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Kenya: Strategies for Development

  • Frances Stewart

Abstract

The Kenyan economy cannot be viewed in isolation either from its own past or from the world economy. The past determines not only where it is today, in terms of distribution of industry, employment, technology, trade, resources of manpower, etc., but also the possibility of exercising policy options. Economists tend to regard policy as the autonomous factor to be manipulated by eager, rational decision-makers in the pursuit of declared objectives. Policies too are part of the fabric of social struggle, and are the outcome as well as, in turn, a cause of historical developments. While its history limits and in large part determines current and future possibilities, this history itself is largely conditioned by the impact of events outside Kenya or Kenyan control, what is often termed ‘the world system’. Current options are likewise limited by this system. The following chapter aims to emphasise this perspective, so that the current situation may be viewed as a link which simultaneously is part of and joins two chains, one chain to the past, another to the world system. Two questions, which underlie most of the discussion here, are thereby raised. First, in what direction do the chains lead? Secondly, how determined is the system; to what extent do decision-makers today have any freedom of choice?1

Keywords

Foreign Investment Informal Sector Development Path Real Income Import Substitution 
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Notes

  1. 3.
    For a brief description of the colonial impact on Kenya up to the Second World War see L. Woolf, ‘Kenya: White Man’s Country?’, Fabian Publications, Research Series, no. 78 (1944).Google Scholar
  2. See also G. Bennett, Kenya: a Political History, the Colonial Period (Oxford University Press, 1963) andGoogle Scholar
  3. C. Rosberg and J. Nottingham, The Myth of Mau Mau: Nationalism in Kenya (New York: Praeger, 1966). For a more comprehensive history see the History of East Africa, ed. R. Oliver and G. Mathew, vols I and II (Oxford University Press, 1963, 1965).Google Scholar
  4. 5.
    See A Rosberg and A Nottingham, Myth of Mau Mau, and J. M. Kariuki, ‘Mau Mau’ Detainee (Oxford University Press, 1963).Google Scholar
  5. 7.
    R.J. M. Swynnerton, A Plan to Intensify the Development of the African Agriculture in Kenya (Nairobi, 1954) : the date at which the first serious attempts to aid African agriculture were made — only nine years before Independence -must be regarded as significant.Google Scholar
  6. 8.
    Any assessment must involve some view of what would have happened in the absence of colonialism, the extent to which colonialism destroyed a self-reliant and developing society and an assessment of the desirability of different patterns of development. For one interesting view see W. Rodney, How Europe Underdeveloped Africa (Dar es Salaam: Tanzania Publishing House, 1972).Google Scholar
  7. 12.
    See Kenyanisation of Personnel in the Private Sector, a Statement on Government Policy relating to the Employment of Non-citizens in Kenya, White Paper of Government of Kenya (1967); and D. T. Asup Mol, Statement on the Application of the New Immigration Act in Relation to ‘Work Permits’ and Kenyanisation, Republic of Kenya (Feb 1968);Google Scholar
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  9. 19.
    See P. Marris and A. Somerset, African Businessmen: a Study of Entrepreneurship and Development, (London: Routledge, 1971) for a fascinating survey of some African entrepreneurs in Kenya. ILO technical paper no. 18 describes services provided by the government for small-scale businesses.Google Scholar
  10. 23.
    According to estimates of B. Herman, Some Basic Data for Analysing the Political Economy of Foreign Investment in Kenya, Institute of Development Studies, Nairobi, discussion paper no. 112 (1971), foreign finance for foreign-owned companies amounted to K£69m. and local finance (share capital and loans) to £7・9m., 1964–9. Restrictions have now been imposed on local borrowing rights of foreign companies.Google Scholar
