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CHINA’S PARTITION OF AFRICA: Will US Intervention Slow Down the New Silk Road?

A letter from 16 US Senators raises questions about Chinese debt-trap imperialism – and Washington’s role (via the IMF) in bailing out distressed countries. As Africa’s leaders are offered new sweeteners by Beijing, the continent becomes the stage for a new geopolitical contest between the 21st century’s Great Powers. By MARY SERUMAGA.

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CHINA’S PARTITION OF AFRICA: Will US Intervention Slow Down the New Silk Road?
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The just ended Forum of Chinese–African Cooperation (FOCAC) in Beijing may prove to be the straw that breaks the camel’s back for the United States, long irritated by Africa’s relationship with an Asian country as powerful as itself. The 2018 forum was attended by more African leaders than attended the last AU Summit. Only six heads of state did not show up; Tanzania, Burundi, DRC, Eritrea and Algeria and were represented by vice presidents and prime ministers. Swaziland alone had nothing at all to do with FOCAC.

On 3 August, the day FOCAC 2018 opened, sixteen US senators wrote to Steven Mnuchin, Secretary of the Treasury and Michael Pompeo, Secretary of the Department of State demanding to know what the Administration proposes to do to stop China’s attempt to dominate the global economy. First signatory is Senator David Perdue, described as ‘Donald Trump’s Man in the Senate’. The letter is therefore guaranteed to get attention.

The senators point out that 23 of the 68 countries hosting Chinese Belt and Road Initiative (BRI) projects are at risk of debt distress. Eight countries with future BRI infrastructure investments are also at risk of debt distress. China is accused by the Senators of ‘predatory lending’,’weaponizing’ capital and holding poor countries to ransom when they fail to repay.

On 3 August, the day FOCAC 2018 opened, sixteen US senators wrote to Steven Mnuchin, Secretary of the Treasury and Michael Pompeo, Secretary of the Department of State demanding to know what the Administration proposes to do to stop China’s attempt to dominate the global economy.

This is not to say that the West has not weaponized capital as a matter of course. Sometimes literally. For example, International Lending Institutions will lend to countries that suppress political opposition. Such oppression means citizens cannot fulfil their right and duty to oppose unsustainable debt through democratic processes. In Uganda, electoral violence prevents the citizenry from freely campaigning for elections. Knowing this, Western sovereign lenders provide the means of repression by arming, for example, Uganda’s Special Forces Command while lending to the perpetrators of violence.

The core of the argument the US Senators are preparing against China’s BRI is this: countries in debt distress caused by BRI projects are also in debt to the IMF and turn to the IMF for bailouts. The US is the IMF’s biggest shareholder. As such, IMF bailouts to countries in debt-distress from Chinese loans would be transferring US taxpayers’ money to China. Sri Lanka’s bailout in 2016 did not prevent the loss of Hambantota Port.

However the major immediate cause of concern is Pakistan, reportedly planning to apply for an IMF bailout after her BRI indebtedness under the China–Pakistan Economic Corridor put Gwadar Port at risk. Djibouti whose debt to China is equivalent to 75% of her GDP (its total foreign debt to GDP ratio is 85%) is said to be at risk of losing Doraleh Container Terminal to China, an asset strategically important to the United States.

Uganda is not mentioned but is likely one of the other countries alluded to. Uganda’s debt–distress has been on the horizon for at least two years. The Auditor General signaled it in 2016. A recent attempt to increase tax revenues led to the #ThisTaxMustGo movement, an outcry from a public that sees little in the way of public services, and more recently, the disruption of a tax policy conference attended by donors.

What is important to Uganda is the questions put by the senators to the American Administration;

“As the largest contributor to the IMF, how can the United States use its influence to ensure that bailout terms prevent the continuation of ongoing BRI projects, or the start of new BRI projects?”

An understanding appears to have been reached with Kenya which this year applied for a bailout and simultaneously suspended all new infrastructure projects apparently in return for assistance.

The senators also require the Treasury and the State Department to investigate: i) which other countries are likely to require bailouts; ii) how BRI countries in debt distress can be assisted to repay their loans; and iii) alternative sources of infrastructure funding.”

The closing paragraph of the senators’ letter indicates that another proxy war is about to be fought on the African continent. It is clear the senators want the United States to disrupt Chinese–African cooperation:

“In his speech to the 19th Party Congress, President Xi declared, ‘China’s development does not pose a threat to any other country. No matter what stage of development it reaches, China will never seek hegemony or engage in expansion.’ It is apparent that this statement is fundamentally false, and the goal of BRI is the creation of an economic world order ultimately dominated by China. It is imperative that the United States counters [emphasis mine] China’s attempts to hold other countries financially hostage and force ransoms that further its geostrategic goals.”

African leaders attending FOCAC have been promised $60 billion in development assistance. It will be made up of grants and more importantly, loans from Chinese financial institutions. China in 2018 has promised to import more non–commodities (finished goods) from Africa. At FOCAC 2015, the same amount was promised. Given that several countries are already struggling to repay Chinese debt, which carries higher interest and is repayable over a shorter period than loans from other sources, the offer is not necessarily an altruistic gesture.

At the end of FOCAC 2015 held in Johannesburg, the dysfunctional relationship between Africa and China was already evident. The relief of the Chairman of the Africa Union as he welcomed the blandishments of President Xi Jinping was palpable. Probably remembering the Bandung Conference of 1955, in a quivering voice President Robert Mugabe (for it was he) delivered one of those lyrical declamations he was so good at, “Here is a man representing a country once called poor, a country which was never our coloniser. But there you are, he is doing what we expected those who colonised us yesterday to do.”

With the colonial and especially settler–state experience, and after the Continent has been all but disembowelled so that its endowment of natural resources has failed to translate to a decent standard of living as the norm, the current belief that China or anyone else is going to do the work, is astounding in its naïveté.

