Strathmore Business School was the backdrop of information on Tuesday 22nd March in a forum titled ‘Change your Approach to Business in Kenya’ in which the former President of Government of Spain H.E. José María Aznar made a key note address on ‘Managing Business and Politics in a Devolved System’.
The highly informative forum was moderated by Sunny Bindra, management consultant and member of the SBS Advisory Board. Other speakers in the forum were Mutakha Kangu, Chair – Taskforce on Devolution, Stella Kilonzo, CEO – Capital Markets Authority and Mugo Kibati, Director General – Vision 2030 who tackled issues on ‘Understanding Devolution’, ‘Devolution and Business’, ‘Business and Governance in a Devolved Government ‘respectively.
For details about the presentations that were made during the program, please click on the respective speaker’s name below:
Mutakha Kangu’s speech on Understanding Devolution
Mrs. Stella Kilonzo’s speech on Devolution and Business
Mugo Kibati’s speech on Business and Governance in a Devolved System
H.E. José María Aznar is acclaimed for having lifted Spain out of an economic downturn in the late 1990′s and early 2000′s during his reign. Below is his speech:
“Your excellencies, authorities, ladies and gentlemen,
It is a great pleasure for me to be here today. I would sincerely like to thank Strathmore Business School for their kind invitation to address all of you gathered here. There are vital reasons for dealing with Africa’s economic and political developments. During the course of my speech I will try to outline the importance of appropriate institutions and good governance to guarantee individual freedom and nurture a vibrant business development. Together, individual and economic freedom and sound institutions will induce sustained economic growth and the raise of living standards, thus taking millions out of poverty.
To support this view let me use an example from my own country. Spain is a bi‐continental country with territory both in Europe and in Africa. Last summer I visited Melilla, one of the Spanish cities located in Northern Africa. The importance of institutions and the rule of law to create free, open and thriving societies comes to light especially in this city. It is no coincidence that the Melilla border with Moroccoshows, at its opposite sides, one of the greatest differences of the world in per capita income.
Ladies and gentlemen,
Africa is a huge and complex reality that Europeans sometimes tend to oversimplify or, even worse, to ignore. This is shortsighted. The African population has grown over the past ten years by two hundred and thirteen million people. It is expected that by year two thousand and fifty the population in Africa will be close to two billion people. Clearly, the future of African societies lies on the expectations to be attained by millions of young Africans. It lies on what quality of life they’ll accomplish and on what sort of freedoms they will be able to enjoy.
Africa has a lot of potential. Especially for the African people, but also on a global scale. Africa may well become a second engine for world economic growth during the next decades. And we must all work to transform this potential into action. Again, especially the African people should be at the core of the transformation of the African societies and economies.
It will be short‐sighted on the side of the more affluent societies to ignore that all this will also affect the way of life in the developed countries. This is especially true in Europe were many migration flows converge. It will also be short‐sighted to ignore all the opportunities a growing African continent will
provide for business investment and trading flows among Africa and Europe. Regarding the development process in Africa, European policies have suffered from maximalist approaches, positioned far away from the real problems and aspirations of the African people. To a large extent, European policies have ignored the different realities and regional needs. At the same time, the objectives set have exceeded by far the role of enablers of a development process that should be basically endogenous. Not understanding this fact has led European governments to waste resources and efforts while at the same time Europe has lost influence in the different regions of Africa.
Europe will only become relevant in Africa if it is able to cooperate effectively in the process of African development and if it is strong and economically thriving inside. The Common Agricultural Policy is a sign of European weakness. It symbolises the lack of confidence in our own possibilities to grow and to reform our economy. And, at the same time, it devastates the hopes of millions of Africans. Cutting off from trade the main African farming producers means severing development possibilities of an entire continent.
Let us be clear, African labour is going to go to Europe. We can decide if we prefer it to go embodied in exports products or as massive migration. The latter will happen if Africa doesn’t resolutely take the road to development and if youth unemployment continues to soar. I definitely prefer the first route. I am also sure most Africans also prefer it.
Ladies and gentlemen,
It is sad, but despite all efforts, the image portrayed by Africa in Western developed countries is that of poverty, malnutrition, war, corruption, political instability… Africa is often regarded by many Europeans as a continent without hope. But let me say something clearly. There is no insurmountable barrier for Africa to enjoy a different future, and for its people to be able to enjoy a stable, thriving, and free existence.
Let me recall that in the early sixties of the twentieth century, the per capita GDP of Spain was roughly twice the one of Ghana: three hundred and ninety six US dollars versus a hundred and seventy nine US dollars. Forty years later, in two thousand and nine, Spain’s per capita GDP was thirty times higher than the one of Ghana. In some regions of Spain people suffered at that time from endemic diseases such as malaria, and all the problems related to the lack of development. The very same problems are still undergone by millions of Africans.
Africa’s ills are not insurmountable. Africans are not doomed to misery for cultural, historical, religious, or least of all, for ethnic reasons. Although it may sound trivial to you, let me reassert this optimistic view in clear contrast to the prejudice held by many in Europe.
Ladies and gentlemen,
The problem of Africa is poverty. The problem of poverty is Africa. Not so many decades ago the problem of poverty in the world was concentrated in Asia. Today, although there are pockets of poverty in all the regions of the world, poverty remains as an unsolved problem only in parts of the African
continent. If we really want to face this problem seriously, we ought to consider the right questions. The right question is not why is Africa poor, buy why is it not developing and growing faster. Thus, the old question posed by Adam Smith is still valid: how is the development of nations achieved?
