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Knowledge and Growth: What Paul Romer’s Economics Nobel Prize says about Africa’s infrastructure obsession

If knowledge and human capital are the engines of economic growth, what is the role of the foreign investment and infrastructure edifices that our governments are obsessed with? By DAVID NDII.

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Knowledge and Growth: What Paul Romer’s Economics Nobel Prize says about Africa’s infrastructure obsession.
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The Nobel Prize season is one of the things I look forward to, not least because there is a prize in economics. But the more important reason is that it is always a welcome reminder that humanity’s most important work is not done by the powerful, the moneyed and the celebrities that hog the daily limelight, but by the people of ideas and ideals. And in these dog days of an apocalyptic time, it could not come often enough.

This year’s economics Nobel Prize was shared by William Nordhaus and Paul Romer for contributions to natural resource economics and economic growth respectively. The commonality between their work is rather technical and I shall not go into it, but it has to do with developing methods of analyzing the interaction of the economy with complex phenomena — in Nordhaus case, climate, and in Romer’s, knowledge. The latter is the subject of this column.

Romer pioneered what is now known as new or endogenous growth theory. Hitherto, economists treated knowledge and technical progress as “exogenous”, that is, something that occurred outside the economic system. This was quite awkward since it was quite obvious that research and innovation were fundamental elements of the economic system.

This year’s economics Nobel Prize was shared by William Nordhaus and Paul Romer for contributions to natural resource economics and economic growth respectively. The commonality between their work…has to do with developing methods of analyzing the interaction of the economy with complex phenomena — in Nordhaus case, climate, and in Romer’s, knowledge.

Another seminal contribution was made by Robert Lucas, the 1989 Nobel Laureate. There is an interesting backstory to his prize. Seven years before, his ex-wife had inserted a clause in their divorce settlement that entitled her to half the prize money if he won it. The prize came 21 days before the provision lapsed. Romer’s prize has an interesting backstory too: he is the second chief economist of the World Bank to leave the institution acrimoniously only to be awarded the Nobel Prize shortly thereafter— the other one is Joseph Stiglitz.

Paul Romer’s model emphasizes the role of knowledge in long run economic growth; Lucas model emphasizes human capital. The two are intimately related but are not the same thing, although many people, including economists, often conflate them. Let me illustrate.

I came across a trending story—about a young Philippino inventor who had just successfully tested his passenger drone in the provincial city of Batangas, Watching the video, his geek-in-a garage drone is as good as those that have been showcased by tech companies with lots of venture capital money. In fact, it looked more fun to fly than the ones I have seen before. And the guy is not even an engineer. And he built it in a garage. An Australian company was sufficiently impressed to propose a commercial partnership. It was then brought to my attention, pleasantly so, that a young Kenyan, Morris Mbetsa, has built and tested one—he tweeted me video footage.

“How to build a passenger drone” i.e. the science and engineering is knowledge—that’s Romer.. The ability of a geek in a garage in Batangas and Ong’ata Rongai to use that knowledge to build a drone in a garage in Banda is human capital— that’s Lucas. One can think of Romer’s model as explaining how the world becomes more prosperous; Lucas’ as explaining why we see developing countries catching up with rich countries. When the Wright brothers made their maiden flight in 1903, it was hard to imagine a native in the colonies somewhere in Africa or Asia making a viable attempt to manufacture an aircraft. A couple of decades ago it took an entire national industrial project to make “Nyayo Pioneer”, the ill-fated contraption that stalled on the track in Kasarani stadium on the occasion of its launch. All the same, from the look of things your future personal transportation could well be made in Kariobangi.

How to build a passenger drone’ i.e. the science and engineering is knowledge—that’s Romer.. The ability of a geek in a garage in Batangas OR Ong’ata Rongai to use that knowledge to build a drone in a garage in Banda is human capital— that’s Lucas.

If knowledge and human capital are the engines of economic growth, what is the role of the foreign investment and infrastructure edifices that our governments are obsessed with?

The title of one of Lucas’s less well known papers on the subject, published in the 1990 edition of the American Economic Review, poses the following question: Why doesn’t capital flow from rich to poor countries? The article links investment, human capital and growth in a simple and intuitive manner. Suppose there are only two countries, a rich and a poor one – let’s call them America and Bangladesh. Average monthly factory wages in the two countries are $1800 and $60 respectively – that is, wage in America is 30 times more than in Bangladesh. At first, they do not trade. Each country makes its own clothes. Suppose they decide to trade?

Let us say it takes a worker one hour to stitch together a pair of jeans. In America, the labour cost for this is $11.25. In Bangladesh, it would cost $0.325. Even if productivity in Bangladesh was only a third of America, it would still cost a dollar to stitch the pair of jeans in Bangladesh. Let us say Made in America sold for $50. The retailers could sell Made in Bangladesh jeans at $45 dollars and still make $5 more. Off-shoring garment factories to Bangladesh would be very profitable. This would continue until Bangladeshi wages rise to the point where cost of production is the same in both countries. As it happens, the wage figures cited are quite close to what the actual wage costs in America and Bangladesh are. And indeed Bangladesh is now second to China in garment exports, earning US$ 28 billion last year, and employing over four million people.

The garment making industry makes a good example because it is a very basic skill that we can reasonably expect people with little or no education to learn quickly and do as well as better educated ones. Using similar analogy with US and India, but with more sophisticated data and mathematics, Lucas demonstrated that at the time he was writing, the return on capital in India would have been 58 times more than in the US. This then begs the question: with profitable opportunities of this magnitude why are poor countries not inundated with investment?