The relationship between China and Africa is said, over and again, to be rooted in friendship and equality. It is this that is expected to provide the impetus to begin to deliver on goals whose attainment is long overdue: industrialization, modernisation of agriculture, poverty reduction, technological capacity building and economic development. These are expected to be reached by means of Chinese capital, technology and personnel for the construction of roads and other infrastructure, investment and trade facilitation and environmental protection. Sino–sceptics recall the very same development goals were discussed at great length with Europe and America in the immediate post-independence period and beyond.

For his part, President Museveni expressed the hope in Beijing 2018, that the relationship with China would allow Africa to, “more easily work with our friends in the EU and the USA on the basis of win-win arrangements, not the win–lose arrangements of the last 500 years […] many African countries and the former colonizers can put to good use the historical relations with the British Commonwealth or the French Community. What was previously negative could become much more positive than it has been hitherto.”

The relationship between China and Africa is said, over and again, to be rooted in friendship and equality. It is this that is expected to provide the impetus to begin to deliver on goals whose attainment is long overdue: industrialization, modernisation of agriculture, poverty reduction, technological capacity building and economic development…Sino–sceptics recall the very same development goals were discussed at great length with Europe and America in the immediate post-independence period and beyond.

In the interim, raw materials have continued to dominate African exports. Structural Adjustment Programmes led to deindustrialisation on a grand scale. Despite mineral and other endowments dwarfing anything available in the West or the East, African countries continue to occupy the lower rungs of the Human Development Index.

Listening to Xi Jinping’s address at FOCAC 2015, one would have thought China has no needs of her own – they were not mentioned either by China or her African hosts – and that China is in it for purely altruistic reasons. Mugabe, the AU chairman, claimed that the -Sino-African relationship goes far deeper than mineral extraction. The 50,000 elephants we lose to poachers every year did not feature either.

Pro–FOCAC leaders no doubt recall the heady days of Bandung and the creation of the Non-Aligned Movement, when there was an Afro–Asian bloc at the UN General Assembly. Back then, African countries were proactive and saw themselves as actors on the world stage rather than as mere props in other people’s scripts and proxies in their wars. An episode that occurred during the Cold War illustrates this. The US sought to bar China from membership of the UN General Assembly and African leaders were lobbied by high-level American officials to vote against China. Just a week after Nigeria gained independence in October 1960, Prime Minister Balewa called on President Eisenhower. Having assured Eisenhower that he was not a Communist, Balewa made a request for bilateral aid and was assured aid would be available through the UN Special Fund. He was advised that the United States preferred making loans to giving grants.

Later in the conversation in answer to a question from Prime Minister Balewa, President Eisenhower said that a vote by Nigeria in favour of Red Chinese representation at the UN would “constitute such a repudiation of the U.S. that we would be in a hard fix indeed.” [i] Balewa in turn expressed surprise that a nation of 650 million should be excluded from representation at the world body. In the event, Nigeria voted against the U.S. position on the Chinese delegation.

Nowadays things are different. Uganda abstained from the historic UN General Assembly vote against the United States’ endorsement of Israel’s annexation of East Jerusalem when Washington announced that the US was moving her Embassy there. Kenya dodged the vote altogether. In an earlier resolution (December 2016) against, among other things, Israel changing the status of internationally recognized Palestinian territory via settlements, Uganda abstained.

FOCAC 2015 provided US$5 billion in grants as a sweetener and US$ 55 billion in loans. In 2018 a further $60 billion has been pledged. Going on precedent, the majority of these funds will not reach their intended beneficiaries, for easily understandable reasons. Apart from the bureaucracy surrounding the loan applications, most African countries lack a strong regulatory framework. The result: massive waste and theft of public funds. Uganda, for example, has spent billions of dollars of tax revenues and loans on civil service reform, and millions on programmes to deepen democracy yet an enabling environment for sustainable development continues to elude her citizens. State brutality is on the increase.

Uganda’s allegiance to China does not require her to address failures in deepening democracy and inclusive development even for public relations purposes. Although the Western development industry too has tolerated what it calls ‘democratic deficits’ their leaders can be called to account because unlike China, they continually profess democratic values. What follows below is a brief run-through of recent examples of kleprocracy and incompetence supported in Uganda:

The National Roads Authority (UNRA) was established in 2006 to make road construction more efficient than it was under the Ministry of Transport. With its large budget, the UNRA quickly became known for some of the country’s more colourful corruption scandals. In 2015 UNRA excelled itself when the country lost in the region of UGX 24.7 billion (US$ 6.5 million at current rates) in the Mukono–Katosi road scam. The Inspector General of Government found that the Minister for Transport, Abraham Byandala, abused his office by inducing the supposedly independent UNRA to give a contract to one Eutaw, a firm claiming to be related to an American firm of a similar name. The firm, which turned out to have no relation to its American ‘parent company’, was paid advances for work it was unable to complete. Byandala was acquitted in August 2018, for insufficient evidence.

Uganda’s allegiance to China does not require her to address failures in deepening democracy and inclusive development even for public relations purposes. Although the Western development industry too has tolerated what it calls ‘democratic deficits’ their leaders can be called to account because unlike China, they continually profess democratic values.

Meanwhile in the south, the brand new highway to Rwanda literally split in two with one half sliding down the hill. The much–praised Northern By–pass in Kampala was closed as the swamp through which it was built began to reclaim it in the March rains. The Roads Authority is slated to be disbanded by presidential decree as a waste of resources.

The Uganda National Bureau of Standards (UNBS), was established in 1983, “to enforce standards for protection of public health and safety and the environment against dangerous, counterfeit and substandard products; ensuring fairness in trade and precision in industry; strengthening Uganda’s economy….” Given that the disposal of disused short–life cheap goods imported from China is becoming an environmental hazard and counterfeit drugs a health hazard, UNBS and other specialised quality assurance agencies would need to be much stronger if the goals of green development, health and prosperity are to be attained.

