A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

On Greece and the Kenyan economy (well sort of)

I’ve just finished reading a fascinating article in Open Democracy about the collapse of the Greek economy and what it will take to fix it. While Greece and Kenya are fundamentally different countries, I was struck by how well the author unpacked the underlying dysfunction of Greece as a country and an economy and how some of the issues apply to the Kenyan economy today.

Don’t have anything clever to add to the article’s analysis, just want to point out the things that stood out for me.

For starters, the author notes:

In a small-scale economy households make different choices from those in an economy of salaried employees and large organizations. The family will seek stability in polyergy: in having varied sources of income, as many as it can find and appropriate.

How many Kenyans do we know who have a side hustle? Banker by day, butchery/hair salon owner by side…. Even during the times we have experienced growth – it’s been a false growth, barely any trickle-down (hence Kibaki and his cronies shock in ’07 when his re-election wasn’t guaranteed based on economic growth).

Author goes on:

In a small-ownership economy household saving and investment is also different. It is channeled, quite rationally, into real estate and into education. In western economies savings are invested collectively through pension funds, mutual funds and bank deposits. They end up funding industry, technology, infrastructure, and in general, sizeable organizations. In the Greek micro-economy monetary savings have few reliable collective outlets.

Cue the ubiquitous Kenyan dream of owning a plot and investing in your kids education. NSSF is widely regarded as a rip-off, and other forms of investment and saving (e.g. stock market) are only taking hold fairly recently.

And does this sound all too familiar?

But clientelism and favoritism have been inherent in the modern Greek state since its inception, and the state has always been a major player in the economy. Distributing political rents was a necessary means of legitimation of politicians in the eyes of the electorate, and harvesting rents was a major egoistic reason for becoming a politician.

And wonder why we don’t hear of enough success stories from Kenyan entrepreneurs – very few can tell the story of how they got from A to point Z without some murky stories or connections in the middle – usually related to government connections or at minimum great skill at navigating the political rent space. Try pitching your open source solution to a government official, unlikely to move anywhere because no fat budget attached.

Business strategy: if businesses can make high profits from government contracts or from other privileges, they will invest more to gain the privileges than to become competitive in an open market. Over time this distorts their whole mode of operation: a good salesman is one who can build personal relationships with bureaucrats, a good engineer is one who can draw out a project to make it more expensive. It is rare for a state-dependent enterprise to be also competitive. This was true for the big so-called ‘national suppliers’, as well as for the small I.T. companies, in which many bright engineers wasted their youth working on useless R&D projects funded by EU Programmes.

And finally, I think this captures the essence of why I think it is – generally – tough to transition big/large scale companies successfully in Kenya and to translate the innovation that we see all around into tangible (profitable) businessess – we work hard, but are loathe to collaborate, because someone inevitably stabs you in the back and there is no penalty – legal or social (as in they’ll be catching pints next to you in the bar a week later as if nothing happened). So most of that innovation and entrepreneurship bubbling around either doesn’t transcend the individual or the small scale – you cannot grow in an environment that lacks trust or that is full of what the author calls low-trust opportunism (I am so adapting this phrase!).

Maybe Greeks will work as hard as westerners when given the same set of choices; but they will not collaborate as well.In game theory an opportunist is one who grasps the chance to make a good profit today, even if that may have negative repercussions tomorrow. Usually, he will break a rule or spoil a collaboration to make the ‘grasp’ (αρπαχτή – ‘arpachti’, from the verb αρπάζω, to grasp).

25 comments to On Greece and the Kenyan economy (well sort of)

  • Afrowave


    Nice “sort-of” blog. You have raised very good points and comparisons. We are left with a number of questions on why the similarity. Is it the commonness in human nature and our leaders penchant for corruption or is it in the roots of democracy and post Cold_War globilisation?

    I have been thinking about this scenario over sometime now. Rangeh Omar documented on Greece’s current crisis and its history very well (http://tinyurl.com/32pzpny).

    The “war” is in the mind. We need a paradigm shift. In Kenya, as Just-a-Band put it, we see ourselves as “tenants”, eager for a green card than a voters card.

    In reality, we suffer from the lust of the “Western Dream”. Since we grew up in a country where from colonial times, aligning yourself with power put “butter” on the table, and that “butter” became a highly sort after status, and since to get the “butter” one had to “give up” even their relatives, we have grown up with little critical thought and no imagination of how we can create our own systems that divorce us from these Western paradigms.

    Income and opportunity disparity has increased and the ethos of hard work and patience has been trodden over by “deals” and “kuangukia”. With our consumption of “Ghetto” culture, few want to be an engineers and doctors. Now they want to be “famous”.

