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Emergence of East African Tigers
limanika
#21 Posted : Thursday, August 29, 2013 5:33:05 PM
Rank: Veteran


Joined: 9/21/2011
Posts: 2,032
timbosho wrote:
From the thesis of the former Prime Minister of Ethiopia, the late Meles Zenawi:

"The political and economic renaissance of Africa is an issue that continues to preoccupy Africans' and non-Africans alike. Various methods of achieving such a renaissance have been proposed.
Most of these proposals are variations of the dominant neo-liberal paradigm of development. My argument is that the neo-liberal paradigm is a dead end, is incapable of bringing about the African renaissance, and that a fundamental shift in paradigm is required to bring about the African renaissance."
Another section
"Creating the proper blend of norms, values and rules to reduce uncertainty and transaction costs is a critical factor in accelerated growth and development. The creation of such social values and norms is called social development or social capital accumulation. Social development is thus not only an essential element of development but also a critical instrument of accelerated economic growth.
The accumulation of social capital, which plays such a critical role in accelerating economic growth, is a public good which has increasing returns to scale. It is, hence, undersupplied by the market and is subject to vicious and virtuous cycles. It is created by social activity by civic engagement in the context of horizontal and dense networks and inculcated and sustained through modeling, socialization and sanctions. The state plays a critical role in social capital accumulation through undermining patronage networks and promotion of fairness and equity, through the promotion of participation and democracy, and through appropriate sanctions and efforts at socialization."

Document is titled Dead Ends and New Beginnings

A lot of big sounding words, but basically, he says when a country is developing from a very low level like Kenya and most other African countries, the state has a big role to play in guiding development and allocation of scarce resources for maximum return in the best interest of the country. However, the state has to do it right. Not be wasteful,corrupt and inefficient.


Indeed. More about his scholarly writings here…
http://afraf.oxfordjourn...12/04/afraf.ads081.full
We need leaders who can apply original and independent thinking to solve Africa’s problems.
Meles rightly seems to say that the West is indeed responsible for creation and sustenance of a lop-sided global world order that knowingly or unknowingly assures its perpetual domination of world economy and capital. Mother Africa should stop following the West’s skewed dictum blindly and come up with independent and innovative strategies that can assure the development of her people. This is what China and Japan did, and Ethiopia now doing it.
Obi 1 Kanobi
#22 Posted : Thursday, August 29, 2013 6:15:53 PM
Rank: Elder


Joined: 7/23/2008
Posts: 3,017
limanika wrote:
guru267 wrote:
Kenya will be unbwogable in East Africa both in real Gdp and per capita income...

The Ethiopians will be somewhere in 2nd place!

GDP is a measure of value of goods exported from a country in a given year, not a measure of wealth. So it is possible for a seemingly ‘’poorer’’ country like Sudan and Ethiopia to have higher GDP than Kenya. Apparently this is actually the case! And GDP is the internationally accepted standard of measuring and comparing wealth creation.
Kenya of today and yesteryears may be having better developed cities and infrastructure than Ethiopia but am looking at the future 10-20 years. Ethiopia is coming up with policies that make its economy more competitive than Kenya i.e.
• Their electricity is subsidised by government so rates are among the cheapest anywhere in the world
• All land in Ethiopia is owned by the state. They are able to lease land to investors at minimal cost
• Their population is twice that of Kenya so the market is larger than Kenya.
On the other hand, cost of electricity and land in Kenya is among the highest anywhere in the world.
Why is it so difficult to see that Ethiopia is doing something right? Kenya may be a better democracy than Ethiopia, but again, Kenya is also better democracy than China. Irrespective of this, US manufacturing companies have opened satellite plants in China not Kenya. Investors think in terms of profits and not sentimental reasons, that’s why someone will only invest where they can reap maximum profits.
I am actually happy for Ethiopian people that they are able to come up with policies that will assure the development of their people. If they continue with these policies, 20 years down the line we will be comparing Kenya and Ethiopia of then and yesteryears and wondering where the rain started beating us.


Your definition of GDP makes me wonder whether we should really be having this arguement. Where did you get that definition, this is what the internet searches give:
"Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time"
Back to the Kenya Vs Ethiopia debate, It can be argued that Ethiopia has more potential at this point due to better endowment with natural resources, however, for me I look at just 1 item that Kenya has and that is human capital, this is what has built America and Japan and UK, Germany and now India.
Ethiopia is like russia while Kenya could be like Germany in the African context, who do you think has more upside.

