What’s the cause for all this hope? It’s too early

But beware! The cause for all this hope, for readers who dig beneath the headlines, is that where prices fell in March, they stayed flat in April (helped by a little extra tobacco tax). Where industrial production fell sharply in March, it fell more in April, but not by as much as it did in March.

But economic crashes, and rebounds, never follow nice smooth bell curves. The lumps and bumps of crumbling confidence, falling sales and declining production are exactly that: lumpy. The collapse of a bank, say Lehman Brothers, causes a bump.

It’s a shock. We get a big drop. A few months where the news is continuously bad, but now no longer shocking, makes for a lump in the line. We begin to hope again. And for those who now scratch beneath that stilted trend, hope should be measured out in very practical portions.

Yes, world governments have wheeled in ranks of measures to get consumers spending again. In the UK, you can now sell any old car back to the government. If you’re rich, you can get a loan at the lowest interest rate today’s adults have ever seen, and spend it on lots of items on special offer.

But the big, bad problem of too much debt is not getting better, but worse.

The government packages are on borrowed money, and those same governments are bringing in a lot less by way of revenue. Unemployment is now curling towards 10 per cent of American adults. Likewise in the UK, more Brits are out of jobs than has been the case for decades.

For Kenya, as in the west, the facts continue to be worse each month.

Remittances, which were the fuel for our country’s own consumer boom, continue to fall relentlessly, as a direct knock-on from the troubles of our own professionals working in the west.

Our flower farms are hanging on with their last breath. Our hotels echo: it’s hard to spot a minivan of tourists these days where before they were everywhere.

And this week, one of our largest banks, Barclays Bank of Kenya, signed off its own cash injection from Barclays plc to rebuild its liquidity available ironically thanks to the UK government’s support of the parent group.

The reality is that there was always going to be a time-lag between the shock headlines of the west, and the falling sales, falling earnings, and really biting, local cash squeeze for Kenya.

Enjoyed a few months
We enjoyed a few months of being considerably less affected than the average European city.

But time-lags work two ways. When the global recession does finally begin to turn, it will be a month or three before people sigh enough relief to treat themselves to roses, and a year or so until a serious foreign holiday comes back onto their shopping list.

It is an inevitability that as we have taken time to start to follow the west down, so we shall take time to start following it up again. Of course, we need to watch hard for when the turn comes.

Until things start to improve out there, they aren’t going to improve much in here. It matters a lot whether this is no more than a rough two years, or whether the adjustment to a more affordable way of life in the west takes a decade, only then to settle at a new, lower level of activity.

There are historians of the Great Depression of the 1930s who say it took a world war to put the global economy back on its feet.

It wasn’t until the 1960s that business really got busy again. We could be in for a very long haul.

It will either be a haul, as we stay alive, thrive and make it all work, even before the recovery in the west brings any more money. Or it will be a lifetime where we never again see the west consuming (buying) so much as it was so very few years ago.

Yet, what does this really mean? Does it mean calamity? Are we going to make it? For me, the quote that said it all came as I read of the latest travails of California, the most populous US state, which this week unveiled a savage new round of budget cuts on education, health and social services in a renewed bid to stay solvent. Yes, there will be more children in a class.

Yes, they are cutting the school year by five days. But, what does it all add up to at the end? We shall just use the money we have, and do what we can with it, the state’s spokesman declared.

And so too must we. Don’t let’s get fruity about thinking that budgets are going to get long again. The extra sales we make will only be because we have something better to sell than the next guy. No one is going to be rolling along on the wave of some new torrent of growth for quite a long time.

We shall have to live on what we have in 2009, and possibly less than that in 2010. And we must do what we can with it not for some more weeks, or for another half year. But until a year or more after we see the first growth figures tumbling from the tables of statistics the other side of the planet.

Jenny Luesby works for Webaraza