Rank: Veteran Joined: 4/27/2010 Posts: 951 Location: Nyumbani
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Kausha wrote:@ Wakanyugi, just who is the whole of africa......Uhuru, Museveni, Mugabe, Kagame etc.last time I checked SA, Botswana, Nigeria, Egypt were not exactly rushing to China. Careful you could be in stupor suffering from the too much antiwest repellant, open your 'windows' or sip some water.
Indulge in my rebuttal, Economics 101, infrastructure spend has a very long value chain and in turn a higher multiplier factor because of the value chain. When you build a road, you need trucks, labor, engineers, draughtsmen, cement, steel, excavators, sand, crushers, quarry etc. That is the first layer, second layer, you have banks to provide financing, cement manufacturers, equipment manufacturers, insurance companies, jua kali artisans, mama uji na githeri at the site, mechanics to fix equipment, quarry labor, sand harvesters, quantity surveyors, civil engineers, apprentists being trained on the site etc. Third layer, you have families of all these people, the government-all taxes, mitumba sellers, mama mboga at home, local supermarkets where the above 2 entities would buy from. the fourth layer is the general economy. Having all these people and institutions in the value chain results in a larger multiplier effect and great impact in the economy, jobs, higher incomes and improved purchasing power in the economy.
Now look at the chinese model. Most of the material is sourced from external suppliers in china, most of the financing is from China Exim Bank of simmilar institutions - occassionally a few banks will be lucky, all skilled labor is from china, all equipment is from china, the proceeds are repatriated to china. What do we get, an excellent road, few small working capital facilities in banks, a few insurance policies, withholding tax and some vat to KRA, low level labor which is not even scaled up during the project and a pockets of Xianhu Kamau and Ling achieng from Chinese cavorting with our ladies. What am advancing is that although chinese built roads are great and have superb short term value, in the long run, the current model of infrastructure engagement with China is value destructive in the long run. Cutting off majority of the locals from the value chain is definitely destructive to the economy and is one sure way to ensure we don't attain the vision 2030 goals. Remember the whole purpose of vision 2030 is ensure we are a middle income society - more people living earning and living comfortably than now. Part of the process is to ensure as we build we create enterprises that can engage more of the citizenry productively. In 2030 if we have roads, a railway and water and majority of the population still unable to feed themselves we will have failed. Please remember to measure vision 2030 in Standard of living by our people and not in terms of visible projects! I agree with on this one but the only thing we have is labor semi skilled , cement ( I saw the Chinese even brought their own cement while constructing Thika highway) , and labor is not even skilled ,talk of Engineers and come to think of one Ephraim Maina who did not even mark the road to Sagana (hope he did it) As for finances we cannot even think of Kenyan banks otherwise they will propose 25% interest as they continue robbing everyone, so the Chinese will count on their China Exim bank. I think the choices are few. 1.Get a western Co like before, I guess the road to Narok from Mai mahiu was done by an Italian Co;how could it be compared to Thika highway and others? pay more money (Euros) instead of Chinese trucks, there will be some few Volvos and Caterpillars. 2.Remain with the Chinese and learn it the hard way 3.Stick with Ephraim Mina and the Mehtas and wait for a decade for them to build several Kms of roads.
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