  11. 25.
    Paul Streeten, ‘New Approaches to Direct Private Overseas Investment in Less Developed Countries’, in The Frontiers of Development Studies (London: Macmillan, 1972) p. 209, has succinctly presented this dilemma, in a formula. In fact the formula he presents (that the rate of increase of new foreign investment must exceed the rate of return on old investment) should be modified to allow for local borrowing by foreign firms, which with non-equity borrowing will further increase the potential outflow if the rate of return exceeds the interest rate on the locally borrowed funds.Google Scholar
  12. 34.
    For example, in 1962 the Ministers of Labour of the three East Africa countries agreed to pursue a high wage policy. The trade unions played a key role in securing independence — see T. Mboya, Freedom and After (London: Deutsch, 1963).Google Scholar
  13. 35.
    A concept developed by G. Arrighi, see ‘International Corporations, Labour Aristocracies and Economic Development in Tropical Africa’, Essays on the Political Economy of Africa, ed. G. Arrighi and J. Saul (Monthly Review Press, 1973).Google Scholar
  14. 44.
    The question of the definition and magnitude of the employment problem in developing countries forms the basis of a vast literature. See e.g. D. Turnham and I. Jaeger, The Employment Problem in Less Developed Countries: a Review of the Evidence, OECD (1971); see also ILO Reports on Colombia and Ceylon (Towards Full Employment, ILO, Geneva, 1970, ch. 1 ; and Matching Employment Opportunities and Expectations, ILO, Geneva, 1971, ch. 2) and ch. 5 of ILO, Employment, Incomes and Equality. Google Scholar
  15. 46.
    H. Rempel, ‘Labor Migration into Urban Centers and Urban Unemployment in Kenya,’ unpublished Ph.D. thesis, University of Wisconsin (1970).Google Scholar
  16. 48.
    Kenya, Ministry of Information, National Development Plan, 1964–69 (Nairobi, Government Printer, 1964).Google Scholar
  17. 59.
    A very good example of the expression of this view is I. Little, T. Scitovsky and M. Scott, Industry and Trade in Some Developing Countries (Oxford University Press, 1970).Google Scholar
  18. 60.
    See the calculations of O. D. K. Norbye, ‘Long Term Employment Prospects and the Need for Large Scale Rural Works Programmes’, in Education, Employment and Rural Development, ed. J. R. Sheffield (Nairobi: East African Publishing House, 1967) especially table 2, p. 249.Google Scholar
  19. 61.
    E. Rado, ‘An Explosive Model of Education’, in McGill Newsletter (Nov 1973).Google Scholar
  20. 62.
    Described by J. E. Anderson in ‘The Harambee Schools : The Impact of Self-help’, in R. Jolly (ed.) Education in Africa: Research and Action (Nairobi: East Africa Publishing House, 1969) andGoogle Scholar
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  22. 63.
    See M. Blaug, R. Layard and M. Woodhall, The Causes of Graduate Unemployment in India, 1945–1966 (Cambridge: Cambridge University Press, 1969).Google Scholar
  23. 64.
    See e.g. J. Harris and M. P. Todaro, ‘Wages, Industrial Employment and Labour Productivity in a Developing Economy: the Kenyan Experience’, East African Economic Review, vol. 1 (1969) ; J. Power, ‘The Role of Protection in Industrialisation Policy’, IDS Nairobi, working paper no. 32 (1972);Google Scholar
  24. S. Lewis, ‘The Effects of Protection on the Growth Rate of the Economy and the Need for External Assistance’, IDS working paper no. 34 (1972).Google Scholar
  25. 66.
    See F. Stewart and J. Weeks, ‘The Employment Effects of Wage Changes in Poor Countries’, discussion paper no. 8, Department of Economics, Birkbeck College (1973).Google Scholar
  26. 68.
    M.J. Westlake, ‘Tax Evasion, Tax Incidence and the Distribution of Income in Kenya’, IDS Nairobi, staff paper (1971) shows that tax paid in Kenya at the end of the 1960s was broadly proportionate to income.Google Scholar

Copyright information

© International Institute for Labour Studies 1976

Authors and Affiliations

  • Frances Stewart

There are no affiliations available

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