The CEO of UNBS was suspended in 2015 with various management weaknesses cited as the reason. In 2018, the situation has deteriorated to the degree that foods have been found to be adulterated, notably meat preserved with formaldehyde.

The judiciary (Justice Law and Order Sector) is at once a source of hope and a constant source of disappointment. Sovereign debt has legal and constitutional ramifications. For example, Uganda’s constitution requires the state and its citizens to ‘defend the independence, sovereignty and territorial integrity of Uganda’ and to build national strength in political, economic and social spheres to avoid undue dependence on other countries and institutions.’ This is meant to be done mainly through Parliament which approves or rejects debt. Clearly unsustainable debt flies in the face of independence.

Other indebted countries too have fallen into debt in contravention of the law. Mozambique’s $2 billion secret loans (one from a Russian bank) were taken out by the finance minister who was not authorised to do so. He later admitted that he was unaware when he signed the guarantee that he gave the creditors sovereign powers over all Mozambican assets until the debt was repaid.

Sovereign debt has legal and constitutional ramifications. For example, Uganda’s constitution requires the state and its citizens to ‘defend the independence, sovereignty and territorial integrity of Uganda’ and to build national strength in political, economic and social spheres to avoid undue dependence on other countries and institutions.’ This is meant to be done mainly through Parliament which approves or rejects debt.

This is what the US Senators refer to as ‘predatory lending.’ However, the same administrative weaknesses taken advantage of by Chinese and Russian lenders are relied on by Western lenders despite the claim that they operate under different standards.

It was expected that the Constitutional Court would strike down Parliament’s removal of presidential age limits further reducing the chance of removing the incumbent kleptocratic regime.. What came as a shock was the ruling on the invasion of Parliament by the Special Forces beating, torturing several Members of Parliament” physical assault on the elected representatives of the people by ‘security operatives’.

During the appeal against age limit removal, only one out of five judges ruled that state violence is unconstitutional in all circumstances and that it therefore rendered the Age Limit Act null and void. Justice Kenneth Kakuru said,

“The Constitution demands that citizens of this Country be treated with respect and dignity by all agencies of the State. Again I am constrained to refer to the maiden speech of President when in 1986 he promised Ugandans that no citizen would be beaten by the army (read or the Police) as it had been the norm in the past regimes.

The police in Uganda have no right to frog march Members of Parliament, beat them and humiliate them the way they now routinely do which this Court takes judicial notice of being a notorious fact [emphasis mine].”

The rest of the judges were of the view that the attack on Parliament did not nullify the Age Limit Act opening the way for President Museveni’s life tenure and also for assaults on members of parliament.

Many blame the constitutional court’s failure to condemn state violence for the subsequent attack on members of parliament and their supporters in the Arua by–election weeks later.

For two weeks beginning in Arua on 13 August 2018 the armed forces indulged in a wave of electoral violence that spread to other cities. At the time of writing, a high level press conference has just ended in Kampala. Briefing the media about the electoral violence, the Minister for Security said the armed forces acted with restraint and that had they not, casualties would have been more severe. In other words – be grateful we let you live. A further update: President Museveni addressing his party caucus warned them that he has the power to shut down Parliament.

Justice, law and order, health, education, immigration, infrastructural development and tax administration, are all sectors important for development which have exhibited persistent weaknesses. Neither debt nor grants (Chinese or Western) have removed precarity from the manner in which the country is governed or from the day–to–day existence of the majority of Ugandans. Increased debt and grants are not the answer.

*****

In any case, the Chinese project is about to receive major push–back from the United States. A decade ago, correspondence between the US Embassy in Kampala and Washington indicated concern about the manner in which China beats American firms in bids for oil concessions and infrastructure projects by bribing government officials. (Email-2011-10-19 07:38:18 From: gary@ocnus.net To: responses@stratfor.com. Source: Wikileaks). At some point, officials discussed (with the UK) but did not implement travel bans on the senior government officials taking bribes, possibly leaving room for negotiation. That era may have ended.

There are two possible outcomes for Africa. It is just possible that African, Asian and South American countries could become active negotiators this time around. If they were to engage regional blocs they would be able to come away with more profitable and transparent financial arrangements. The best case scenario would include repudiation of illegitimate debt; all monies recklessly loaned to kleptocrat administrations and all those used to perpetuate despots in power.

The best case scenario would include repudiation of illegitimate debt…Failing that China, Europe and the United States will simply agree to a second partition of Africa into new spheres of influence…The current crop of African leaders, noted mainly for bribe-taking and theft of public resources is more likely to cooperate in the second partition of Africa than to restructure the basis of the Continent’s relationship with the imperial powers.

Failing that China, Europe and the United States will simply agree to a second partition of Africa into new spheres of influence. Which brings us to the main ingredient lacking: leadership. The current crop of African leaders, noted mainly for bribe-taking and theft of public resources is more likely to cooperate in the second partition of Africa than to restructure the basis of the Continent’s relationship with the imperial powers.

[i] FRUS 1958-1960 v.14 Newly Independent States, Document 77, Memorandum of Conference with President Eisenhower, October 8, 1960.

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Mary Serumaga is a Ugandan essayist, graduated in Law from King's College, London, and attained an Msc in Intelligent Management Systems from the Southbank. Her work in civil service reform in East Africa lead to an interest in the nature of public service in Africa and the political influences under which it is delivered.

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India Election 2019: Modi’s Victory Signals Growing Far Right Intolerance in India and Around the World

Narendra Modi epitomises the kind of neo-fascist right-wing leadership that is sweeping across some parts of Europe, the United States, South America, Asia, and even Africa, where the likes of Donald Trump, Victor Orban, Benjamin Netanyahu, Rodrigo Duterte and Jair Bolsonaro are imposing intolerant, highly regressive policies that polarise populations and create false “them-versus-us” narratives.

