Urban Planning and Development
This is a writing sample of an essay written for PPD 250: Development in Third World Cities.
Fiscal Policy in
The dilemma arises when questioning if fiscal policy should be restricted to just the government and unilateral policies. With the prospect of corruption, which has come to be a major problem with fiscal policy in the past, would it not be more rational to have non-governmental organizations and international authorities play a more significant role? If external influence is detrimental, how can there be a better system of checks and balances to minimize corruption in the local and national governments? These questions are relevant especially in regards to public procurement, or the public services that the city provides from the revenue generated through collecting taxes.
This paper is an attempt to address the issue of corruption in the government,
especially with matters of fiscal policy, in the developing world. First I will
give a general description of the developmental potential of
The topic of public procurement will be the focus because
it is a direct contribution to the local government from the citizens. I expect
that the role of managing public procurement will have a great significance in
the attempt to refine
In 2002, the KIBAKI government took over
In January 2008, Finance minister Kimunya estimated that
Despite the crisis,
One initial problem with public procurement is the fact
How then, can the country better invest in public services
with tax money, when there is inequality and inefficiency in the tax collecting
process? In the
One taxing method used in
In Victor Mosoti’s article “Reforming the Laws
on Public Procurement in the Developing World: The Example of Kenya”, Mosoti
analyzes the current procurement laws of
The unsuccessful bidders result from the fact the Public Procurement system is headed by a small department called the Public Procurement Directorate. This department has only two directors that are responsible for a multitude of tasks including professional development, ethical standards, and maintaining a tender committee. This results in not only inefficiency, but ineffectiveness as well. The fact that there are only two people in charge of procurement leads to minimal progress, as well as more room for corruption due to a lack of checks and balances.
Kenya drafted a reform bill in 2003 with the main objectives of: making the procurement process more transparent, more economically efficient, more fair in regards to competition, and ultimately more trustworthy. The bill has proposed to add a public corporation called the Public Procurement Oversight Authority that will be used to monitor the procurement process and act as another tier of checks and balances for procurement in the country. Additional checks and balances will be added through the mandatory addition of internal organizations of public entities. These organizations will be the official “whistle-blowers” and are responsible for creating the tender committees.
Finally, the rules of public procurement will be refined and regulated. In these rules, conflict of interest will be minimized through more regulations on contracts. Also, the procurement departments will be subjected to regular auditing, and the tendering process is left open so that bidding can be more fair and competition can be promoted as well. More provisions will be made for tendering as well, so that changes can only be made to documents for grammatical errors and minor changes of that sort.
The World Trade Organization has its own procurement laws which can be summarized by promoting efficiency, transparency, and non-discrimination. Kenya has yet to become a signatory to the WTO’s Government Procurement Agreement, but many scholars think that it would be extremely beneficial for developing countries to adhere to the regulations provided by the WTO. They believe that their reforms will have a much better chance to succeed through a multilateral process. Kenya, however, is unilateral and is reluctant to concede.
I believe that the problem is that Kenya has a dualistic approach to international affairs. This is more than likely a response to the colonial influence in Kenya that is not even fifty years removed. Kenya’s approach to international affairs has even infiltrated the procurement reform bill by stating in part one of the bill that if the regulations of the bill do not completely coincide with the stipulations of other international organizations rules, the requirements of the Kenyan bill reign supreme. I think that this can be a severe hindrance to Kenya’s economic development, because it is obvious that in order to be a global economy, multilateral agreements are becoming more necessary.
Instead of embracing the similarities, and possibly compromising to meet the requirements of any other organizations bills, the policies have to be introduced and adopted by the Kenyan government in order for them to be implemented and followed by the country. This has resulted in Kenya being neither a bilateral nor multilateral government, and may result in being a roadblock to progress and receiving aid further on. I believe that this is especially significant in regards to the country’s current crisis. As a result of much of the industries suffering from the violence, foreign aid is becoming more and more necessary. Kenya should attempt to be more multilateral to establish a better relationship with more inter-continental countries, and possibly have more of a safeguard for the prospect of future crises, whether they be violent or due to natural disasters.
Kenya’s issues with public procurement and tax reform have significant relevance to the city of Nairobi. The extreme opposition to the corruption in the government, and the desire of government officials to maintain their stronghold has led to violence that has had significant economic impacts as well. Nairobi, the capital of Kenya, was right in middle of the conflict, but because of international influence already present, pre-election violence was minimized more than expected. If the problems of corruption, especially in regards to fiscal policy, had been solved already, however, there would have been less political unrest during the election period. Kenyan citizens, especially around Nairobi, have become tired of being unrepresented and not reaping the benefits of the economic growth of the country. As a result, the violence has caused an economic downturn for all Kenyan citizens and has significantly slowed down development. The need to reform fiscal policy does not just have economic implications. Political and ultimately development related issues have come up as a response to the need for reform as well.
