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The two horse race PDF Print E-mail
Written by Job Obonyo   
Wednesday, 19 September 2007

One way or the other, a majority of Kenyans are affected by poverty, insecurity, low quality education, inadequate health services, a lack of social welfare programs and huge disparities in income.

Growing unemployment, tribalism, massive corruption, disempowerment, escalating prices of basic commodities and a desperate hopelessness are also continuing to ravage our society.

With less than twelve weeks to the general elections, many people must be reflecting on imminent and crucial electoral decisions. The two horses battling for the Presidency (I'll temporarily exclude the donkey); Mwai Kibaki and Raila Odinga, have respectively set entirely different visions for addressing the above concerns.

A look at President Kibaki's policies indicates that his main focus has been maximizing growth in the short-term, while passing on the burden of poverty alleviation and equitable distribution, to future governments. His chief challenger Raila indicates in his vision that tackling poverty and ensuring equitable resource distribution will be immediately prioritized under his government.

the forgotten poor

While Raila views curbing corruption, streamlining governance through a new constitution and pursuing a programme of massive investment in infrastructure as key pillars in his poverty alleviation efforts, his rival Kibaki is silent on corruption and constitution reforms, proposing only the most modest investment in infrastructure.

After all Kibaki would not wish to remind Kenyans about his failed promise to deliver reforms through a new constitution in 100 days, neither would he wish to stir a hornets nest by outlining what he has done (not done) to fight corruption.

Conservative proponents of Presidential systems like Kibaki are adept at significantly limiting public spending and facilitating fewer benefits for the people, and this eventually results in inequality, as is the case with our current system.

Many saw the gusto with which Health Minister Charity Ngilu's universal healthcare plan was trashed by Kibaki and his Finance Minister for the specific reason of having the letter S, for social, sitting in front of the name of the plan.

On the contrary, progressive reformists focus principally on social and economic improvement of people's lives. Power-sharing in a people-driven and consultative process, along with devolution of power, as provided for in the Bomas Draft, guarantees more public spending and less inequality. This is precisely what Raila Odinga has vowed to change and set as his reform hallmark if given an opportunity to govern.

While Kibaki's record on public spending is documented, Raila has committed to prudently spend more of public funds in economic growth stimulants like infrastructure and devolution. Even considering very basic spending on people, Mwai Kibaki has demonstrated his reluctance to increase CDF constituency allocations up beyond the paltry current level of 2.5 % of national expenditure. On the other hand ODM's Raila Odinga, has offered an immediate increase in CDF allocations to 10%, from which point, it would eventually be expected to rise to 30% contingent upon other factors. That alone, is an indicator of clear differences between their respective poverty alleviation concerns.

Raila has specific and big infrastructure plans to: convert Mombasa port into a free port, construct another port at Lamu, and modernize the inland port at Kisumu; and expand to international airport status, Kisumu, Malindi and Wajir's facilities. In addition, the facilities at Isiolo, Lamu and Lodwar would be expanded and improved to full airport status. This he sets out to fund through a collaborative effort of public, private sector, and international partnerships.
The ODM candidate also proposes to expand and modernize the railway system; improve telecommunications; rehabilitate and expand our road network, build a dual carriageway from Mombasa to Malaba/Busia; construct water-supply and conservation systems for multiple uses and upgrade infrastructure in all our cities and major towns.

In a late effort at playing catch-up (following the launch of his competitors' visions), President Kibaki has recently promised to improve already existing airports. By proposing the same airport projects proposed by Raila, Kibaki's promise spurs negligible excitement not only because he has been in office for five years, but also because the public is aware of his penchant for not fulfilling publicly stated promises.


bridging them out of poverty

Rather than upgrade most town and city infrastructure across the nation like Raila plans to, Kibaki proposes to improve a select few model towns including his native Othaya, and the Local Government Minister's neighborhood towns of Bungoma and Kitale.

While Kibaki primarily seeks to invest development in parts of the country that are already prosperous, due to their proximity to the centre of power, Raila fronts for economic expansion beyond the traditional "high potential" zones designated through 1964's Sessional paper number 10, co-authored by Kibaki.

President Kibaki's formula for regional investing has taken a clear pattern lately. The incumbent president is currently engaged in roadside dolling-out of promises for regional development while seeking votes, for instance proposing the setting up of universities at the Coast and Western provinces, during campaign tours in the respective regions. His main competitor Raila, on the other hand, has laid out an equitable plan to ensure that at least one university is built in all eight provinces of Kenya.

Adding to the haphazard and inequitable resource distribution quagmire, and utilizing his presidential patronage whims, the President has lately resorted to proclaiming the establishment of various administrative units such as districts and divisions, at individual requests of local politicians while on vote seeking tours. On the contrary, his ODM nemesis has stuck to his stance that political patronage should not be the factor determining our internal re-districting, preferring an objectively spelt methodology instead.

While provision of free primary education has been touted as Kibaki's major achievement, it must be clearly noted that problems of low quality and gender and regional disparities still dog public education. Teacher : pupil ratios are as good as 1 teacher per 15 pupils in a few Municipalities, Kiambu and Nyeri districts; while as terrible as 1 teacher for 70 pupils in Kwale, Wajir, Kisumu, Butere-Mumias, Mwingi, and Narok districts.


wake up call

Whereas Kibaki campaign strategists would want to sell a blanket statement of success in basic education across the country, the reality is that many parents are aware that millions of their children are being left behind through policies whose architects are Prof. George Kinuthia Saitoti (Minister), Beth Mugo (Asst. Minister) and Prof. Karega Mutahi (PS). Raila Odinga recently pointed out that rather than increase spending on education (both basic and secondary); the Kibaki government has instead increased spending in the Defense budget by 11 billion shillings, reaching 35 billion shillings.

As suspected (we are not at war), the ODM leadership attributes this increase in pooling of public funds in Defense, under the Office of the President (OP), as a calculated assault on our coffers, through fictitious military procurements for non existent goods and services that eventually give rise to scams like Anglo-Leasing. Old habits die hard and the lure to steal is irresistible among those schooled in the old colonial order.

Just like oil and water, primitive wealth accumulation and poverty alleviation don't mix. A presidential candidate agitating for immediate address of poverty concerns, like Raila, is definitely considered a threat to both the incumbent President Kibaki and former President Moi's own wealth protection schemes. Wealth protection of yesteryear and present-day looters seems to be a key objective of President Kibaki's. How else could one explain his sitting on the Kroll report detailing the looting and stashing abroad of Kenya's public coffers since the year 2004? How about his inaction to the Goldenberg inquiry report, the Ndun'gu report, the Ouko inquiry report, Githongo dossier, and PIC reports on Anglo-Leasing corruption scams?


two from the top

Kibaki's principal challenger Raila, while in the US on a trip recently, vowed to fight corruption and declared that he was ready to pay the heavy price for it, since he argued that corruption is the single biggest impediment to our development. Fighting corruption and ending presidential patronage is no simple task. It calls for the mobilization of majority of citizens. ODM is a threat to the existing order, especially because it is working for a new Constitution seeking to introduce devolution and executive power sharing.

Raila is also be a threat to the existing order because he has vowed to end official tribalism which he accuses Kibaki of perpetrating, through detribalizing, and giving a face of Kenya, to the public service, starting with the two most powerful institutions in the country, namely the Office of the President and State House. They are currently dens of tribalism.