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India Election 2019: Modi’s Victory Signals Growing Far Right Intolerance in India and Around the World
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The re-election of Narendra Modi as India’s Prime Minister (his second term) is hardly surprising but does signify a worrying global trend of increasing intolerance and xenophobia. India’s weakened opposition – personified by the lacklustre and lightweight Congress leader, Rahul Gandhi – had no chance in a country riding on a wave of nationalism that equates Hinduism with patriotism. Rahul Gandhi’s lineage (he is the son of former Prime Minister Rahul Gandhi, the grandson of India’s “Iron Lady”, Indira Gandhi, and the great grandson of India’s founding father, Jawaharlal Nehru) failed to attract sufficient voters, perhaps because the Gandhi family is associated with the kind of dynastic politics that Modi says he is eschewing. (Modi never fails to remind Indians that he is the son of a tea seller who rose through the ranks without the support of any political godfather or dynastic family.)

Modi and his Bharatiya Janata Party (BJP) have been selling the narrative that the Hindu religion and way of life have been undermined by centuries of subjugation of the Indian people, first by Muslim Mughal conquerors/emperors, then by British colonialists, and finally by the secularist (read Congress) politicians who led India to independence and thereafter imposed a socialist mindset on the country’s governance. This narrative also feeds off the decades-old rivalry between India and Pakistan that began when India split into two countries at independence in 1947.

The re-election of Narendra Modi as India’s Prime Minister (his second term) is hardly surprising but does signify a worrying global trend of increasing intolerance and xenophobia

As the activist and author Arundhati Roy quipped, being a Muslim in Modi’s India is now considered unpatriotic. “Of late, the criterion for being considered anti-national has been made pretty simple: If you don’t vote for Narendra Modi, you’re a Pakistani. I don’t know how Pakistan feels about its growing population.” (The number of Muslims in India is almost the same as the number of Muslims in Pakistan, around 180 million.)

Despite not keeping many of his promises (like improving the lot of India’s struggling farmers), Modi managed to rally his countrymen and women behind him. The reasons for this are many, among them a compliant and conservative Indian media, which did not challenge his divisive politics. As one Indian commentator put it, “A major section of the media has been a willing accomplice in the marketing of the Modi cult and the over-selling of the government’s performance in various ‘schemes’.”

Modi and his Bharatiya Janata Party (BJP) have been selling the narrative that the Hindu religion and way of life have been undermined by centuries of subjugation of the Indian people, first by Muslim Mughal conquerors/emperors, then by British colonialists, and finally by the secularist (read Congress) politicians who led India to independence and thereafter imposed a socialist mindset on the country’s governance

Indeed, the mainstream media and journalists have been under increasing attack in recent years by the BJP government. Journalists have also been targeted for assassination by Hindu fundamentalist groups, among the most recent case being that of Gauri Lankesh, an outspoken left-wing journalist who was killed outside her house in Bangalore in 2017.

Elitist politics

Modi’s victory perhaps reflects an Indian electorate that is fed up with the elitist kind of politics associated with the Congress Party, which, despite (or perhaps because of) its secular credentials, failed to inspire a majority of the country’s people who have lost faith in the institutions that Nehru and his successors in the Congress party set up. As Ramesh Thakur commented in an op-ed piece in the Times of India, “Inevitably this [Congress Party culture] morphed into the VIP culture that Indians by and large detest with a depth of contempt, anger and resentment” – a situation that Modi fully exploited.

Aatish Taseer explained some of the reasons for Modi’s victory in a recent TIME magazine article:

“The nation’s most basic norms, such as the character of the Indian state, its founding fathers, the place of minorities and its institutions, from universities to corporate houses to the media, were shown to be severely distrusted. The cherished achievement of independent India – secularism, liberalism, a free press – came to be seen in the eyes of many as part of a grand conspiracy in which a deracinated Hindu elite, in cahoots with minorities from the monotheistic faiths, such as Christianity and Islam, maintained its dominion over India’s Hindu majority. Modi’s victory was an expression of that distrust.”

Modi’s and his party’s supporters claim that he has brought India into the 21st century, and rather than being a traditionalist, he is actually a modernising reformer. (However, as he himself has pointed out, he does not equate Westernisation with modernisation; rather, he sees all the trappings of modernity in India, such as being fluent in English, drinking alcohol or eating meat, as contrary to the Hindu ethos of vegetarianism and spiritual purity. (Alcohol and meat are no longer on the menu at state banquets and several states in India have banned the eating of beef.)

As the activist and author Arundhati Roy quipped, being a Muslim in Modi’s India is now considered unpatriotic. “Of late, the criterion for being considered anti-national has been made pretty simple: If you don’t vote for Narendra Modi, you’re a Pakistani. I don’t know how Pakistan feels about its growing population

But Modi’s claim that he is taking India into modernity are not entirely accurate. India under the leadership of the Congress Party’s Oxford-educated Manmohan Singh, first as Finance Minister, then as Prime Minister, ushered in the first wave of liberalisation in the early 1990s, which opened up the economy to foreign investment and led to the deregulation and privatisation of various sectors. Modi is simply riding on the back of that first wave, which, fortunately, also coincided with rising economic growth, which catapulted millions of Indians into the middle classes.

Modi’s main appeal lies in his ability to convince a majority of India’s people that he is a reformist that can uproot India’s entrenched corruption and make government bureaucracy less cumbersome by ushering in a business- and private sector-friendly environment that can compete with the likes of China and the United States.

He also appeals to the aspirational instincts of India’s rising middle classes, who are eager for a cleaner, more efficient India. They say that the BJP has increased the country’s economic potential by building new roads, highways and airports. This is evident in cities such as Mumbai and New Delhi, where the infrastructure has been markedly improved in some areas. The Prime Minister’s campaign to clean up India and improve access to sanitation has also been welcomed by a population used to seeing filth on the streets of Indian cities and villages. He even managed to mesmerise some leading Bollywood stars, who not only campaigned for him, but even stood as candidates on a BJP ticket.

