Infrastructure is sure bet for development

[RV Pundit]

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[einstein_g]

No doubt. Which makes me think that the Jubilee loans are not so much of a bad thing at all if we're able to pay. Perhaps a leader who would have taken a massive gamble and done all the development decades ago would have propelled us to South Korea status by now. But no international financier would have been willing to support and even then, they'd be expensive vs the now rich China. Which means creative internal financing would have been needed. And again no telling whether sufficient factors necessary for ROI on the infrastructure gamble existed then e.g trade linkages.

[sema]

How? when kenyans make nothing? what is kenya's competitive advantage? i.e. what can kenyans make that others aren't so good at making, that they can then export?

E.g. -- Japan's competitive advantage is electronics and cars. America's is technology; Germany's is heavy machinery; China provides cheap labor to the world. 

Roads are needed yes, but without production, the country's per capita income will remain at a pathetic $1,500 dollars a year.  Did you see that report that said only 70,000 kenyans earn over 100,000 shillings in a month? In a country of 50 million. That's only $1,000 dollars a month. There's no production besides farming and remittances have now outstripped all of kenya's farming exports COMBINED.

[RV Pundit]

But you see that road has allowed for more flowers, vegetables and dairy both local and export bound? isn't that not too sexy for you or you need us to produce drones and cars?Those flowers requires packers, trucks and planes to export them to Europe

[RV Pundit]

No doubt. Which makes me think that the Jubilee loans are not so much of a bad thing at all if we're able to pay. Perhaps a leader who would have taken a massive gamble and done all the development decades ago would have propelled us to South Korea status by now. But no international financier would have been willing to support and even then, they'd be expensive vs the now rich China. Which means creative internal financing would have been needed. And again no telling whether sufficient factors necessary for ROI on the infrastructure gamble existed then e.g trade linkages.

Basic infastructure is key.. therefore we need marshall plan like US funding Euro to rebuild after world two.There is enough money to borrow in debt market...we just need to float a centenary bond..that very long maturity bond of say 100B dollars to be repaid in 100yrs and use it to build basic infrastructure..make sure there is a paved road, piped clean water, sewage line, electricity,ports, expressways and railways .. everywhere in Kenya....then watch magic of development happens and repay that loan.Right now we have development in few pockets like Nairobi or metro with such basic infrastructure...rest of countries lack the basic infrastructure to

[RV Pundit]

Without basic infrastructure you cannot develop..lamunow with deep sea port is ready for export oriented industries..gov just need to build few industrial parks and invite manufacturer targetting export market .. industrial park with as competitive micro environment as anywhere in china..low taxes, subsidized electricity, no labour unions and soon you get a Samsung like conglomerate and your fortunes change

[einstein_g]

Yeah I was thinking about the marshall plan. But yes, such a huge investment in infrastructure needs an even higher investment into production/trade thought/planning & execution. Germany et. al were already ridiculously good at making stuff and just needed to be back on their feet.

We're the 3rd largest exporters of both cut flowers and black tea globally against a backdrop of inefficiency due to bad infrastructure vs much larger & developed Asian countries. Which says that we could have potentially been like Thailand and been very large exporters of fruits and vegetables -- we're closer to Europe and Eastern US than they are. I think this is what the colonialists would have made Kenya become. I recall reading (need to confirm) that Thailand (same geographical size as Kenya) exports more fruits/veggies than all of Africa combined.

Ideally, we get quickly to marketing end products instead of Europe making a killing from packaging African agric produce and raw materials. Even now I'm wondering whether it remains efficient for Lipton et. al to ship raw produce to Europe and manufacture/package there, given how much western manufacturing took flight to China and AfCFTA now. Some of the companies should probably start moving factories here or we double down on what Dormans et. al are doing and manufacture ourselves. I believe the African market alone gives us a chance to execute on a big vision. Somehow we become the re-export base that Europe is now, for our region. West & Central Africa import a lot from US/Europe and we need to act on those markets before other African countries (including Ethiopia) catch up. We also need a serious quid pro quo from the Chinese market. On the continent, Kenya probably stands to gain the most from China vs the west competition.