Looking at insecurity, it is difficult to give President Kibaki a passing score following: his disastrous handling of the ghastly acts of terrorism by Mungiki; Mt. Elgon conflicts; Likia, Trans Mara and Kuresoi clashes; Artur mercenary brothers saga; the media raid on Standard and KTN; and the obvious infiltration of the police force by political meddlers. Many suspect that Raila can provide a stark contrast to such ineptitude and conflict of interest.

Land reforms have been another elusive subject pitting conservative status quo proponents like Kibaki, against reformists like Raila. It is no secret that the large scale land owners comprising colonial settlers, Asian profiteers and collaborators elites born of local colonial administration allies, and conservative politicians from the Kenyatta, Moi and Kibaki regimes have had an upper hand in this debate. They are all on Kibaki's side while the poor and landless look up to ODM for redress of this injustice.

Kibaki is obviously not keen to disturb his own peace and that of his allies, through serious and comprehensive efforts to address social and historic land injustices. Millions of landless squatters continue being squeezed into tiny inhumane plots. The best Kibaki has done is to try to unleash a smokescreen on this land issue, through cosmetic, uncoordinated hand-outs of small tracts to loyal subjects. In a bid not to disturb the multi-decade order drawn by colonialists, Kibaki has avoided the comprehensive, constitution backed, land reform route that his ODM rival prefers. Many squatters may have noticed the gimmick.


ready for takeoff?

As we draw nearer the elections, recent events reminiscent of the last days of the Moi regime seem to re-appear. There has been a sudden frenzy to privatize public corporations at discounted prices, through irregular deals. For instance, Kibaki's government is in a rush to quickly dispose public shares at Safaricom when pertinent questions about full disclosure and ownership, at Mobitelea, have arisen. The leaked Kroll report reveals that MPs, Gideon Moi and Nicholas Biwott and Biwott's Canadian son-in-law, are the owners of Mobitelea and by extension 5-10% of Safaricom, The public wonders how the three mysteriously acquired ownership of a portion of Safaricom huge enough to generate a billion shillings annually.

While Kibaki pushes for the Safaricom deal to go through, as espoused by his Finance Minister's statements, Raila has vowed to block the divestiture deal through the courts, until all the public concerns and questions are cleared.

It will be very interesting to see in whom, between the two contrasting horses, the status quo proponent Kibaki, and the change agent Raila, the majority of Kenyans will entrust their faith. The campaign blitz promises to be very exciting and I am cautiously optimistic that ODM will prevail.





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Good synopsis Job!
written by Sijui , September 19, 2007
Job I give you credit for giving the most coherent, rational and well articulated economic program of Raila's team so far. You have done a far better job than the candidate himself and majority of his handlers. Assuming you are conversant with more of the specifics of his actual plans please indulge me with some clarifications (Disclaimer, my view of Raila is that he is a bombastic politician who has wasted opportunities to be more a technocrat and policy tactician, and less a loud mouthed politician.....that being said I know he is intelligent and can be convinced that he can execute coherent fiscal and public policy).
Questions:
1) what form of devolution does he envision? Will he grant political, administrative and fiscal devolution to the provinces/districts/towns? I.e. will municipalities directly vote for their officials? Also how will municipalities raise the public revenue, will they still rely on the central government for disbursements, or does he envision subsidizing some e.g. Mandera as opposed to Nairobi, or does he have in mind independent financing such as establishing in law the provisions for municipal bond funds on the NSE? I know other countries in Africa are thinking creatively along these lines when they say devolution, what are his specifics?
2) Infrastructure projects and public/private partnerships. Where will he get the funding? I know Kibaki is going the route of international sovereign bonds to finance infrastructure projects, what is Raila's preference? Also what are his views in regards to the potential of inflation, deteriorating balance of payments and destabilization in the domestic financial markets especially if government once again CROWDS OUT the domestic private sector especially struggling SMEs.
3) POVERTY ALLEVIATION: Welfare state or robust domestic private sector? Raila seems to lean towards establishing a welfare state, what are his views on the impact this will have on productivity, resource and capital efficiency that are all vital ingredients for a growing domestic private sector?
4) CORRUPTION: How will he reconcile the fact that both his vice president and Prime Minister designate are tainted with corrupt business and political dealings plus have a demonstrable track record of lack of integrity, principles and outright professional incompetence?

Kibaki is a disappointment but many Kenyans are intelligent and savvy enough to know that social, political and economic well being comes at CONSIDERABLE cost with a lot of sacrifices and compromises. The Government cannot 'solve' wananchi's problems at best it can facilitate through sound economic and public policy the environment for wealth to be created and expanded. I would like to hear Raila's position on where he thinks THESE COMPROMISES AND SACRIFICES WILL OCCUR, AND HOW HE WILL PRIORITIZE THOSE TOUGH DECISIONS.
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written by Kamale , September 19, 2007
Sijui,

Well done!!! A very well reasoned response without degenerating to trash Job's excellent defence of a Raila candidature.

What this country needs is a system where we can question our leaders on the promises they are making to us rather than just cheer a whole load of promises that are made to us.
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written by mosaisi , September 19, 2007
This was a very fair and balanced analysis of the 2 candidates. Keep it up!

The only clarification that you should make is how Raila will meet the goals he has set. Some of the points that are note clear are:

1. How will he fight corruption when his running mate and future PM are accused of engaging in corruption?

2. Detribalizing the country has been the main agenda in this campaign. How will Raila achieve detribalizing without being accused of witch hunting? And how do you tell who has a job because of his/her tribe? [By the way I noticed your list of top Ministry of Education officials as: Prof. George Kinuthia Saitoti (Minister), Beth Mugo (Asst. Minister) and Prof. Karega Mutahi (PS). George Kinuthia? Does this factor into the campaign agenda of exposing tribalism?]

3. How will Raila carry out land reform to redistribute land held by "colonial settlers, Asian profiteers and collaborators, elites born of local colonial administration allies, and conservative politicians"?

4. Will Raila-friendly companies (like Dominion Farms) that recently acquired thousands of acres of land courtesy of Odinga influence be subjected to redistribution of land? What will become of the Odinga owned farms in Koru?

5. On equitable distribution of wealth, how has Raila used his seat as an MP to protect the welfare of the Kenya worker?

6. On infrastructure, what policy did Raila leave behind during his stint in the ministries of Energy and Roads?

7. Last but not least, how has Raila used his seat in parliament to bring about the changes he is promising? I will be happy if you pointed to a single bill he tabled in parliament to that effect.
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Not Really
written by Kimani Njoroge , September 19, 2007
Kibaki’s group was elected to end looting, insecurity and tribalism. But they have become proponents of the same. Voting them out will send a clear message to future administrations: that they must deliver or get fired like Kibaki and Moi before them.

The nation is in desperate need for sensible leadership. This means welcoming the most organized opposition, i.e, Raila and his group. However, Raila’s Gospel According to Job leaves loads of questions about the man. Is he as riotous as Job would like us believe? Does he sacrifice for the poor or for his own gains? Is Savior Raila any different from Kibaki and company? Was the 1997 NDP-Kanu merger intended to help Kenya or smoothen his route to power; was his 2002 Kibaki Tosha meant for Wanjiku or aid his ascendance to sweet Primiership? Was helping Moi escape prosecution directed at helping our economy or say pole for the pain caused during 2002 elections? Bottom line: Raila is just another politician whose thirst for power comes before the nation’s interests. Believing everything he is said to be might be déjà vu all over again.
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Let Kibaki hand-over the reign
written by Ofisa Nyaikondo , September 19, 2007
Since independence, our elected leaders have always been in denial of the faulty 'inherited' British consitution, tribalism and its dear supporters (look back at Kenyatta, Moi, and Kibaki appointees) and ever-expanding executive at the cost of Wananchi.
If gains are to be made in Kenya at all levels (economic, social, and political), something has got to give, the old power barons!
By the way, where did the young turks fizzle to?
Good analysis Sijui.
Ofisa
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Good questions
written by Job , September 20, 2007
Sijui, Mosaisi et al,

Excellent and insightful questions (lots). These are just my opinions/ analysis, I don’t purport to speak on behalf of any candidate. Both candidates don’t have a problem picking skilled teams to handle the nitty-gritty of formulating coherent fiscal, public or monetary policies.

