Why are the US and IMF imposing draconian austerity measures on Kenya?

Zipitydew , 4 days ago

They aren’t. This opinion article sucks. It’s certainly a version of the story but it’s not a good one.

aljazeera.com/…/why-are-kenyans-angry-with-the-im…

Kenya has budget shortfalls because the previous government borrowed from China and others like they never had to pay it back. The IMF extended them a small line of credit (compared to their existing loans) at I believe a 0% interest rate. It was to help them stabilize their budget temporarily and pay off other loans with interest coming due. Because helping Kenya is way more beneficial to everyone than letting them collapse.

The IMF made recommendations for a bunch of ways Kenya could start digging out of the hole they’re in. One of them was tax changes. Kenya’s leaders chose to simply increase taxes and say the IMF is making them to shift the blame. Instead of deploying a variety of suggestions IMF made.

That pissed people off of course. So now they’re going to try other suggestions the IMF came up with. Like eliminating government administrative waste. Such as no longer covering unnecessary travel costs and ending monthly allowances for spouses of politicians.

JustZ , 4 days ago

I agree. This is an advocacy piece, really.

Voluntarily taking on too much foreign debt and making bad trade deals with China does not equate to colonialism.

autotldr Bot , 4 days ago

This is the best summary I could come up with:

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Kenya can have democracy or neocolonial extraction, but not both – because democracy means addressing the demands of the Kenyan people for jobs, healthcare, education, housing, transportation and basic social protections under a fair and equitable fiscal regime, while colonial extraction means the destruction of economic and monetary sovereignty, austerity for the poor, extravagant lifestyles for the elites, corruption, injustice and socioeconomic exclusion under a fiscal regime that accelerates the engines of economic entrapment.

Despite Kenya’s democratic institutions, transparent elections, independent judiciary, freedom of speech and vibrant civil society spaces, its elected governments systematically undermine the social and economic demands of Kenya’s population – less because those governments wish to ignore the mandate given to them by the electorate, but because they face financial pressures from abroad that force them to prioritize external debt service and the financial needs of creditors and foreign investors.

When a country uses half of its export revenues to pay interest on its external debt instead of investing in the basic pillars of development and prosperity, it is not surprising to see the kind of revolt that we have seen in Nairobi against the 2024 finance bill.

And third, the kind of manufacturing that Kenya was allowed to have requires importing the machines, the fuel to power its factories, the intermediate components to be assembled by low-cost labor and even the packaging.

These structural trade deficits constantly weaken the Kenyan shilling relative to the US dollar, and with a weaker currency anything Kenya imports (food, fuel, medicine) becomes more expensive.

Unfortunately, despite being aware of these structural traps, Ruto has opted to listen to policy advice from global north institutions rather than Kenyan and Pan-African independent experts, thinktanks and civil society organizations.

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The original article contains 954 words, the summary contains 287 words. Saved 70%. I’m a bot and I’m open source!

PP_BOY_ , 4 days ago

Did you consider the fact that they’re brown?

wurzelgummidge , 4 days ago

and that they have been doing business with China?

its elected governments systematically undermine the social and economic demands of Kenya’s population

It’s elected governments don’t do what we tell the to so we’d better send in the NED to stir up some student rioters demanding proper 'murican democracy.

Fixed it for them