alexa Kenyan xenophobia should not inform trade policy with China - Daily Nation

Kenyan xenophobia should not inform trade policy with China

Friday May 17 2019

By KWAME OWINO
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Pascal Lamy wasn’t just an eloquent trade commissioner for the European Union, but also an admirable Director General of the World Trade Organization (WTO). Among the phrases that I heard him state more than once is that modern trade policy is difficult to take forward because, ''In domestic policy, it is often good politics to blame the foreigner''. This aphorism aptly describes the Kenyan condition and informs the punditry of the ''posh and serious'' in relation to Chinese presence in Kenya.

The profundity of Lamy’s statement crossed my mind after media coverage that Chinese exports into Kenya included garlic while Kenyans still mulled exporting avocados to China.

Kenyans have learned that blaming the Chinese is a convenient ground of solidarity among the faux patriots. This ill-disguised bigotry is supported by disgust at the way in which Kenya’s bureaucrats and its leaders have virtually prostrated themselves before Chinese officials to borrow money at atrocious interest rates and bought a diesel-powered train service that will not pay for itself. This form of bigotry and an attempt to save face by acting like victims has been manifest in three ways.

The first is based on misreading of international trade data. While it is true that Chinese exports into Kenya are multiple times larger than Kenyan exports into China, the conclusion that this result is harmful to Kenya’s growth is baloney. Decomposition of the trade shows that Kenyan firms export vegetable products and primary materials that are lightly processed. These products attract low prices and Chinese therefore source them at cheap rates. In turn, Kenyan firms import more processed goods and electronic equipment that are needed for other commercial and household consumption.

TRADE BALANCE

It is sensible to try and close the trade balance, but the belief that Chinese imports in Kenya demonstrates domineering trade policy is simplistic. The balance reflects the relative advantages of each country in this trade relationship. Exports by Kenyan firms into China have a low complexity component and the prices reflect that. The trade balance in China’s favour should be monitored but hidden in its signs are the fact that Kenya is exchanging primary products and receiving equipment that is processed to a greater degree in addition to the garlic and fish too. The answer here is that one country is selling basic things of low value while another is selling products with a greater knowledge component.

In trying to dissect the reason for the animus towards China, I saw references to the fact that Chinese exports into Kenya included tilapia fish. Many Kenyans consider it an affront to the Kenyan fisheries industry that tilapia that is raised in China is valuable in Kenya. The ostensible reason for this resistance is that imported tilapia is displacing Kenyan fishermen who are encouraged to assume that Kenyan consumers must prefer local catch to any imports. This hostile sentiment towards imports of fish from China is expressed while being oblivious of the fact that the domestic production of fresh water fish meets less than 30 percent of demand. It is therefore futile to protect such industry because there is no chance of displacement of local fishermen.

TWEET

A third example of local prejudice against the Chinese in Kenya was expressed through a Tweet widely circulated during the week. In it, a Kenyan who lives in the Kilimani area of Nairobi expressed disagreement with a high rise construction in his neighbourhood by alluding to colonialism and suggesting that Kenyans would be colonised by the Chinese owing to the docility of a majority of its tribes. This preposterous argument was couched in anti-colonial language and elicited support with supplementary arguments that a million Chinese may soon take over Nairobi and then the rest of Kenya. A few brave and wiser Kenyans called out this cheap baiting and forced the author of the messages to rephrase them. Planning regulations in Nairobi are not enforced by the Chinese and a construction company ought not to be blamed for blatant violations that were subject of the claim.

To my mind, the disproportionate focus on Chinese misdeeds in Kenya misses a salient point. It is a mistake to attribute to Chinese firms and government the blame for these misdeeds. The government of Kenya, like its African peers have successfully deployed the dualist policy of playing countries against each other. Based on this behaviour, Kenyan citizens must expect to meet more Chinese firms and individuals in Kenya and these people will reflect the good, bad and ugly of their society. Bad economic logic and bigotry that falsely alludes to new colonialism may serve to isolate people for purposes of domestic policy but makes for terrible public reasoning.

Kwame Owino is the chief executive officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank based in Nairobi.

Twitter: @IEAKwame