Substance of  the speech by James Shikwati (Director, Inter Region Economic Network and CEO, The African Executive) during the Kenya Alliance of Resident Associations (KARA) Bi-monthly Talk Series on 18th September 2008 at Kenyatta International Conference Centre, Nairobi.

 

Acting Minister for Finance, Hon. Minister John Njoroge Michuki, Assistant Mission Director USAID, Mr. Dwight Smith, The Chairman KARA Governing Council, Mr. Christian Hegemer, Head of Hanns Seidel Foundation, Ladies and Gentlemen, all Protocols observed I beg your indulgence to interrogate the role of Foreign Aid to Kenya’s Future Development.

Introduction

Mzee Jomo Kenyatta

I would like to thank KARA for this opportunity to discuss The Role of Foreign Aid to Kenya’s Future Development. The Inter Region Economic Network was founded in 2001 to explore ways in which Kenyans and Africans in general can invest in the ultimate capital – the human mind. Our philosophy is that money in itself cannot develop any country unless it gets a constituency of people with freed minds. And through our weekly magazine The African Executive that we publish every Wednesday, we reach out to thousands of Africans and have even influenced developed nations’ thinking on the impact of aid to Africa.

Mzee Jomo Kenyatta (First President of Kenya) in his Independence Day Speech,  said: “We shall never agree to friendship through any form of bribery. And I want all those nations who are present today-whether from west or from east-to understand our aim. We want to befriend all and we want aid from everyone. But we do not want assistance from any person or country who will say: Kenyans if you want aid you must agree to this or that. I believe my brothers and I tell you now, that it is better to be poor and remain free, than be technically free but still kept on a string. A horse cannot choose; reins can be put on him so he can be led around, as his owner desires. We will not be prepared to accept any aid that will tie us like a horse by its reins.”

The term ‘Foreign Aid’ is used to refer to both loans and grants that wealthy nations give the Kenya and Sub-Sahara African governments to promote development in general. I will restrict my discussion on development aid – and not Humanitarian Aid. As we all know, Humanitarian Aid is assistance given out in times of crisis such as earthquakes, floods, war and famine.

What is Foreign Aid? In the aid industry, there are well meaning and well intentioned motives that drive some of the operatives. History however, points at the fact that the Western incursions into Africa were also clothed in good intentions, to ‘civilize’ and help ‘preserve natives’. Having given the genuinely well intentioned individuals latitude of respect; let me go forth and define Foreign Aid as it is.

Foreign Aid is a bribe given to poor countries by rich nations to enable the latter access resources, and markets cheaply. It is also a bribe to poor nations to prevent the migration of poor people to rich nations. It is a bribe to poor nations meant to address rich nation’s interests. We all know what bribes (aid) do to our police force (governments), the police get fatter but the crime and traffic offense related highway accident rates go up (under development of people). To the robber who bribes a policeman to ensure he/she is not caught – bribery is a good thing that promotes the looting industry! BUT if one were to ask the citizenry whose relatives perish on highways and their property get looted by thugs - a future without bribery is what they will go for. 

Berlin Conference’s Free Lunch to Africa – The Genesis of ‘clothed good intentions’

Article VI, The Act of Berlin, 1885: IN THE NAME OF THE ALMIGHTY GOD, All the Powers exercising sovereign rights, or having influence in the said territories undertake to watch over the preservation of the native races, and the amelioration [modernize] of the moral and material conditions of their existence.

It is VERY CLEAR THAT DONORS HAVE THEIR OWN SECRET OBJECTIVES and all else is STRATEGY ( see Adam Hochschild’s Book “King Leopold’s Ghost” and Caroline Elkins’ “Britains Gulag: The Brutal End of Empire in Kenya - History is clear on what exactly the reality of what Article VI meant – extract resources from Africa to Western capitals; has anything changed?)

The Point is, are Africans and Kenyans still keen to “enjoy” the preservation, modernization and moralization that Foreign Aid pundits propose to sustain? (Aid driven governance, and democratization) And if we surrender the quest of the modernization of Kenya to foreigners through Aid, will Kenya’s Future Development be Kenyan or that of the donors?

Foreign Aid and Perpetuation of an ‘illegal’ Social Contract between Kenyans and their government

The January 2008 Post Election Violence offers some insights on just how we missed the boat and continue to do so today: How was Kenya born? Kenya’s history is traceable to 1895 when the British declared it a protectorate; the history of the people in Kenya dates back hundreds of years before. A brief glimpse at Kenya’s history points at a country founded on the basis of fraud – Kenyan citizens did not willingly sign a social contract to create a system of government to manage their affairs in the late 18th century. The birth of Kenya was based on trickery, treachery and in some cases pure robbery. Where guns were not used to capture land, a bribe in the form of cigars, bottles of gin, and mirrors were used. The word treaty recorded in British history books was in fact euphemism for robbery for many chiefs had no idea about the implications of what they were signing. By covering looting intentions with philanthropy and civilization Kenya was born…  

