Yesteryear the country’s gross domestic products(GDP) was growing at 7% and everybody in wall-street and 10 downing street was very happy that there is emerging economic tiger in sub – Sahara countries, but today it is masturbating at 2% a clear indication that the country’s GDP as whole was not growing at that 7% something which leave any upright layman with a little hint of economic development to conclude that the 7% growth was having its reflection in Kenyatta avenues,Moi venues, Ngala street and Uhuru highway, but it was missing in Kibera slums, Korokocho slums, Mathare slums and the entire rural villages across the country. Can anybody out there explain to me how this economy sunk like a titanic ?
While someone is thinking about it……I hope there are some appropriate measure which can be used to diagnose this sick economy from its symptoms .To begin with,
Higher investment is only one of the pre-conditions for realizing a high rate of economic growth in any country. Other factors that influence the growth rate of any country are health and healthcare. Educated and healthy population can make a lot of difference to the economic growth,. as it helps them rise the social and economic ladder. More people that are added to the prosperous middle class more economy develops faster.
This is amply borne out by the experience of many developed countries, which have witnessed, over the years, relatively higher rate of growth by adding more people into the middle class. Thus when we say that vast majority of the people in developed countries belong to middle class we mean that they have not only relatively higher level of income which provides them comfortable level of living beyond bare substance but a level of income which also provides access to good education and good health care.
The economic evidence in the developed countries shows that relatively high income and comfortable level of living is dependent upon access to good execution of education and health care coupled with highly developed infrastructure.Knowledge of better job opportunities and ease of mobility makes a significance difference in improving the living standards.
Unfortunately, in Kenya adequate attention has not been paid to provide universal education and heath care to all. After more than four decade since independence vast majority of the people are illiterate and have no access to even primary medical facilities. This is a sharp contrast to westerners-while socialist countries where the goal of universal education and heath care for all was achieved within one decade of the revolution. And we even after 46years of independence ,have yet to ensure universal education and primary health care for all.
The available data on Kenya show that though the government is willing to give subsides on no-merit goods, the expenditure of education and health care has almost remained stagnant or gone down in certain individual years.
The expenditure on education hovering in single digit and health care share the same single digit numbers, on the gross domestic products(Gdp) for many decades. As against this the subsidiary paid by government is on food fertilizers and export and import promotions.
This is in sharp contrast to other countries where social expenditure as percentage of GDP is much higher compared to Kenya. Many countries in Asia relatively spend more of their Gdp on health care. México and S.Korea spend more than 5% of their on health care. Based on human development Report, more than double digits of our population has no access to health care services. In the same figure has no access to save drinking water while almost half of the adult population are illiterate .
The contribution of education to the economic growth at the macro level and in improving the living standards of the families at the macro level cannot be underrated. According to American scholars, the investment in education contributed 23% or more of the growth of real income and 42% and the growth of real income per person employed in the USA during 1929-57.Therefore to ensure high economic growth the state will have to make serious efforts to provide education and health care to all and make conscious to bring bulk of the population above the poverty line.
The educated labour force can raise its productivity manifold as also its earnings. The time has come to challenge the argument that cheap labour provides comparative advantage to Kenya in the international market. But cheap labour also means low earnings. The labour should be cheap in the sense that that it is more productive. This can come through education only. We should make conscious efforts to move absolute cheap labour to relatively cheap labour .
The productivity of skilled labour is much higher. Today societies are going to be knowledge driven and Kenya cannot afford to be left behind in the race simply because a substantial population of its population is illiterate.
Apart from education and health care, an efficient infrastructure which includes good roads and rail network, efficient transports system and up date communication facilities so that people especially at the lower rung of the society can move easily and quickly from one place to another in such of better opportunities. But the infrastructure as it exists today in this country is one of the biggest stumbling blocks for achieving higher growth rates.
Except, for the national highways, development of modern airports, harbors, communication systems and railway is very slow. The facilities available in Jomo Kenyatta International Airport do not march the facilities available in let say in Frankfurt Airport or Singapore Airport.
Frankfurt Airport and Singapore Airports handle thirty to forty times more flights than Jomo Kenyatta International Airport. The government has yet to make a major move on the various recommendations presented before them on the development and the infrastructure in the country.
In fact, the country should stop talking about eradicating poverty and bringing people above the poverty line but start working to uplift vast majority of the people of the margin to the lower middle class level; the country must get out of poverty syndrome. That 25% of the population which lies below the poverty line , needs to be brought to the lower middle class level. The key to economic growth lies in universal education, health care to all and easy mobility.
It should be our vision of 2030 memo that people below poverty line should be brought to the level of middle class and once that is achieved the social mobility towards middle class and upper class will gain its own momentum.
The term ‘middle class’ should not be understood in derogatory sense as it is more often used but as an economic category which shows the absence of both absolute and relative poverty. Middle class in developed countries is the engine of the economic growth and development; it is in this class, which sustain the domestic market. This becomes quite obvious when one travel in Europe or Japan or for that matter in South East Asia countries like Thailand, Singapore and Malaysia.
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