With regard to his running mate Musalia and PM designee Ruto, my opinion is to let justice take its natural course. The best people to answer this question would be Ringera (KACC), Wako (AG) and Karua (who runs the Justice Ministry). There are laws and if anyone whether Raila or his running mate Musalia, Kibaki or his presumed running mate Awori, Saitoti, Biwott, Mwiraria, Ruto or even Moi is found guilty of any crime in a court of law they need to face the penalties.

Looking at the other side gives a bleaker image, I would be worried if the constellation of wakina Moi, Biwott, Murungaru, and Mwiraria were falling over each other supporting me.

On poverty alleviation, in my view, Raila has indicated his priority for effecting the trickle-down effect to end the cycle of “private affluence and public squalor” while Kibaki hopes that maximizing wealth in the short term (by a few), would eventually generate jobs through repeated investments by the same (with less strain on public spending).

Raila’s plan will involve a lot of public spending, with joint partnerships with the private sector and foreign (bilateral & multilateral partners). Huge infrastructure investments are expected to open up (expand) the dormant regional economies (aka low potential areas) strewn around all corners of Kenya.

Some of these places just need to be connected to the national infrastructure network (roads, telecommunications, & other facilities) and they would engage in (or multiply efforts in) seriously productive economic activities,…hence contributing to the national economic grid.

Such aggressive initiatives for mobilizing resources will contribute to faster economic growth. Active economies will sprout in Lamu, Malindi, Wajir, Isiolo, Lodwar, Loitoktok, Busia, Kisumu, Mwingi & other places that would be connected to the national communication network. Thus Raila looks at say investing in rural farming, horticulture, pastoralist & fishing areas where majority live.

For instance, if livestock farming is the economic mainstay of NEP then an Int’l airport at Wajir opens opportunities for meat export, which needs processing, packaging & processing (creates many jobs) besides offering the livestock suppliers a portion of foreign exchange. The airport itself provides jobs. Good roads and abattoirs would means faster delivery to other local towns and a buzz in trade and business. Tons of hide would open new industries creating even more jobs. Other areas would have bursting activities tailored for the respective regions thanks to infrastructure development. Raila’s proposed Marshall Plan for un-tapped areas also covers fast-tracking development in education, health, & social services.

On specifics for funding, Raila proposes (a) that an expanded tax base and seals against massive graft would increase available revenue for prudent public spending, (b) private sector involvement through concepts such as road concessions and tolls (this is one area that he did ample research as Roads Minister -remember he organized the first ever Conference in Kenya seeking to address the perennial problem of securing fiscal resources for roads and came up with solid private sector road funding proposals) and ( c) grants/loans from foreign partners (I need not restate the links he made with bilateral partners China, France & Germany, or Int‘l partnerships he helped restore with World Bank, EU, Nordic Devt Fund, ADB, AFD, KFW, DANIDA, BADEA, French Aid Agency etc).
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Good questions
written by Job , September 20, 2007
On devolution, Raila has stated his stand in support of the Bomas devolution proposals (refer to it) which is a mix of political, and economic devolution units (18 regional units across Kenya) overseen by a central government. On Municipalities, he is a proponent of direct voting for Mayors and Council Chairs and supports the Bomas proposals on local governments.

About a welfare state, nope, I don’t think so, Raila stated in his vision that he stands for a social-market economy ( the Third Way) which stimulates faster socio-economic development and equitable distribution resources. He supports growth of the private sector (engine of efficient wealth creation - remember he is an investor/industrialist) while ensuring equity in development exists. Raila also targets the productive sectors – manufacturing, large-scale agriculture, and IT besides promoting the service sector, including tourism, communications and financial service. In fact he plans to expand the capital markets.

Other specifics that he states his experts will immediately deal with include vigorous pursuit of : price stability in the economy; a policy of meaningful and sustainable public debt; a tax policy that encourages domestic savings for investment in increased production and more equitable wealth distribution. All these in the hope that a large middle-income group will be created, constituting a large market, which would spur more investment.

On land, Mosaisi, I don’t know about any of Raila’s land in Koru, (I’m aware he has a farm in Bondo) all I know is that his father Jaramogi purchased a cane farm near Koru, around Muhoroni. Jaramogi resisted Kenyatta’s attempts to grab two large tracts of formerly white settler land near Koru, specifically at a place called Songhor (Kisumu/Kericho border) shortly after Independence - which was part of his problem with Kenyatta (land grabbing). Anyway, Raila proposes to facilitate access to land by squatters, viewing it as an important factor of production. In specifics, he supports the comprehensive land
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Oops!
written by Job , September 20, 2007
I cut off a portion of my previous reponse .....he supports the comprehensive land reforms suggested in the Bomas draft.

About detribalizing Kenya, Raila proposes a major paradigm shift, with symbolic actions,…giving public service a true, reflective face of Kenya. As such I precisely do not expect to see him fill the OP, State House, Finance Ministry and such with members of his own ethnic community. He must live by his words, that will be the expectation of Kenyans and nothing less would be acceptable.

About Dominion farms, Raila stated that he supports foreign direct investment that creates job, so long as the socio-economic benefits outweigh any negative impact to local communities. Ironically, it is Kibaki who has more responsibility here than Raila who is not even an MP in that neighbourhood. There is debate about the assessment of Dominions impact in the Yala swamp, but my personal opinion is that Dominion needs to do two things (a) lease the land and not buy out locals, (b) do a lot more in terms of social responsibility to the locals. The Provincial Administration, NEMA, local Mps and community leaders have embarked on a fresh series of re-negotiations with Dominion.

On the welfare of the Kenyan worker, Raila needs to articulate more about his specific plans vis-à-vis Labour Unions and worker welfare. But his specific proposals on urban housing, poverty alleviation, protecting poor tenants at the mercy of marauding landlords and other human rights issues contained in the Bomas Draft (Bill of Rights Chapters) mean a lot to wage workers. He also contributed to the Pensions Amendment bill for the immediate release of pension upon retirement. His rival Kibaki devouts little emphasis on this area after having bagged COTU leadership under his wings.
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Good questions.
written by Job , September 20, 2007
Lastly Mosaisi, on Raila’s Ministerial record, I cant enumerate everything he has done, but his record looks fairly impressive to me. As a Roads Minister, he instituted ground breaking reforms in road policy, financing and ministry institutions (eg decentralizing road funds to district roads committees and constituency boards, investigating pending bills for road contracts which unveiled shs 89 billion worth of fraud waiting to happen, blacklisting cowboy contractors that perennially robbed taxpayers, harmonized statutes governing road network in Kenya, and restored broken partnerships for funding roads with EU, WB, DANIDA, SIDA, ADB, China, Germany, France etc.). Within his short stint he completed >200 projects for gravelling, new construction and rehabilitation. He also introduced private sector involvement via concessioning & tolls.