But once you move from low tech manufacturing like stitching garments, offshoring becomes a little more challenging. It takes armies of engineers and techies to manufacture commercial jetliners and all manner of scientists to do pharmaceutical research. Using very basic measures of education attainment, Lucas’ model demonstrates that once differences in human resource base are taken into account the potential returns to capital in India reduce to just 4% above the US.

In a previous column, I used similar data to show how initial differences in human capital may give answers to the questions that can’t seem to stop Africans from scratching heads: how it is that countries we are told we were “at par” with at or shortly after independence took off, and we did not. In 1970, the Kenyan workforce had an average of two years of education per person, and was the highest in the region. South Korea’s had six, Singapore five and Malaysia four years per person. In fact, South Korea’s education attainment was higher than several European countries including Portugal (3), France (4.8), Spain (5.6) and Italy (5.6) years per person. South Asia by contrast was in the same league with Africa—India (1.6), Pakistan (1.6) and Bangladesh (1.4). Sri Lanka is an outlier with 6.4.

Education attainment data provide only a rough approximation of human capital, even though the data have proved to be quite robust in economic research. The World Bank has recently published its latest national wealth accounts, in a report titled The Changing Wealth of Nations. National wealth accounting is a new statistical initiative that responds to the shortcomings of gross domestic product (GDP) as a measure of economic performance. As many readers will know, GDP and its derivatives are measures of production and expenditure, which in business accounts correspond roughly to annual turnover. As currently constructed, national economic accounting does not produce the equivalent of balance sheets, that is, the assets and liabilities of a business. To illustrate, the Jubilee administration has borrowed KSh 3.5 trillion but there is no account where we have recorded the value of assets acquired with these loans. One of the assets financed, the SGR railway, has cut through the Nairobi National Park. We ought to be able to revalue the park to reflect the loss of both economic and ecological value caused by the railway, but there is no way of doing that in the GDP system. This is what national wealth accounting seeks to remedy.

This latest version, which provides wealth accounts for the year 2014 has what the Bank says is the “first sound estimates of human capital”. With wealth accounts we are able to compare the relative importance of different assets in a nation’s wealth directly. What do they tell us? First, that human capital accounts for two-thirds of the world’s wealth. Second, the wealthier the country the higher the proportion of human capital in its wealth portfolio. It ranges from 40 percent in low income countries, to 70 percent in the high-income OECD countries (See chart below). In the wealthiest region, North America, human capital accounts for 77 percent of total wealth, compared to half of national wealth in Sub-Sahara and South Asia. The Middle East/North Africa is an outlier with only a third of its wealth in human capital on account of the region’s unusually high oil wealth.

National Wealth, 2014 US$ Per Person

National investment rates in most developing countries are between 15 to 25 percent of GDP while expenditures on education and health (both public and private) are between 5 and 10 percent of GDP. Roughly, this suggests that a dollar invested in people generates five times as much wealth as a dollar investment in other assets. This should not surprise—think of a million shillings invested in an engineering degree against the same amount invested in a rental apartment.

Human capital accounts for two-thirds of the world’s wealth. […] the wealthier the country the higher the proportion of human capital in its wealth portfolio. It ranges from 40 percent in low income countries, to 70 percent in the high-income OECD countries… In the wealthiest region, North America, human capital accounts for 77 percent of total wealth, compared to half of national wealth in Sub-Sahara and South Asia. The Middle East/North Africa is an outlier with only a third of its wealth in human capital on account of the region’s unusually high oil wealth.

Eight years ago, the African Development Bank (AfDB) published a report in which it estimated that Africa has an infrastructure financing requirement of US$ 93 billion a year to the year 2020. The figure was subsequently adjusted upwards to $120 billion a year— a cumulative figure of 1.2 trillion dollars. Consequently, less than two decades after the HIPC (Highly Indebted Poor Countries) debt forgiveness initiative many African countries are now hurtling towards a second debt crisis.

It is stated in the AfDB report that the purpose of building on this scale is to crowd in the investment to create jobs. Texas Instruments was the first Western company to invest in Bangalore. I came across a photograph of the first equipment Texas Instruments delivered to its first facility, in a bullock cart. Texas Instruments was attracted by Indian workers, not its roads. In fact, there is no account of India’s tech boom that does not mention the Indian Institutes of Technology (IITs). It is now said that IIT graduates are now India’s leading export to the US.

Eight years ago, the African Development Bank (AfDB) published a report in which it estimated that Africa has an infrastructure financing requirement of US$ 93 billion a year to the year 2020…The figure was subsequently adjusted upwards to $120 billion a year— a cumulative figure of 1.2 trillion dollars. Consequently, less than two decades after the HIPC (Highly Indebted Poor Countries) initiative many African countries are now hurtling towards a second debt crisis.

In all the documents and discussions I have encountered, there is no acknowledgement that Africa does not have the skills—the engineers, architects and builders—to scale up building on anything close to this scale of investment, and to maintain it subsequently. Let us do the math. An engineering degree on the continent is at most $25000. The $120 billion annual “infrastructure deficit” budget works out to six million engineers. That is a whole passenger drone industry right there. And of course, once we are zipping in drones, we will not be needing so many roads.

