Kenya: Why Corruption is the Root Cause of Poverty

Makau Mutua
Nairobi

I have never seen a coin with only one side. As a matter of fact, all the coins that I have ever seen are multifaceted - with at least heads and tails.

In more educated language, the two sides are known as the obverse and the reverse.

My point is that there are some people who want us to abandon the fight against corruption and focus only on poverty as though the two evils are inseparable. Nothing could be further from the truth.

We need to understand that poverty results from multiple forms of corruption. These include the corruption of material things as well the corruption of the metaphysical such as the soul and the intellect.

I strongly believe that Kenya will not develop into a fully functional modern state unless it can cure or minimise the scourge of corruption in all its dimensions.

Kenyans immediately think of Mr John Githongo, the former anti-graft czar, every time they hear the word corruption. This is the good news.

The fight against grand corruption - or theft of public resources by senior government officials - is what Mr Githongo is associated with.

Undoubtedly, this form of corruption is horrible and directly contributes to the material poverty in Kenya. Any other statement to the contrary is simply false.

You do not even need to be a rocket scientist to figure this out. Every public penny that is diverted into a politician's pocket is a penny less for investment in schools, infrastructure, and social services.

By some estimates, more than 40 per cent of Kenya's public revenues were for a long time stolen and either conspicuously consumed or secreted to banks in Europe.

As we all know, Anglo Leasing was not the first case of high-level graft in Kenya. There were many such heists even before Goldenberg.

Ask many of the senior politicians how they - and their families - "acquired" the huge chunks of real estate that they own today. Not a single one of them has the courage to publicly account for such wealth.

That is why Minister James Orengo is getting zero cooperation from the elite in his quest to implement the Ndung'u Report on illegally acquired land.

The elite have circled wagons and are using bureaucrats to undermine him. Yet we all know that Kenya will remain seated on a knife's edge unless it addresses corruption in land and implements keys reforms in the sector.

Is it not a fact that the land problem was one of the underlying factors of the post-election violence?

Is it not also a fact that it was historical injustices and corruption in land matters that brought the country to the brink of collapse?

If so, how can we honestly abandon the fight against corruption?

The bad news is that material corruption is only one aspect of the vice. In addition, our society is afflicted by moral corruption. You cannot trust what public officials say.

That is because they do not mean what they say and they do not say what they mean.

Take, for example, the corruption of the idea of national citizenship. Leaders claim that they are committed to forging a national identity and psychology.

But are they? My honest opinion is that very few, if any, are believable on this point.

Most of our leaders are committed to a tribal citizenship at the expense of the Kenyan nation. This form of corruption is insidious because it brings the country closer to the precipice.

This moral corruption leads to intellectual dishonesty and the poverty of philosophy. Many a Kenyan intellectual is a hireling of some tribal baron.

This was evident in the lead up to last year's election and its aftermath. In such a vacuum of integrity, there can be no concerted national purpose.

We cannot agree on whether we should have a democratic constitution, develop and implement a national infrastructure project, conceive a progressive self interested foreign policy, or carry out much needed transitional measures.

We dither like minions when the country needs us the most. It is this corruption that has eaten into our souls and rendered us poor.

One wonders when a light bulb is going to go off and let us know that we are at zero hour - and that we must act now in the national interest before we run out of time.

Those who claim that we should abandon the fight against corruption and focus on poverty have a fundamental misunderstanding of the old chicken and egg question.

Poverty is a symptom of many things, but not a cause of anything. You will most likely end up in a ditch if you fight symptoms instead of actual causes.

It's like the old saying about the love of money being the root of all evil. It is not money that's the problem. Rather, it is the love of it! One is cause, the other is effect.

That is why some countries such as Singapore or Malaysia that have developed in the last 40 years - and which were on the same level as Kenya at independence - focused attention on the morality of their politics as a condition precedent for economic development.

I do not want to sound like a broken record, but our understanding of corruption - both the Githongo type and the metaphysical one - lies at the root of Kenya's renaissance.