On his legislative record: he’s contributed to either motions, amendments, or private bills which have led to; ensuring establishment of constituency roads funds, adoption of the report on revival of EAC, amendment to local authority financing, pensions, equity in education, stiffer penalties for rapists, urban housing provision, corruption by ministers besides his contributions to the constitution debate.

In his Langata constituency, since Raila was actually my MP until a few years back, his projects in education, social services, environment, health and infrastructure are impressive by any standards. He has personally set up a modern education center (not with CDF funds) for disadvantaged children to access quality education; prudently managed CDF as a patron (women hold a key stake in Langata‘s committee), personally (not via CDF) initiated an ICT center at Langata High school, personally initiated free medical camps esp. targeting pre and post natal mothers, infants and children via NGOs & other orgs like Ushirika, UNICEF, Gina Din, Constant gardeners, Umande trust etc; sponsors annual tournaments for youth soccer/volleyball etc eg Ramadhan Cup held at the Woodley grounds; shows up and takes personal interest in local tragedies eg Mungiki attacks or police shootings; set up with personal funds a women empowerment initiative; and participated in numerous environmental and sanitation drives for pit latrines, water tanks, etc. Don't forget his input into the slum upgrading project and better housing collaboration with Habitat.

That's all. Cheers!
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written by Kamale , September 20, 2007
Dealing with specifics:

Do you think that corruption is best fought by keeping anyone perceived corrupt out of public office or should we wait until they are proven guilty by a court of law? Accusations of corruption have been levelled against the Raila team and also on members of the Kibaki team. None is in court with the dubious exception of Ruto already charged and of course Raila's attempt to prevent any investigation on Molasses arising from the Ndung'u report through a constitutional reference that he is not prosecuting.

My view is that as long as a public leader is perceived to be a reciepient of proceeds of corruption, even without a finding of guilt, such a leader should be made to purge that perception first before seeking a leadership position. Do you agree?

Raila's poverty eradication model seems premised on increased government spending (read welfare state) rather than progressive wealth creation that leads to increased employment and economic growth. In order to achieve what Raila seeks, then KRA would need to be collecting close to 800 billion per annum in taxes on a non-expanding economy which only means higher taxation as opposed to the current model where taxes have not been increased in the last 3 years but tax revenue has grown considerably.

The Kibaki model of rural enrichment through aggessive investment in the youth and women to create rural entrepreneurs will be achieved when the two funds for youth and women take root. The government initiative to create digital villages managed through investment from these funds will greatly enhance the economice wellbeing of the rurakl folk. This certainly is contrary to what Raila proposes where he talks of massive investment that is more populist that realisting. The network you are talking about is already in place where a national fibre optic ring is nearing completion in anticipation of the landing of the submarine cable. Raila can only be repeating whatis already in place such as the Wajir airport or the network infrastructure.

I would like to know how Raila proposes to widen the tax base, especially since virtually every Kenyan is being taxed for anything they do, including jua kali artisans who now have to pay a turnover tax! As I said above, it is the economy that needs to be expanded through creation of wealth rather than the tax base. There is only so much that people can pay in the form of taxes. What is even more scary is the devolution concept that Raila dreams of since this would probably impoverish Kenyans more than enrich them. Remember it is the reason that led the government to remove local authority taxation due to inefficient use of resources and ability to collect and insteat replaced this with LATF and other government funding.

Raila's plan on economic stability is already in place and he will not be re-inventing the wheel. Today, the economy is being drive by an extremely large middle class who provide most of the resources being mobilised. The growth of this middle class is as a result of the changed economic circumstances where interest policies have stabilised and the increased credit has meant that this group grows. The problem with this is that this has tended to close the taps on the lower income groups and is the cause of the misplaced complaints that the economic growth has not triggerd a trickle down effect on the poor. In my view, this is but a matter of time!

There is this misplaced notion that placing a luo or a kikuyu in a public place equals tribalism if the patron comes from the same tribe. What Raila is proposing is a form of affirmative action or tokenism where you distribute jobs to satisfy tribal arithmetic as opposed to ensuring that whoever is given the job does it to the satisfaction of Kenyans. Personally I have always hoped that this is what a good leader would do. Unfortunately, this 'detribalisation' proposed by Raila is more of a political gimmick than an action intended to improve quality of service!

On Raila's ministerial record, we need to go back to when he was Minister for Energy. Just what did he achieve - i.e. how many homes were supplied with electricity during his tenure? Is it not correct that his ministry superintended the rape of KPLC by Gichuru? When he became minister for roads, apart from being all talk no action, just what did he do? Is he not on record for nearly leading another Goldenberg rip off with Dominion? You do recall his proposal that Dominion be given all tax expemtions to construct low cost houses, a facility that would not be given to local contractors?

On Langata, Kibera is perhaps the better known part of that constituency that include leafy Karen and middle class South C and Nairobi West. In Kibera which is his political bedrock, there has been little change in the status of the folks there. Many NGOs have camped out there and are perhaps responsible for all the celebrities who have made Kibera the Taj Mahal of Nairobi - a must visit site including being a location for an award winning movie! I think Job needs to visit Gatanga constituency in Thika District where Raila's friend Peter Kenneth is the MP to see what CDF and community partnership can do. That is not happening in Kibera, I a afraid!

It is one think to want to become a leader and have even the brightest vision, but all this needs to be thought out soberly without populism rearing its head and you can then see that some promises are simply not feasible!
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promises,promises.
written by Mr.Kay , September 20, 2007
A spirited defence of Raila's vision from Job Obonyo's article. But as other's have asked...all this talk of wealth distribution being raised to 30%. it sounds good in theory, but we all know it will leave the economy broke from undertaking anything else.
As for the constitution...why would Raila implement a new one...when he campaign against it?
Raila has been in government before, and he did not implement any of these things you are talking about in the article. His record in his own Kibera constituency is equally appalling.
Why should we believe Raila will improve all of a sudden?
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written by Marangu , September 20, 2007
Job, Kamale, Mosaisi...
This is the rational discussion Kenyans would rather be having, I admire the questions that have been asked of the author and how he has responded. We are a big house in Kenya and we will have different opinions, what is demonstrated here is a diversity of opinions with our particular loyalties and emotions in check.
There is a reason to believe that anyone that gives the current leadership a good run and even possibly defeat them, will probably address the many issues that Kenyans have come to expect and deserve of their politicians.
Hopefully we can continue to get the calibre of analysis that Job embarked on here not only on Raila but on the other candidates, it will serve to get people to know and understand them but also demistify them.
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Thanks Job!
written by Sijui , September 20, 2007
Job, thanks, I totally understand that the best you can do is articulate your understanding of Raila's platform, after all you are not his official spokesperson. Thanks again, I feel better educated and informed about his vision for Kenya.