In all the documents and discussions I have encountered, there is no acknowledgement that Africa does not have the skills—the engineers, architects and builders—to scale up building on anything close to this scale of investment, and to maintain it subsequently.

There is no evidence in economics that infrastructure investment contributes to economic growth.

This conclusion by the Asian Development Bank is typical:

“The main conclusion is that a number of countries in developing Asia have significantly improved their basic infrastructure endowments in the recent past, and this appears to correlate significantly with good growth performances. However, the evidence seems to indicate that this is mostly the result of factor accumulation (a direct effect), while the impact on productivity is inconclusive.” – Stéphane Straub and Akiko Terada-Hagiwara (2010) “Infrastructure and Growth in Developing Asia” ADB Economics Working Paper Series No. 231.

Mwalimu Nyerere: Development which is not development of the people may be of interest to historians in the year 3000. It is irrelevant to the kind of future which is created. Thus, for example, the pyramids of Egypt and the Roman roads of Europe, were material developments which still excite our amazement. But because they were only buildings and the people of those times were not developed, the empires, the cultures, of which they were a part have long ago collapsed. The Egyptian culture of those days—with all the knowledge and wisdom which it possessed—was quickly overthrown by foreign invaders because it was a culture of a few; the masses were slaves who simply suffered because of the demands of this material development, and did not benefit from it.

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David Ndii

David Ndii is a leading Kenyan economist and public intellectual.

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We Are Not Overrepresented, It’s the Imperial Presidency That’s Killing Us

On what basis are we to believe that if we change the rules, the new rules will survive the next power struggle? No amount of constitutional tinkering can cure impunity.

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We Are Not Overrepresented, It’s the Imperial Presidency That’s Killing Us
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Are Kenyans overrepresented? If the raging referenda campaigns are to be believed, we are groaning under the financial burden of overpaid and extravagant elective offices. This contention is buttressed with cherry-picked misleading statistics and comparisons, for example, in an op-ed published in December 2015 titled Let us tackle the burden of over-representation, the Hon. Moses Kuria observed that India’s 1.2 billion people are represented by only 548 Members of Parliament while California’s 38 million people elect only one governor and two senators.

Let’s start with India. In addition to a 792-member parliament (547 MPs and 245 Senators) Indians elect another 4,600 representatives to state assemblies. Below the state governments, India has over 270,000 local authorities which translates to a local government for every 5,000 people. That is the equivalent of our having 9,600 local authorities, about 200 of them per county on average. Even under the old constitution, we only had 283 local authorities for the whole country. I do not have the number of councillors but even if we assume a modest average of five, that would be a councillor for every 1,000 people.

Let us now turn to California and the United States more generally. First, Hon. Kuria neglected to mention that Californians are also represented by 53 congressmen and women. In addition, California has a state legislature with 80 elected members which for the United States is quite small. In the same country, New Hampshire (Pop. 1.4 million) has a 400-member strong State legislature, an MP for every 3,500 residents. While both California and New Hampshire are outliers, there seems to be no method to the mathematics of representation in state legislatures in the United States.

In addition to Federal and State governments, Americans elect representatives to over 3,000 county, and 36,000 municipal/town governments, as well as to a host of special-function civic bodies including school districts, police and fire departments, libraries and so on. So numerous are elective civic bodies that a census is conducted every five years. As per the latest one, there are 87,576 of them, an elective body for every 3,500 people. We do not have data but even if we take the same conservative figure of five, that is a representative for every 700 people. Americans cannot complain of being under-represented or under-governed.

If the raging referenda campaigns are to be believed, we are groaning under the financial burden of overpaid and extravagant elective offices. This contention is buttressed with cherry-picked misleading statistics and comparisons

According to data from the International Parliamentary Union (IPU), our parliament’s combined membership of 416 is ranked 33rd largest legislature out of 233 legislatures worldwide and 37th in terms of population per MP, at 108,000. The population of 108,000 per MP is in the middle of the pack in our peer group of countries with populations of 40 to 50 million people. The population per MP in this group ranges from Spain’s 78,000 people per MP to Colombia’s 178,000 per MP. It is below the group’s average of 123,000 people per MP.

The 2012 edition of the Global Parliamentary Report, also published by the IPU, featured a comparative analysis of the cost of national parliaments. Countries spend an average 0.5 per cent of the government budget on pay (of both elected members and parliamentary staff), and $5.77 per citizen in purchasing power parity (PPP) terms, equivalent to Sh290. In our peer group of countries in the 50 million population range, the budget share ranges from Spain’s 0.07 per cent to Tanzania’s 0.6 per cent, while the cost per citizen ranges from Tanzania’s $3.5 to South Korea’s $13.9. The total compensation budget for Senators, MPs and parliamentary staff this financial year, inclusive of allowances, is in the order of Sh13.2 billion and, translates to 0.66 per cent of the national budget, and Sh275 per person (PPP $5.44). The wage cost is higher than the global average while per citizen the cost is slightly below that average, but overall, these parameters are well within the global norm, as well as within the population peer group range (see chart).

The long and short of it is that both our level and cost of representation at the national level is well within the global norm. When it comes to the subnational level, the overrepresentation narrative is a ludicrous proposition. A total of 2,222 MCAs (1,450 elected, 772 nominated) works out to an average of 22,000 people per MCA, while 47 counties is, on average, a subnational government per million citizens.  In addition to having the second-largest parliament in the world (1,443 members), the United Kingdom (Pop. 66m) has 418 local councils with 20,224 seats, that is 3,300 people per councillor. If we were to benchmark with the United Kingdom, we would have 300 local authorities with 14,500 councillors.