Hindutva and fascism

Modi is no doubt a charismatic and disciplined leader, but his brand of politics can also be dangerous for a nation, especially a nation as vast, diverse and complex as India. He represents a particular kind of nationalism-cum-populism that has the potential to fragment a country irreversibly and take it back to place where rights and freedoms are arbitrarily – not universally – applied.

Modi’s main appeal lies in his ability to convince a majority of India’s people that he is a reformist that can uproot India’s entrenched corruption and make government bureaucracy less cumbersome by ushering in a business- and private sector-friendly environment that can compete with the likes of China and the United States.

While paying lip service to secularism, Modi has entrenched an insidious form of Hindu nationalism (Hindutva) that has allowed anti-Muslim, anti-Christian and anti-Dalit (lower caste) sentiments to flourish. Physical attacks and violence against non-Hindu groups and individuals have risen in recent years and the image of India as a country that accepts all religions is being severely eroded. India, a land of immense diversity and where virtually every religion in the world has found a safe home, is now being touted as land for and of only Hindus.

The BJP has also embarked on propagating a revisionist history of India that fails to recognise that the subcontinent has never been a purely Hindu entity; it has been an amalgam of different religions for centuries, and Hinduism itself has undergone various transformations since its birth some four thousand years ago. In fact, one could say that India has never been a purely Hindu country, and that Hinduism is not so much a religion as it is a way of life that is interpreted differently by every Hindu, depending on her God, what region she hails from, and what caste group she belongs to.

Unfortunately, Modi epitomises the kind of neo-fascist right-wing leadership that is sweeping across some parts of Europe, the United States, South America, Asia, and even Africa, where the likes of Donald Trump, Victor Orban, Benjamin Netanyahu, Rodrigo Duterte and Jair Bolsonaro are imposing intolerant, highly regressive policies that polarise populations and create false “them-versus-us” narratives. Brexit and growing neo-Nazi and racist groups in Europe and the United States have further fuelled the idea that outsiders are to blame for a nation’s woes. In India, Modi’s Hindutva has emboldened Hindu chauvinists who no longer feel they need to hide their hatred for other races and religions. In all these places, democratic institutions are being weakened and the media and intellectuals are being vilified. Fascism – the feverish exaltation of ethnicity, race, nation or religion above the rights of the individual – has become the new normal.

Modi’s victory perhaps reflects an Indian electorate that is fed up with the elitist kind of politics associated with the Congress Party, which, despite (or perhaps because of) its secular credentials, failed to inspire a majority of the country’s people who have lost faith in the institutions that Nehru and his successors in the Congress party set up

There is also an inherent anti-intellectualism in these leaders’ statements and a propensity to install pliant and mediocre people whose only qualifications are sycophancy and blind loyalty to the leadership. In the Indian state of Uttar Pradesh, for instance, the BJP appointed a hate-mongering Hindu priest as chief minister, and did not suffer any consequences for this grave mistake. These trends, not just in India, but in many parts of the world, should worry all those committed to promoting human rights and democratic values.

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Out of the Box Thinking or Garbage Can Policy: Is Jubilee’s Government Protectionism and Economic Controls Good for the Country?

Uhuru Kenyatta’s grand scheme, the Big Four manufacturing agenda, is predicated on the restoration of protectionism and economic controls. But as DAVID NDII argues import licensing and exchange controls – the old tools of the trade – are no longer available, hence the “out of the box” solutions of the Jubilee government.

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Out of the Box Thinking or Garbage Can Policy: Is Jubilee’s Government Protectionism and Economic Controls Good for the Country
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In October last year, Uhuru Kenyatta fired a broadside at imports of fish from China: “The Finance bill has passed but we can think outside the box. We might as well say the fish imported is bad then we lock it. There are many ways the government can work if we really intend on serving our people.”

The trick backfired. The ban was imposed in November and lifted two months later following what was reported as a “biting shortage”. Had he taken a quick peek into the Economic Survey – the government’s annual statistics report that should be on his desk – he would have noted a steady decline in domestic fish production over the last five years – from 160,000 tonnes to 98,000 tonnes, a difference of 35,000 tonnes. Imports in 2018 were 22,000 tonnes, not enough to plug the deficit. On several occasions prior to the ban, senior government officials had been widely reported explaining that Kenya has a large and growing fish deficit. That they went ahead to implement a harebrained roadside declaration tells us everything we need to know about the state of sycophancy in the Jubilee government.

The latest from the Uhuru Kenyatta out-of-the-box policy institute is a proposed ban on used motor vehicle parts. Initially reported as a blanket ban, the Government has since clarified that it is limited to particular parts that endanger safety, such as brake pads. Sensible, isn’t it? Roads full of overloaded matatus and Proboxes with faulty brakes is a scary thought.

Road safety is not the business of trade policy. The person most at risk from a defective vehicle is the driver so, a safe, roadworthy car is in their interest. That said, drivers do kill and maim themselves and others far too often, not just because of defective vehicles but also by dangerous driving, notably speeding and drink driving. I can say without fear of contradiction that defective drivers, and not defective vehicles, are the single largest cause of road accidents. Moreover, there is no law that compels owners to service their vehicles. In many countries, vehicles over a certain age are required to undergo regular roadworthiness inspections. In the absence of a law requiring vehicle owners to replace worn parts, banning the import of used parts is an exercise in futility. What, then, is the ban in aid of?

The latest from the Uhuru Kenyatta out-of-the-box policy institute is a proposed ban on used motor vehicle parts. Initially reported as a blanket ban, the Government has since clarified that it is limited to particular parts that endanger safety, such as brake pads. Sensible, isn’t it? Roads full of overloaded matatus and Proboxes with faulty brakes is a scary thought.

