Globalization: The Case of Kenya

Introduction

The process of multilevel integration of people and economies into one global community is known as globalization. Initially, such integration is expected to take place to the mutual benefit of all the members of the process. However, numerous studies demonstrate that globalized states tend to experience both improvements and failures. East Africa has been impacted by the process of globalization essentially, this paper is intended to investigate whether the outcomes of it were worth the cost. While Kenya is one of the most progressive states in East Africa at the moment, the study will focus on Kenya’s highs and lows on its way to global recognition.

From Colonialism to Decolonization

To understand the peculiar features of Kenya’s economic and political development, it seems rational to turn to its history first. Parenti provides much details on how modern Kenya appeared on the world map (63). At the end of the 19^th century, the British Empire began to explore the lands of East Africa. The Imperial East Africa Company guided the occupation of Kenya and Uganda, and the process was not peaceful at all. The British severely raided, looted, and murdered the Kikuyu, the native people of Kenya until the British Foreign Office took charge of colonization in 1895. Then, the methods applied by the conquerors became more civilized, and the locals could also benefit from intrusion. They received new opportunities for trade and other contacts with Europe. However, the natives were persistently pushed away from their lands, exploited by colonizers, and economically antagonized (Caplan 22). The native farmers were restricted in their activities, as the settlers had to protect themselves from competition. Thus, the Kikuyu farmers were forbidden to grow and sell coffee. Only after World War II, the local farmers were “finally allowed to compete for and produce a share of exports” (Parenti 64).

Further on, the oppressive colonial rule, continual expropriations, and economic deprivation provoked the ongoing resistance of the Kikuyu which developed into a painful military conflict of 1950s-1960s. In December of 1963, Kenya became independent; constitutional changes made it a republic with a centralized government. The first president of the republic was Jomo Kenyatta, who shifted to conservative bourgeois politics (Roessler 208). However, decolonization did not mean immediate advancement and prosperity of the state. “Acquired assets – land and businesses – were mostly distributed to a new Kikuyu ruling class, who were also heavily represented in Kenyatta’s new government, and the Kenya African National Union, which was the ruling party until 2002,” Parenti underlines (65).

The Need for Reforming

In the 1970s, Kenya’s economy was based on general controls – the state used to control wages and prices, currency rates and foreign exchange transactions, domestic retail and import amounts. As a result, import substitution and poor export incentives made the state’s industries uncompetitive. By the 1980s, it became obvious that “macroeconomic policies pursued were not sustainable and needed to be drastically changed” (Wolf 23). Finally, in 1993, the government started implementing an economic liberalization reform under the assistance of the World Bank and the International Monetary Fund (IMF). In particular, most of the controls were eliminated; public sector was widely privatized, while conservative fiscal and monetary policies were introduced. As a result, the GDP of Kenya began to grow by 4% annually. Persistent engagement of multinational corporations (MNCs), international nongovernmental organizations, and United Nations agencies has become a crucial factor of Kenya’s economy development and reinforcement (Zepeda, Chemingui, Bchir, Karingi, Onyango, and Wanjala 104).

The Challenges of Neoliberalism

Nevertheless, globalization provoked both inspiration and criticism. Kenya was successfully integrating with the world market, but, as Manda and Sen (29) conclude, the “overall effect of international trade on manufacturing employment has been negative in the 1990s.” First of all, the informal sector of employment began to dominate, thus creating more jobs, but putting employees into unsafe and disadvantageous conditions. Trade liberalization also resulted in the decline of small businesses, unable to compete with the imports. Moreover, many employers began to hire part-time workers or seasonal workers, in order to escape paying the bonus.

Meanwhile, Kenya’s economy became extremely dependent on agriculture. Agricultural sector provides employment for 75% of Kenyans, but it is still underfinanced and challenged by a number of different factors. Limited agricultural exports, the growth of population, and prolonged drought have coincided with unreasonable governance, bribery, and increasing social inequality (Caplan 111). While Kenya’s GDP made up $69.977 in 2015, 23% of the Kenyans still live on about $1 per day. According to Manda and Sen, free-trade economy was hampered by the lack of economic knowledge and market research, low quality of the products put up for export, and low negotiation position in the World Trade Organization (WTO) (34).

Although the demand for agricultural products is growing, the farmers face too many obstacles in their daily activities. In The Travels of a T-Shirt in the Global Economy, Rivoli illustrates how “the poor and powerless often suffer more from the suppression of competitive markets than from competition itself” (265). Under market-based economy, there has been a decline in wage employment and self-employment outside smallholder agriculture since the 1980s. As long as MNCs are usually interested in non-farm sector, the rural labor markets have been significantly tightened, since the introduction of liberal reforms. While a share of agricultural employees is prevailing among the least prosperous class, these were the poor who suffered the most because of neoliberal economic restructuring. Actually, “internal country policies often keep poor countries in a “small farm” trap, which in turn dramatically limits farmers’ productivity and profits,” Rivoli admits (266).

Despite the challenges listed above, globalization has provided certain opportunities for initiative. Zepeda et al. note two factors that create certain perspectives for Kenya as a member of global economy (122). One of them is ethnic tolerance of the Kenyan society, which is especially noticeable by contrast with the neighboring states. Along with breathtaking landscapes and catching flavor of local culture, ethnic tolerance makes Kenya a promising destination for tourists. Tourism is the sector which has already attracted an impressive flow of investment to Kenya’s budget and has strengthened its reputation in the global economy.

Another factor is horticulture, the fastest developing sector of Kenya’s economy. After tourism and tea, it is ranked as the third earner of the country’s foreign exchange and it goes on attracting foreign investors. Globalization has made Kenya one of the most open societies in Africa, but, according to Zepeda et al., the citizens believe they will fully benefit from its outcomes only when the governance becomes efficient (190).

Conclusion

Globalization has essentially influenced the states of East Africa, and one of the most representative cases is that of Kenya. On the one hand, as the controls on trade were removed, the economy of Kenya began to get out of depression, and the improvement in economic, social, and foreign activity rates was remarkable. However, the reduction in trade barriers has also contributed to the growth of unemployment, social disparities, and political contradictions. Obviously, as the increasing international integration of markets cannot be beneficial for all of the participants, the outcomes of neoliberal reforming significantly depend on efficient governance within the state. Although, the overall impact of liberalization in Kenya may be controversial, the reforms it brought were up-to-date and urgent.

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