Back to post-independence Kenya, we had relative peace and pandered a lot to the west when a lot of the world (practically all of Sub Saharan Africa incl SA with apartheid, South America, SE Asia) was in turmoil. I think we should have gotten more out of this and attracted significant FDI, even if nowhere close to China's. Perhaps agricultural produce could have been a precursor to more high tech exports as we simultaneously embark on rapid training/education. I was surprised about how Ireland was able to attract huge electronics/semiconductor manufacturers, but after reading up on investments that the government made on technical education and attracting these manufacturers to set up base around technical universities (much like Konza), it makes sense.

[RV Pundit]

Industries should grow organically - be it flowers or whatever it will be - gov job is to ensure we have basic infrastructure needed for someone do whatever they want in any corner. Basic infrastructure meaning paved roads, electricity, piped water, and in urban areas modern sewer lines - of course soft issues like security and good governances - are nice to have - that basically mean you can wake up in deep remote area of your locale - and decide to build your factory or hotel or school.

Electricity we are nearly there - at 70 percent - paved water we are nearly at 50 percent.

Paved roads we have barely started -  so we need to double down on paving roads - it still a nightmare in many areas - we are maybe 20 percent of all classified roads...and 10 percent of all roads paved.

Railways - we are nearly there - for now finishing SGR to kisumu - and later on SGR from LAMU to JUBA - plus the road. These projects have doubtful ROI - and we should go slow on them.

Ports - we have LAMU - that has capacity for really huge cargo traffic - and later on we can do Dongo Kundu.

Now because it's expensive to build everything everywhere - at competitive rates - as stop gap - we need EPZ/SEZ - where we can establish mini china - ideally all these should be near the coast - Lamu and Mombasa - for export market - and for us - as country- to employ the millions of jobless youths.

If we build on top of LAMU deep sea port - the industrial park - gov just need to fence some land - provide water - electricity - and invite big manufacturers to take advantage of AGOA - we would be in big business. LAMU can easily host  1 million workers - mostly in light industries - like textile - with linkages in cotton farming from river tana irrigation schemes.Next move to Mombasa - get the Dongo Kundu free port - with industrial park in Kwale/Likoni area.

So for me it appears very straightforward - complete electrification, complete mega dams and supply water to almost everyone, continue to pave more roads - and once that is completed - the magic will happen without any further gov intervention.

Yeah I was thinking about the marshall plan. But yes, such a huge investment in infrastructure needs an even higher investment into production/trade thought/planning & execution. Germany et. al were already ridiculously good at making stuff and just needed to be back on their feet.

We're the 3rd largest exporters of both cut flowers and black tea globally against a backdrop of inefficiency due to bad infrastructure vs much larger & developed Asian countries. Which says that we could have potentially been like Thailand and been very large exporters of fruits and vegetables -- we're closer to Europe and Eastern US than they are. I think this is what the colonialists would have made Kenya become. I recall reading (need to confirm) that Thailand (same geographical size as Kenya) exports more fruits/veggies than all of Africa combined.

Ideally, we get quickly to marketing end products instead of Europe making a killing from packaging African agric produce and raw materials. Even now I'm wondering whether it remains efficient for Lipton et. al to ship raw produce to Europe and manufacture/package there, given how much western manufacturing took flight to China and AfCFTA now. Some of the companies should probably start moving factories here or we double down on what Dormans et. al are doing and manufacture ourselves. I believe the African market alone gives us a chance to execute on a big vision. Somehow we become the re-export base that Europe is now, for our region. West & Central Africa import a lot from US/Europe and we need to act on those markets before other African countries (including Ethiopia) catch up. We also need a serious quid pro quo from the Chinese market. On the continent, Kenya probably stands to gain the most from China vs the west competition.

Back to post-independence Kenya, we had relative peace and pandered a lot to the west when a lot of the world (practically all of Sub Saharan Africa incl SA with apartheid, South America, SE Asia) was in turmoil. I think we should have gotten more out of this and attracted significant FDI, even if nowhere close to China's. Perhaps agricultural produce could have been a precursor to more high tech exports as we simultaneously embark on rapid training/education. I was surprised about how Ireland was able to attract huge electronics/semiconductor manufacturers, but after reading up on investments that the government made on technical education and attracting these manufacturers to set up base around technical universities (much like Konza), it makes sense.

[sema]

What magic? why is the per capita income still below $2,000 a year then?

[RV Pundit]

The magic is industrialization. It can only happen once we have set all the conditions and have met all the preconditions.

What magic? why is the per capita income still below $2,000 a year then?