Some economic history background is helpful and this is the history of the import control regime that was in place from the early 70s to the early 90s. The regime was a two-stage process, the first of which was the acquisition of an import licence. Import licences were issued by a committee of the Ministry of Commerce and Industry known as the Import Management Committee (IMC). Having acquired an import licence, one proceeded to apply for a Foreign Exchange Allocation Licence (FEAL) at the Central Bank. The role of the IMC was to implement quantitative restrictions. It would review the imports to be authorised based on the domestic production capacity and adjust the amount of imports that would be allowed in accordingly. Obviously, it is impossible to do this for hundreds of products when both the production capacity and the size of the market are constantly changing. Moreover, for some strategic products, importers were required to obtain a “no objection” from the domestic monopoly.

While import substitution industrialisation became the accepted justification, this was actually not how the control regime came about; import substitution industrialisation had been proceeding satisfactorily using tariff protection without import and foreign exchange controls. The regime was put in place in response to the effects of the 1973 oil price shock on foreign exchange and the controls were supposed to be temporary, to be lifted once the effects of the shock subsided. The effects subsided and were, in fact, followed by a coffee boom that more than offset the oil price shock, but the control regime remained.

I can say without fear of contradiction that defective drivers, and not defective vehicles, are the single largest cause of road accidents

Once it was in place, people discovered that it was useful in other ways. Everything about the regime was subject to bureaucratic discretion that could be abused – and was abused – in two ways. First, the determination of import tariffs was completely discretionary, and was determined to a considerable extent by political influence as opposed to economic logic. Second, influential incumbents were able to buy protection not just from imports but also from potential domestic competitors. Suppose an established incumbent noticed a competing product from a new local manufacturer on the shelf. With sufficient influence, the incumbent would get the bureaucrats to frustrate the competitor by denial or long delays in obtaining import licences or foreign exchange allocations. The surest way of buying influence was to have a business relationship with powerful people in government, either as sleeping partners or as distributors or suppliers. The overall effect was a corrupt, distorted, unpredictable policy regime that stifled competition and rewarded inefficiency, effectively undermining investment and entrepreneurship.

It should not come as a surprise then that by the early 80s, import substitution industrialisation had stalled. In Sessional Paper No.1 of 1986 on Economic Management for Renewed Growth, the government owned up to the failure of import substitution industrialisation and ushered in the era of market liberalisation and economic policy reforms known as structural adjustment programmes (SAPs). The paper argued that the state-centric protectionist economic model had reached a dead end. In particular, it highlighted the system’s failure to create jobs and warned that, unless it was reformed, we would be “overwhelmed” by population growth.

The trade regime was one of the first targets for reform. The first task of the reform agenda was an exercise known as tariff harmonisation, which culminated in three tariff bands: 0 per cent for raw materials and capital goods, a 10 per cent band for intermediate products and a 25 per cent band for finished goods. Also included was a list of items prohibited for health and safety reasons. The second task was the removal of import licences and foreign exchange controls, which was completed in 1993. The same regime was subsequently adopted by the East African Community. The effect of these reforms was to level the playing field and to tie the government’s hands, and the policy regime itself became stable and predictable. It is this policy straightjacket that the out-of-the-box solutions are meant to circumvent.

In Sessional Paper No.1 of 1986 on Economic Management for Renewed Growth, the government owned up to the failure of import substitution industrialisation and ushered in the era of market liberalisation and economic policy reforms known as structural adjustment programmes (SAPs)

Up until 1993, the reforms had been proceeding in fits and starts, with several reversals in between due to resistance from vested interests. But in the aftermath of the 1992 general elections, the Goldenberg chickens came home to roost. Staring an economic meltdown in the face, Moi accepted to open up the economy in exchange for a financial bailout. The impact was immediate; trade boomed and within a year, Nairobi’s city centre was transformed into one big bazaar. People spruced up. On the streets, you could no longer tell people’s socio-economic status by their appearance – everyone was well dressed. In the rural areas, patched up clothes disappeared. Everyone wore shoes. Motor vehicle ownership boomed. Vehicle registrations, which had been in decline, rebounded immediately, growing 22 per cent per year over the next five years, and 12 per cent per year over the decade (see chart). Owning a decent car ceased to be a status symbol for the upper echelons of society, and they resented it – some still do.

The rationale for foreign exchange controls – that liberalisation would cause scarcity – was blown out of the water; foreign exchange availability actually improved. But most importantly, the prognosis of the 1968 Sessional Paper on employment was vindicated; employment growth doubled from 4.8 per cent in the previous decade, to 9.4 per cent in the decade following liberalisation. This labour absorption was driven by an explosion in micro and small enterprises, particularly in trade, but also in jua kali manufacturing and in other sectors as well. Supermarket shelves featured a wide variety of colourful, affordable local brands of consumer goods – toiletries, shoe polish, vegetable oils – where previously choice was limited to two or three staid multinational brands that had remained unchanged for twenty years or more.

Staring an economic meltdown in the face, Moi accepted to open up the economy in exchange for a financial bailout. The impact was immediate; trade boomed and within a year, Nairobi’s city centre was transformed into one big bazaar. People spruced up.

Uhuru Kenyatta’s grand scheme, the Big Four manufacturing agenda, is predicated on the restoration of protectionism. But import licensing and exchange controls – the old tools of the trade – are no longer available, hence the “out of the box” solutions.

The used spare parts ban opens a window for bureaucrats to rummage through every consignment of used car parts looking for prohibited parts. Bribes, demurrage and other transaction costs will go up. Many businesses, particularly small ones, will be driven out of business. Maintaining the diverse models of imported used cars will become a challenge and the used-car import trade will be strangled to death by regulation and bureaucracy.

Uhuru Kenyatta’s grand scheme, the Big Four manufacturing agenda, is predicated on the restoration of protectionism. But import licensing and exchange controls – the old tools of the trade – are no longer available, hence the “out of the box” solutions.

