Steps Kenya should take as Trump upsets global trade

Opinion and Analysis

US President Donald Trump at work: Kenya must watch the ‘America First’ train so as not to miss key pointers. PHOTO | AFP 

By GEORGE WACHIRA

In Summary

• ‘America first’ New US President has shown the will to implement his campaign promises.

Within one week of Donald Trump’s inauguration as the 45th US President it has become evident that he is determined to deliver on his campaign promises, which many thought was mere election
rhetoric.

He is actually implementing a whole range of changes that he promised and has caught many people and countries unawares.

Of significance is his ‘America First’ policy, which he is already implementing by rolling back whatever protocols or policies that stand in the way of reviving US trade and jobs.

Whatever changes he undertakes, they will directionally impact the rest of the world, including Kenya. And when the world pushes back, the global trade model as we have known it since the 1990s, will take a different shape.

The role of the US as the leading sponsor of free trade and globalisation now stands in doubt as Trump embarks on undoing global systems.

If the US makes good its ‘America first’ stance, global agencies like World Bank, International Monetary Fund, World Trade Organisation and even the UN systems may be influenced by the Americans who are the key financiers.

Should this happen, the agencies’ independence may be interfered with, resulting in skewed policies and actions. Further, preparedness and capacity by the developed world to underwrite the prosperity of developing nations are likely to be less prioritised.

In respect of trade, economies like China which leverage their trade and investments on globalisation are likely to be the first major casualties of Trump’s protectionist policies.

Should US imports from China decline, we are likely to see increased dumping of Chinese goods into African markets, and this will inherently weakening African and Kenyan capacity for local industrialisation.

When it comes to guaranteeing local employment to citizens, I am very much sympathetic to Trump’s protectionist policies.

The methods he has chosen to fulfil his ‘America First’ agenda may be unorthodox and dramatic, but, in principle, he is seeking to do what many countries have failed to achieve for their citizens.

Unemployment is a very emotive subject as it negates human dignity and reduces citizen’s socio-economic participation.

Trump has said that everything his government does should and will reflect American jobs. Policies, laws and regulations shall be focused on enabling and protecting jobs, not killing them.

And I would love to see Kenyan national and county authorities thinking along similar lines to maximise employment potential.

Indeed the level of employment is the most effective measure of a country’s quality of lives and per capita incomes.

The number of direct and indirect jobs delivered should be a reflection of our economic success and GDP growth. Employment statistics are a very critical economic metric that should be correctly evaluated and published every month.

Yes, in respect of trade and jobs, let us not rubbish outright what President Trump is trying to achieve for his people, and instead pick whatever good principles we can emulate from him to create and protect our own jobs.

As we do this, we need to get our policy frameworks and governance right.

Firstly, we need to create capacity in our citizens to undertake gainful employment through targeted education systems and skills that meet our socio-economic needs.

If in the past we have failed to deliver the right training, we should be ready to retrain and up-skill our workforce for relevance and productivity. We should also not forget that we can export technical and professional skills to the rest of the world.

Undivided focus

Secondly, like Trump is doing, we should identify and prioritise the economic sectors that have the greatest capacity for jobs creation. These sectors we should go all out to resource them with undivided focus and dedication.

For Kenya, agriculture and animal husbandry are the most endowed for wealth and employment creation. Any government that does not fully give priority and exploit this opportunity would be failing in its duties.

Thirdly, our regional and international trade outlook should be biased towards maximisation of local content through reduced imports and increased local production.

This is simply what Trump is trying to achieve for his people. Kenya should unapologetically be implementing basic protection for local production and jobs.

Fourthly, we should avoid one-sided trade relationships. Our growing investment debt with China is gradually reducing our freedom of action and capacity to independently steward our trade.

We need to spread out our trade options, and check the Chinese penetration and domination of our economy. China’s trade model is essentially designed to maximise Chinese jobs, and may not necessarily be working to our interests.

Finally, our capacity to create new jobs is dependent on how well we create and conserve national wealth. Independence of action in global trade can only be possible if we have developed some measure of economic self-sufficiency through prudent debt levels, and frugal use of public resources.

Yes, Trump is probably going to upset the world out of its comfort zones and prompt it to do things differently. Kenya should closely watch every move and experimentation by the new America to ensure we do not miss critical pointers.

We shall need to adjust and align ourselves to maximise benefit and value out of the new global order that appears to be emerging.Wachira is a director of Petroleum Focus Consultants. Email: wachira@petroleumfocus.com