If I were to advise any of the three major political forces in the country today - ODM, PNU and ODM-K - I would say this: the leader who first understands the complex problem of corruption and creates a national platform to respond to it will emerge victorious in 2012.

I have a strong feeling that, in the next five years, Kenyans will want to see a real transformation of our body politic.

That is the lesson of the post-election crisis that traumatised the country. The leader who seizes on the trauma of the country to lead it to a high plane will reap huge dividends. Is anyone listening?

Makau Mutua is Dean and SUNY Distinguished Professor at the State University of New York at Buffalo Law School and Chair of the Kenya Human Rights Commission

Economic Growth: Strongest Antidote to Poverty in Africa

Published in : Main News, Features

Poverty rates in Sub-Saharan Africa have been steadily declining over the last 10 years or so, according to a new World Bank paper.

Setting a new poverty line of US$1.25 a day to reflect improvements in internationally comparable price data, the report estimates that 1.4 billion people in the developing world lived below that threshold.

The global data, however, mask a number of regional nuances. Africa’s poverty rate of 50 percent is shown to be the same in 1981 and 2005: this is because poverty worsened between 1981 and 1996, a period of slow or negative growth on the continent.

This changed in 1997, when economic growth started to pick up and poverty rates fell significantly—by over 7 percent, from 57.5 percent to 50.4 percent—and much faster than in South Asia, for example, which saw stronger economic growth during the same period.

But the depth of poverty is greater in Africa than other regions—the mean consumption of the poor is lower than any region, at around 70 cents per day in 2005, using the $1.25 poverty line. Improvements in the depth of poverty on the Continent are also encouraging, with Africa registering an overall improvement of more than 15 percent since 1990, from 24.6 percent to 20.8 percent.

The paper, produced by the Development Research Group and titled “The developing world is poorer than we thought, but no less successful in the fight against poverty”, cites a doubling in the number of poor people in Africa between 1981 and 2005, from 200 to 380 million.

The significant increase can be explained by two factors. First, the new poverty estimates use a more careful assessment of what $1.25 actually “buys” in different countries rather than equating the value of the US dollar in the US with that of the US dollar in an African country.

That calculation renders the cost of living in Africa higher than using the previous methodology and changes the initial estimates of poor people. Second, Africa has the highest population growth rate in the world. So while the poverty rates declined between 1996 and 2005, it was not enough to counteract the effect of faster population growth.

The report, which tells a global story about the numbers of poor people, should not be used to judge if poverty in a particular country or region has improved or deteriorated over the 1981-2005 period. “What is more important is to look at national poverty lines”, says Shantayanan Devarajan, Chief Economist of the Africa Region at the World Bank.

“This will better answer the question of how poverty in a particular country has changed over time.” In the case of very poor countries such as those in Africa, there may have been progress in extreme poverty (e.g. people living on 70 cents a day), but this may not be reflected by the $1.25 per day measurement used in this study.

Economic growth is the strongest antidote to poverty in Africa. If Africa can sustain its recent better-than-six-percent growth rates, the continent will make significant progress in reducing the number of poor within its borders “Strengthening governance is critical to achieving growth”, according to Mr.

Devarajan, pointing to Botswana and Ethiopia as countries which have made rapid progress in this regard. He also notes the need for countries to continue pursuing reforms that have begun to pay dividends, to accelerate progress in human development, and to close the continent’s massive infrastructure deficit.

“Tackling poverty in a multi-pronged approach will yield significant and much faster results.”
The challenge of lifting people out of poverty is daunting and will only be met if economic gains are shared widely. At the same time, recent increases in food and fuel prices, the effects of climate change, the impact of HIV/AIDS and other exogenous factors, threaten to unravel any gains made.

But while reminding us of the magnitude of the task ahead, the recent estimates of global poverty also show that Africa can reduce poverty if it commits itself to meeting the challenges ahead, as it has in the past decade.
Source: The World Bank

source: Economic Growth: Strongest Antidote to Poverty in Africa
Accra Daily Mail, Ghana - 10 hours ago

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Poverty's roots lie in state constitution

Monday, September 01, 2008

REPORTS THAT Mobile County and the rest of Alabama continue to have unreasonably high rates of poverty — despite considerable economic growth — should energize citizens and government alike to work for a new Alabama Constitution.

