Terror attacks are not just about lives lost; they’re about the economy
What you need to know:
- The full extent of the economic harm to what until recently was the country’s most important foreign exchange-earner will only become clear when all the statistics are out.
- When you have a situation where travel and movement of people is curtailed by fear, trade cannot possibly thrive.
If the frequency of terror attacks we are witnessing today do not subside soon, all those extravagant growth predictions the government spelled out as it unveiled the spending plans for the next financial year last week will come to nought.
Confidence, although intangible, is a critical economic factor. The terrorists want us to lose confidence in the ability of our security systems to protect us. They want us to be scared and to lose confidence in going to shopping malls, and they want us to fear travelling by bus, or going to church.
Today, you are frisked as you enter a matatu, walk into a shopping mall, a night club, a restaurant, even as you enter into church.
Frequent terror attacks have already caused a heavy toll on our tourist sector. The full extent of the economic harm to what until recently was the country’s most important foreign exchange-earner will only become clear when all the statistics are out.
In an economy with a weakening export sector, the drastic fall in tourist arrivals and bed occupancy rates in hotels are worrying.
The performance of tourism has implications on the health of our external account, and on the stability of the exchange rate. When you persistently run a huge external account gap, your national currency becomes vulnerable to speculative attacks.
The terrorist attacks are bound to harm our economy in even more profound ways. If you closely scrutinise the way the economic policy making in this country is evolving, you will realise that apart from oil and gas, we are in future going to rely heavily on trade.
You hear about making Nairobi the hub of financial transactions in the region. We are spending big money on roads and railways to connect us with our neighbours and to open new corridors within the region.
The Lamu corridor project is about connecting Kenya, Uganda, Ethiopia, South Sudan and Rwanda.
We are spending billions of shillings in building an electricity transmission line to connect to the Ethiopian power grid.
The plan is that this connection will eventually be part of the proposed East African Power Pool extending all the way to the DRC and Malawi.
President Uhuru Kenyatta’s oft-touted policy of putting the accent on economic diplomacy is informed by these new realities.
The attacks are bound to hurt our economic plans on two fronts. First, when you have a situation where travel and movement of people is curtailed by fear, trade cannot possibly thrive.
BUNKER MODE
More critically, the terrorist activity is beginning to spawn a bunker mentality in both the leadership and populace of this country.
We are becoming more insular in our thinking and attitude towards people we regard as outsiders. You see it in the blanket condemnation of the Somali community in casual discussion, and in the blogosphere.
Mentality and attitude may be intangible things. But you cannot mount an effective trade strategy when the leadership and society are in a bunker mode.
As a society, one of our biggest weakness is the tendency to prescribe simplistic solutions to complex social problems.
Today, there is still a great deal we don’t know about Westgate. We are sold to the simplistic tit-for-tat narrative: that it is all about retaliation over the activities of Kenya Defence Forces in Somalia.
We hear the theory that Al-Shabaab are angered by the fact that the Kenyan troops have taken over Kismayu – a lucrative trading post for the group.
Then there is the theory that attributes the recent attacks to the security swoops in Eastleigh.
In 2011, US President Barack Obama, in the foreword to the national strategy for counter-terrorism document, said the following: “We must define with clarity and precision what we are fighting”.
This war is not going to be won through brawn alone. We forget that the terrorist we are dealing with today is a nihilist without a cause.
Today’s terrorist will not target a police station or even the headquarters of the Ministry of Defence; he will kill innocent children and women attending a cookery competition at Westgate.
The political class must close ranks and create a bipartisan national alliance against terrorism.
We owe it to our economy.
