Eyes on Kenya

When it comes to the root of all evil in Africa, specialist in conspiracy theories, left wing crowds, Marxists, Anti-colonialists, development experts, Bob Geldorf, Bono, Ngugi wa Thiong’o and basically everyone else has one institution in mind: The World Bank.

And if the World Bank was aiming to demolish the rest of credibility they have, they were quite successful in doing so in Kenya. A confidential memo from the World Bank’s Kenya office that supports President Mwai Kibaki’s claim of victory in the country’s disputed elections plunged the Washington-based lender into controversy on Wednesday.

The East-African Standard gave the report as follows:

"World Bank Country Director, Mr Colin Bruce, was a man on the spot as a confidential memo he authored supporting President Kibaki’s re-election kicked off controversy in Nairobi and Washington.

The leaked January 8 briefing note, originating from the World Bank Kenya office, lays out the case for accepting Kibaki’s victory on the basis of "oral briefings and documents from senior UNDP officials" who "monitored the overall electoral process".

The memo, quoted in a story by the Wednesday issue of The Financial Times claims "the considered view of the UN is that the ECK announcement of a Kibaki win was correct".

However, Michele Montas, a spokeswoman for the UN Secretary-General, denied that the UN had adopted that position.

UNDP officials said they had neither monitored the elections nor provided any assessment suggesting a Kibaki victory."

William Wallis, Michael Holman and Krishna Guha summarize the incident as follows:
Mr Bruce’s memo has created discomfort among some senior World Bank staff who fear the bank’s analysis of the Kenyan crisis has been influenced by too close a relationship with Mr Kibaki. Mr Bruce, from Guyana, lives in a house owned by the Kibaki family. The bank said the tenancy was inherited from its previous country representative and was chosen on security grounds.

The World Bank has been criticised for maintaining its large development programme in Kenya in spite of evidence of high-level corruption in Mr Kibaki’s government. The bank says its projects are vital for the country’s poor.”

Former Western Mail journalist Sarah Elderkin yesterday said the following of her unique involvement in the dramatic political events of Kenya that have plunged the country into chaos.

“We have had a poor experience with Mr Kofuor – poor in that he was unable to make any headway at all with self-declared president Mwai Kibaki. “I attended meetings between Kofuor and our Orange Democratic Movement Party (ODM) leaders, and so am privy to what happened.

“A document to facilitate mediation had been drawn up at the initiative of Dr Collins Bruce, country director of the World Bank in Kenya, who is well known as a personal friend of Kibaki’s.

“ODM had heard that Kibaki was broadly in agreement with the document and was ready to sign. Then it was suggested by ODM that, because Kofuor was coming, the document be signed publicly and witnessed by the signatures of Kofuor, the UK and US ambassadors and the EU representative.

“After several hours’ final consultation with ODM leaders, Kofuor went off to State House to take the document to Kibaki.

“To Kofuor’s intense embarrassment, Kibaki said he had never heard of the document. He disclaimed all knowledge of Dr Bruce and refused to sign anything. Kibaki had been ready to sign a document he’d later ignore, but signing with international witnesses was a different story.”

Donaldson, a spokesman of WB's Washington headquarters, clarified to Financial Times the memo's intention was to ensure the bank staff were more efficient in presenting the news.

The World Bank's Kenyan loan portfolio is at least $1 billion. It has been criticized for extending loans despite charges of high-level corruption against the Kibaki administration.

The close connection between the World Bank in Washington under the leadership of Robert Zoellick (formerly United States Deputy Secretary of State) to the US government would explain their early acknowledgement of Kibaki by the US State Department. One might assume how great the influence of the World Bank is.

Minister of finance Amos Kimunya exchanges an agreement with Mr. Colin Bruce, the World Bank Country Director

The World Bank's interest in Kibaki's government

What interest does the World Bank have in Kenya and why did it support the Kibaki government, knowing about their corruption? Leaving all conspiracy theories and all critical analysis aside and just focusing on World Bank policies, some facts could have influenced this:

1. Up to the 27th of December 2007 it was a Democratically elected government, immediately following the Moi area and so seemingly a fertile field for exemplifying their policies.

2. Kibaki's government made some changes in the beginning of his legacy that gained him credit.

3. The geo-strategic role of Kenya, its impact on the region and therefore its stability were more important to the international community than the corruption of the government. The World Bank, like many other international institution chose Nairobi as regional head quarters, because of the relative stability compared to some of the neighbouring countries. Nairobi was the place for peace talks for Sudan and Somalia, even the seat of the Somalian government for some time.

4. Kenya is not only the strongest East-African economy, it is also the biggest Transit point of goods for East-Africa. The impact can be seen now with the close to stand-still of East-Africa's economy.