At independence, Kenya inherited governance institutions that had been put in place by the colonial government. Of particular importance in today’s topic is what transpired at the Lancaster House Conference on the subject of property rights; Kenyan nationalists pushed for a land policy and land reform to enable aggrieved communities access (repossess) their land. Differences over this land issue were so deep that they threatened to scuttle independence talks. It was only through AID from the World Bank’s land buy-out scheme that eased pressure and enabled Lancaster talks to focus on other issues. Once Kenyan elites dipped their hands into the land-buy-out aid money, they forgot about the independence ideals they had fought for. The corrupting effect of aid caught up on Kenyan elites; they bought land yes – but took huge portions for themselves. They used the same money to literally bribe people in their ethnic communities to purchase land from migrating whites in the rift valley and totally ignored the fact that rift valley communities too had land grievances (hence perpetual Central and Rift valley animosity). The donor achieved his objective of safeguarding his interests – saving property rights of their cousins in Kenya – but Kenyans to date and we saw in January 2008 still – are – still grappling with land issues.

Kenyans are yet to popularly and legitimately get an opportunity to draw a proper social contract with their government (through the constitution). Attempts to write a constitution that reflects Kenyans' wishes always hits a stalemate because of thorny issues on property rights that donors helped gloss over. Armed with aid, Kenyans continue to endure the largesse of governance whose historical premise is yet to be legitimized in the minds of many.  That partly explains why ethnic loyalties take precedence over everything else.

Kenya's post-election violence was partly due to Kenyans’ general attitude towards existing institutions and their lack of intrinsic appreciation of institutions as presently constituted. To quote President Thabo Mbeki – Kenya’s post election violence was a resultant effect of decolonization gone wrong! (Why because of fixation on aid as in the land-buy-out scheme that helped alienate independence fathers from their own people.) Time and again the media reports incidents of citizens taking it upon themselves to mete out justice on stolen chicken, (mob justice) and most recently even primary school children at the Coast of Kenya were captured on TV fighting to protect the school land from grabbers! Attempts by aid to make Kenyans think development at the expense of focusing at the key issue of ensuring legitimate social contract (constitution and institution building) that will serve the citizens interests simply serves to postpone the problem to other generations.

What is Foreign Aid doing today? The Malthusian Trap

Prof. Gregory Clark “A Farewell to Alms: A Brief Economic History of the World”

Prof. Clark revisits Rev. Thomas Robert Malthus who in 1798 in An Essay on the Principle of Population pointed at the danger of population growth outstripping food productivity. In a Malthusian economy; populations interact with their environment in a similar fashion to other animal species that add little or no creative means of increasing food productivity – all is driven by nature. A state of ‘natural’ economy where technology does not play a role in differentiating the living standards of humans; picture a situation where animals in the Game Reserve outweigh the carrying capacity of such a reserve; unless external intervention is applied – such animals will perish due to starvation. Too many animals – too little grass to feed on; what technology and innovation did for humans was to enable them escape the Malthusian trap; that is, be in a position to feed themselves irrespective of whether they outnumber what the natural economy has to offer.

Unfortunately, the Kenya and sub Saharan societies in general have remained trapped in the Malthusian era, where technological advances from donor countries merely serve to produce and preserve more people while driving living standards down to subsistence. Kenyan numbers go up, are sustained - but they cannot creatively add value to the environment for survival. A foreign aid driven society that does not allow citizens to utilize their own ingenuity to interact with their environment creates high levels of dependency. Kenyans are grappling with the issue of high number of educated and unemployed citizenry, while at the same time are confronted with a myriad of economic challenges that the so called educated seem unable to offer solutions. So they look out to the donors…while they leave youth idle on the streets and rural corner shops scheming on who to rob next.

Dependency on aid has led to living standards of majority of Kenyans to drop to the Stone Age era; they cannot interact and utilize their environment to make ends meet. Any time they make such attempts – the aid driven economy ejects them and relegates them to informality. We know them – street vendors, jua kali, and small holder farmers – and yet again, their ingenuity is seen to be the type that aid ought to salvage!

Aid as bribery: We are not Beggars

Do Mumias’ sugarcane farmers deserve Aid? A typical sugar cane farmer in Western Kenya will lease out an acre of cane at Ksh 30,000 for 3 harvests (6 – 8 years). Such action is taken to address urgent concerns such as school fees, medical bills, and food. On average, an acre of cane will earn one an estimated Ksh 50,000 per harvest; a “donor” who “helps” such a farmer to address his urgent needs fetches a cool Ksh 120,000 in 3 harvests. Such a donor may benefit even more if he chooses to utilize the lease hold to generate capital for his other businesses through commercial loans. Our farmer remains in a cycle of urgent needs!

Mr. Asman Osieko (Head Teacher, Mumias Boys Muslim High School) and a Western Kenya native came up with an innovative way to save farmers. Says Mr. Osieko, “I figured out that parents who genuinely wanted to take their children to school were loosing out to unscrupulous business people every year, I and my staff came up with Irrevocable Forms for Mumias Sugar Company that enable the company to act as a guarantor and pay fees directly to school once the harvests have been made.” Parents maintain control of their resource (cane) and are able to utilize the surplus earnings in developing other aspects of their lives.  What lessons does Mumias farmer’s scenario have for Africans who believe in aid and debt relief?

