Looking at Kenya today and the many policies we have had in the past, one wonders why we are still struggling to get sustained economic growth. Policy is an important driver of economic development.
Singapore has been the growth benchmark for African countries because of its quick rise to become one of the top economies in the world. Indeed, Singapore’s growth has been phenomenal, rising from a Gross Domestic Product (GDP) of $ 650 million 1960 to a GDP of $1.1 trillion in 2018.
Everyone loves Singapore’s story. I remember in former President Mwai Kibaki’s government, Singapore set the tone for his second term. The common phrase in financial cycles that ‘in her peak’, Kenya had a higher GDP than Singapore in the 1960s is in fact true as Kenya had a GDP of $740 million in 1960.
Four decades later and the two countries have experienced very different fortunes, with Singapore’s economy now 15 times bigger than Kenya’s by GDP. There are several reasons for the disparity, of which these factors have played a significant role — corruption, geopolitics and governance.
It is no secret that corruption has hindered Kenya’s development agenda. However, that is a debate for another article. What is key to point out, is that Kenya’s policy-makers have failed adopt the rigorous development and implementation framework that Singapore put in place to ensure the policies it formulated had impact.
For example, in 1979, after much economic prosperity and consistent foreign direct investment (FDI) inflows, the Singaporean government implemented policies which drastically increased labour costs for the country’s factories in the hope that they would make more superior products and shift up-market. It did not take long before the country realised that this was a misinformed decision. In 1985, Singapore plunged into a recession accompanied by sharp rise in unemployment, low profits, dwindling external demand and the GDP declined by 1.7 per cent. While the recession was immediately blamed on depressed international market for oil, Singapore’s then Prime Minister Lee Kuan Yew set up a high-level economic committee to investigate the reasons for the negative growth.
The committee came to discover that it was economic structural deficiencies and to a large extent the 1979s labour policies that had negatively impacted economic growth. The committee termed the labour policies as overambitious and pointed out that labour productivity in the country had not kept pace with the higher wages.
The committee then recommended that the government takes a less interventionist approach towards the private sector. Singapore adopted the recommendations and in 1988, the country recorded high export and domestic growth that led to 11.5 percent real growth, the highest in 15 years.
Much of this rapid growth is owed to the policy change recommendations by the economic committee. This was not the first time Singapore adopted informed, evidence-based policy changes.
In the 1960s when the IMF was recommending import substitution, Singapore changed its policy to export promotion because at the time it lacked the capital and skills required to develop its own industries.
Lee Kuan Yew had to create policies to attract international firms to set up shop in the small island for the export market.
Back at home, most scholars have commended Kenya as having one of the most progressive policies in Africa. There is even an inside joke in the private sector that goes, “Kenya will create the policies, Rwanda will implement.” This is to imply Rwanda does a better job implementing policies compared to Kenya.
Indeed, Kenya has very progressive sector policies. However, because of a laxed implementation process, poor monitoring and delays, most of these policies end up being poorly executed and hence do not serve the purpose for which they were created.
In Kenya, a case highlighting the need for policy adaptation is the Free Maternity Policy 2013 formulated to address the barriers associated with accessing maternal health services.
As we would all agree, this was a well-intentioned policy, however, as the International Journal of Health Policy and Management noted in an article published in 2017, rapid implementation lead to inadequate stakeholder engagement and therefore, while there was an increase in deliveries, there was no increased clinic capacity which compromised the quality of care as the policy was meant to cover antenatal visits, deliveries and post-natal visits.
This shows that the policy should have been accompanied by adequate resources to support the growing number of patients so as not to compromise on quality of care. For example, a pilot implementation in a county should have identified these gaps in the policy and create adaptive measures to address the unforeseen circumstances.