By Ibrahim Bakayoko
Immediately after independence in 1963, Kenya implemented a three tier complementary economic system of the state, cooperative and private sectors. This worked very well and the country was developing even along the emerging capitalist ruling class led by the first President of Kenya, Jomo Kenyatta. But things started going wrong at the end of the 1980s when successive regimes in the country embraced neoliberal economic policies imposed to the country by the World Bank and International Monetary Fund (IMF) that are commonly known as Structural Adjustment Programmes (SAPs).
The SAPs, among other things, aimed at privatising economy and particularly targeted state parastatals and cooperatives. The neoliberal policies that have brought the ongoing economic crisis to the country continue to be implemented by the JUBILEE and ODM government today. In the meantime, poverty, unemployment, national debt burden, inequality and general underdevelopment of the majority of citizens continues to escalate. In fact, the government is now unable to pay civil servants and to provide basic services such as public education, health, money to the elderly and pensions. The 3.6 trillion national budget remains a meaningless annual budget of statistical figures which has nothing to show on the development of the country or welfare of the majority of citizens.
Amidst all this, those who are in favour of neoliberalism and privatisation policies make the parastatals scapegoats for the current national crisis. The promoters of neoliberalism argue that the government cannot cling to its parastatals while citizens go hungry, hospitals lack medicine, free primary education needs financing and teachers are demanding higher pay, among other things.
It's a matter of give a dog a bad name and so that you can hang it. The same government that has mismanaged the economy resorts to neo-liberal driven platitudes such as “dynamics of free enterprise dictate that the Government has no business doing business. This task, the promoters of neoliberalism argue, should be left to the private sector. The State’s responsibility, in their view, is to create an enabling environment for business to grow”. They also say that as long as it is carried out transparently and according to the law privatisation of the parastatals is not only welcome but belated. This is tantamount to saying that there is nothing wrong with the robbery of public property as long as laws made to rationalise it are observed and seen to be observed. And who made the laws? Isn’t the same class of people that will buy the privatised state institutions?
When it comes to imposing neoliberal reforms upon the Kenyan people, despite its populist rhetorics, ODM does not differ with JUBILEE ideologically. They are just birds of different feathers. As a matter of fact, the whole parliament welcomes and embraces privatisation that has far reaching consequences to the economy and welfare of the nation. Actually, this is not unexpected for the Kenyan parliaments and executives that are dominated by businessmen and women. The President, Deputy President, Cabinet Secretaries, Governors and members of parliament are businessmen and women. And when businessmen and women become rulers of a country, the majority citizens cry. The history of Kenya continues to show that the business people in power always put their interests before those of the nation. It is not surprising, therefore, members of parliament have remained silent as the property owned by the public through state corporations is grabbed by the ruling capitalist class in the name of privatisation.
Privatising the state parastatals means selling the property that belongs to all Kenyans to few local and foreign rich families. Yet, the news about the privitisation that includes strategic national assets is considered to be trivial. This, of course, works in the interests of the government and the Kenyan bourgeoisie who wish the property of all Kenyans is transferred to the ruling classes without raising controversy from those who represent the interests of the masses of Kenyans.
The argument that privatisation will help the government solve the current social and economic problems including hunger, salaries, lack of medicine and other essential services, is simplistic and myopic. In the first place, if we go by the history of privatisation in Kenya as elsewhere, it escalates unemployment and therefore poverty and hunger while increasing inequality. Secondly, there is no proof hitherto that by privatising them the enterprises will work more efficiently. In any case, even if they work more efficiently it is mostly for the benefit of the new owners who will appropriate the profit they make at the expense of society. Thirdly, privatisation of parastatals has not reduced corruption, tribalism and nepotism in their operations in the past and there is no guarantee that it will do so today and in the future.