    So now we have to “systems” that are accepted in the West, “slavery” and “class”. This is what democracy and capitalism live by.

    Let’s take for example “Free Education”. The moment we, Kenyans embarked on this, we were told its too costly and won’t work. We went ahead anyway and suddenly DFiD was at he door offering cash “for books”. Obviously, the “easy money” found its way into Kenyan pockets, and suddenly, there were noises of “corruption” and “we will withdraw our aid”.

    Guess what?, DFiD’s contribution was 500Mil Kshs. Kenya’s education budget is 140Bil Kshs (www.hakijamii.net/banalysis.pdf). Actually, we could have done very well without their money and of course, DFiD has continued to give money to Kenya.

    So though we are really responsible for our own chaos, The Western governments can’t let us solve them. They will have no business opportunities left. Remember “Dead Aid”.

    With the IMF and World Bank going after their “pound of flesh” in Greece like SAPs did in Africa in the name of “privitisation”, Greeks are now demanding the return of the Drachma and leaving the Euro behind. Global business won’t let them.

    We need to think inwardly, “Africanly” more and take our gaze off Washington DC and Brussels as a source of leadership. We need to look at what we have got and stop seeking affirmation from people who do not see our development “without them” as progress.

  • Bemused

    Small business, no trust of big govt., so the Tea Party nirvana is purgatory? We developing countries might start looking away from Western models of “development”. This is not just idle talk, maybe the Asian countries who have developed, have developed with corruption, with their countries current cultures. I am not for corruption, but is corruption more a symptom than a cause of a disease? The Suharto family is wealthier than the Mobutu regime, and Indonesia with fewer natural resources.

    Ha Joong Chang, a Korean economist at Cambridge has done a lot of work in development economics, studying what works in development.

    Here is a short talk he gives, funny, but very informative and eye-opening.


  • Sums the Kenyan economy a bit too well!

  • Ken

    Even HaJoong Chang distinguishes corruption that involves “reinvestment” of the proceeds locally and corruption that involves deposits in foreign banks–Kenya has experienced far too much of the latter for corruption not to be a big obstacle to a better standard of living for most Kenyans, in my humble opinion.

    I don’t see that Kenya needs a specific model from either the West or from Asia. Keep in mind that the point being made in the quoted piece in the post is why Greece has had a different experience than other countries in Europe under the EU system. To me, reform of law enforcement and the judicial system under the new constitution could give Kenyans hope of bettter ability to trust and collaborate, knowing that rules can be fairly enforced.

  • Bemused

    Yes Ken the key is trust. Back to my point the corruption we experience is a symptom of a larger disease.

    While law enforcement and judicial reform are necessary… can a marriage really be built on the pillars of a pre-nup, post-nup, divorce decrees and their enforcement? Is there more?

  • Thanks Ory, you just cleared up some things I’ve been thinking about for some time. It is impossible for Kenya to move forward if the changes are only cosmetic and barely skin deep. There are some strong and deep rooted mores that have yet to be unlearned – and maybe this change is a factor of time? Who knows. Maybe Greece needs more time, and maybe we’ll never know.

    “Low-trust opportunism” as you call it and lack of trust, translate more or less to a situation where everything is a zero-sum game. My win is your loss and vice-versa… an exercise adopted my our primitive ancestors, which as we know can’t have a good ending.

    On the positive side, we have made some good progress and its time to stop and take stock. Each gain must be celebrated.

  • maybe you should improve your articles, that would help us understand better.http://www.pisconsulta.com

  • thanks for your article,it’s really useful

  • Volvo has a traffic accident database, including around 40000 traffic accident data, in the past 40 years has been in the use of the database security research. The database establishment, mainly depends on the Volvo special automobile traffic accident investigation team.

    In 1966, three point safety belt began in the Volvo automotive applications, for measuring safety belt in a traffic accident in effect, Volvo arrange for Volvo car accident was a one-year follow-up analysis. Analysis shows that, the invention does make the occupant casualties fell 50%.

    In this activity, Volvo engineers recognize, understand the car with passengers in the process of accident or very important. The Volvo Car Corp was established in 1970 of the traffic accident investigation team. Which lasted 42 years, traffic accident investigation team collected a total of more than 40000 relates to Volvo’s accident information, conducted 2100 in-depth analysis, first hand investigation data into the latest research, constantly applied to the models of development and improvement, the Volvo car safety performance upgrade.AK-47

  • 3 years later- and liking the analogy between Greece and Kenya, also wish to add my motherland- Ghana, to the list, only we had it about 30 years ago and that is how Ghana met and got married to the IMF and World Bank.