On the businessman saying Ethiopia has more potential, one needs to look at the context he was observing this, for a business mind, your interest is profits and not development, Ethiopia currently remains greatly under exploited, therefore its normal for a businessman to look at the markets where he will have less competition, make higher returns etc.

Finally, the overall size of the GDP is irrelevant, China may have a larger economy than say Taiwan and South Korea, but it will take a very long time to catch up with either of this two countries on the all important number of GDP per Capita, which is the more important indicator. Ethiopia with twice Kenya's population should certainly have a larger GDP and present a more juicier market, but that does not mean they will be more successful than us.
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
limanika
#23 Posted : Thursday, August 29, 2013 7:18:00 PM
Rank: Veteran


Joined: 9/21/2011
Posts: 2,032
Obi 1 Kanobi wrote:
limanika wrote:
guru267 wrote:
Kenya will be unbwogable in East Africa both in real Gdp and per capita income...

The Ethiopians will be somewhere in 2nd place!

GDP is a measure of value of goods exported from a country in a given year, not a measure of wealth. So it is possible for a seemingly ‘’poorer’’ country like Sudan and Ethiopia to have higher GDP than Kenya. Apparently this is actually the case! And GDP is the internationally accepted standard of measuring and comparing wealth creation.
Kenya of today and yesteryears may be having better developed cities and infrastructure than Ethiopia but am looking at the future 10-20 years. Ethiopia is coming up with policies that make its economy more competitive than Kenya i.e.
• Their electricity is subsidised by government so rates are among the cheapest anywhere in the world
• All land in Ethiopia is owned by the state. They are able to lease land to investors at minimal cost
• Their population is twice that of Kenya so the market is larger than Kenya.
On the other hand, cost of electricity and land in Kenya is among the highest anywhere in the world.
Why is it so difficult to see that Ethiopia is doing something right? Kenya may be a better democracy than Ethiopia, but again, Kenya is also better democracy than China. Irrespective of this, US manufacturing companies have opened satellite plants in China not Kenya. Investors think in terms of profits and not sentimental reasons, that’s why someone will only invest where they can reap maximum profits.
I am actually happy for Ethiopian people that they are able to come up with policies that will assure the development of their people. If they continue with these policies, 20 years down the line we will be comparing Kenya and Ethiopia of then and yesteryears and wondering where the rain started beating us.


Your definition of GDP makes me wonder whether we should really be having this arguement. Where did you get that definition, this is what the internet searches give:
"Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time"
Back to the Kenya Vs Ethiopia debate, It can be argued that Ethiopia has more potential at this point due to better endowment with natural resources, however, for me I look at just 1 item that Kenya has and that is human capital, this is what has built America and Japan and UK, Germany and now India.
Ethiopia is like russia while Kenya could be like Germany in the African context, who do you think has more upside.

On the businessman saying Ethiopia has more potential, one needs to look at the context he was observing this, for a business mind, your interest is profits and not development, Ethiopia currently remains greatly under exploited, therefore its normal for a businessman to look at the markets where he will have less competition, make higher returns etc.

Finally, the overall size of the GDP is irrelevant, China may have a larger economy than say Taiwan and South Korea, but it will take a very long time to catch up with either of this two countries on the all important number of GDP per Capita, which is the more important indicator. Ethiopia with twice Kenya's population should certainly have a larger GDP and present a more juicier market, but that does not mean they will be more successful than us.


Thank you for putting the full definition of GDP. Mine was streetwise half full definition that in any case didn’t change the main message. However my one point was that Ethiopia has a higher GDP than Kenya… and added that if the trend continues, they will be far ahead of us in GDP terms after 10 -20 years.... I also added in some post that I have no problem with Ethiopia developing faster than Kenya, many other countries have and Kenya does not have monopoly of ideas.
My other point is that Kenya should learn lessons from Ethiopia and other countries rather than just following the same path we have followed for the last 50 years. On human capital.. please explain how human capital will help Kenya if –
• You cannot afford to buy land to put up an industry
• The electricity costs and transport costs are so high anything you produce is already 10 times more expensive than equivalent products produced in China
I also hold the view that every developed country managed to develop by crafting own distinct path. We could list each and exactly what they did. Therefore we cannot and should not equate Kenya with Germany or Ethiopia with Russia. Every nation is unique and they must chart their own distinct path …even if no one has walked that path before..
InnovateGuy
#24 Posted : Friday, August 30, 2013 12:41:04 AM
Rank: Veteran


Joined: 11/15/2012
Posts: 1,110
Ethiopia Airlines made a 178 pc profit in the 2012/13 financial year. Our KQ made lossses.

