MUGA: Rival views on tackling Kenyan poverty

The past few weeks have given us a degree of clarity concerning the upcoming presidential election.

We can now say with some certainty that no matter how many presidential candidates we may ultimately have on the ballot, the race will be essentially between Deputy President Dr William Ruto and the former Prime Minister Raila Odinga.

So, turning to these two leading politicians who are competing for the presidency, I want to draw attention to what seems to me to be a rather odd factor of their campaigns:

While making campaign promises of unprecedented extravagance, neither of them seems to be promising to do the one thing that Kenyans are most in need of. And this is a massive programme of job creation, accompanied by accelerated urbanisation.

Also, both of their central campaign promises are obviously based on what has worked elsewhere in the world. But they neither give any credit to those they are copying, nor yet acknowledge the intellectual foundations of these ideas.

Raila’s most memorable promise is that he will introduce what is usually termed Universal Basic Income. This does not mean endless handouts to all and sundry, as his critics claim. Rather it is the provision of a temporary social safety net, through a cash grant, for those who are languishing in extreme poverty.

This is an idea pioneered by Brazil, a country of extremes, being rich enough to belong to the G-20 group of nations, while at the same time having about 12 million people living in shanty towns or slums, known as favelas. And by most accounts, the provision of Universal Basic Income to the residents of these favelas seems to have the desired impact.

Brazil is definitely worth emulating because it has the same structure of economic inequality as Kenya; only the richest Brazilians are much richer than any Kenyan, and the poorest Kenyans much poorer than any Brazilians.

Ruto’s pet project is for creating various loan schemes that would enable the young and unemployed, the hustlers as he calls them, to set up small businesses. Globally, this is usually referred to as microcredit.

This too is a tried and tested method of bringing hundreds of thousands – if not millions – out of poverty, and was initially a creation of Bangladeshi economist Muhamad Yunus, who founded the Grameen Bank.

However, it seems to me that whether enjoying the temporary relief of Universal Basic Income, or being self-employed courtesy of a microcredit loan, the person concerned would still be lacking what I believe many Kenyans most yearn for: gainful employment. More specifically, factory or service sector jobs in the major towns as an escape from backbreaking farm labour in the rural areas.

And for this the best example we could follow is from China. In the span of just a generation, China moved about 300 million people out of rural poverty and into paid employment in cities. This rate of urbanisation has since slowed down, but it is still regarded as an unprecedented economic miracle.

So, we have Raila arguing for the Brazilian model of cushioning the extreme effects of poverty, to allow families breathing space to seek alternative economic activity when they find they no longer have a viable means of livelihood.

And Ruto appears to be planning to copy the Bangladeshi model, where the Grameen Bank has over 8 million members and is reported to have given out loans of over $6.5 billion (Sh700 billion) since its founding, with an alleged 98 per cent repayment rate.

So why is neither of these leading presidential candidates promising us mass urbanisation on the China model, and undertaking to create, say, three million jobs over the next five years?

The answer I would offer is this: flawed government policy in the energy sector, which has led to overpriced electricity which in turn makes Kenya’s nascent industries uncompetitive globally.

At the end of the day, all these proposed solutions to our problems currently “on the table”, so to speak, are mere temporary fixes.

Until we drastically bring down the cost of power, this country cannot prosper.