By Hez Gikang’a
We need a strategy to secure our national economic interests, as we regale in the Chinese dalliance and as we prepare to host India’s celebrated premier, the reformist Narendra Modi this year. We should contextualize our relationship with India within the wider scope of our bilateral relations with China, a nation that has shown more than passing interest in Kenya and the region. And also remain alive to the realities that as these nations dock their fleets on our shores, their own economic interests remain their top draw, and so should ours. It is moot whether we have a cogent, all-encompassing strategy to extract our pound of flesh in these engagements.
China and India are two of our bigger trade partners. However, a rapidly changing global trade architecture, largely driven by sluggish growth in our more traditional partners in the EU and America, present opportunities, risks and challenges for Kenya. Both China and India are emerging economies like ours, are resource hungry, have a combined 37% total of the global population at 2.7 billion people, large sections of whom clamour for basic services and development like us, but also with a significant population among the ultra wealthy, meaning there are nuances and experiences to be shared.
We can learn from China, which has packaged and branded its economic trade Policy into ‘The Silk Road’, complete with bilateral trade agreements and transcontinental roads and railway corridors connecting markets to consumers in China. A number of significant events last year marked China’s big arrival on the global stage, affirming it as the world’s second biggest economy after the US. China now contributes15% of global economic output, nearly triple that of a decade ago. This was just an icing on the cake after an arduous three-decade long journey to modernization, and global power, replete with a multi-faceted long-term economic strategy.
Key milestones on China’s journey last year include the International Monetary Fund’s (IMF) inclusion of China’s currency, the renminbi (RMB)in that elite category of a global Reserve Currency, as a Special Drawing Right (SDR); the rollout of a new, and alternative multilateral development and financial framework led and capitalized by China, notably the US$100 billion Asian Infrastructure Investment Bank (AIIB), viewed in western circles as a counterweight to the dominant World Bank/IFC/IMF troika; the formation of the US$50 billion Asia Fund; the rollout of the One Belt, One Road (OBOR) flagship projects and the announcement by President Xi Jinpingin December in Cape-Town of a new US$60 billion China-Africa three year 10-point development plan.
Though these developments and announcements neither registered on our tepid local financial markets nor elicited informed debate in economic policy-making circles, they nevertheless have far-reaching ramifications on our trade relations, balances, economic diplomacy, competitiveness and attractiveness for investment. They are fundamentally altering the hitherto established rules of engagement in a unipolar world.
To remain competitive, and given our national economic interests, and cognizant of the evolving global economic realities, we must recalibrate our audacious ‘look-east policy’ started by President Mwai Kibaki and given currency by Uhuru Kenyatta, and re-examine whether the more pragmatic ‘we look neither east nor west policy‘will serve us well, even as we judiciously rebalance our economic portfolio to grow key sectors of our economy.