Among counties with more than 250,000 population, Mobile's 21.1 percent poverty rate stands among the 10 worst.

As for the state, 16.9 percent of Alabama's residents lived in poverty in 2007. That compares unfavorably with a national rate of 13 percent.

Granted, personal incomes in Alabama rose slightly in 2007, but so did the state's rate of poverty.

The contradiction isn't coincidental. The framers of the state's 1901 constitution wrote the document to keep poor people poor and wealthy people (themselves) wealthy.

Direct, sometimes racist language declares, among other things, that the state has no responsibility to educate its citizens, and limits local government to keep power in Montgomery.

Moreover, the constitution sets in stone a tax system that rewards wealthy landowners and businesses with low property taxes, and places the burden of taxation on the middle class and the poor by funding the cost of government mostly through regressive income taxes and sales taxes.

Indeed, the constitution helped establish a culture of indifference to public education and pride in low property taxes. Over the decades, that has meant impoverished schools and insufficient and unreliable funding for other state services.

High rates of poverty can be directly related to Alabama's record of poor education and a tax system that sucks money from the poorest citizens.

Because of restrictions in the state constitution, local governments remain hamstrung when it comes to controlling growth, improving education and encouraging economic development.

The Alabama Citizens for Constitutional Reform Foundation appropriately recognizes that the state's constitution continues to condemn thousands of Alabamians to lives of poverty.

That's why it was fitting for the group to give Alabama historian Wayne Flynt its annual Bailey Thomson Award. Dr. Flynt, in speaking to the group last week in Mobile, stressed that there is a direct line between high poverty rates and the abuses of the state constitution.

(The award is named after the former Press-Register editor and University of Alabama journalism professor, Bailey Thomson, who died in 2003.)

Reforming the state's constitution , which works against poor people in the state, would be a fundamental step toward reducing poverty.

source: Poverty's roots lie in state constitution
Press-Register - al.com, AL - 1 hour ag

Trade not aid the answer to poverty, economists say

By Jonathan Lynn

GENEVA, Aug 31 (Reuters) - As ministers from over 100 countries gather in Ghana to review how effective aid is in helping developing nations deal with poverty, many economists argue the answer is elsewhere -- in freeing up trade.

The meeting in Accra this week comes just over a month after talks at the World Trade Organisation (WTO) to secure a breakthrough in the long-running Doha round collapsed at the end of July.

Rich and poor countries alike have called for efforts to save the Doha round and build on the compromises that were reached in July's talks. Senior negotiators are likely to meet in September to see whether the talks can be revived.

Economists of all persuasions agree now that growth is the key to lifting people out of poverty -- a view reinforced by a major World Bank report in May on growth and development.

And the key to growth is trade, the WTO says.

"Trade openness is believed to have been central to the remarkable growth of developed countries since the mid-20th century and an important factor behind the poverty alleviation experienced in most of the developing world since the early 1990s," it said in a report last month (July).

Former New Zealand Prime Minister Mike Moore, who headed the WTO when the Doha round was launched, put the case for trade in a characteristically forceful manner earlier this month.

"Seven years ago, we introduced at Doha what was to be a "development round". All trade rounds are," he said. "President Kennedy, who introduced the Tokyo round, famously said: 'This will lift all boats and help developing countries like Japan.' Case made, I would have thought."

Since Japan's rise to prosperity, many other countries, such as South Korea, Chile and India, have followed a similar path.

Many developing-country leaders share the view that the solution to poverty lies in the increased economic capacity that trade can bring rather than in aid handouts.

"Africa critically needs to realise development and get itself out of poverty through the establishment of fair trade rather than aid," Kenya's Trade Minister Uhuru Kenyatta, who coordinates African countries at the WTO, said after the collapse of the WTO talks.