To justify privatisation by saying that it will raise money to deal with immediate problems is very bad leadership and economics indeed. Supposing the sale of the parastatals succeeds to raise money to provide food and salaries to teachers and other civil servants and avail medicine to public hospitals today; what will happen next year or in future when there are no longer any parastatals to privatise? What plans does the government have to raise funds to pay salaries and solve social problems that are likely to remain with the country for a long time, considering the fact that the problems have been escalated by the global Covid-19 pandemic? Is it not similar to a farmer who decides to sell all of his land in order to solve the immediate problems confronting him? Isn’t more sensible for the government to come out with sustainable strategies of reviving the economy and dealing with the present crisis rather than seeking short term populist solutions that cause even more damage in the long run? Unfortunately, the JUBILEE - ODM government and their allies are bankrupt of ideas for solving the current economic and social problems. The leaders think about how to rob the country to hoard money in billions and even trillions of shillings for themselves.
It may be true that the parastatals may not be making profit. But is that enough reason to sell them? If private enterprises start making losses, what the owners usually do is to conduct research to find out whether the enterprise should be reformed or abandoned. Kenyan parastatals ought to be reformed rather than privatised. They used to perform in the past. There is no reason not to believe that they can be made to start performing again by studying and correcting the mistakes that have made them not to continue performing. There are enough patriotic, qualified and professional Kenyans capable of reforming the state autonomous economic institutions. There is no reason why the same professionals who run the private sector cannot be used to run the state sector as professionally and efficiently provided certain subjective and objective conditions are established. These conditions include ensuring that they are operated as independently as possible with no undue interference from politicians in power.
Other parastatals are targeted for privatisation even when they are making profits. After all, if they cannot be able to be reformed, then why are they being privatised rather than being abandoned all together? Which capitalist worth his mind will invest in or buy a company or enterprise that is incapable of making profit? Who will buy shares in a company that is likely to collapse?
The argument put forwards in favour of privatisation that Kenyans will buy shares and become owners of the privatised parastatals is another gimmick meant to hoodwink the majority of Kenyans. It is only members of the class of wealthy Kenyans who will buy substantial and durable shares of the said enterprises. Those from the working class who are lucky enough to afford to buy the shares, and at the time of World economic recession, will only be escorting to wealth the real would be shareholders of the enterprises. This is because most people from the high echelons of the working class only buy shares for short term speculative reasons only to sell them sooner than later. But the vast majority of Kenyans who hardly handle any money and merely survive day by day would never afford to buy the shares.
Kenyans are being deceived that in order to have a growing economy the state should keep out of the economy and leave it to the private sector and the dynamics of the free markets, i.e., only capitalism. In other words, the economic role of the state should purportedly be only to create the necessary infrastructure to facilitate a capitalist economy. But the capitalist system is class system where the means of production are owned by individuals, group of individuals or families. Capitalism, ultimately, only obeys only capitalist laws of maximising profits for those who own the means of production. The majority of the people, alienated from the means of production, cannot realise true liberation, justice, equality, peace and freedom under such a system. Under capitalism, the workers, the poor and the class of the majority perpetually work and create wealth that is appropriated by the capitalists. Thus the rich continue to become richer while the poor become poorer.
Under neo-liberalism, privatisation policies are implemented through the discredited structural adjustment programs of the Bretton Woods institutions: the World Bank and International Monetary Fund which imposes them upon debt and crisis ridden economies of underdeveloped countries. But the present world financial and economic recession (actually it is capitalist crisis though it has ripple effects in the world) has disapproved these neo-liberal economics. Economic liberalisation and so called market forces have been unable to save financial institutions, businesses and industries in the USA, Europe, Japan and the whole capitalist world from recession. Capitalist economic institutions are collapsing every other day escalating unemployment, poverty and suffering among the masses while states are resorting to nationalising them to save jobs and to alleviate the crisis. Despite all this the JUBILEE -ODM Government still insist upon leading the country along the same economic path that has driven the country into the present economic crisis where the government is even unable to pay salaries of civil servants and to prevent Kenyans from starving to death.
CPK appeals to Kenyans not to elect the candidates and parties of the ruling class - JUBILEE, ODM and OKA coalition - in the 2022 national elections. Instead, they vote for CPK and only those parties and candidates that will provide alternative economic policies to those of neoliberalism that are pushing the country deeper and deeper into the ditch and quagmire of underdevelopment. And alternative economic policies are those that are geared away from capitalism and towards socialism
The writer is a Member of CPK Secretariat