Why Kenyans urgently need economic stimulus
We are certainly in a precarious position economically as a country.
The debt to Gross Domestic Product (GDP) ratio is higher than at any other time in history, unemployment rate remains a constant worry to the President. All these are hallmarks of economic recession. This has been compounded by the resurgence of the triple planetary crises of climate change, loss of biodiversity and pollution. When all these are put together, then you see an environment that greatly threatens human survival.
In moments of such great peril as these, we must see our social contract working for us in both word and deed. In its newness, the expectation is that this administration must put in place necessary investment and measures to protect the most vulnerable even as we think of long-term solutions.
This is precisely what responsible governments have done in the past, failure to which history is replete with examples of how the citizens opted out of social contract. The most famous examples are the French and Bolshevik revolutions of 1917. More recently we had the Tunisian revolution that brings to mind the entire spectacle of early 2011 that was famously christened the Arab spring.
As speaker John Bercow once observed “History is more than a path left by the past, it influences the present and can shape the future. “As such let us look at how countries have responded to economic distress”.
Without going deep into the annals of history, let us remember the economic depression of 2008 when the Lehman Brothers, an American global financial services firm, went belly up triggering panic in the American banking and financial system and inadvertently setting in motion the recession.
The American Government was concerned with two critical issue; Stabilising the market and providing help to the most vulnerable families. To this extent, the world watched as a bi-partisan bill was quickly processed through congress to ensure the financial system was stabilised. The Troubled Asset Relief Programme (TARP), not only helped inspire confidence in the market, but also stopped the crisis from deepening. After this, another landmark legislation was passed, the Home Affordable Refinance Programme (HARP), a stimulus package that focused on homeowners who were already underwater and most vulnerable.
We will ask for no more and no less. In the face of this prevailing economic anxiety, the government must find means of jump-starting economic productivity even as it aggressively engages multilateral partners to discuss modalities of a less painful debt restructuring. As Adam Smith puts it in the book “The Wealth of Nations”, an economy is as vibrant as what it produces, what it consumes and the investment it makes in its people.
We must provide a stimulus package that will provide a safety net to the most vulnerable even as we focus on production. We cannot leave our people, especially those without wealth to their own devices in the name of subsidising production. These people braved the biting cold to stand in long queues to put this government in office.
Pastoralist communities in Arid and Semi-Arid Lands regions, which are currently bearing the brunt of the drought are citizens of Kenya, we need to deliberate urgent measures to send them help even as the government crafts a long-term strategy.
To end where I started, history is not a burden of one man or woman alive, but some are called to meet a special share of its challenges. This, I believe is a duty that the President has committed to discharging with distinction and as such, we must give this administration the necessary support to put us back on the path of economic prosperity.
— The writer is a Governance and Policy Expert