DEVELOPMENT THE GOAL

The Doha round, launched in Qatar capital in late 2001, was expressly intended to help developing countries export their way out of poverty, by tackling the unfinished business of previous trade rounds such as the distorted global food trading system.

Many advocacy groups argue that trade negotiations are still skewed against the interests of poor countries.

Forcing them to open up their markets to provide more export opportunities to Western businesses could threaten the livelihoods of millions of subsistence farmers and snuff out infant industries.

The Manila-based Focus on the Global South said the collapse of the Doha talks was a welcome respite for poor countries.

"The aggressive push by the rich countries led by the U.S. and the EU for more trade liberalisation at a time of global crises of food and fuel (became) too blatant for developing countries to stomach," it said.

But many changes sought by developing countries -- such as cuts in the multi-billion-dollar U.S. and EU farm subsidies -- have been on hold since the Doha talks collapsed.

Developing countries also recognise that they benefit from the rules-based multilateral trading system the WTO represents, not least because of the power it gives small and weak members.

African countries would much rather tackle U.S. cotton subsidies that squeeze them out of the market in a comprehensive WTO trade round rather than sit round the negotiating table with just with the United States.

For developing countries, many of which are in unstable areas, the security aspects of trade are also important.

The prosperity and contacts promoted by trade foster peace, and when trade rules affect major economic sectors, such as West African banana growers, they must be negotiated carefully.

"If goods cannot cross borders, armies will," said U.S. Franklin Roosevelt's World War Two Secretary of State Cordell Hull who won the Nobel Peace Prize for his contribution towards the creation of the United Nations.

Trade and aid are closely linked.

The WTO coordinates the international Aid for Trade programme, in which developing countries are helped to build trade capacity and infrastructure by ensuring that their trade projects are part of their aid and economic strategies.

And one of the trickiest parts of the WTO Doha agenda covers food aid. The proposals would tighten rules on "monetisation" where rich countries send food surpluses to developing countries to be sold locally and the funds distributed.

The aim is to prevent this being used as a disguised export subsidy which squeezes local farmers out of business.

(Editing by Matthew Tostevin)

source: Trade not aid the answer to poverty, economists say
Reuters - Aug 31, 2008

Income erodes, poverty gains in Minnesota

The state got a head start on economic woes, and things may not improve until later next year, the state economist said.

By WARREN WOLFE, Star Tribune

Last update: August 26, 2008 - 11:54 PM

Minnesotans' median income dropped substantially last year, and more people were living in poverty, the Census Bureau reported Tuesday.

The results reflect the downturn in Minnesota's economy that began two years ago, while the national figures were still improving, said state economist Tom Stinson.

"It's not a surprise," he said. "But the census report does reflect the reality that Minnesota hit the wall in job formation early in 2006 and pretty much stayed there. We probably won't begin to recover until next year."

Even though the report shows Minnesota was declining while national measures were improving, the state remained among the highest in income and lowest in poverty.

Using two-year averages, the report said Minnesota's median income dropped from $59,583 in 2004-2005 to $57,932 in 2006-2007.

That compares with $49,901 nationally, putting Minnesota eighth-highest.

There were about 482,000 Minnesotans in poverty last year, up 60,000 from 2006. The poverty rate rose from 8.2 percent to 9.3 percent.

That dropped Minnesota from fifth-lowest in 2006 to ninth-lowest last year, still well below the national rate of 12.4 percent. The poverty guideline in 2007 was $13,690 for a family of two, or $20,650 for four.

"Our hope is that next year's report won't show any worsening of the situation in Minnesota," Stinson said. "This quarter is probably the strongest of the year, and it will probably be next spring -- my crystal ball's a little cloudy here -- that we begin to see improvement nationally and in Minnesota."

The Legislature responded to recent economic problems with budget cuts "that made it hard for low- to moderate-income workers to make ends meet," said Katherine Blauvelt, policy analyst with the Minnesota Council of Nonprofits. She urged lawmakers to find different solutions as they face another deficit next year.

source: Income erodes, poverty gains in Minnesota
Minneapolis Star Tribune, MN