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Thursday, December 04, 2008

Kenya - Pull up the bootstraps or else...

Kenya has always had 'potential'... but a lot needs to be done. Soon. And most of it does not require much money!

Tax Simplification: There are too many different taxes in Kenya. The confusion & complexity of the myriad fees/taxes/duties - as well as collection agencies - leads to corruption as the rent seekers are out in force.

Debt Levels: The gov't needs to scale back on its public debt or it will crowd out the private sector. Or if it takes on debt, it should be focused on INFRASTRUCTURE in partnership with private firms.

Inflation: I fear that inflation will be stoked by the recent actions since corrupt deals abound when subsidies are introduced as well as excessive borrowing OR printing of money.

Subsidies: Bad idea.

Moral Hazard: By selectively forgiving debt, the gov't is favoring those who were not either prudent or borrowed beyond their means. I think the bankruptcy laws need to be simplified & allow people to go 'bankrupt' rather than mass forgiveness of loans to specific groups. This opens channels for corruption & tribalism.

(Lack of) Property Rights: Why I do not invest in properties in Kenya.

FDI: Court the Chinese (warily), Indians, Arabs, Libyans, etc BUT do not give the family jewels for free or give monopolies!

Bastion of Peace: Remain a peaceful island that allows all to come to trade. It will provide jobs & economic diversification. Kenya needs to improve its infrastructure from the port to the railways to encourage other countries to trade with Kenya.

2-party system: I think this will stabilize our politics and force Kenyans to choose parties without being overly tribalistic. No more PNU for kikuyus, ODM for luos or ODM-K for kambas!
Or a no-party system like Rwanda! (There are many downsides to a no-party or 2-party system as well).

Security: A terrorist attack would devastate us. Let's make peace with our neighbours BUT carry a big stick. Look at the Dec 2008 Mumbai Bombings. India has a much more diverse tourist industry vs Kenya yet they expect to suffer a huge tourist drop-off.

3 comments:

MainaT said...

You are right that most of what needs to be done is not about money, but willingness and aptitude to implement tough choices.

Btw, don't miss out on property because over concerns about rights. There are many ways of safeguarding what you buy. Keep copies of stamped maps from the land registry, title deeds et al.

PKW said...

That tax thing must be the reason some Kenyans come to UG to buy stuff in wholesale that's later retailed in Kenya. For the record, UG is landlocked and most of that stuff is imported from Dubai, London, Bangkok etc and passes through the port of Mombasa, is then transported by road to UG. It should be cheaper in Kenya, and Ugandans should be coming to buy it from Kenyans-but for the taxes.

no-spin said...

Good point PKW! I always wondered that. How can stuff that is passing through Kenya be cheaper in UG? We need business minds in our parliament. It seems as if our parlimentarians are more interested in enriching themselves than in where the country is going.