http://www.theeastafrica...14/-/fslnp6/-/index.html
Live Full Die Empty - Les Brown.
limanika
#25 Posted : Friday, August 30, 2013 1:21:57 AM
Rank: Veteran


Joined: 9/21/2011
Posts: 2,032
[quote=InnovateGuy]Ethiopia Airlines made a 178 pc profit in the 2012/13 financial year. Our KQ made lossses.

http://www.theeastafrica...4/-/fslnp6/-/index.html[/quote]
Not sure you are comparing apples to apples here. Ethiopian air lines is state owned with lots of spoon feeding unlike our kq which has been left to fend itself from market forces and sharks. Perhaps passenger numbers and relative air fare comparison would give good picture. But it is a discussion we need to have, whether govt should give any support to a company like kq which does so much to boost our image out there
murchr
#26 Posted : Monday, August 29, 2016 3:18:46 AM
Rank: Elder


Joined: 2/26/2012
Posts: 15,979
Ericsson
#27 Posted : Monday, August 29, 2016 7:30:43 AM
Rank: Elder


Joined: 12/4/2009
Posts: 10,626
Location: NAIROBI
Kenya's economy is weakening.
Poverty rates increasing.
High debt to GDP ratio. The rebasing was done to fool us that our economy is now bigger.On the contrary this was done to enable govt borrow more and cheat us again that our debt is manageable since it hasn't reached 70% to gdp ratio yet we are borrowing to pay salaries.
Manufacturing which forms basis of economy is shrinking despite gok saying infrastructure has improved
Kenya as a tiger I don't see prospects based on the way government is being run
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
sparkly
#28 Posted : Monday, August 29, 2016 7:39:49 AM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
Obi 1 Kanobi wrote:
limanika wrote:
guru267 wrote:
Kenya will be unbwogable in East Africa both in real Gdp and per capita income...

The Ethiopians will be somewhere in 2nd place!

GDP is a measure of value of goods exported from a country in a given year, not a measure of wealth. So it is possible for a seemingly ‘’poorer’’ country like Sudan and Ethiopia to have higher GDP than Kenya. Apparently this is actually the case! And GDP is the internationally accepted standard of measuring and comparing wealth creation.
Kenya of today and yesteryears may be having better developed cities and infrastructure than Ethiopia but am looking at the future 10-20 years. Ethiopia is coming up with policies that make its economy more competitive than Kenya i.e.
• Their electricity is subsidised by government so rates are among the cheapest anywhere in the world
• All land in Ethiopia is owned by the state. They are able to lease land to investors at minimal cost
• Their population is twice that of Kenya so the market is larger than Kenya.
On the other hand, cost of electricity and land in Kenya is among the highest anywhere in the world.
Why is it so difficult to see that Ethiopia is doing something right? Kenya may be a better democracy than Ethiopia, but again, Kenya is also better democracy than China. Irrespective of this, US manufacturing companies have opened satellite plants in China not Kenya. Investors think in terms of profits and not sentimental reasons, that’s why someone will only invest where they can reap maximum profits.
I am actually happy for Ethiopian people that they are able to come up with policies that will assure the development of their people. If they continue with these policies, 20 years down the line we will be comparing Kenya and Ethiopia of then and yesteryears and wondering where the rain started beating us.


Your definition of GDP makes me wonder whether we should really be having this arguement. Where did you get that definition, this is what the internet searches give:
"Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time"
Back to the Kenya Vs Ethiopia debate, It can be argued that Ethiopia has more potential at this point due to better endowment with natural resources, however, for me I look at just 1 item that Kenya has and that is human capital, this is what has built America and Japan and UK, Germany and now India.
Ethiopia is like russia while Kenya could be like Germany in the African context, who do you think has more upside.

On the businessman saying Ethiopia has more potential, one needs to look at the context he was observing this, for a business mind, your interest is profits and not development, Ethiopia currently remains greatly under exploited, therefore its normal for a businessman to look at the markets where he will have less competition, make higher returns etc.

Finally, the overall size of the GDP is irrelevant, China may have a larger economy than say Taiwan and South Korea, but it will take a very long time to catch up with either of this two countries on the all important number of GDP per Capita, which is the more important indicator. Ethiopia with twice Kenya's population should certainly have a larger GDP and present a more juicier market, but that does not mean they will be more successful than us.


You spake the truth @obi.

Kenyan capital is developing Ethiopia. Kenyan companies like KCB, Equity, Bidco are invested in Ethiopia while Ethiopia sends us refugees to sell fish in Kilimani and Ngara.
Life is short. Live passionately.
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