Closer to home, South Africa has, in addition to a 490-member parliament, nine provincial assemblies with 430 members and 278 municipalities. The City of Johannesburg (Pop. 4.5 million) Council has 270 councillors, more than double the size of the Nairobi County Assembly’s 123 members, while Gauteng Province (Pop. 13 million) has 1,072 elected councillors, one for every 12,000 people. Uganda’s elaborate local government system has district, municipal, town, sub-county and parish councils with a total of 26,000 councillors (and 1,500 chairpersons!), a councillor for every 1,460 people. It would not come as a surprise if, in a comprehensive comparison, we came out among the most underrepresented people in the world.

According to data from the International Parliamentary Union (IPU), our parliament’s combined membership of 416 is ranked 33rd largest legislature out of 233 legislatures worldwide and 37th in terms of population per MP, at 108,000.

The real backbreaking burden in this country is the executive arm of national government, both in terms of being bloated, but more significantly on account of profligate spending and plunder.

Since they came into being, the county governments have received a total of Sh1.7 trillion in equitable share of national tax revenue. Over the same period, the national government has spent Sh10 trillion in total, six times as much, with Sh3.2 billion going to development, which is almost double the total revenue share of the counties. County governments have a target to spend 30 per cent on development projects, which they seldom achieve, meaning that at most they would have spent Sh500 billion of their budget on development. This makes the national government’s development spending six times that of the county governments. In actual terms, the county governments’ development spending works out to an average of Sh11 billion per county, while that of the national government is Sh70 billion per county.

I would challenge anyone to show a county where we can see Sh70 billion worth of national government development projects, and better still, one where there are more national government projects on the ground than county government ones, despite the books reflecting the national government having spent seven times as much on development projects.

It is often forgotten that the 2010 constitution abolished several administrative tiers (provincial, regional, district, division). Essentially, the national government ought to have only two tiers national and county. But determined to cling on to power at all costs, the national government has resisted divesting itself of some devolved and many redundant functions, in particular the provincial administration. It is also worth noting that the counties’ Sh1.7 trillion equitable revenue share is actually less than the cumulative wage bill of the national government’s Sh2 trillion cumulative wage bill over the same period. The wage bill of Senators and MPs (Sh6 billion a year) is less than 2 per cent of this.

I would challenge anyone to show a county where we can see Sh70 billion worth of national government development projects, and better still, one where there are more national government projects on the ground than county government ones, despite the books reflecting the national government having spent seven times as much on development projects.

The recurrent budget of the presidency in the last financial year was Sh9.5 billion, more than the combined budget of the Auditor General’s Office (Sh5.4 billion) and the Ethics and Anti-Corruption Commission (Sh3.6 billion) and almost twice the combined budget of Sh5.8 billion for the ten oversight commissions established by the 2010 constitution (see Chart). Five years ago, the Judiciary’s budget was more than three times that of the presidency, but the presidency seems set to catch up. Over the last five years, the presidency’s budget has increased threefold (by Sh6 billion) while the Judiciary’s share has increased 10 per cent (by Sh1 billion), well below the rate of inflation. Is it by happenstance that the oversight institutions are underfunded while the only budget item that matches the presidency’s appetite is the increase in debt?

Chart. 2It should not come as a surprise then, that the political crisis precipitated by the failed presidential election has morphed into a problem of “power-sharing” by which is meant creating more room at the top of this gluttonous edifice. We are now called upon to forget that the electoral crisis was a consequence of impunity—the refusal by Uhuru Kenyatta to play by the rules of constitutional democracy. We had a fatally flawed presidential election in 2017. Who would have won it is immaterial—the Supreme Court of Kenya annulled it and ordered a clean election. This was blatantly defied. On what basis are we to believe that if we change the rules, the new rules will survive the next power struggle? No amount of constitutional tinkering can cure impunity.

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Sleeping with the Enemy: Are KDF and Humanitarian Agencies Doing Business with Al Shabaab?

Kenya’s bid to have Al Shabaab listed as a terrorist organisation by the UN Security Council has raised several questions about the timing of the proposal and about whether it is a genuine attempt to deal with the terrorist threat emanating from Somalia writes RASNA WARAH.

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Sleeping with the Enemy: Are KDF and Humanitarian Agencies Doing Business with Al Shabaab?
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For several years, Somalia-watchers have suspected that aid and humanitarian organisations make deals with Al Shabaab in order to gain access to territories controlled by the terrorist group. Now, these suspicions have been confirmed by none other than former United States officials and heads of donor agencies and humanitarian organisations who are urging the Kenyan government not to request the United Nations Security Council to list Al Shabaab as a terrorist organisation because such a designation will hinder humanitarian work in Somalia.

According to a Daily Nation report, the group—which includes the former US Ambassador to Kenya, Mark Bellamy, the former Undersecretary of State, Thomas R. Pickering, and the former USAID administrator, J. Brian Atwood—says that Kenya’s proposal will “break the current working relationship where humanitarian workers are allowed certain windows to reach extremist-held regions”. In a letter to the US Secretary of State Mark Pompeo, the group stated that such a move could put hundreds of thousands of lives at risk.