5. Despite corruption Kenya's economy was constantly growing, which gave credit to Kibaki's policies.

Taking a closer look at these points, some can be identified as wrong assumptions. The strongest boost of reforms were made under the great coalition that brought Kibaki into power. When the coalition broke over the promised new constitution, almost no further reforms were made. Instead the Kibaki government became tough on their opponents, getting rid of the pro-reform members of parliament from his cabinet. On the 3 of July 2004 protest against the broken promise to deliver a constitution on July 30, police brutally attacked demonstrators in Nairobi and Kisumu on what became known as “Kenya's Day of shame”.

In 2006 special police forces were sent to attack the East African Standard. Highly armed officers stormed into their newspaper's office, as if it were a hostage situation. According to World Bank policies freedom of press is a common standard for premising negotiations with governments. It seems not to be a requirement in the case of Kenya.

Kibaki's economic growth - fact or fiction?

Part of Mr. Kibaki's election campaign strategy was to use the “fact” that he was able to bring about economic growth. Handling this as a fact is left to review by different economists and economic theorists. In my opinion, economic growth as has been seen in countries like China, India, Vietnam and other Asian high performers, where absolute poverty was also reduced cam be called positive growth. Sustainable human development and the Human Development Index should have a commensurate rise in such an economic growth.

In the case of Kenya however, as an article at AllAfrican reports:
Curiously, the current analysis is comparing fall in poverty from 56.8 per cent in 2000, to show a huge 10 per cent reduction, which, to my knowledge, was not the product of any nationwide survey. Good analysis requires comparing apples with apples.

Nevertheless, even with the fall in poverty to the current 45.9 per cent, KIHBS noted that the number of poor Kenyans has, indeed, increased from 13.4 million in 1997 to 16.5 million currently.

How growth translates to quality of life is crucial. Otherwise, one would ask, why it is that poverty in a province like Coast stands at a staggering 70 per cent, and this is the region that hosts the tourism sector responsible for much of the 7 per cent growth? Many people at the Coast noted that lack of jobs has become much worse in the last five years.

Another point to review would be the link between growth and employment creation. AllAfrican continues to say:

According to the Economic Survey when the economy grew by a meagre 0.6 per cent in 2000 about 459,000 new jobs were created, but when the economy grew by 6.1 per cent in 2006 about 470,000 new jobs were created.

So, with a major jump in growth only 10,000 new jobs were created. This shows that growth might be coming from technical progress or capital-intensive investments, meaning the type of growth needed for the millions of unemployed is yet to be engineered.

One non-Kibaki related impact to Kenya's economic growth was the increase in mobile phone communication. It is a major factor for the economy and continues to grow, for example as a money transaction system for people without bank accounts, connecting the informal economic sector with formal established businesses.

Several failures of the government in the endeavour to provide jobs can be highlighted here. With an English-based school system and good university education, Kenya could have benefited from international entities seeking to out-source services in education and other areas. However, a vital and necessary infrastructure is missing, which not necessarily the fault of the Kenyan government. East-Africa has no fiber-optic internet connection, therefore Kenya has only an expensive satellite uplink, which makes internet 200 times more expensive than for example in Switzerland. It is not possible for Kenya alone to invest into a connection to the world's internet back bone (this cannot be blamed on Kibaki, since his government tried to make an agreement and finally succeeded). It has become attractive for international investors to build a cable along the East coast of Africa through the increased amount of traffic in South Africa, which most likely will further increase before the soccer world championship (this is not the only reason for the investment, but it speeded the process up). Investment in this infrastructure should be done soon, an East-African network of fiber-optic uplink before 2010. If Kenya follows the same patterns that they have shown in other fields of infrastructure, they will not reap its full potential.

Kibaki and his tenant

This question still bothers me. What is the essence behind a continued support of Kibaki by World Bank? One answer lies in the one talent that Kibaki has really revealed. In a Machiavelli style, he has managed to engage people into his politics. He managed to get himself on top of the opposition for the 2002 election. He managed to temporarily disarm Transparency International by pulling the leading figures into his government. And in the same way, he has played the World Bank officials like the Ruler in Ngugi wa Thiong’o's “Wizard of the Crow”. If the above mentioned article that Colin Bruce was even Kibaki's tenant is correct and considering the memo he wrote, it sure smells fishy.

The World Bank should do damage control and remove Colin Bruce from his position, before the situation gets worse. That this affair can heat up the situation in Kenya shows a comment posted in Gerald Baraza's blog:

“Bruce, you can do better than that…dats why yo gave all the internship jobs at the world bank office to youths from one community during your tenure…Can we expose you???? They all had secondment letter from the ministry of finance and CBK!!!! Collins we know you better.”

It seems that everything can turn tribal now in Kenya.