My primary concerns remain:
1) his ability to expand the tax base simultaneously as well as significantly increase public investment. Personally, I do not think that is possible because an expanded tax base requires a careful balance between demand side and supply side stimulii i.e. widening the tax base through increases in private sector players (cutting taxes for capitalists and industrialists to fuel private capital and human resource investment, making capital cheap and roping in sectors (informal economy) that were previously un-accounted for by giving preferential tax concessions to jua kali and SME enterprises. Both instances require lowering taxes and interest rates, and let's assume that the deficit in tax receipts can be plugged through sealing corruption loopholes and greater efficiency, at best that will create a balanced budget not a great surplus that can be plowed back in to massive infrastructure investments.
2) I think we can all agree that massive infrastructure investment is needed both to tackle unemployment as well as spur human and capital investment, the devil in the details is HOW DO YOU FINANCE THAT SUSTAINABLY WITHOUT DESTABILIZING THE ECONOMY? Raila has mentioned increasing the tax base to fund this (pipe dream!), private/public partnerships......great idea but we all know the private sector cannot and will not foot the lion's share of the bill so that funding shortfall will still need to be covered, last option external grants/loans (BAD, BAD IDEA and unimaginative thinking) for starters the Bretton Woods quartet will not fund massive infrastructure projects, neither will bilateral donors, hence the reason why most governments resort to bonds in the capital markets.
3) He talks a lot about equitable distribution of opportunity and wealth, but all I hear are platitudes. For example how will he grow the private sector? He has said infrastructure investment, GOOD, what else? What about skills and technology training, can he do both i.e. fund infrastructure and investments in education, R&D and ICT? What about labor intensive industry and manufacturing, this will require massive concessions to big business to fuel the necessary investments, how will he do that plus balance increases in public spending? Lastly, bringing the informal economy in to the mainstream through business and training support, cheap credit, developing linkages to formal economy, changing the regulatory and legal environment........?

Job, please don't feel obligated to answer any of these questions, that is not your job it is Raila's. My point is this, in comparing Raila's vision to Kibaki's track record there are several distinctions that I think all voters must evaluate carefully:

1) Kibaki believes in emphasis on giving stimulii to the private sector, especially BIG BUSINESS. The end result is strong growth but not EXPANSIVE growth, benefits are still accruing to a minority of the population. Raila's vision is changing that but how? Tackling corruption, increased government spending in infrastructure and social services and growing the private sector. I believe he champions state centric interventions, which is not necessarily bad but when you evaluate how he'll get Kenyans productive again the details are scant on fact and logic which leads me to believe that he will continue MANY of Kibaki's policies including those proposed in Vision 2030 because he has no other options in an environment of limited resources and he will attempt some populist interventions that will be unsustainable in the long run.

2) Kibaki represents the status quo in terms of the government bureacracy and patronage networks. Raila wants to end corruption but he also wants to maintain a large state machinery that manages the public investments that his government will make. His devolution proposal also does not include the complete divestiture of the central government's apparatus in this regard. How he will both finance the state bureacracy and alter the culture of government so that it is NOT a carbon copy of Kibaki's is unclear.

Like I said, economic development comes at a price. I think we can all agree that we can see the PRICE WE'RE PAYING for Kibaki's vision, the issue, Raila's plan too will come at a cost and the choice is WHO'S PRICE IS GREATER?
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written by mosaisi , September 20, 2007
Your answers look nice if only you had not misrepresented some facts.

You said, Raila's policies helped in "decentralizing road funds to district roads committees and constituency boards"

District roads committees have been in place for more than 10 years. Districst have been receiving funding since 2000 from the Kenya Roads Board's RMLF. I suggest you read The strawman in Nairobi for details.

I expected more from Raila in terms of policy but he opted to act like a common Kenyan politician. Populism and roadside policies took prominance over long term policies. An example is the building demolitions early in his tenure. People celebrated Raila for teaching the rich grabbers a lesson. That was a good show.

But what policies were put in place to detar future encroachment of "right of way" and easements?

How does the public get information on how close to roads and utilities they can build?

What happens in cases where government officials issue building permits for construction of structures that encroach public land?

And does the government notify property owners when a road's ROW has been expanded?

On Raila's performance in legislation, you glossed it up. Contributing to debate is noble but what about sponsoring bills to address the ills that he has always spoken out against. The last time I checked I found out that Raila has no single bill in his CV. Newcomers like Njoki Ndung'u brought to the floor what they wanted straightened and sailed through. Othes like Joe Donde brought up laws on banking that were defeted but atleast they tried. What can Raila show for his time in parliament?

Your piece on Dominion was not convincing at all. You said, Ironically, it is Kibaki who has more responsibility here than Raila who is not even an MP in that neighbourhood.

That would suffice were it not that Raila Odinga and his brother Oburu were instrumental in pushing for the interestst of Dominion. Dominion is their baby. As minister for Roads and housing Raila pushed for Dominion to be tax exempt and also receive free land to build houses. It was packaged as a noble deal. I know many people in Kenya who could have built houses had they received the same deal as Raila was pushing for. To refresh your memory read this.
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written by Job , September 20, 2007
Mosaisi,

On Dominion, I have given my opinion about it, it's benefits to the community outweigh any negatives. But I would like them to do more -specifically the two things I mentioned above.

On District road commitees, I know they've existed for ten years, but togehter with constituency roads boards, check the new roles they have assumed today and take note when that started?

About sponsoring private bills, could you give this issue a more balanced approach and provide contrast between the specific private bills that Raila's opponents have sponsored? I will respectively acknowledge their personal & exemplary parliamentary contributions too.

Did I also get it from you that you are suggesting that there is no policy on preservation of road reserves in Kenya. My understanding isthat technocrats in the MOW have dealt with this skillfully, save for political interventions by the president (seeking more time before demolitions can continue).
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written by Job , September 20, 2007
Kamale,

On perceptions about corruption, this is highly debatable depending on how you look at it. But it would be good to look at both candidates from a balanced angle. For instance, while Raila has been accused of irregularly acquiring the Mollasses plant, he argues that his company bought it (for some hundred millions)-which was the highest bid placed for it in the market.

His chief opponent Kibaki has not been spared of allegations of corruption, more serious than the Mollases allegation. The 1970s moribund Ken Ren fertilizer plant scandal is a scam attributed directly to Kibaki (check the Marsgroup website for intriguing details). He has not bothered to respond, despite a fresh allocation of shs 260 million in this years budget made as payments to this non existent entity.

What about the Kenya Re and Railways South B (Plainsview/Golden Gate) scandals that ripped off the public. He has not uttered a word and the media has given him a fre pass.

What about the swathes of land allocated to Kibaki by Kenyatta and Moi, mentioned in none other than the Ndungu land report. What about allegations by Githongo & revelations by Murungaru about the President's direct authorization (with signature to boot) of fictitious Anglo-Leasing contracts worth sh 56 billion?

The truth of the matter is that these (Railas and Kibakis) are all allegations that need to be investigated in the interest of all Kenyans. Meanwhile, every citizen will judge for themselves whether either is a "saint" or not.

On increasing tax revenue,....Raila indicated that he will NOT increase tax on the already overburdened payers. His plans for increasing tax revenue is two pronged,..(a)quantitatively increasing the number of individual taxable accounts (widening the base) and (b) qualitatively collecting tax and VAT from scrupulous and notorious corporations (with political connections) noted for tax evasion -merchants like Nakumatt, Tusker Mattresses, Insurance companies like Invesco, and many many more.

Your assertion that the taxable pool has already been exhausted IS ABSOLUTELY FALSE. Estimates are that we have not reached peak levels in quantitative numbers of estimated taxable accounts.

Don't even contradict Kibaki himself who is well aware of this fact,..that's why he keeps reminding Kenyans to offer to pay their taxes,..or the "government will catch up with them".

The thing is that, Kibaki's handlers have touted increased tax collection as one of his major achievements, hence they don't want to release the figures indicating that a lot of collection effort still needs to be done to include new payers into the taxable pool.

Raila can not afford the luxury not to pursue widening of the tax base since his poverty alleviation proposal, hinging on huge spending on infrastructure and devolution will require huge public spending. If you aim to spend big on the public you must aggresively source for the funds. If you aim at modest public spending, then you can have the luxury of saying 'we can do it only if funds become available".