Now it is not very clear why the Kenyan government has suddenly decided that Al Shabaab should be declared a terrorist organisation by the United Nations, given that Kenya and several other countries already recognise Al Shabaab as a terrorist outfit. Speculation is rife that such a listing in the UN Security Council would release more funds for counterterrorism efforts, which could financially benefit Kenya, which is both a frontline state and a major target of Al Shabaab’s terrorist activities. The timing of Kenya’s bid is also strange given that in 2010 the UN Security Council had designated Al Shabaab as a threat to peace and security and had added it to a list of sanctioned entities that are subject to travel bans, asset freezes and arms embargoes.

According to a report prepared jointly by the United Nations Environment Programme (UNEP) and Interpol, after losing Kismaayo, Al Shabaab began imposing “taxes” at roadblocks along routes in the hinterland that were used to transport charcoal to the port. At just one roadblock in Somalia’s Badhadhe District, the terrorist group was estimated to have made between $8 million and $18 million per year from charcoal traffic

Some Kenya government officials have hinted that if Al Shabaab is listed as a terrorist organisation along the same lines as Al Qaeda and the Islamic State in Iraq and Syria (ISIS), this will lead to an international military campaign to counter the group, an effort which is currently being shouldered mainly by African Union Mission in Somalia (AMISOM) forces, of which Kenya is a part.

Whatever the real motives of the Kenyan government, the admission by the aid sector that it has contacts with the terrorist organisation has unleashed all kinds of conundrums, and exposed the convoluted nature of aid to Somalia.

What is surprising is that former US officials and diplomats are at the forefront of stopping the Kenyan government from presenting its proposal to the UN Security Council. After all, the United States designated Al Shabaab a terrorist organisation as far back as February 2008 following the group’s proclamation of its allegiance to Al Qaeda. Subsequently, Norway, Sweden, Australia, Canada and the United Kingdom also listed Al Shabaab as a terrorist organisation.

Protection money

Two things happen when a group is declared as a terrorist organisation by a donor country or aid organisation. One, donor countries who name the group as a terrorist organisation put in safeguards to ensure that their funding/aid does not directly or indirectly benefit the organisation. There are severe consequences for those who break this rule. For instance, in the United States, violations can result in both civil and criminal penalties, including fines of up to $1 million or 20 years in prison. Two, donor countries stop or reduce funding to the country where the terrorist organisation is based.

Yet in the case of Somalia, these rules became a bit blurred, especially at the height of the 2011 famine in the country, when there was an international effort to raise millions of dollars for food aid. Sceptics wondered how the UN and other aid agencies expected to deliver food to large swathes of central and southern Somalia that were controlled by Al Shabaab, considering that the terrorist group had banned several UN agencies and international NGOs from operating there. (Al Shabaab views international aid organisations as fronts for Western intelligence agencies.) This was when it became apparent that in order to gain access to Al Shabaab-controlled territories in Somalia, aid agencies and NGOs on the ground had been making deals with the terrorist group; many UN agencies and international NGOs were paying taxes or “protection money” to Al Shabaab through their local implementing partners (usually Somalia-based NGOs).

Whatever the real motives of the Kenyan government, the admission by the aid sector that it has contacts with the terrorist organisation has unleashed all kinds of conundrums, and exposed the convoluted nature of aid to Somalia

A paper published in December 2013 by the Overseas Development Institute (ODI) titled “Talking to the other side: Humanitarian negotiations with Al Shabaab in Somalia” explained how the system worked: “While banning some organisations, Al Shabaab permitted others to work – albeit under increasingly tight rules and regulations. With the consequences for disobedience clear, the threat of expulsion compelled agencies either to comply or to withdraw, which was seen by many as unacceptable given the scale of the need. In November 2009, Al Shabaab imposed 11 conditions on remaining aid agencies in Bay and Bakool, including payment of registration and security fees of up to $20,000 every 6 months.”

Ashley Jackson and Abdi Aynte, the authors of the report, say that such behaviour is not limited to Somalia; aid agencies in Afghanistan have also been known to negotiate with the Taliban.

Some aid and humanitarian organisations resisted this form of “taxation”, but those that complied had to factor in these fees in their project budgets. Yet, these same organisations continued to deny that they gave money to Al Shabaab in exchange for access—such an admission could have led to reduced funding and perhaps even sanctions against the organisations.

KDF’s links

What is surprising about Kenya’s recent move is that the government itself has not been averse to dealing with terrorist organisations in the past, as when Kenya Defence Forces (KDF) recruited the Ras Kamboni militia to fight alongside it when KDF invaded southern Somalia in October 2011. It is common knowledge that the Ras Kamboni militia’s leader, Sheikh Ahmed Mohamed Islam, better known as Madobe, was a high-ranking official of the militant Islamic group Hizbul Islam, which was formed in 2009 by Sheikh Hassan Dahir Aweys (who has been designated as an international terrorist by the United States) before he joined the Kenyan forces.

Madobe was the governor of Kismaayo during the short-lived rule of the Islamic Courts Union, and later joined and then defected from Al Shabaab, ostensibly after protesting against its brutal methods. He later formed the Ras Kamboni militia to fight his former allies and to regain control over the prized port of Kismaayo, which was under the control of Al Shabaab when his and the Kenyan forces entered southern Somalia. (This could have been his primary motive for collaborating with the Kenyans.) All these double-dealings and defections should have been a cause for concern to KDF, but apparently they were not factored in when KDF—or rather the government of Mwai Kibaki—recruited Ras Kamboni militia for Kenya’s military mission in Somalia.

