Ndii, please spare us the voodoo economics

In the last few years we have witnessed attacks on the government from Dr David Ndii. Some of us wondered why he would engage in such normative economic arguments against all the flagship projects being initiated by the government. But recently, at the Bomas of Kenya, we got our answer.

Dr Ndii is an economist who has been lost to partisan political mercenary work. He leads the economic brigade of his preferred political outfit and reports to his general. His favourite area of attack, one he comes back to every now and then, is megaprojects. His attacks have hinged on the importance of megaprojects from superhighways to the Standard Gauge Railway (SGR) and his perceived corruption in the same.

Dr Ndii posits these projects do not mean development. As the person who led the technical team that developed Vision 2030, I want to tell him that he is wrong. Our megaprojects – including Thika Super Highway, Kisumu Airport and related road infrastructure, Lappset, and the SGR – are a key plank to our economic growth. In fact, we did not call them mega projects in Vision 2030.

We called them enablers of economic growth.
Dr Ndii is an academic and, like most, knows what should be done but has never done it. That is why his writing is so different from scholars such as Dr Bitange Ndemo who, though academics, have been in the government and understands better how things are done.

GREAT NATION

People of goodwill, those among us who believe in the vision of a great Kenyan nation, are not swayed by rhetoric and heavy words (like points of inflexion, marginal utility, mass prosperity, and the most recent comparative study of costs of projects between say Kenya and Morocco) that normative economists like Dr Ndii use to hide the truth, incompetence and to escape reality like Huxley’s soma – a narcotic that raises “a quite impenetrable wall between the actual universe and their minds”.

The actual universe, Dr Ndii, is that Kenya is not in a free fall. In fact, Kenya is on the up as the economic indicators show (see figure). When government borrows to do megaprojects like roads, rail, dams, geothermal, irrigation, and invests in security, this unlocks huge benefits for all Kenyans. In the Kenyan Treasury, Planning, Central Bank of Kenya and across government, you find the best and brightest economists in charge of the country’s fiscal and monetary policy. Dr Ndii, stop scaring Kenyans. The economy is in good hands. Now Dr Ndii, take a real good look at the economic figures. If you do so, you agree with me that the only time in the recent past that our economy has suffered untold damage was when your general, in January 2008, promised to make Kenya ungovernable.

PAST WORK

Right? You must agree because some of the figures come from your past work. As a result, the country lost more than 1,000 people and Sh200 billion – equivalent to 10 Thika superhighways. Now Dr Ndii, who is destroying the Kenyan economy? Is this what you are preparing us for?

Sometimes Dr Ndii’s writing reminds me of an intellectual exchange scholars in public policy like me witnessed a short while back. When Pressman and Wildavsky wrote about reasons for policy implementation failure in the US, citing reasons such as corruption and self-interest, Eugene Bardach quickly cautioned them to stop looking at the glass as half-empty but rather advise on how the half-full glass can be improved.

Dr Ndii, pragmatic incrementalism has, as a minimum, been demonstrated. This government has done real tangible projects across several sectors that anybody who has not encountered soma can see. All people of goodwill must keep building this country, even as we deal with corrupt individuals and doomsayers.
Let me get back to mega projects. Which country in the world ever developed without such megaprojects?

SPILLOVER EFFECTS

Think of the US and her superhighways. Can anyone, particularly an economist, fail to see the spillover effects from such a system? Dr Ndii seems to love attacking these projects – I think out of seeking cheap publicity and partisan politics than conviction. Drive along Thika super highway any morning today and the traffic jam is back. That is the best indicator that it was a right investment.

Look at the number of businesses attracted there from Garden City Mall, TRM to Tatu City. “Small investors” have also started developing their land assured of the market. Add the multiplier effect and the road could have paid for itself by now if we look at the bigger picture. The same will be true for the SGR, Kisumu airport and related road infrastructure, the Isiolo-Moyale road, Dongo Kundu bypass in Mombasa and many others.
Dr Ndii’s argument in the past that we could benefit more by taking more graduates to school is right but he does not tell us that such schooled people like him can be a problem.