Kamale, kibaki's youht fund of about 1 billion shillings, faced with more than 15,000,000 (15 million) mostly unemployed youth is a drop in the ocean,..please don't call it aggresive investment in the youth by Kibaki. The youth need skills training, and human resource development opportunities as outlined by Raila, besides the opening up of rural economies through infrastructure development.

The choice is this,...either to continue with Kibaki's centric and short term growth maximization approach, which is reliant & anchored upon few venturists and investors,...or opt for Raila's broadened and equity based wealth distribution paradigm that seeks to bring neglected regional economies to the grid.
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written by Stephen Wanyama , September 21, 2007
This site has become so serious, I now have to make notes before I post. Good work Kenyans.

Job
Good work. You are very consistent in your defence of Raila. It comes across as more rational than most of what we here. If I was Anyang' Nyong'o I should feel threatened by you. You certainly do a much better job than he does, and in the process help the majority of us begin to see the Odinag ticket as more than just a bunch of mad fanatics.
Even then, the insult you directed at Kalonzo was totally uncalled for, an unnecessary reminder of the disrespect Raila's supporters have for democracy and any mind that does not agree with them.
---------
You have mentioned Charity Ngilu's Health Plan. I want to ask, like Mosaisi did above, has Raila come up with any such schemes? Is his concern for the Kenyan mwananchi limited to his being in State House? Did he support Ngilu's bill in earnest? Is Raila kinder to socialist ideas than Kibaki or Moi? His treatment of his staff at Spectre does not encourage such a conclusion, and neither does his record in Parliament, or his investment dealings, e.g. the Molasses deal. Even if we were to absolve him of guilt before the laws of Kenya, his actions were still highly immoral, just like Kibaki's massive land grabs. Illegal? Maybe not, but definitely immoral.

You have spoken about increased public spending, and castigate the Kibaki government for limiting how public expenditure. I think we have to get the balance right. A sudden massive injection of public spending like Raila proposes may have positive effects in the short term, and then really hurt the economy in the long-term. It also does not necessarily result in diminished inequality. Ask any resident from around the Sondu-Miriu or Turkwel areas.

I am slightly bemused by the continued assessment of increasing CDF outflows as a positive campaign promise. I am sure it will wow the people in the villages, and greedy MPs in parliament. CDF is simply a band-aid measure, and a very harmful one at that. CDF takes away community resourcefulness and perpetuates a culture of neediness and waste. As an illustration, here is what Raila is doing with CDF in his constituency.
2006-2007
2005-2006

This is not just unimaginative, and failed leadership. It is also a sign warning us about Raila's sense of priorities and his lack of attention to detail. Raila loves to quote Mahathir Mohammed, he should take some time to consider the good Doctors attention to details, and his sense of priorities. #9 million from the Exchequer, and the best we can contrive is a plan to buy desks!!

Truth be told, Kibaki's record is hardly better.
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written by Stephen Wanyama , September 21, 2007
Kimani,
Yes Kibaki was corrupt. That is hardly news. The point is Raila is also corrupt. Are we teaching any lesson by replacing a corrupt man with another? Will we be punishing corruption, or rewarding a successful marketing campaign?
Nyaikondo,
The constitution I think was just fine, until Tom Mboya took his tools to it, much to our unending anguish. Kenyans have used the silly ageist revolution argument since 1963. It has never made sense, and it never will. Uhuru Kenyatta, Musalia Mudavadi, Cyrus Jirongo, William Ruto, Alfred Gitonga, Jimmy Kibaki and even Baringo ye Keti are not old men.
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written by Stephen Wanyama , September 21, 2007
In my previous past, I meant 39 million and not #9 million.

Next,
There's the proposal to turn Mombasa into a free-port and to build another one at Lamu. Alfred K'Ombudo had written an article on that second port. Even then I argued that these things are hardly ever thought through. Where is Lamu, and will we still be helping the Ethiopians in their war on the Somali? Have we calculated the ramifications of this free-port, especially with Dar and the EAC? Have we thought about the implications for KRA? Making a free-port is not as easy as saying be. Raila's manifesto (and Kibaki's too) seems like one of those KANU ones, where there seems to be a minimum word limit of 12,000,000 or something and the writer is forced to bloviate to fill up space.

Next,
Here is the idea that we need one university per province!! There's a lesson here to be learned from the British. They have too many university graduates,too few skilled workers and the economy is lamenting it. We discussed this also in an article titled 'The Miseducation'. Putting up a university in every single province is just about as silly as creating new districts.

Next,
Defence Spending. Will Raila really cut defence spending? We have seen just how chummy his is with the Americans, and especially with Sen. Obama. We also know that he is chummy with some people in the arms industry, a certain Sikh gentleman of not-so-good repute. Where does that leave us? Are we off on any adventures, Iran maybe?
Admittedly, we must be relieved that Kalonzo is out of the picture, he would be so much worse.

The Kroll Report. Come, come. You really want to talk about defending Moi, giving succour to the thiefman? No? I thought so! Raila has done so much to please Moi in the last ten years, suffice to say nothing anyone else can do would measure up. For the umpteenth time, is leadership only possible on entry to State House? A sudden volte-face simply from seeing those lawns? Oh, and the Kroll report was mere conjecture. It would not be fair to bring up Strabag, Kisumu's Water System or Luo Thrift would it?

Corruption.
Fighting corruption makes for good sound-bites, but as the example of Kibaki has shown, a man who has himself got rich through shadowy means is very unlikely to want to call attention to the crimes of others. May I also add the long list of ODM MPs who voted to ensure that all corruption pre-2003 be forgiven and forgotten.

Land Reform,
You point at Asian profiteers, and colonial whatsits. Surely, this is wrong. What does their being Asian have to do with anything? Colonial what? Many of those you are calling colonial bought or grabbed their land after Uhuru. Even then they are still a very small part of the problem and to bring them up shows off the insincerity of our politicians. Is it likely that Raila will also be giving back some land? that was allocated to him?
Finally My Questions
A presidency is not a solo project. It is a position that requires great tact, and a lot of balance. Given the fact that Raila can brook no dissent, and that he has shown great intolerance for independent thinkers/ rivals (insert here Orengo, Donde, Ochuodho, Tuju and the old Anyang' Nyong'o) and also the fact that he has shown a profound disrespect for institutions and their organs ( remember his treatment of Kalonzo and Musila in LDP); what are we to expect from his presidency? Endless wrangles? Is this not the real reason why Ngilu has not come to ODM? How long will Ruto be Raila's friend?

Secondly. Raila's core support has proved very unprincipled and unruly. MPs allied to him vote in the most disgraceful way in Parliament, and his supporters show no regard for common decency or democracy. Are we not right to fear a Raila presidency? Are we not justified in being unnerved by their herd-like mentality, and their unquestioning indefatiguable loyalty? This is part of the reason why Kibaki's government has failed so much. There has been no-one within his team who could set him straight or advice him on the interests of the mwananchi. His court has been filled with jesters, selfish crooks and sycophants. Raila's seems similarly constituted, why should we expect any change?

The received perception is that Raila is an effective man. His time in government showed us he could be, but given his unique ability to polarise and his underwhelming development record, why should we at all believe any of the hype or promises he makes?
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mayai
written by Amir Ibrahim , September 21, 2007
While we're on the spending binge. Eggs, Class A eggs are retailing for GBP 2 a 30-egg tray here. 39 million should buy 300,000 such trays. That is nine million omelettes, a lot of vitamins and maybe next time I can get my sums right.

CDF is a cruel joke. That we should raise to 10% of all expenditure, these sums we regularly chuck at the villages is a cruel joke. Looking through the constituency reports shows you just what harm it is doing, and how little help it will be in the long term.