What could have prompted the Kenyan government to not only join forces with a known insurgent but even train his soldiers? Was it not a huge risk to be partnering with a militant group that had previous links with Al Shabaab? Wasn’t supporting such a group a security risk to the Kenyan forces? What if the Ras Kamboni soldiers defected? Given Madobe’s own record of defections, could he be relied on as a steady and committed ally?

Some observers believe that because he already knew the lay of the land, and had similar objectives as the Kenyan forces—to gain control of Kismaayo, Al Shabaab’s economic lifeline—Madobe was identified, and probably presented himself as a natural ally of the Kenyans, who were keen to create a friendly “buffer zone” in Jubbaland in southern Somalia. His Ogaden clan, which has for years sought to control southern Somalia, and which is also politically dominant in northeastern Kenya, could have also worked to his advantage.

It is important to note that the Kenyan government did not seek UN Security Council approval before it invaded Somalia. Kenyans were told that the operation was merely an “incursion” that had the blessing of the Federal Government of Somalia in Mogadishu and which was aimed at ousting Al Shabaab from areas along Kenya’s border with Somalia. It is ironic that the Kenyan government is now seeking the UN Security Council’s support.

The hypocrisy of the Kenyan government vis-à-vis the UN Security Council was further exposed when KDF were re-hatted as AMISOM. In September 2012, almost one year after the Kenyan invasion, when Kismaayo, the prized port that was Al Shabaab’s main economic base, fell to the Kenyan and Ras Kamboni forces, rumours began to emerge of Kenyan and Ras Kamboni soldiers exporting charcoal from the port, despite a UN Security Council ban.

Apparently, when the Kenyan and Somali forces entered Kismaayo, they discovered an estimated four million sacks of charcoal with an international market value of at least $60 million lined up by Al Shabaab and ready for export. In its report to the UN Security Council, the UN Monitoring Group on Somalia and Eritrea claimed that the Kenyan and Ras Kamboni forces decided to export the charcoal despite the UN ban, and that the export of charcoal more than doubled under their watch.

The Kenyan and Ras Kamboni forces, like Al Shabaab, it seemed, had turned Kismaayo into a cash cow. The UN Monitoring Group on Somalia and Eritrea estimated that charcoal worth $250 million was shipped from Somalia in 2013 and 2014, and that an average of 20 trucks, each carrying 5 to 12 tonnes of charcoal, were arriving in Kismaayo every day.

Kenya thus has to contend with the fact that the UN Security Council may not be holding a favourable view of Kenyan forces in Somalia because KDF might, in fact, be funding Al Shabaab. In its 2014 report to the UN Security Council, the UN Monitoring Group also made the astonishing claim that profits from the port of Kismaayo, which were made through taxes, charcoal exports and the importation of cheap sugar, were equally divided between the Kenyan forces, the Interim Jubbaland Administration headed by Ahmed Madobe, and Al Shabaab—suggesting that KDF’s presence in Somalia had not affected Al Shabaab’s ability to raise funds; on the contrary, KDF might have been aiding the terrorist group’s income-generating activities.

These claims were also supported by a report by the US-funded Institute of Defence Analyses, which was cited by the Sunday Nation in an article published on 27 July 2014, which stated: “Kenya, although formally a participant in AMISOM, which operates in support of the Somali national government, is also complicit in support of trade that provides income to Al Shabaab, its military opponent, both inside Somalia, and, increasingly, at home in Kenya.”

According to a report prepared jointly by the United Nations Environment Programme (UNEP) and Interpol, after losing Kismaayo, Al Shabaab began imposing “taxes” at roadblocks along routes in the hinterland that were used to transport charcoal to the port. At just one roadblock in Somalia’s Badhadhe District, the terrorist group was estimated to have made between $8 million and $18 million per year from charcoal traffic. Christian Hellemann, the principal analyst for the report, likened the charcoal trade in Somalia to the drug wars in Mexico in terms of the violence and the amounts of money involved.

An anonymous source who spoke to the Saturday Nation claimed that smuggled sugar was also a major source of income for Al Shabaab and KDF. There were five checkpoints between Kismaayo and the Kenyan town of Garissa; three of them were controlled by Al Shabaab and two by the Kenyan forces. “The sugar trucks are waved through all the checkpoints without any checks,” said the source. “There is a tacit agreement between the owner and these entities and we are sure hefty sums of money change hands in the form of illegal ‘taxes’,” stated the source, who was cited in the article published on 25 April 2015.

These reports were corroborated by other investigations that indicated that about 70 businessmen located in Kismaayo, Nairobi and Garissa were brokers in the sugar trade between Somalia and Kenya.

In other words, Kenyan forces were implicated in aiding Al Shabaab materially. Yet no sanctions have been placed on the Kenyan government or KDF and none of these allegations have affected how Kenyan forces in Somalia are viewed at home. In fact, reports about KDF’s involvement in the illicit charcoal and other trades in Somalia are largely ignored.

Maritime dispute

So what could be behind this new-found urgency on the part of the Kenyan government to compel the UN Security Council to declare Al Shabaab a terrorist organisation? After all, if sanctions are imposed on Kenya as a result of its own alleged affiliation with Al Shabaab, then will Kenya not be the ultimate loser?

Analysts believe that there must be something else behind Kenya’s diplomatic efforts at the UN. “It may have something to do with the maritime dispute between Kenya and Somalia because the Kenyan government is not going to accept a negative result from the court,” says Andrew Franklin, a Nairobi-based security analyst.