They do not see the reality and most prefer to study, not science and technology, the courses that shape economic growth and build megaprojects, but Mickey Mouse courses that prefer talking, which is valued over reality and tangibility. Full of ceteris paribus, only applicable in fiction.
We can give other examples. Was Aswan Dam in Egypt a mistake? Was Sun City in South Africa a bad project? Some economists are paralysed by their analysis. The small people on the ground know what they want, better than activists disguised as economists.

That’s the truth Dr Ndii.
Suppose Americans are still waiting for the market to build Las Vegas? No feasibility study would have passed Las Vegas; but today? Is the highway to the Ethiopia border a mistake? Is the highway to Tanzania a mistake? What is right in Dr Ndii’s eyes?
Such structures enable the public and even individuals to go on with their economic activities more efficiently, reducing the cost of doing business. Dr Ndii knows so well that once we set up the basics – highway, water, power – individuals will do the rest. It is strange we should educate thousands of graduates but we have no roads for them, housing, power or clean water. All these facilities are built through megaprojects.
We must accept that you are more likely to get published if you go against the grain.

But for an Oxford scholar like Dr Ndii, you do not need to go that far. Objectivity is the hallmark of a great scholar not emotions.
Real scholars and practitioners who have built megaprojects such as Harvard University’s John Macomber have this to say about megaprojects. Megaprojects create value to society by making possible very large scale changes to the built environment, very quickly, while mobilising large amounts of cash and a wide array of skills.

OTHER CHOICES

And creating jobs by extension, both long-term and short-term.
What are the other choices for government and the people in the absence of megaprojects? Macomber asks. What else will happen in the estates or for the road or for the water project? Often, the answer is “nothing.” So, despite the sometimes distasteful aspects of megaprojects, something is often better than nothing.

Megaprojects often are able to attract both private capital and public capital (from bond issues or multilateral organisations like the World Bank or the African Development Bank) that would not be mobilised otherwise in either status quo or “serial mini-projects” or “county government writes a cheque” scenarios. What alternative model does Dr Ndii offer us?
Macomber notes that the creation of value can be separated from the capture or allocation of value.

Megaprojects might create a large amount of economic value. Value capture and allocation can be done in numerous ways, many of which explicitly benefit displaced residents, lead to clear improvements in public services like mass rapid transit, water, schools, or fire and police, or contribute to the coffers of the city or state in ways that can be spent for the public good.

BE IMPROVED

The creation of value is to be embraced; the mechanism for allocation of value can be improved.
Macomber admits, and I agree with him, that there can always be bad actors, rogues, and crooks – who are not in short supply (economics again!) in Kenya. How can “Ndiieconomics” deal with crooks from chicken eaters to rogue governors? It is more effective in the long-run to think carefully about how to control the players and their actions with respect to megaprojects than it is to not do the project at all – and therefore sacrifice the benefits – out of fear of bad guys.

Does Dr Ndii think we should stop working because there are pickpockets or a governor who has stolen our coffee?
The case of government policy benefiting the privileged few is often a case against megaprojects. Dr Ndii must realise it is not only the owners of capital benefiting from mega projects. Everyone has a share. With the new political dispensation like devolution, the framework for sorting this is already in place.

NO SOLUTION

What is most disturbing about Dr Ndii is that he does not offer any solution to the current problems facing the country. It is the classic case of lots of African scholars (I used to be one). We love pinpointing the problems, singing them till they become a chorus, but offer no solutions. He thinks that by merely changing the Jubilee government, all our challenges will evaporate like chanting abracadabra. Dr Ndii, what this country needs is not the opposition, if it is corrupt. What this country needs is good leadership to steer the socio-economic development of our country from Karachuonyo to Karatina, Moyale to Mombasa.

Remember Barack Obama’s lecture to the opposition for constantly attacking the commander-in-chief? Trying to make other people look bad by giving distorted data so that you look good or get a pay cheque is not only petty but unexpected from a scholar of your stature. Can Dr Ndii offer solutions to our national problems that are practical, real, and less emotional? Can he spend more time in the village instead of online and golf courses to understand real economics and avoid voodoo?

Dr Wahome Gakuru is founding director, Vision 2030, former lecturer, University of Nairobi, and Fulbright scholar.