What about Congo? Africans are under-pricing their raw materials and commodities to developed nations because their bargaining power is lowered by the weight of foreign aid and debt relief. Countries that feature on debt relief sheet coincidently have raw materials of strategic importance to Western nations and China. For example, Niger has Uranium, Nigeria (Oil), Democratic Republic of Congo (Uranium, Coltan, Cassiterite among may other minerals), and Uganda (Oil and gateway to East DRC) to name but a few. Another interesting observation is that the majority of countries on debt relief list are involved in some form of violent conflict that is somewhat linked to subsurface wealth.

Take for instance Democratic Republic of Congo, a country that holds World’s estimated 70% of Coltan and 34% of Cassiterite; two strategic minerals in the production of cell phone, laptops and other portable electronics. Stan Cox, a journalist with Channel 4 TV last year pointed out how 50 kilogram packs of Cassiterite fetch $400 on the world market while it fetches Congolese $5 if they are lucky not to be robbed by soldiers. Recall, DRC has only 300 miles of paved roads (good place to send AID for roads eh?) The World cell phone industry is churning out 25 cell phones per second everyday, Supposing DRC was stable politically AND traded its products in a sober manner in the World market would it queue for aid? (Put in another way, who gains when African countries are politically unstable?)

The role of Wazee’s kamkunji in Kenya 

In the African cultural setting, such a forum comprised of wazee waheshimiwa would be bequeathing to the young the mantle of inheritance either in the form of land, cattle and blessings. Given Kenya’s facts on debt that are variously reported to range from $6 – 8 billion (27% of Kenya’s GDP); I am afraid that the subject matter at hand could as well be equated to discussing how much debt and enslavement we propose to bequeath Kenya’s future.  President Mwai Kibaki’s administration inherited a $5.8 billion debt from the Moi administration; what will stop the political, business and professional elites from colluding with “donors” to put Kenya and Africa in debt if the future generation has no power to limit their excesses? Is it debt and underdevelopment we want to give to our grand children?

Kenyans ought to ask themselves: Exactly how much aid do we need and for how long? Who determines the amount of aid we need – Kenyans or donors?

Conclusion 

The scramble by the aid industry to dominate poor countries has necessitated the formation of an aid effectiveness initiative. Such an initiative while well intentioned on the surface helps cloud the fact that donors are scared of new entrants such as China, India, Turkey and Brazil joining in their trade. As the situation is not changed; the role of foreign aid to Kenya’s future development will be that of alienating the average Kenyan further from the country’s economy and natural resource. Ultimately Kenyans will remain but servants of donors’ interest. Clearly Kenyans will not be in a position to plan for and implement anything if aid still dominates the affairs of the country.

Kenyans should not fall into the trap being set by Westerners through Aid Effectiveness Drive; such a drive evokes the memories of the infamous Berlin conference where Western powers euphemistically resolved to modernize (plunder) Africa. The aid effectiveness drive is meant to check “rogue states” that want to join the Aid Pie strategy to dominate and access raw materials – China, India, Turkey, Iran, Russia, Brazil among others. Kenya should take advantage; develop its own interests, equipped with the knowledge that Foreign Aid will not develop Kenya!

Experts have argued that Kenyans and Africans in general have more problems per square person! Such problems include poverty, diseases, conflict over resources (land, water, jobs in government), corruption, hunger, giant slums, sanitation, housing, energy (electricity, fuel, wood) lousy schools (not equipped), minimal health care, little infrastructure – list is endless

What our education system has done is simply prepare us to look out to donors for assistance. And donors have made it clear that we have to cut on number of health workers and even teachers! They even pushed (in the 80s and 90s) for the scrapping of some subjects in our curriculum that they thought useless – I remember the war on history lessons and the arts – so that Kenya can develop ‘scientifically’ and have robots as citizens who have no idea about their own history. How do you get confidence to negotiate trade deals with people who have information on you and you have non on them?

Point is; we need to push our citizenry to adopt a business attitude. Business attitude is not just about minting money at the expense of customers (our government functionaries are good at giving out contracts to their relatives to do just that). Business attitude is about offering products and solutions that transform people’s lives – that is what Kenya needs- and Kenyans are ready to reward each one with immense profits that successfully transform our problems into business opportunities. That way, Kenya’s future will be guaranteed for it will be Kenyan themselves driving their own destiny.

If the future of Kenya’s development depends on Foreign Aid; the donors are better placed to determine how Kenya will look like!

Mzee Jomo Kenyatta (1963): “We ourselves can save us, but nobody else. When children of Israel were crying, saying: ‘God, why did you bring us to this wilderness, where there is no water or sustenance? God said He would bring them something called manna. This cannot happen again. He said He had closed the door, and anyone who wanted manna had to work for it. These are not the words of Kenyatta” [God’s words]

Thank you.

See the speech by Hon. John N.Michuki, Minister for Environment and Mineral Resources and Ag. Minister for Finance at the same event at

http://www.kara.or.ke/readnews.php?newsid=79