Kenya is currently in a legal dispute with Somalia over a maritime boundary along its border—a 100,000 square metre triangular chunk of the Indian Ocean that is suspected to be rich in oil. The International Court of Justice is expected to announce its decision on the dispute soon. It is possible that the Kenyan government is using the Al Shabaab threat to put additional pressure on the Federal Government of Somalia to withdraw the case against Kenya. Maybe Kenya believes that the listing of Al Shabaab as a terrorist organisation could lead to the imposition of UN sanctions on countries that harbour terrorists, in this case, Somalia. Having been weakened by the UN sanctions, Mogadishu might then consider negotiating with Nairobi on the border dispute. (The distribution of oil wealth will no doubt determine the content of any such negotiations.)

But there might be other considerations as well. Kenya has been unsuccessful in bringing back two Cuban doctors working in Kenya who were abducted by Al Shabaab in April this year from the border town of Mandera and taken to Somalia. Perhaps pressure from the Cuban government might have prompted the Kenyan government (which made a deal with Cuba to bring in the Cuban doctors, a decision that has irked Kenyan doctors who have failed to negotiate better terms for themselves with the government for years) to make it look like it is doing something about the Al Shabaab menace, hence the proposal to the UN Security Council.

Meanwhile, Al Shabaab, not one to let an opportunity go to waste, has apparently been using the medical services of the Cuban doctors. “There are rumours that the Cubans are treating Al Shabaab fighters and the general civilian population,” says Franklin. How ironic will it be if these Cuban doctors, when finally released, are charged with aiding a terrorist organisation?

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Khashoggi Murder: Is There a Double Standard at the United Nations?

The UN’s silence on Khashoggi’s much-publicised murder was surprising for many because his killing had created shockwaves globally, not only because it had occurred inside an embassy but also it had apparently been carried out in a cruel medieval manner that entailed torture and dismembering of body parts.

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Khashoggi Murder: Is There a Double Standard at the United Nations
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In June this year, Agnes Callamard, the United Nations rapporteur on extrajudicial, summary or arbitrary executions, made a startling statement that is not usually heard within the hallowed chambers of the UN. Not only did she implicate a rich member state in the killing of the Saudi journalist and Washington Post columnist Jamal Khashoggi, she also castigated the UN for not doing enough to address the issue.

Callamard told the UN Human Rights Council, whose members include Saudi Arabia, that Khashoggi’s murder “constituted an extrajudicial killing for which the State of the Kingdom of Saudi Arabia is responsible”, implying that Saudi prince Mohamed bin Salman, the de facto head of the Saudi kingdom, may have played a crucial role in the brutal murder of the journalist at the Saudi consulate in Istanbul in October 2018. She also criticised the UN Secretary-General Antonio Guterres for failing to demand accountability for the murder of the journalist, adding that “the silence of this intergovernmental body and lack of measures were a disservice to the UN and to the world”. (Although Callamard reports to the UN, she is not a UN staff member.)

The UN rapporteur argued that because the UN has remained quiet on the killing of the journalist, who had been a critic of the regime in Saudi Arabia, it has put at risk the lives of all journalists and has violated its own mandate to protect freedom of speech and expression. Journalists and human rights activists around the world had said that the killing of the journalist was a direct assault on freedom of the press. She called on the UN and its member states to carry out an international criminal investigation on the murder.

The UN Secretary-General responded that the only way to carry out such an investigation was through a UN Security Council resolution sanctioned by the Council’s five permanent members, namely the United States, Britain, France, Russia and China. However, this is highly unlikely because at least one of these members – the United States – has been reluctant to push investigations into the murder further. President Donald Trump, who is more keen on selling arms to Saudi Arabia rather than on ensuring that human rights are respected, has been lukewarm about Khashoggi’s murder, and has even hinted on several occasions that doing business with the Saudis is more in the US national interest than ensuring that justice for Khashoggi is done. Callamard claims that the US government did little to assist her investigation, and that she was not granted access to the CIA or the US Department of Justice.

The UN Secretary-General responded that the only way to carry out such an investigation was through a UN Security Council resolution sanctioned by the Council’s five permanent members, namely the United States, Britain, France, Russia and China

The UN’s silence on Khashoggi’s much-publicised murder was surprising for many because his killing had created shockwaves globally, not only because it had occurred inside an embassy but it had apparently been carried out in a cruel medieval manner that entailed torture and dismembering of body parts. The fact that his body has not been found to this day also suggests that perhaps it was burnt beyond recognition or has been buried in a secret location.

Callamard’s call to make the Saudi regime accountable for Khashoggi’s death has largely fallen on deaf ears, with the Saudis insisting that they have carried out their own investigations and that the culprits are facing trial. No one quite believes that these trials are actually being conducted by impartial courts or if even they are, whether the suspects are actually the ones who carried out the killing, which was conducted in hit squad manner that could only have been sanctioned by the highest echelons of the Saudi government. One right-hand man of Prince Salman is widely believed to have overseen the murder but is not among those being prosecuted. Callamard says she received no cooperation from Riyadh when she conducted her investigations, and that Saudi officials have been largely opaque about the case.

It is possible that Callamard is unaware of the limitations of the UN or how international diplomacy works? Or maybe she believes that in her role as an impartial UN rapporteur she can push the international community to do the right thing.