The Draft National Automotive Industry Policy featured in this column a month ago has precisely this situation as one of its objectives. This ban complements the plan to initially lower the maximum age of used-car imports to five years from the current seven, and then to three years, effectively putting cars out of reach for many people.

But the Government has a plan – model rationalisation and homologation. Model rationalisation means reducing the number of models sold in the market while homologation simply means state certification. The policy is “geared towards an entry model for the local market based on acceptability and affordability”. In short, the state will choose one model of car that will be mass-produced for the local market.

The logic of this is as follows: because we are a small market, having too many models makes it difficult for the local assemblers to have economies of scale. This of course means that the chosen model will be frozen in time technology-wise, and will probably be available in just a couple of colours. But of course, in other markets, design and technology will be moving on and therefore, this will only work if “the people’s car” is protected from the imported used cars that consumers would prefer.

This has been done before; India had the Ambassador, the Soviet Union had the Lada, and East Germany the Trabant. We had the Peugeot 504, which we kept assembling for at least a decade after it had gone out of production. I had the good fortune of visiting Berlin in my youth, just a year before German reunification, and I still recall the surreal images of Trabants sputtering along on one side of the Wall while BMWs, Audis and Mercedes Benzes whizzed by on the other. I find it difficult to contemplate that, thirty years on, and on the cusp of the fourth industrial revolution, we have apparatchiks formulating communist industrial policy.

In the decade after the 1993 “big bang” as we called it, the economy created four million jobs – 400,000 a year, compared to 80,000 a year in the preceding decade. In the absence of these reforms, Kenya would have preceded Zimbabwe on the route to land invasions and economic meltdown. We may not have led then, but we are certainly doing our best to follow now.

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In Whose Interest? Reflecting on the High Court Ruling Against John Githongo

The core issue in the Murungaru v Githongo case remains whether the revelations of the Anglo Leasing scandal – which was not just exposed in the Nation newspaper that published the Githongo Dossier in 2006, but was also extensively documented by the British journalist Michela Wrong in her book, It’s Our Turn to Eat were in the public interest.

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In Whose Interest? Reflecting on the High Court Ruling Against John Githongo
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The awarding of a hefty Sh27 million ($270,000) in damages to the former minister Christopher Ndarathi Murungaru by the High Court judge Joseph Sergon has sent a chilling message to all those who might be inclined to report corruption or wrongdoing within government: do so at your own peril.

Murungaru’s libel case against anti-corruption activist and former Governance and Ethics Permanent Secretary, John Githongo, has raised serious questions about whether court decisions are being made without due reference to constitutionally-protected rights and freedoms and whether Kenya’s judiciary has been “captured” by the state.

These questions were recently discussed and debated at a public forum in Nairobi organised by various civil society organisations, and attended by prominent legal minds, including the former justice minister and NARC leader, Martha Karua, who described the Sh27 million award by the judge as “outrageous”. Karua, who has been accused by her critics of not doing enough to protect Githongo when she served in Mwai Kibaki’s administration (when the so-called Anglo Leasing scandal that implicated Murungaru and others in government was exposed), stated that the case will make people afraid of coming out and reporting corruption within government. She further claimed that when she realised that many of the Anglo Leasing contracts that Githongo had exposed in what is known as the “Githongo Dossier” were fraudulent, she made several attempts to have the government not honour them, but was thwarted in her attempts by none other than the then Attorney General, Amos Wako.

As George Kegoro, the Executive Director of the Kenya Human Rights Commission, pointed out, “This case was about isolating John and exposing him financially. It was to embarrass and ruin him and to silence him.”

Wachira Maina, a constitutional lawyer and governance consultant, believes that this case illustrates how “state institutions have been repurposed for private gain”. He wondered why Murungaru had not sued the Nation newspaper, which published the dossier, suggesting that the case was a personal vendetta against a soft target who could be financially crippled by the case. As George Kegoro, the Executive Director of the Kenya Human Rights Commission, pointed out, “This case was about isolating John and exposing him financially. It was to embarrass and ruin him and to silence him.”

The amount awarded to the plaintiff also seemed unusually large. As Jill Ghai noted, “If you lose a leg in an accident in Kenya, the most you get awarded is 2 million shillings, so 27 million for damages is outrageous.”

“The court did not consider that Anglo Leasing happened under Murungaru’s watch,” said Maina. He further pointed out that every ruling in the courts must “pass the constitutional test”, which this ruling clearly did not. “There is no single reference in the judgement to the constitution. Judges are not only expected to apply the constitution, but are also expected to interpret law to reflect the constitution.”

Did the public have the right to know the people and events that constituted the Anglo Leasing scandal? Definitely, because billions of Kenyan taxpayers’ shillings were involved, and the contracts signed had to do with national security

Several countries are reconsidering their libel laws and amending them so that they do not impinge on freedom of speech and the right to access to information, which are constitutional rights in many countries, including Kenya. These rights and freedoms become even more salient when the publication of certain information is in the public interest. The UK’s Defamation Act of 2013, for instance, curtailed what is known as “libel tourism” (libel cases brought by people who go to court in countries where they are most likely to be awarded large amounts of money in damages) and extended to the mass media the “qualified privilege” defence, which provides protection from a defamation lawsuit for journalists who publish information that is in the public interest.

Perceived injury to an individual versus public interest

The core issue in the Murungaru v Githongo case remains whether the revelation of the Anglo Leasing scandal – which was not just exposed in the Nation newspaper that published the Githongo Dossier in 2006, but was also extensively documented by the British journalist Michela Wrong in her book, It’s Our Turn to Eat: The Story of a Kenyan Whistleblower, published in 2009 – was in the public interest. Did the public have the right to know the people and events that constituted the Anglo Leasing scandal? Definitely, because billions of Kenyan taxpayers’ shillings were involved, and the contracts signed had to do with national security. (The Anglo Leasing scandal, as the corruption scam that Githongo exposed has come to be known, was a series of fictitious security contracts signed with shell companies by the Moi and Kibaki governments that cost the Kenyan taxpayer millions of dollars. According to reliable estimates, the contracts were worth more than $700 million, of which an estimated $250 million was paid out). Some of those implicated are currently facing trial in the Kenyan courts.

