Hook-up thy neighbour, sort out thyself

One billion of the world’s six-plus billion people are stuck in poverty, with few prospects of breaking out of it. While most of the world was poor about 50 years ago, many have managed to break out of that poverty to see themselves and their children enjoy healthier and longer lives. The journey to greater prosperity is by no means over, but the majority of the world is on the right track.

But not so for a group of countries that account for a sixth of mankind. People in these countries have not seen things change much for them economically and socially, with the prospects of their future looking as bleak as their pasts. They are stuck in a poverty trap. Paul Collier, an economist from Oxford University and ex-World Banker, isolates four key traps: abundant natural resources; recurring cycles of conflict; bad governance in a small country; and being landlocked with bad neighbors.

On the last trap, Mr. Collier notes that landlocked countries are highly dependent on their neighbours for their economic advancement. Switzerland has had the good fortune of having Italy and Germany as neighbours. Both are large markets for Swiss goods and services and provide efficient transportation links to the wider world. Mr. Collier contrast Switzerland and its neighbors to Uganda, which, he notes, “has Kenya, which has been stagnant for nearly three decades; Sudan, which has been embroiled in civil war; Rwanda, which had a genocide; Somalia, which completely collapsed; the Democratic Republic of Congo, the history of which was sufficiently catastrophic for it to change its name from Zaire; and finally Tanzania, which invaded it.” In short, a tough neighbourhood in which to flourish. This is not to say that Uganda does not have its own fair share of problems, but overcoming these will be particularly difficult with geographically determined constraints to growth.

And there are some countries in the region that are very serious about addressing issues of economic growth. Rwanda’s Minister of Commerce personally hosts and fetts coffee buyers from abroad, talking to them about the specifics of what Rwandan producers need to do to better meet their needs as buyers. Rwanda climbed 9 places in the World Bank’s Doing Business ranking, a good measure of government intent as it looks at the business environment mainly from a regulatory perspective (so not measuring other constraints that businesses may face, such as poor infrastructure); Kenya slipped 4 places. Despite such intentions, Rwanda is not growing at the pace required to lift sufficient numbers of its people out of poverty. Again, it has numerous problems to overcome, but being landlocked with bad neighbors does not help.

The ability of our landlocked cousins in the region to lift themselves out of their poverty traps - Rwandans earn an average of US$320 compared to Kenyans’ US$640, which is low as it is - is intimately tied to decisions that Kenya makes about its development. This is good news for the Ministry of the East African Community. It gives the Ministry, which could otherwise reasonably just be a desk in the Ministry of Commerce or Foreign Affairs, a substantial mandate. Well, huge: fixing Kenya.

The Ministry needs to become the loudest cheerleader for removing barriers to growth that Rwanda and Uganda face as a result of decisions made in Kenya about its own development. This includes pushing for a business environment that is supportive of growth, so that Kenyans become wealthier, and therefore more attractive consumers of Ugandan and Rwandan goods; improving port facilities; making customs clearance predictable and fast; developing an effective road and rail network to facilitate the movement of goods into the interior; ensuring reliable access to cheap undersea optical fiber. While all of these items are the clear responsibility of other Ministries, the Ministry of the East African Community ought to develop a priority list of issues and urge those responsible into action. Where progress lags, the Ministry should highlight this and shame those responsible into movement. Pushing forward such an agenda would massively advance inter-regional trade and trust, and, therefore, cooperation and integration, the Ministry’s core mandate.

The honest pursuit of this agenda is crucial to enabling Ugandans and Rwandans to have some prospect of pulling themselves and their children out of poverty. And, as I hope is clear, this agenda is not only about Uganda and Rwanda and their needs, important as they are in and of themselves. It is intimately about Kenya and its own prospects for economic development. There is no Kenyan who would not be grateful for a business-friendly environment in which to sell extra farm produce or start a new business; a good road network that links her to markets and distant family members; reliable and honest customs officers that quickly clear steel and medicine imports; and an information network that allows Kenyans to share ideas with the rest of the world. There really are very few Kenyans who would object to us hooking up our neighbours, perhaps with the exception of the odd customs officer with particularly greasy palms.