report places Kenya in 11th place, with its highest ranking for personal freedom, entrepreneurship and opportunity.
- Rwanda received high marks for its economy and governance and is the most improved country in Africa over the past 10 years.
- Tanzania received a less favourable rating and is ranked the least improved country since 2009.
http://mobile.nation.co.ke/business/Kenya-named-among-prosperous-countries/-/1950106/3227898/-/wpy16gz/-/index.html
A contrast to this Ndii narrative about. ke loosing regional shimmer to Tz:
Enter Magufuli, and Kenya’s control of region is now history
By DAVID NDII
In Summary
- The desperate helter-skelter we have been treated to since losing the Uganda oil-pipeline project to Tanzania now confirms that Jubilee administration has become the victim of its own propaganda.
- Land has been grabbed all along the LAPPSET corridor and the speculators, who are of course powerful people, are waiting patiently to reap big time on compensation.
- Investors can come to Tanzania with the confidence that when they encounter the corruption and bureaucratic obstacles, the man at the helm can be relied on to deal with it.”
http://www.nation.co.ke/oped/Opinion/-Enter-Magufuli-and-Kenyas-control-of-region-is-now-history/-/440808/3193422/-/ccossjz/-/index.html
I don't see the two as contrasting. Because Ndii is saying that Magufuli is tilting the balance in favor of Tz. The other report covers a long period, about 7 years, of which Magufuli's stint is only a few months, and it says on that basis that Kenya is ahead of Tz.
That said, I think we make too much of these differences in what is really one economic zone with artificial boundaries left by departing wabeberus, to what end it is not clear.[/list][/list]
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Dr Doom Ndii now release his suber-bitter bile on WB & IMF with lots of damn lies.
http://www.nation.co.ke/oped/Opinion/IMF-and-World-Bank-telling-a-big-fat-lie-that-will-burst/-/440808/3231514/-/mw58p6z/-/index.html
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Dr Doom Ndii now release his suber-bitter bile on WB & IMF with lots of damn lies.
http://www.nation.co.ke/oped/Opinion/IMF-and-World-Bank-telling-a-big-fat-lie-that-will-burst/-/440808/3231514/-/mw58p6z/-/index.html
The $750m that kenya took out wasn't even used. Meaning there was no need for it as there was no external shock for it to be needed. This insurance policy is what has offered stability to the kenya shilling. Doubling it down means even a bigger extra cushion incase of external shocks e.g the oil market heating $80. And the 3% deficit requirement only applies if kenya access the funds. Which most likely it wont http://www.bloomberg.com/news/articles/2016-03-15/imf-agrees-to-lend-kenya-1-5-billion-in-precautionary-funds .
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Obviously he knows that--that facility exist but treasury has not needed it so far. Ndii has lost all credibility in his attempt to invent EuroBond scandal. Obviously Kenya after rebasing it economy and having a stellar re-payment record is going to qualify for bigger WB/IMF pie.
The $750m that kenya took out wasn't even used. Meaning there was no need for it as there was no external shock for it to be needed. This insurance policy is what has offered stability to the kenya shilling. Doubling it down means even a bigger extra cushion incase of external shocks e.g the oil market heating $80. And the 3% deficit requirement only applies if kenya access the funds. Which most likely it wont http://www.bloomberg.com/news/articles/2016-03-15/imf-agrees-to-lend-kenya-1-5-billion-in-precautionary-funds .