We need to teach ‘Chinomics’ in schools, universities

By Moses Kuria

This past week I have been travelling with the Kenyan business and government delegation to the People’s Republic of China. What an eye opener this has been. From the private sector delegation to Cabinet Secretaries, from MP’s and Senators to Governors, everyone I talked to seemed to derive a vital lesson or experience that they want to implement when they return to Kenya.

There are four major take-home lessons from this trip. First, a lot of people have the mistaken view that ‘look East’ is an antithesis for ‘look West’. On the contrary, this cannot be true because it is impossible to look West when the West itself is looking East. American and European economies are so dependent on Asia and China in particular that by looking West, you are actually looking East. Of America’s 16 trillion dollars sovereign debt, 5.6 trillion is owed to foreign countries with 1.7 trillion dollars owed to Beijing alone, a whopping 22 per cent of America’s foreign borrowing.  When Kenya and China announced 5 billion dollars in loans to fund infrastructure and energy take-off projects, there were muted murmurs that the loans would push our total borrowing to beyond the Sh2 trillion mark.

American’s GDP is currently equal to her indebtedness and the latter is actually growing at a faster rate than the former. Nobody talks about unsustainability or servicing capabilities there. Yet Kenya’s borrowing is less than 60 per cent of our GDP. We still have room to borrow more to fulfill our ambitious infrastructural needs. The second lesson is that what we were taught in Economics 101 about the thick line between the laissez faire free market, invisible-hand driven economies on the one hand and the Marxist-Lenninist, State-controlled economies on the other. That line has been repeatedly crossed by China especially over the last 60 years.

China has managed to come up with a unique model of economic management that depends on only one factor: whether every decision is good or bad for the Chinese people, their happiness and prosperity. The most spectacular sight was in the village of Xiaoshan Hangmin in Zhejiang Province, where the ownership model is purely private. Yet when it comes to other functions, the Huwaei, ZTEs, China Constructions and other state owned enterprises are relied on. 

As long as the service rendered is for the good of China, it does not matter whether the ownership is private or public. The third lesson, which is of immediate urgency for Kenya is on devolution. Each of the devolved regions in China is evaluated on an annual basis by the central government and allocated a grade that is publicly announced. Regions are in constant competition to create more jobs, export more, build new factories and attract new investments.

 In addition, the regions have to demonstrate that they compete even as they stick to their core competencies and comparative advantages thus avoiding senseless duplication. All these regions know that there is one unwritten rule: never ask for money from the central government. Create wealth by attracting investments to your region.

The current clamour for a referendum to change the Constitution is the exact opposite of the goings on in the regions in China. Our model assumes that counties should compete to consume while the Chinese regions are in cut-throat competition to produce. When I saw governors Jackson Mandago (Uasin Gishu), Ken Lusaka (Bungoma), Evans Kidero (Nairobi) and William Kabogo (Kiambu) diligently taking notes at every stop and meeting, I thought that if all the 47 governors had the opportunity to be part of the trip, nobody would be asking for more money from national government. Finally, China has evolved in the last 60 years since the Second World War. The people came to an unanimous collective decision that politics had to be downplayed so that the nation could focus on development.

From the day the Western controlled Komintaung were expelled, Chinese energies were singularly focused on building the economic powerhouse which is on course to be the largest economy in the world by the year 2017. It is another lesson some fellows in Kenya need to learn and give Kenyans a chance to exhale.

The only regret I had by the end of the trip is that Prof Jacob Kaimenyi was not part of it. Perhaps he would have gotten a few ideas about how we can teach the Chinese model of economics or ‘Chinomics’ in our schools and universities to replace the outdated Keynessian models and such.

The writer comments on public affairs and policy matters