One of the remarkable transformations we are witnessing in our generation is the end of poverty in Asia. Within less than thirty years, more than four hundred million people have escaped from extreme poverty throughout the world. No curse, neither historical nor cultural, was hampering the development of Asian countries. Hence, it is senseless to say there is a dilemma between being African and achieving development. There were no cultural limits to development in Asia, nor are there any now in Africa. The Asian experience has shown that the way out of poverty can be completed in just one generation. Yes, just in one generation.
In this regard, I am aware Kenya’s national vision is to put aside the images of the past and to move the country into a future of stability and opportunities for all, within this generation. Certainly the way forward to full development will have its hurdles but the objective is not only possible it is, in fact, essential.
Having dealt so far with the objectives, we could now ask ourselves for the right means to achieve them. Who or what was responsible for development in Asia? Asians and the free market. Who or what will be responsible for development in African countries? Africans and the free market.
Africa enjoys three advantages to achieve this development: first, the example of those who are already defeating poverty; second, a world economy growing again at unprecedented rates, despite the Great Recession in the developed economies; and third, the fact that the true human landscape of Africa are indeed the markets, (not the savannas or the jungles as many Europeans believe based on novels and films).
Consequently, more free market is the natural solution for African societies, albeit we cannot forget that this option is incompatible with the short‐sighted interests of some oligarchies and groups of interests lobbying for the preservation of a status quo of intervened and closed markets from which they can benefit at the expense of all consumers and citizens. Fortunately, African political leaders are becoming aware that the future of Africa lies in their hands. What Africans have to start doing is engage in true politics, not in power fighting. Politics should be the way to push forward political projects of social improvement. The solutions for the serious problem of poverty are not eminently technical or economical, but essentially of a political nature.
Africa has been a field of experimentation of social engineering projects since the nineteen‐fifties, and it is the only place in the world where globalization is still struggling to break through. What Africa needs is to get on the wave of globalization, although some insist on setting it apart by saying it is a cultural exceptionality. This has proven to be lethal for the African people.
The main task of the developed countries in the challenge against poverty should be to encourage African societies to work for all this to happen in this generation. Not to make it happen from the distance. This is not only impossible but also highly counter‐productive as it diffuses responsibilities.
Development aid that really works is globalization. In contrast, aid that doesn’t work is that which only tries to soothe consciences in developed countries.
Many decades of all kind of aid have taught us that development aid does not develop. At best, development aid acts as assistance. In an emergency situation or in more permanent cases, it mitigates misery to which we cannot remain indifferent for a clear moral reason. This is the case of aid devoted to mitigate the devastating effects of drought on the population in some areas of your country in which the international community is engaging. But to take advantage of globalization, which is the development aid that really works in the long run, there is a political precondition that was already noted by Adam Smith when he asked himself for the nature and causes of the wealth of nations: the very existence of nations is needed.
In many parts of Africa the presence of Al‐Qaeda and of criminal organisations is increasingly important and is undermining the power of African States. Kenya knows firsthand the horror of terrorism. The vacuum of power doesn’t exist. Power is always held by whoever can hold it. That is why it is a
responsibility of the international community to promote that those who are in power in Africa do so legitimately for the good of their countries.
Investing in the consolidation of the Rule of Law in Africa is the best investment for economic and social development. But it is also vital for the security of European nations. Without viable countries in Africa all type of threats to security multiply themselves, which sooner or later, will end up affecting Europe. That is why Europe must cooperate with African States asserting their power as the best means to foster stable and effective institutions able to protect the rights and liberties of African citizens.
Ladies and gentlemen,
The Rule of Law implied by the very existence of a nation State is needed, and everything it implies for security, respect for contracts and to given words; fair laws, and judges and institutions that enforce them. Good governance and the right institutions to preserve it are vital for the economic development process to get started and be maintained. No doubt, legitimate, democratic, transparent, responsive and accountable institutions provide the right environment were businesses can flourish, compete and grow providing value and opportunities to all along the way.
Political decentralization processes may be of help to increase the accountability and transparency of public administration vis‐a‐vis the citizens. At the same time, and speaking from my own experience in Spain regarding decentralization, devolution processes should always bear in mind the importance of
reinforcing the mechanisms that provide national cohesion. Striking the right balance between safeguarding diversity and keeping unity is the challenge ahead of devolved political systems.
Having set the importance of the institutional setting let me move on, before I finish, to the core of corruption, that is, the lack of ethics and of a clear sense of the public interest. Make no mistake; there is no institutional substitute for individual ethics. Institutions can limit the damages of unethical
behaviours and provide negative incentives and penalties to misbehaviour. But institutions alone are ill prepared for the promotion of an ethical conduct. That is primarily a role of the society in itself, where education, tradition and social behaviour play a major role. And it would be a mistake to try to move it on to the governmental sphere.
Policies can affect social attitudes but they can’t legitimately substitute them. That is why governments should work hand by hand and support the initiatives of the civil society that works to create a better and a more prosperous and ethical society. The constant work of this Business School is a prominent example of what I am calling for. And I am very glad to have participated in this initiative addressed precisely to the objective of promoting abetter future for Kenya.
Thank you very much.”