We must try to bring in the influence of the planning ministry, and focus on projects of lasting and profound effects on local economies.
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written by Kamale , September 21, 2007
Job Says:

What about the Kenya Re and Railways South B (Plainsview/Golden Gate) scandals that ripped off the public. He has not uttered a word and the media has given him a fre pass.

Being fully apprised of the deals involved, I can assure you that Kibaki was not involved in the scam. This scam involved a company called Cargo Master Internation Limited and whose ownership included Albert Ekirappa,Ngini, Kanja and Nyammo. Kenya Railways sold the land to Cargo Master, and Kenya Re bought out Cargo Master leading to the only time the accounts of Kenya Re were qualified by the auditors Pannell BellHouse Mwangi as they were called then.
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written by Abdirahman , September 21, 2007
Hello folks,

It is my first time in this site and I am happy that the issues relevant to Kenya are being discussed with such clarity and tranquility - good thing that there are no insults flying around, as I have noticed in many other sites.

I am in Nairobi myself and I would not say that there has been much improvement in the economy to warrant giving Kibaki and his clique five more years to continue the astounding loot of publix resources that they have been carrying around in the previous 5 years. It is sad to see a President heckled by herdsmen, as happened in Garissa and Wajir, and it behoves to ask why this happens: is it because in the past 5 years he has been at the helm he made sure that there were no investments in NEP, not a single road constructed? And by the way, why should road construction be so expensive in Kenya? Sample this: JKIA - Gigiri road will cost me and you a whooping Ksh 100million per kilometer ... where in the world does this kind of looting happen?

The infrastructure in Nairobi is simply falling apart. You can no longer drive on Thika Road, Mombasa Road, whatever road. For the last 5 years Kibaki's government has been tring to complete the 70km-odd Naivasha-Nakuru road. What hogwash that he now wants us to give him 5 more years.

And of course he traded for the lives of his fellow Kenyans with the pat-in-the-back by Bush. In case you forgot, he sent hundreds of Kenyans to Guantanamo and hellish Ethiopian jails.

Need I say more? We will see whether Raila is a man of his word...

Cheers.
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written by Job , September 22, 2007
Christian Aid organisation, working with the Tax Justice Network, produced a report entitled "The Shirts off their Backs: How tax policies fleece the poor" in 2005.

Just this week, the same organization
hosted tax expert Jack Ranguma, and Institute of Economic Affairs’ Kwame Owino at a public forum to discuss tax justice. (my attention to this was brought by a report by Kwamchetsi Makhoha's DN article 9/21/07).

Some basic facts reported inlcude: Less than 3 million people in Kenya pay tax; Kenya Revenue Authority only captures 24 per cent of the Gross Domestic Product; Multi-national corporations are the most expert tax dodgers.

Serious presidential candidates seeking to increase revenue collection must have by now drawn strategies and clear plans (of what/how/when) to specifically expand this tax base. I precisely noted this in Raila's vision.

In contrast, Kalonzo Musyoka of ODM-K (whom I like personally, but have reservations about his ability to facilitate fundamental reforms) prescribes what I consider a lethal unfeasible plan - to cut taxes for those at the bottom of the pyramid (earning less than 30,000 shs). Very populist and appealing but economically disastous and impracticable for Kenya.

The other candidate Kibaki, has boasted that Kenya is financing its budget almost entirely from local revenues. With KRA capturing only 24% of Kenyas GDP, only 3 million taxable accounts, and rampant tax evasion by big corps, his argument falls flat (to borrow Makhoha's words).

The forum revealed that KRA is owed Sh88.5 billion in unpaid taxes — and this money will probably never be paid because the businesses that owe are no longer trading in Kenya or have closed.

Tax Justice Network supported revelations by the Kroll report, which estimates that up to 70 per cent of the wealth holding of high-net individuals is held offshore. I don't wish to measure each candidates credentials on fighting corruption, but at least I can make my own judgement about Kibaki's record on corruption - 100% tolerance of the vice & total failure & lack of committment.

I suspect Kalonzo and Raila would both wage a better anti-corruption fight, but the will required is no joke. It first requires the appreciation that corruption fights back real hard, and that costly sacrifices must be made. Raila has verbalized his willingness to "pay a price for that fight" repeatedly. I'm afraid I suspect Kalonzo might, in his spiritual inclination, choose amnesty over repatriation (just an opinion).

Nigeria's repatriation efforts following action on a report by the same Kroll, got back $ 4 Billion ( almost Ksh300 billion) from the late Gen. Abacha's assets stashed abroad. That is no small money especially when you have grand investment plans in infrastructure and equitable resource distribution across the country .

Kamale,
During the Railways South B scandal, who was the Finance Minister of Kenya? Hit back then I refer you to the then Minister's role in the deal.

Wanyama,

In the balanced spirit of diversity of opinion, I noted your strong support for Kalonzo Musyoka. That's really good because you can now share with us his specific proposals, plans and visions for Kenya and how they compare to his rivals' (Raila and Kibaki) plans.

We could then do some serious comparative analyses. Besides his proposals, line up his record too, in the topics you mentioned in bold (health insurance, public spending, defense, land reform, corruption, Kroll report, constituency record at Mwingi North, Foreign Affairs policy articulation or lack thereof etc ). I'm looking forward to a healthy debate as we meticulously appraise all the three candidates comparatively. I'm glad you brought in a third perspective.

Job
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Welcome Dr. Abdirahman
written by Job , September 22, 2007
Thanks for bringing another perspective from the ground, especially about the infrastructure falling apart and the exorbitant cost of building roads. It's good to critically interrogate the development achieved so far.
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@Wanyama
written by Don , September 22, 2007
Yes, like Job, I have concluded from your stellar contributions that you support Kalonzo Musyoka. I too would like to hear what exactly Kalonzo stands for or envisions for Kenya. From his Mwelekeo Mapya, all I see is one seeking to create a "Nanny" State. We'd be the richer if you could educate us about him, like Job has done with Raila, and Kamale with Kibaki. And, please, don't mention "beauty" :-)
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tax cuts are GOOD
written by emmo opoti , September 22, 2007
Job,Don,
Wanyama makes the following statement,
Admittedly, we must be relieved that Kalonzo is out of the picture, he would be so much worse.

Hardly an endorsement of Kalonzo.

Now, more than anything I would like to take Job to task for suggesting that increasing CDF is a good thing. Someday soon someone is going to calculate just how much we have wasted through CDF these past years. Look through the lists on the CDF website, what waste!! Imagine if roads were being built instead of buying desks, and building toilets at such hefty prices!! The splendors of Thebes, Mohenjodaro and Tenochtitlan were much less expensive. All you need in order to build latrines in any constituency is the MPs gravitas. Basi!!

Now as to the tax structure. I think Kalonzo is onto a good thing here, and odd that someone affiliated to Raila should call Kalonzo out on populism. Anyway, I believe that the knock-on effects of taking away taxation on the bottom of the pyramid will be enormous. It will really work more than any other measures to reduce poverty levels and increase consumption.

If KRA can work hard to ensure less cheating on tax, especially from businesses and those at the top level ( e.g. MPs and judges), then we can make up for the short-fall from eliminating tax on the bottom people. In any case, with reduced tax there will be increased spending ( there is no saving with less than 30,000/-) and so sales taxes will also rise partly defraying the reduced revenue from reductions in payroll taxes.

