A measure of the maturity of a democracy is the extent to which an election is carried out without interruption of the economy.
It goes without saying that our economy has been inching along over the past couple of months and businesses effectively hit the pause button on Monday.
A measure of the maturity of a democracy is the extent to which a presidential election is carried out without material interruption of the economy – and by extension everyday life.
When I consider the United States elections, I recall two contentious ones: George W. Bush (Republican) versus Al Gore (Democrat) in 2000; and last year’s Donald Trump (Republican.) versus Hilary Clinton (Democrat). I happened to be in the States for both.
Some would say these events were rigged at the last minute, with unexpected upsets challenging the integrity of the electoral process in arguably the most mature of democracies.
As much as there was uncertainty in both cases, what was clear to me as an on-the-ground observer was the level of faith Americans had in their established systems.
Regardless of their political leanings, there was this confidence that life would go on and, like time, business stops for no man (or woman).
In the case of Mr Bush, Mr Gore contested the results in court for five weeks. Meanwhile, we all went to work. After all, “rent’s gotta get paid.”
If there was ever a time that Americans with very strong cultural views — and seemingly unfettered access to guns — would have caused trouble, it was in 2008 when the first black man, Barack Obama was elected. But again, the system prevailed.
There were no serious threats of violence from the White Knights. There were no mysterious deaths of officials. There was no talk of the military needing to step in.
Eight years later, the day after the unimaginable words “President Trump” became a reality, I had several meetings in New York City.
As I walked the streets of Manhattan on November 9, I was intrigued with how ordinary life seemed to be, despite the campaign being so polarising.
I was prepared for meetings to be cancelled, streets to be deserted, and shops to be shut (for mourning). But this was not the case; it was business as usual.
How many of us in Kenya plan to hold business meetings tomorrow?
The private sector has been told to pray for peace and stability, but I do not think prayer is what we need most. What we are experiencing is neither spiritual nor a Kenyan “peculiarity”.
Poorly governed democracies witness this uncertainty every presidential campaign period.
A 2008 research titled ‘‘Elections and Economic Policy in Developing Countries’’ by Lisa Chauvet and Paul Collier, found that business is directly affected by politics with pro-market policies diminishing as you get closer to voting day.
According to Mr Collier, this deteriorating environment causes a “price” that fragile democracies must pay, with the ultimate one being the price of peace which can cost as much as two per cent of GDP.
The price is obviously much higher in countries where civil war breaks out and in this case recovery can take as much as 10 years.
I suppose, Kenya’s example of such well-timed populist policies is the introduction of arbitrary price controls in the banking sector, which the International Monetary Fund (IMF) has cautioned will weigh down economic performance.
In Ghana, political events also had a significant drag on growth, with a disputed John Mahama outcome causing economic performance to drop by 50 per cent between 2011 and 2012.
An indicator of favourable economic conditions is the purchasing managers’ index (PMI).
Stanbic published Kenya’s PMI based on an assessment of 400 private sector companies and in their June 2017 report and cautioned that our private sector had slowed down due to uncertainty around today’s poll, coupled with weaker purchasing power and the ongoing reduction of credit to the private sector due to the capping of interest rates.
The report stated that “overall, the second quarter was the worst-performing quarter in the (PMI) series history” (i.e. since 2014). By contrast, in 2016 the US PMI showed activity during the campaign with only minimal subdued performance in the days surrounding the Trump victory.
I feel that 25 years is enough time for us to establish government systems that would ensure a business-as-usual environment – regardless of which party wins.
It is said that God helps those who help themselves. So perhaps instead of taking to bended knee to ask for peace and stability, the business community should be more specific in keeping our government officials (not politicians) accountable.
