One way Kenyans can think about sanctions

Jan 18, 13 One way Kenyans can think about sanctions

The thing about Koffi Annan’s recent statement on Kenya was the sense one got of his “finger wagging”. Being a career diplomat he obviously did not do it literally but you got the clear meaning of it from the tone of his remarks. In an interview with the BBC, Annan remarked that Kenya’s “external relations could be damaged”. Evidently, he did not divulge to what extent this might be possible but he was unambiguous about this being a certain occurrence if Kenyans choose a leadership of International Criminal Court (ICC) suspects.

Annan hinted at travel restrictions and the fact that many governments around the world will simply not deal directly with a leadership that will comprise of suspects. Of course a round of rebuttals, phrasing and campaign messaging about how Kenyans should be left to make their own choice was the expected reaction. However, my only wish is that out of this political gamesmanship an explanation on how we could survive any form of sanctions can be given.

So, what do Kenyans need to know about sanctions? Of course a simple understanding of our political economy would suffice. The four major elements of the Kenyan economy are its land, its free market orientation, its need for foreign investments and its propensity to trade. Its production is highly driven by informal labour and varied skill levels of employment; the presence of Multi National Corporations (MNCs) in the country; and access to regional markets.
The Kenyan economy is one that is highly dependent and responsive to world prices due to our production of primary products. It has a relatively vibrant manufacturing sector while it still relies on a massive agricultural base that is said to be shrinking due to growth in the service industry that has experienced an expansion in the communication and tourism sectors.

An elaborate power infrastructure is being developed; the country has a proud constellation of profitable public; and private enterprises some of which have a regional presence. The country has experienced relatively positive growth despite consistently facing social, economic or environmentally related shocks. Its working population comprises an ever growing entrepreneurial ‘merchant’ class; an expanding civil service – especially with the implementation of devolution under the constitution of Kenya 2010; and a professional class in a wide variety of fields.

All this will probably be put to test under economic or international sanctions if we choose to vote in a government that comprises Messrs Kenyatta and Ruto. Economic sanctions are obviously the lesser of the two evils as this will typically be a ban on trade that is limited to targeting certain sectors of the economy with certain exceptions that are normally within social sectors such as food and medicine. International sanctions on the other hand are intended to coerce a change in behaviour. This is the probable trajectory considering the enormity of transgression attached to crimes against humanity within the international value system. Depending on how crushing those imposing these instruments intend them to be, economic sanctions can morph into international sanctions.

So how would Kenya operate under such conditions? The obvious answer on every pundit’s lips seems to be the country’s ‘Look East’ policy that has been prompted by the current administration. Would this keep the country afloat? A perusal of the Kenya National Bureau of Statistics’ Economic Survey 2012 shows that in theory this strategy would suffice considering the concentration of trade activities within the continent. If the country was to maintain or improve its exports to Eastern Europe, Africa, the Middle and the Far East, the country would shrink the Balance of Trade by almost US$ 3 Billion.

However, going by the norm in international relations especially with regards to alliance building in support of sanctions, this could be a whole different matter. If one was to loosely base this on the simple fact that President Barack Obama now has a second term in office then the influence of the United States (US) would surely test our abilities to import or export goods that are necessary within the different segments of our economy. This is definitely because of US uneasiness with Kenya having ICC suspects for its leadership.

Kenya is a net importer and therefore that means that in every sector, industry, public or private enterprise we need a foreign good or item (and in some few instances a person) for our productive endeavours. Therefore, considering that by a rough calculation of quick conversion, the Kenyan state would automatically lose US$ 3.6 Billion in imports, US$ 1.8 Billion in exports, the citizens of this country should definitely have some food for thought. Also, the fact that while this is happening the country will have to preserve traditional markets while negotiating for markets in the Middle and Far East in contestation with countries of far greater influence than itself on the world stage would be a stretch for the Republic.

Speculatively, under an Obama administration a Kenyan government experiencing sanctions in the form of what the Zimbabwean government has gone through would be suspended from any preferential trade agreement such as the Africa Growth and Opportunity Act (AGOA), and any or all economic deals signed between the two governments. Since the US and the United Kingdom are traditional allies a suspension from the Commonwealth of Nations would not be too far fetched considering the precedent that has been set down in Harare.

Targeted actions in the model of the European measures that institute travel bans and asset freezes-to as many as two hundred individuals and over forty companies; in conjunction with parallel measures as a result of a US Executive Order; and subsequent legislation similar to the US Zimbabwe Democracy and Economic Recovery Act of 2001 would oppose any form of refinancing from international financial institutions or wave any form of debt relief pursued. Further the country’s voting rights at the international Monetary Fund would most likely be suspended.

At this point in time Kenyans obviously have no idea what form such actions would take. Thus, whether they will be targeted or broad and sweeping sanctions, the lessons from our Zimbabwean comrades are not to be ignored. Increased social tensions, conflict, unemployment, and poverty -as if we don’t have enough of that already- will be the direct effects to the mass population.

Kenya’s vulnerability to shocks whether economic or environmental will increase and the ominous hyperinflation will turn the populace into instant millionaires of no worth. Chronic shortages will not be too far behind. It therefore all well and good for the people of Kenya to decide what they want under the auspices on sovereignty; but it is also important to let them know that the peoples of other states, as represented by their governments, have a practical endorsement to determine whether our relations are of any value or importance in accordance with their norms and perspectives.

Therefore, they can choose whether they would like to associate with our country, just as much as we can choose not to associate with them notwithstanding our knowledge of the fact that all actions in any relationship have consequences. Lastly, it is worth noting how in 2012 the Kenya government retreated from its proposed dealings with the Iranian government in the attainment of oil shipments to the country. This frantic eating of humble pie took place once the country was presented with the option sanctions by its traditional friends. Thus it provides a case of how fragile our ‘Look East Policy’ and it gives a clear sense of the current administration’s position on the matter.

  • George

    I heard that they would sell oil in Turkana and use it to run the government. I don’t think they are bothered by whatever sanctions the international community might throw their way. But we are waiting to see how they will do it.