Still, given the massive expenditure proposed by the candidates, one wonders how they will be funded without hurting increasing taxes.
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@emmo
written by Don , September 22, 2007
Thanks for the pointer. Then, that leaves Wanyama dissatisfied with all the three presidential candidates, which means he will either vote for Muiru or sit it out? Strange but possible.

Regarding taxation. You have batted on both sides. I find your support for Kalonzo's tax cut proposals, while at the same time wondering whether the massive expenditures are possible without increased taxation, confusing. Of the three candidates, Kalonzo's vision has the most expensive "pork barrel" items. That's why I call his a "nanny" State.

Proposing to yank off a large proportion of the tax base before shoring it up from other sources or plugging the leaking holes is disingenuous. Kalonzo's assumption is that he'd meet the shortfall by plugging the tax loopholes, a task he made sound like a cake walk. He'd have been more credible, to me, proposing to plug the holes first then, once he's captured enough fish into his net, relieve the bottom tax bracket. Or, even better, work extra hard to widen the tax base then implement an across-the-board tax cut.

I remain largely skeptical that any tax savings from the lower bracket will spur consumer spending in any meaningful ways. The income elasticity of demand at that level is relatively inelastic. If it does affect demand, it's likely to be more inflation- than growth-inducing.

Finally, I share your sentiments about the CDF; One of the bitterest misfortunes of our times! It's such a sad tale reading through the various CDF projects across the country. Like you wondered, "what would have been had we invested strictly in the productive sector!" What's the use of buying desks and building classrooms when the people you are educating won't have work. Why not enable their parents or siblings to invest income/employment generating projects? That would be more sustainable, otherwise we're just building a new pool of rural-urban migrants.

But, I don't blame the MPs per se; they are only politicians. Although they have enriched themselves by forming companies to supply and implement the same CDF projects, I blame, instead, the system of governance that gobbled and wasted everything at the center, thereby creating an agitation for devolution. I so hope that some time soon the CDF will be restructured to be relevant to development. But that's expecting too much, as long at it remains under the grips of our ravenous MPs.
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written by Gichangi , September 22, 2007
Don,
I suppose Raila balances his books right?
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tax
written by Timothy Wainaina , September 22, 2007
I do not think Kalonzo has promised to start the new tax regime from day one, has he?
Don, poor Kenyans are going without many things that are in fact basics, our economy is open and the shilling is floating. Yes, there may be a short-term market reaction but that will only stimulate production and raise all boats, including increasing GoK revenues.

That said, Kalonzo is not going to win, so maybe you guys should be discussing someone else? Discussing Kalonzo's policies is as useful as discussing Pius Muiru's.
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Kenya\'s context!
written by Job , September 22, 2007
Emmo,

Don has aptly debunked your assumption that tax cuts for the lowest bracket reinvigorates the economy by inducing spending. It does not, and therefore doesn't back up the grand plans proposed by Kalonzo.

Tax cuts targetting the middle class (take note, THE MIDDLE CLASS & not the lowest bracket) can induce spending to boost the economy. The underlying consideration should be that the middle class constitutes a big portion of the Tax pyramid (as in the US). Tell me frankly how large Kenya's middle class is, if it really exists (figuratively).

In our Kenyan case where more than 65% of all tax accounts fall in the category earning below shs 30,000, Tax cuts targetting this bottom base essentially means a significant reduction in tax revenue. That's what I mean by Kalonzo's disastrous but populist tax policy (i meant this specific policy, not any generalization).

On CDF, true it is a band-aid solution but let's be more practical than theoretical in our arguments. I honestly think Emmo's views on CDF are too lopsided based on certain instances of mismanagement of CDF funds.

Until fundamental reforms in governance are instituted, including devolution, then CDF is a temporary forward step.

This temporary CDF measure should be strengthened and coordinated by incorporating tenets of efficiency, effectiveness and internal equity, rather than be theoretically dismissed. MPs should not run it, in my view for instance, and better oversight must be instituted to avoid corruption, misappropriation, poor choice of projects etc. CDF should be built rather than it's hasty dumping.

As of now, CDF is a little positive gain. My CDF consideration is thus temporarily contingent upon the awaited fundamental governance reforms and based upon three things.

First, the fact that our current constitution still doesn't provide for devolution, second, in view of the stark and undisputed inequties in resource allocation presently, and third, on the premise that without loopholes to stem corruption (as is the current scenario), failure to decentralize exchequer spending only leaves more available for grand corruption.

Thus, on reforms, corruption and equity grounds, I would rather CDF being one mechanism of allocating and distributing a portion of funds until devolution is implemented.

At present, our current constitution's single resource allocation mechanism remains that of -whims of presidential patronage. It has created gross inequities, skewed distribution of resources while leaving big funds for Anglo-Leasing like looting. A second mechanism (CDF) distributing resources doesn't hurt therefore.

Lastly emmo, it is important to carefully put certain concepts in our Kenyan context. For instance, titling your message simplistically as : " Tax cuts are good!" would be a relevant argument in the US tax structure (with the middle class constituing the largest taxable pool). In fact any political arguments on tax are aimed at the middle class in the US. However, put that principle in Kenya's context and you get the folly! One can easily roll into a ball of wax.
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written by emmo opoti , September 23, 2007
Job,
The group that Kalonzo is talking about seems to me to be quite middle-class, cmprising as it is lecturers, teachers, policemen, many civil service cadres and even the odd magician.
In addition, he does not propose to put all of that extra money into people's pockets, but to have some of it set aside for investment in a fund.

Let's agree that Kalonzo will not win the election. Now let's see if his ideas would be at all useful.
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written by Sijui , September 24, 2007
Gosh Emmo we appear to agree on this one! I wholeheartedly agree that tax cuts for the middle class and lower income/working poor are absolutely essential.

Job, I will read and re-read Kalonzo's proposals but already he has won some admiration from me. By your own statement 65% of taxable accounts are in the Ksh. 30,000 income category. Does that not automatically translate to 65% of the 3,000,000 accounts that are diligent payers? Part of the reason our economy remains stunted is the PUNITIVE tax regime, and personally I believe our economy will never take off to Vision 2030 proportions i.e. 8-10% clip until the tax regime is overhauled and there are substantial tax cuts for 65% of the productive population. I accept Don's argument that cutting taxes for this segment may not lead to an immediate short term consumer binge but at the very least I believe it will facilitate investment either in social capital (education, health, domestic infrastrcuture) or business capital. That in the long term will forebear consumption. A good example is the new investment vehicle unveiled for members of the Jua Kali sector (introduced by K-Rep Bank as a mutual fund), GOK can provide incentives and say in lieu of X or Y tax obligation, you have the option of investing in either this mutual fund, or pension fund etc with the following benefits and the strict understanding that forefeiture obligates you back to the tax. GOK then re-coups the revenue through taxation of investment income accrued through the mass mobilization of these funds. Imagine the windfall and the benefits to the economy of these mututal funds investing in divested public corporations and regular blue chip companies!!!!
That will go a long way to inculcating a savings and investment culture for the large swathe of wananchi who have the capacity to become a robust middle class with targeted social and economic investments sans state paternalism! Most importantly these people are not dirt poor requiring welfare interventions, they are already economically productive....the problem being their output is not economically viable in the present economy.

Bottom line, I give Kalonzo A for effort, thinking out of the box, and agressively very much within the Kenyan context....hopefully it will not be a F for substance!
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written by emmo opoti , September 24, 2007
Sijui,
Our core principles seem to be the same. The only thing is I may need to explain at greater length my conception of the new private parastatal, which is my way of reacting to our quite criminal gulf between haves and have nots.
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Last Updated ( Thursday, 20 September 2007 )
 
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