What most people don’t realise is that the UN may appear to be a neutral, independent body, but its decisions have always been influenced by its most powerful and influential member states, who almost always have their way when it comes to handling international crises. For instance, the United States did not seek UN Security Council approval before invading Iraq in 2003, nor did the UN reprimand the US for taking this illegal action.

People also forget that a sizeable number of the UN’s 193 member states are dictatorships or repressive regimes that do not care much for human rights. Freedom of expression is not on top of the agenda of influential member states like China and Russia, for instance. So, as the setter or moral or ethical international standards, the UN is hardly the place to go.

It is possible that Callamard is unaware of the limitations of the UN or how international diplomacy works? Or maybe she believes that in her role as an impartial UN rapporteur she can push the international community to do the right thing.

In the Khashoggi case, Saudi Arabia, a big donor to the UN and a key ally of the UN’s biggest contributor, the United States, will do all it can to prevent an international criminal investigation. Saudi Arabia has already said that it will reject any attempt to undertake an international inquiry. The kingdom’s main allies, the United Arab Emirates, Bahrain and Egypt, have also rejected Callamard’s 101-page report, which does not mince words when naming those who were most culpable for the murder of Khashoggi.

Hush money

Why have the UN and the US remained silent on this issue? Well, partly because Saudi Arabia has bought their silence. The US is keen to keep its relationship with one of the biggest buyers of US-made arms and military hardware, hence the lukewarm response to the murder. And the fact is that the UN Security Council’s five veto-holding permanent members have never really been committed to world peace because wars keep their military industrial complexes going. These countries are the largest manufacturers and suppliers of arms. When wars occur in far-off places, arms manufacturers in these countries have a field day. Wars in former French colonies in Africa keep France’s military industrial complex well-oiled. Wars in the Middle East are viewed by British and American arms manufacturers as a boon for their arms industries.

If there were no wars in the world, the arms industry would have fewer or no customers. It is no surprise then that Donald Trump’s first foreign visit was to Saudi Arabia, which has been buying billions dollars-worth of arms from the United States for decades. Arms from the US have fuelled Saudi Arabia’s ongoing war in Yemen. Thus Saudi officials were neither embarrassed nor dismayed when Trump held up a placard showing the newest weapons his Saudi clients could get their hands on and use in their campaign in Yemen. The connection between military sales and silence on human rights violations became acutely visible in that particular photo opportunity.

In a world where nuclear disarmarmament deals are casually broken by the President of the United States because he has a feud with Iran, the UN remains a paralysed specatator. It has nothing to say, nothing to contribute. No pressure is placed on the United States – which contributes up to a quarter of the UN’s budget – to rethink its policies. There are no press releases issued on the dangers that the cancellation of the deal will pose to world peace.

On the contrary, wars and other disasters provide the UN an opportunity to fund-raise. The UN’s campaign in Yemen, for example, is not about ending the war, but raising donations for the millions who are suffering as a result of the Saudi-led war. Wars and other calamities fuel various United Nations agencies, including the refugee agency UNHCR and the World Food Programme, whose coffers get quickly filled when disaster strikes, which enable their employees to continue earning hefty tax-free salaries.

The UN is also not keen not to upset a key US ally and a big contributor to its coffers. Saudi Arabia uses its vast oil wealth to cover up its crimes. In March 2018, for example, the UN received nearly $1 billion from the Saudi prince as a donation towards the UN’s efforts at alleviating a humanitarian crisis in Yemen – a crisis that would not have occurred if the Saudis had not bombed Yemen in the first place. The war in Yemen has killed several thousands of people and created a humanitarian crisis in which more than 20 million people are in need of basic supplies.

Saudi Arabia – the perpetrator of this war crime – is now trying to be the face of compassion in Yemen. The donation was a great photo opportunity for the prince, who was seen giving the money to a smiling UN Secretary-General at the UN’s headquarters in New York. Antonio Guterres did not use the opportunity to urge the prince to stop the onslaught against the Yemenese people. In fact, the UN has remained rather muted throughout the crisis in Yemen, and only speaks out when soliciting for donations for the traumatised Yemenese population.

And in 2016, after a leaked UN report on children’s rights violations became public, the then UN Secretary-General Ban Ki-moon admitted to removing Saudi Arabia from a list of countries that had violated children’s rights. This admission shocked the world but did not result in the resignation of the Secretary General.

Hush money has bought the UN’s silence on human rights violations that the Saudi state has committed against the people of Yemen and against its own citizens, including women who are jailed for breaking Saudi Arabia’s draconian laws that punish female car drivers and torture those who dare defy the regime. Ironically, Saudi Arabia even has a seat at the UN Human Rights Council, which has left many human rights defenders equally amazed and disgusted.

That is how international diplomacy works at the UN. Keep quiet when big donors violate human rights, but be vocal about violations committed by small, insignificant countries whose voices are drowned out at the UN Security Council and other UN bodies. Talk about women’s rights in Afghanistan but keep quiet about torture chambers in Saudi Arabia. Scold a poor country like Liberia for not doing enough for children’s education, but ignore the plight of children who are sexually abused or trafficked in the United States. Castigate former child soldiers from Uganda or the Congo for crimes against humanity but ignore the war crimes and mass murders ordered by President George Bush and Prime Minister Tony Blair in Iraq.

If anyone still has any doubt that the UN is fair and impartial, its response to Khassoggi’s murder should lay to rest any such illusions.

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