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November 17, 2018

Threats Of Sanctions Over Uhuru Presidency Are Real

Finance Min Uhuru Kenyatta in different moods. 16 June 09. Jack Owuor
Finance Min Uhuru Kenyatta in different moods. 16 June 09. Jack Owuor

The head of media relations at Deputy Prime Minister Uhuru Kenyatta’s presidential campaign, Macharia Murigi, wrote a thought-provoking opinion piece recently in one of the daily newspapers under the headline; Prophets of Doom: “The West can’t afford to sanction Kenya.”

The gist of Mr Murigi’s argument is that Western economic powers, notably America and Britain, no longer have the necessary weight to throw around to cajole developing countries into toeing the line as far as certain geopolitical issues are concerned.

The balance of power, Murigi argues, has shifted eastwards where countries like China are now calling the shots, thus affording poor countries new developing partners. In this regard, Murigi goes ahead to say that Kenyans have nothing to fear if they elected Uhuru Kenyatta and William Ruto at the forthcoming polls.

If Western powers feel they cannot work with Kenya because these two leaders are facing crimes against humanity charges at the ICC, Kenya could as well work with other countries like China and still remain afloat economically.

A number of Western diplomats have warned that, in the interest of democracy and good governance, there will be severe consequences should Uhuru and Ruto be elected while they still face trial at the ICC.

According to these diplomats, the values espoused by their societies do not permit their governments to associate with countries whose leaders are accused of such crimes.

Although the Western diplomats have not specified the severe consequences Kenya could face, Murigi speculates that their governments will slap Kenya with economic sanctions as punishment for electing Uhuru and Ruto.

But the author still thinks that Western governments cannot afford to go the sanctions way because the recent economic meltdown they suffered left them so disparate that they cannot risk imposing sanctions on Kenya because that would hurt their investments in the country.

Therefore, Murigi argues that Western countries need Kenya more than Kenya needs them—they will just have to accept a Uhuru/Ruto presidency come-what-may.

But this argument, persuasive as it may appear on face value, is naïve, simplistic and misleading. By arguing that Kenya can simply turn to China if Western countries refuse to do business with it, Murigi seems not to know how international commerce operates.

First and foremost, he seems to forget that China’s international trade heavily relies on American and European Union financial institutions. For example, even if Kenya were to trade with China, they would need U.S. dollars in order to complete transactions.

Despite its robust economy, China does not trade with other countries using its local currency, the Yuan— it trades in American dollars and that is why Beijing has the largest dollar reserves in the world today.

But even with this massive dollar reserves, China always prays that Western financial markets remain stable because the value of their dollar reserves depends on them.

In any case, if shunning the West by shifting to China was a reliable and better option for any developing country, then Zimbabwe’s economy would not be in shambles. Mugabe’s regime thought it could depend on China after it was slapped with sanctions.

But the China option has not helped Zimbabwe in any way because the sanctions have limited its capacity to access the dollar.

Iran, which is the fourth-largest producer and exporter of petroleum and the brainchild of OPEC, is today feeling the pinch of economic sanctions slapped on them by Western powers.

Despite over 80 percent of Iran’s international trade being with Asian powerhouses like India and China, the country is today crippled because it cannot access payments made for its petroleum exports.

Why? — Because those payments, whether made by China or India, must be in U.S. dollars, and must be wired through international banking institutions owned by Western countries.

Hence, if Western countries slapped sanctions on Kenya, it would include sanctions on the country’s ability to access dollars— meaning that even trade with China or any other alternative development partner would not be possible.

Above all, Murigi must be assumed to know that despite the robust status of the Chinese and Indian economies, these countries cannot give Kenya everything. For example, despite their economic might, Chinese airlines themselves still fly the Boeings and Airbuses of this world.

If sanctions were slapped on Kenya, the national career, Kenya Airways, cannot pretend that it would go to China or India to buy aircraft or spare parts for their fleet.

For these reasons, Kenyans must not be misled by Murigi’s article about what options they have if Uhuru and Ruto are elected. The threat by Western powers must be taken seriously and should not be underestimated by short-sighted analysts.

Be that as it may, Murigi’s argument has also attempted to portray China as a country that does not recognize the authority of the ICC, and that’s why he thinks that Beijing will continue working with a Uhuru/Ruto government, the ICC charges notwithstanding.

But this is a very erroneous perception of China. It is important to know that despite not being a signatory to the Rome Statute, which established the ICC, China, like the United States, has been very supportive of the ICC.

Several high-ranking officials of the Chinese government visited The Hague last year where they held fruitful discussions with the President of the Court and reaffirmed Beijing’s respect for the Court’s authority. In this regard, Kenyans should not be misled into thinking that China will tolerate a leadership in Kenya that defies the ICC.

Many Kenyans have been misled into thinking that the new road infrastructures like Thika Superhighway are Chinese goodies to Kenya. But it is important for Kenyans to know that construction of Thika Superhighway was largely funded by the African Development Bank, not the Chinese government.

Shareholders of the African Development Bank are largely American, European and Middle East investors. The design of the superhighway was done by an Indian company while Chinese companies won the tender to do the construction.

The reason Chinese companies were awarded the tender is not only because they are capable, but also because the leadership in Beijing has committed itself to respect and espouse the values of the international community on good governance, integrity and respect for rule of law.

In this regard, Kenyans should not be misled into thinking that they can just elect Uhuru and Ruto and get away with it— then expect to be embraced by China, India or Indonesia as an alternative to Western economic support.

 

The writer is the Deputy Secretary General of the Supreme Council of Kenya Muslims and Secretary General of the Muslim Leaders Forum.

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