Spatial distribution in regards to ethnicity is extremely significant with respect to the public procurement of Nairobi as well. When the political unrest occurred right around Nairobi, the UN, international relief NGO headquarters, and government officials were ready to provide at least some health, food, and housing programs needed to service the citizens. The violence that ensued around the western outskirts of Nairobi made foreign aid unable to effectively service a large demographic of the citizens due to ethnic tensions. Nairobi also has an extremely diverse ethnic make-up that it ultimately spatially separated. This has caused for tensions between ethnic groups, especially between those in power and those not in power, which has resulted in discrimination in economic policy in the past. These ethnic tensions also fueled the recent civic unrest in the city. Now, foreign aid is being used in largely discriminatory ways, and some violent rebels have forced the denial of aid for any ethnicities that are not Kikuyu.
The current conflict is mainly a result of internal corruption in the current administration, however. Those that have opposed the corruption created the ODM political party and actually won the election. The current administration, however, rigged the elections and though there is opposition from a majority of the working-class citizens, few people in the government will oppose the current president. The lack of checks and balances does not just affect fiscal policy, but political infrastructure as well. If public procurement had been used more appropriately early on, there would have been less opposition to the current administration and the crisis probably would not have been to this extreme. With the existing funds, the Nairobi government is still squandering parts of it on propaganda to villainies the ODM party and try to encourage tourism still. I believe that the funds the government is getting could be better used to provide more public services, like using them to get more safety in IDP camps.
I believe that part of the reason why the government cannot provide many of these services is because of the country’s unilateral approach to policies and agreements. Kenya needs to reform its economic policies to include more agreements that involve countries that are not limited to the COMESA. If Kenya was more multilateral, then there could be more negotiations occurring with investors to establish more domestic and international confidence in the economy, even during these tumultuous times. If Kibaki wants to stay in power, then he should adopt the ODMs demands for more transparency in economic management to restore more confidence in the Nairobi stock exchange. Though I feel that it is necessary to work on industry and exports to create a more sustainable economy, I believe that most of the procurements should go towards creating social services such as job development and health promotion, especially in the lesser developed areas.
I also believe that ethnic relations should be able to be subdued by adopting some of the policies Beirut has adopted and create economic divisions instead of ethnic ones. This will minimize ethnic conflict by decreasing the amount of areas in Nairobi sectioned off by ethnicity. This cannot be established, however, until the economy has been more stabilized. I think one way both can be started is by creating job development programs in IDP camps, which have a wide variety of ethnicities. This way the government can unify the ethnic groups through the common need for job training and employment. The International Crisis Group has indicated that members of the private sector would be willing to contribute to this job development. Therefore, there is a significant need for a public-private partnership to be created to create a program that can help with this issue.
I believe that if Nairobi wants to become a more developed city, it should adhere to the regulations present in the global markets. Nairobi has an advantage because it is the trade and economic hub of the whole east African region. I believe that Nairobi should focus less of its policies on COMESA, the regional trade union, and focus more of its efforts on infiltrating more inter-continental trade unions. Nairobi has the potential of becoming a major economic center, and is making moves to eliminate some of the barriers of entering the global market.
If Nairobi and the rest of the country of Kenya choose to join more inter-continental trade unions, then hopefully there will be even fewer opportunities for corruption because there will be more countries holding Kenya accountable for the appropriation of its funds. Minimizing corruption will not just benefit the disenfranchised of the city, but every citizen. By minimizing corruption, there will be more trust in the government, and people will feel less inclined to rebel against it. There are significant amounts of money that Kenya has wasting by grafting and squandering. If Kenyan officials were more transparent and were less inclined to steal from the people, there would have been an even greater surplus available that would have sustained the economy even if a crisis were to occur. There would have been more equality in taxation that would have increased revenue significantly as well. Now, Nairobi needs to focus its procurement funds on providing services that will mend the torn relations between ethnic groups and a majority of the citizens and the government. Investment in job development, which will benefit domestic industry, is needed. Services that will provide damage control are also needed, however, and should be invested in as well.
"Kenya in Crisis." CIAO. 2008. International Crisis Group. 2 Dec. 2008 <http://www.ciaonet.org/wps/icg10465/icg10465.pdf>.
"Kenya." The World Bank. 2008. Data and Statistics. 2 Dec. 2008 <http://web.worldbank.org/wbsite/external/countries/africaext/kenyaextn/0,,menupk:356536~pagepk:141132~pipk:141109~thesitepk:356509,00.html>.
"Kenya." The World Fact Book. 20 Nov. 2008. Central Intelligence Agency. 2 Dec. 2008 <https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html>.
Mosoti, Victor, Reforming the Laws of Procurement on the Developing World: The Example of Kenya(July 2005). International and Comparative Law Quarterly, Vol. 54, Issue 3, pp. 621-650, 2005.
UNU-WIDER. WIDER Research Paper. World Institute for Development Economics Research. Vers. 67. 2005. United Nations University. 2 Dec. 2008 <http://www.wider.unu.edu/publications/working-papers/research-papers/2005/en_gb/rp2005-67/>.