Kimeu said that the role of the judiciary is to interpret the law, and to do so in line with the aspirations of the people. “This case was about Kenyans and their money,” he stated. “The case made an example of John – it is basically telling us to lie low. If you speak out, it is to your personal detriment.”

Moreover, the court must determine that there was “actual malice” on the part of Githongo when he claimed that Murungaru and four other high-level government officials orchestrated the Anglo Leasing scam. So, for instance, there needed to be evidence that Githongo deliberately tried to malign Murungaru in order to cause harm to him or to damage his personal or professional reputation. (Murungaru claimed that he lost his parliamentary seat as a result of Githongo’s allegations, which is neither here nor there.) As Samuel Kimeu, the Executive Director of Transparency International-Kenya, rightly asked, “How is it that a perceived injury to one person trumps the public interest?”

Kimeu said that the role of the judiciary is to interpret the law, and to do so in line with the aspirations of the people. “This case was about Kenyans and their money,” he stated. “The case made an example of John – it is basically telling us to lie low. If you speak out, it is to your personal detriment.”

Kimeu highlighted that there is currently no law in Kenya that protects whistleblowers, which makes exposing wrongdoing a daunting task, and that this particular libel case has had a “disorienting” effect on those who protect the public interest.

Integrity issues

Prof. Kibe Mungai, an advocate of the High Court, admitted that many judges and public officers in Kenya disregard the constitution, especially on issues to do with integrity and values. However, as I have noted in previous articles, the precedent was set by none other than the current presidency, Uhuru Kenyatta and William Ruto, who stood for the highest political office in the land despite being indicted by the International Criminal Court (ICC) for crimes against humanity. By doing so, they contravened Article 73 of the constitution that states that “authority assigned to a State officer is a public trust to be exercised in a manner that … promotes public confidence in the integrity of the office”.

In my opinion, Kenyatta and Ruto should have disqualified themselves as candidates in the 2013 election (but could have stood for political office when or if they were acquitted). While I believe that the ICC process has proved to be flawed and perhaps even discriminatory, and that Mwai Kibaki and Raila Odinga – respectively the head of state and the leader of the opposition during the post-election violence in 2007/8 – should have borne ultimate responsibility for the deaths and destruction during that time, I think that by putting themselves up as candidates, Kenyatta and Ruto rubbished both the ICC and the Kenyan constitution – an unfortunate development that severely eroded Kenya’s reputation as a country that upholds the rule of law and which had a detrimental effect on the country’s political landscape.

The constitution, in particular Chapter 6 on Leadership and Integrity, was further ignored by a large segment of the Kenyan electorate, which went ahead and voted for Kenyatta and Ruto, not despite the fact that they were indicted, but because they were. The country has been on a downward spiral constitutionally since then, and we the Kenyan voters, have only ourselves to blame.

Justice Sergon also failed to recognise that the role of a whistleblower is not to bring forth evidence, but simply to raise suspicion about possible wrongdoing that will, hopefully, result in a full investigation by the relevant authorities

George Kegoro believes that the case, which took 13 years to conclude, was flawed from the start. First, in March 2015, the previous judge, Justice David Onyancha, disqualified himself from the case on the grounds that there had been attempts to compromise him, while providing no details about who the compromisers were. This raised the question about whether his successor, Justice Sergon, was considered to be a more pliable judge by those who tried to compromise his predecessor.

Moreover, Justice Sergon proceeded as if Anglo Leasing never happened. As Kegoro argued in an opinion piece published in the Standard:

“Besides underrepresenting issues of process in the final judgement, Justice Sergon totally ignored questions of context. The suit against Githongo arose from the Anglo Leasing scandal that gripped the country in 2006, giving rise to a tumultuous political situation that almost toppled the young Kibaki government. The fallout from the scandal included the resignation of Githongo from government before he went into exile in the United Kingdom. Also, a number of high officials, including Murungaru and [former finance minister David] Mwiraria, eventually lost office or were charged in court in relation to the scandal over which there was significant public outrage… Allowing Murungaru’s claim against Githongo has given judicial approval to a blinkered and contrived self-view by the former minister, which is at variance with how the general public has come to view him…”

Yet, in his ruling, Sergon stated: “There were no iota of evidence presented by the defendant and his witness linking the plaintiff to the corrupt practices. Therefore the contents of the dossier in the absence of evidence to establish their truthfulness means that the publication is and was defamatory of the plaintiff.”

Justice Sergon also failed to recognise that the role of a whistleblower is not to bring forth evidence, but simply to raise suspicion about possible wrongdoing that will, hopefully, result in a full investigation by the relevant authorities.

Kenya’s legal history is littered with bad judgements and excessive punishments, not just for those who raise their voices against injustices and human rights violations but also for those ordinary citizens who cannot afford savvy lawyers or who lack access to political influence

Githongo has said that he will appeal the High Court decision, and a crowd-funding mechanism to raise Sh27 million has already been put in place in case he loses the appeal.

Kenya’s legal history is littered with bad judgements and excessive punishments, not just for those who raise their voices against injustices and human rights violations but also for those ordinary citizens who cannot afford savvy lawyers or who lack access to political influence (like chicken thieves who end up eight years behind bars because a judge deemed that a hungry man who steals a chicken is more criminal than a man who robs an entire country).

We must also not forget that Kamlesh Pattni, the mastermind of the Goldenberg scandal in the early 1990s, which almost brought Kenya to its knees economically, is still enjoying fresh air and living large. The Murungaru v Githongo case might just outrage Kenyans enough for them to demand more accountability from governments that steal and from courts that continuously thwart or ignore the will and aspirations of a fatigued citizenry yearning for a more just and humane society.

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