  • brown

    The article is really eye opening.Thank you very much.For more info on world economic trends check our books at http://www.booksfromus.co.ke/

  • bop nu


  • bop nu


  • bop nu

    In 1966, three point safety belt began in the Volvo automotive applications, for measuring safety belt in a traffic accident in effect, Volvo arrange for Volvo car accident was a one-year follow-up analysis. Analysis shows that, the invention does make the occupant casualties fell 50%

  • The staff should also be in a position to offer advice to the customers. Also, you can tailor made workouts that require operating from your property to the gymnasium, in order to get much more workout.2 By Sub-segment5.Sleeping pills will help you by way of a red-eye flight. Thus, it would be wise to have a large variety of wedged sandals to choose from. Now add little salt in one of these slices and use it to rub on the affected area. For those cretan female warriors, infamous for their fussy heavy garments to fight and scare the enemies with, their decolletages were supported by an underbust corset (check out our underbust corsets at notnaked. To match with the dresses special shoes are available for boys and special sandals for girls too. You typically submit your debit card information and private address after you make an order. Alexandria City Tours, Trips, Excursions From Alexandria Port [url=http://www.blackfridaylouisvuittonstore.com/]Louis Vuitton Bags Black Friday[/url] We’ve Attended Plaid!!!!! [url=http://www.blackfridaylouisvuittonstore.com/]Louis Vuitton Black Friday[/url] If you want to look thinner and avoid predicting these undesirable caloriesThe title of it probably arises from french term [url=http://www.blackfridaylouisvuittonstore.com/]Black Friday Louis Vuitton Bags[/url] ‘tiretaine’ and in the past described a part wool, part linen material. When you converse your vows, you want to permit out in front of everybody just how much you actually really like the person you’re marrying. It doesn聮t require a Montreal winter either, even the relatively mild winters of Fredericksburg, VA are enough to deter. This can be done as the portal owner purchases huge amount of shoe at a wholesale rate.

  • Believe that it or not, there are lists readily available that score the ‘greenness of motels. 93,420 spectators is also the most [url=http://www.patriotsofficial.com/]Patriots Jersey Cyber Monday[/url] recorded by any of the recent Continental Confederation Tournaments Finals. Which do you want?Marketing and advertising Director for Bondage Deals, a one-end shop for the largest variety of bondage [url=http://www.patriotsofficial.com/tom-brady-jersey.html]Tom Brady Jersey Cyber Monday[/url] gear, bondage toys, costumes and a lot more, all 30%-70% OFF and no revenue tax.”So at least now we have a job to do, me and Carlos. However, it鈥檚 a good idea to hire the services of an experienced Orange County Feng Shui consultant to guide you in achieving your goals. Transfers are revival of Robin van Persie, Wenger to link eating into [url=http://www.patriotsofficial.com/aaron-dobson-jersey.html]Black Friday Aaron Dobson Jersey[/url] the two strikers are easy to raise suspicions of a signal. An assortment of freshly squeezed lemon juice and ginger may be included with a bit of ginger root to help control hemorrhoids.You can also drop PMI when you create up your principal to twenty% or the dwelling appreciates so that your equity is around twenty%. Moncler tried out high gloss colors to use cooperation with Junya Wsatanabe at the same time.Fukukara was beaten by the 21-year-old Wu Yang from China by 7-11, 11-7, 11-8, 11-9, 11-2. 2%Example: For 100 referred product sales you need to earn $2, 350.Contemplating that cartridges can repeatedly occur at an exceptionally important selling price tag. Even though specific for little ones ages six-14, grown ups not only just take their children, but get pleasure from animated films as effectively.

  • This may be due to personal tastes or ethical reasons. Individual dietary choices may be more or less healthy.

  • Several prom outfits of Karen Millen cost a couple of hundred bucks, and are exclusively available to people with less cash thru second-hand bargains.

  • Thanks for the information!

  • Even during the times we have experienced growth – it’s been a false growth

  • This is a great post & something that’s very important to keep in mind! Thank you!!!!

  • Great job!! Your task is not simple but it looks easy and one can easily understand whatever you want to say. That’s how you make your article a valuable one.

  • Lance

    Extremely interesting points you have raised here – very unique, interesting and equally inspiring.

    Tycoon WoW – The Tycoon World of Warcraft Gold Add-On

  • Title…

    Ugh, I just wrote a long comment, but it disappeared when I clicked send. Anyway, I’m not going to redo it again, so I just wanted to say great blog! Better than http://facebook.com! :-)…