NAIROBI, November 6 – Barack Obama faces an uphill task in turning around the super power\’s economy, addressing the financial crisis and restoring the confidence of its citizens in the government.
Financial analysts concur that a major concern in his first year in office will be how he will put in motion strategies and policies that will ensure that the largest economy in the world does not go into recession as it is feared.
Kwame Owino a Programs Officer at the Institute of Economic Affairs said the president-elect was faced with challenges such as ensuring that the over 700,000 plus jobs that were been lost in the last 10 months are restored.
"That is easier said than done because the details will probably not be agreeable to everyone but the incoming President will have to find some money to spend in sectors that can boost the economy," Owino explained while admitting that it\’s hard to estimate how much the country would require to stabilize the economy.
He told Capital Business that the recession fears were real but how long or how deep the economy sinks would depend on what plans the government takes, how businesses behave and how the consumer spending picks up.
"On the whole however, it\’s not a good picture. Anybody would want to come to office in far better circumstances," he empathized.
Reacting to whether Obama\’s win would make a difference for Africa and particularly for Kenya, Owino said although the Democrat, who has Kenyan roots was phenomenal the world over, he is first and foremost a public servant whose allegiance is to America and its citizens.
The economist explained that although it\’s one of the richest nations in the world, the US gives the least amount of aid and pointed out that no economy – whether in Africa or any other part of the world – has grown on US foreign assistance and it was unlikely that any developing country would benefit.
He added that considering Obama would be looking for funds to bridge the US balance gap and ensure that there is no expenditure slug; it was highly likely that a few pledges of financial assistance to any nation especially from the American public sector would probably have to be put on hold for a while.
He predicted that those long term agreements that had been signed prior to the crisis would not be affected and they would probably be honoured.
"It\’s not too easy to give out money when domestic factors and pressures require that the economy should be sorted. New commitments are likely to be frozen and even existing ones are going to be looked at more carefully," he added.
And just because US investors are some of the savviest in the world, it does not automatically mean that they would be looking for viable opportunities to invest in Africa at this time, meaning that not much would change in the continent, Owino warned.
He said Africa\’s problem with investment has never been the state of the US economy but rather how open the continent is to investors.
"Nothing much has happened since January 2008 that is more dramatic that would lead to a rush of dollars. On the whole, I think there will be an investment freeze because many corporations which are the ones that mostly invest are suffering and trying to cut down on their budget in order to preserve their resources," he argued.
On the arguments the Democrat win would positively affect the tourism sector, Owino said there would probably be an interest by tourists to see Obama\’s ancestral home and that was likely to bring in more visitors to Kisumu and Kogelo village in the short term.
However, the curiosity would wane with time and the fact that there are not many tourism promotion products that have been developed around the area to warrant a return visit by the tourists.
"Perhaps that\’s an area where the Kenya Tourism Board and the government ought to look at and promote by encouraging the establishment of accommodation and development of infrastructure," he said.
He agreed that the US image and its foreign policies would probably get a boost given Obama\’s demeanor and his willingness to reach out to other countries.
Owino pointed to Obama\’s admission that no single country can address the challenges facing the world as a statement that was likely to bring many countries to the negotiation table to tackle issues such as the high energy costs, global warming and insecurity around the globe.