Economics 172 Issues in African Economic Development

Economics 172Issues in African Economic Development Lecture 25 April 25, 2006

Outline: • Barkan (1994) • Miguel (2004) on Kenya versus Tanzania Economics 172

Politics in Kenya • Kenya is extremely ethnically diverse (as is Tanzania): Ethnic GroupPercentage Kikuyu (Embu, Meru) 28* (Kenyatta’s group) Luhya 14 Luo 13 Kalenjin 12 (Moi’s group) Kamba 11 Nomadic groups in north 7 (Small numbers of South Asians, Whites) Economics 172

Public policy in the Moi period (1978-2002) • His political coalition consisted of ethnic groups previously marginalized during the colonial and Kenyatta periods: Kalenjin, Maasai, coastal groups Economics 172

Public policy in the Moi period (1978-2002) • His political coalition consisted of ethnic groups previously marginalized during the colonial and Kenyatta periods: Kalenjin, Maasai, coastal groups • Important policy shifts: (1) Increased tax rates on agricultural exports (2) Replaced Kikuyu civil servants, military officials with loyal Kalenjins Economics 172

Public policy in the Moi period (1978-2002) • Additional policy changes: (3) Public investments in health, education, roads shifted to Moi’s Rift Valley stronghold: Central (33% pop.): 44% funding in 1979 to 16% by 1987 Rift Valley (33% pop.): 32% funding in 1979 to 57% in 1987 Economics 172

Public policy in the Moi period (1978-2002) • Additional policy changes: (3) Public investments in health, education, roads shifted to Moi’s Rift Valley stronghold: Central (33% pop.): 44% funding in 1979 to 16% by 1987 Rift Valley (33% pop.): 32% funding in 1979 to 57% in 1987 (4) Doubled the number of university slots, but not funding. This led to dramatic deterioration in the quality of instruction. Founded “Moi University” (5) Doubled the size of the civil service (133,000 to 272,000), but many were patronage posts Economics 172

Political opposition to Moi • There was an attempted coup by Kikuyu Air Force officers in 1982, put down by Moi • In the aftermath of the coup, Moi cracked down on the opposition, banned opposition parties, imprisoned hundreds of peaceful dissidents, banned all ethnic organizations. In 1986 he revoked the independence of the civil service and judiciary. Economics 172

Political opposition to Moi • There was an attempted coup by Kikuyu Air Force officers in 1982, put down by Moi • In the aftermath of the coup, Moi cracked down on the opposition, banned opposition parties, imprisoned hundreds of peaceful dissidents, banned all ethnic organizations. In 1986 he revoked the independence of the civil service and judiciary. • With opposition and public oversight weakened, Moi and his cronies became increasingly corrupt: (1) Massive kickbacks from foreign investors (2) Chartering banks, and then looting their deposits Economics 172

Political opposition to Moi • There was an attempted coup by Kikuyu Air Force officers in 1982, put down by Moi • In the aftermath of the coup, Moi cracked down on the opposition, banned opposition parties, imprisoned hundreds of peaceful dissidents, banned all ethnic organizations. In 1986 he revoked the independence of the civil service and judiciary. • With opposition and public oversight weakened, Moi and his cronies became increasingly corrupt: (1) Massive kickbacks from foreign investors (2) Chartering banks, and then looting their deposits (3) Smuggling food into the country, selling at profit (4) Printing money for patronage  high inflation Economics 172

Political changes in Kenya • The rigged 1988 national election was a turning point • In early 1990, former ministers Kenneth Matiba, Charles Rubia called for restoration of democracy Economics 172

Political changes in Kenya • The rigged 1988 national election was a turning point • In early 1990, former ministers Kenneth Matiba, Charles Rubia called for restoration of democracy • In July 1990 large protests were organized by students, church groups in Nairobi to call for democracy. 28 protesters were killed on July 7, 1990 (“Saba Saba Day”) • In 1991 Matiba, Rubia and Oginga Odinga founded the united opposition party Forum for Restoration of Democracy (FORD) Economics 172

Political changes in Kenya • The rigged 1988 national election was a turning point • In early 1990, former ministers Kenneth Matiba, Charles Rubia called for restoration of democracy • In July 1990 large protests were organized by students, church groups in Nairobi to call for democracy. 28 protesters were killed on July 7, 1990 (“Saba Saba Day”) • In 1991 Matiba, Rubia and Oginga Odinga founded the united opposition party Forum for Restoration of Democracy (FORD) • In November 1991 international donors imposed explicitly political conditions on further aid. Aid suspended for six months Economics 172

Ethnic clashes during democratization • Moi relented and in December 1991 lifted the ban on opposition parties, and called an election for late 1992 Economics 172

Ethnic clashes during democratization • Moi relented and in December 1991 lifted the ban on opposition parties, and called an election for late 1992 • However, from late 1991-1993, KANU is reported to have organized Kalenjin youth militia groups to terrorize and expel non-Kalenjin farmers in Rift Valley • Roughly 1500 were killed and 300,000 mainly Kikuyu and Luhya farmers were made homeless Economics 172

Multiparty elections in 1992, 1997 • Perhaps surprisingly, Moi easily won the multiparty elections in 1992, and again in 1997. Why? Economics 172

Multiparty elections in 1992, 1997 • Perhaps surprisingly, Moi easily won the multiparty elections in 1992, and again in 1997. Why? • The political opposition in both elections was split along ethnic lines. For instance: Kenya African National Union (Kalenjin, Maasai) Democratic Party (Kikuyu) Ford-Asili, NDP (Luo) Ford-Kenya (Luhya) Social Democratic Party (Kamba) Islamic Party of Kenya (Coast – eventually banned) Safina (Whites, Asians, others in Nairobi) Economics 172

Democratization in 2002 • Moi was constitutionally prohibited from running again in 2002. He chose Uhuru Kenyatta as KANU candidate • Raila Odinga (Oginga’s son) was hoping to be the KANU candidate. He left the ruling party and joined the opposition NARC (National Rainbow Coalition) Economics 172

Democratization in 2002 • Moi was constitutionally prohibited from running again in 2002. He chose Uhuru Kenyatta as KANU candidate • Raila Odinga (Oginga’s son) was hoping to be the KANU candidate. He left the ruling party and joined the opposition NARC (National Rainbow Coalition) • For the first time all of the opposition groups were united, behind Odinga (Luo), Mwai Kibaki (Kikuyu), Michael Wamalwa (Luhya), Charity Ngilu (Kamba). NARC won a major victory in the 12/2002 elections • The “deal” was that if they won, Kibaki would be President and a “strong” prime minister post would be created in the constitution for Odinga Economics 172

Is Democracy enough? • During constitutional negotiations in 2003-4, Kibaki went back on his promise to create a powerful prime minister position for Odinga, preferring a ceremonial position. This has strained the government. • The government tried to pass their version of the constitution by referendum but were defeated in 2005 Economics 172

Is Democracy enough? • During constitutional negotiations in 2003-4, Kibaki went back on his promise to create a powerful prime minister position for Odinga, preferring a ceremonial position. This has strained the government. • The government tried to pass their version of the constitution by referendum but were defeated in 2005 • Anti-corruption czar John Githongo uncovered a massive corruption scandal involving the VP and three ministers, “Anglo Leasing”, which has further eroded support for the government Economics 172

Is Democracy enough? • During constitutional negotiations in 2003-4, Kibaki went back on his promise to create a powerful prime minister position for Odinga, preferring a ceremonial position. This has strained the government. • The government tried to pass their version of the constitution by referendum but were defeated in 2005 • Anti-corruption czar John Githongo uncovered a massive corruption scandal involving the VP and three ministers, “Anglo Leasing”, which has further eroded support for the government • All sides are jockeying for position in the 2007 elections. Which coalitions will form? What options do the Kenyan people have? Economics 172

Whiteboard #1 Economics 172

Map of Africa Economics 172

Economics 172 Issues in African Economic Development