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FT: Do not allow Kenyašs tragedy to wreckAfricašs prospects
Do not allow Kenyašs tragedy to wreck Africašs prospects
By William Wallis Financial Times Published: January 4 2008 19:14 | Last updated: January 4 2008 19:14 Kenya has occupied a treasured place in Africa in the minds of many outsiders. It was not, until this week, a country that flashed red on the map and certainly not one where women and children fled murderous mobs only to be burnt alive in church. Rather, in the western imagination it was where the azure waters of the Indian Ocean meet breathtaking landscapes dotted with majestic fauna; where the best hospitality in Africa can be found in hotels, and a robust private sector has been built with the sweat of generations of Kenyans and Kenyan Asians. At the centre of east Africašs trading and transport links, it was also the most important * and it seemed most resilient * of the mere handful of sub-Saharan countries to have survived the aftermath of colonial rule without a major episode of bloodletting. The shock waves emanating from its descent this week into chaos will therefore be doubly strong, and the potential damage to the reputation of Africa as a whole very real. For the past year, international investors have joined a chorus of development agencies highlighting unprecedented economic growth and shoots of democracy to argue that the continent has turned the corner. It is the next big thing in emerging markets. Riding this wave of optimism, bankers from New York to London and Johannesburg have launched a record number of funds to invest solely in sub-Saharan Africa. More than $5bn was raised in 2007, drawing in US and European pensions, some Arab petrodollars as well as more specialist investors. Unlike previous bouts of Africa euphoria, this one has been inspired neither by the ephemeral promise of visionary autocrats, nor solely by a spike in commodity prices. Instead, fresh hope has been built on broader developments including a turnround in the terms of trade brought about by China and India, as well as Brazil and Russiašs grasp of Africašs potential. These new relations have begun to break the debilitating dependence of many African countries on former colonial powers in Europe for aid and trade. Glance across the map and you see more elections, fewer tyrants at the helm and fewer conflicts than in the 1990s when the protagonists of the cold war abandoned client dictators, leaving a legacy of failing states. If you turn a blind eye to the conflict creeping across the Sahel and central Africa from Darfur, and to chronic instability in Nigeriašs oil-producing delta, it is even possible today * for the first time in two decades * to argue that west Africa is at peace. Nor is it the continentšs oil producers alone that have been growing. The spread of mobile phones has added a percentage point to continental growth; debt relief, in some cases better macroeconomic management and liberalisation have all contributed to more dynamic economies. As one London-based investment banker put it on Friday, there is also the ŗwillingness of a new generation of younger, often better-educated, urbanised Africans to challenge the petrified strata of ageing leaders whose corrupt hogging of the continentšs limited wealth has held back economic progress˛. Kenyašs place in this perceived renaissance seemed to many to be assured. The same month as the countryšs immense inequities and latent tribal divisions were exposed by a flawed election, France Telecom acquired a 51 per cent share in Telkom Kenya and Helios, the private equity group, took a stake in Equity Bank. The Nairobi stock exchange, although down from a January 2007 high, also seemed unperturbed at the prospect of polls. Yet in Kenya, as in much of the continent, this resurgence of investor confidence has lived alongside grimmer realities too easily ignored in the rush to erase Africašs image as a repository of man-made disaster. It is as if sleek new airports, homogenous hotel luxury, internet access and BlackBerry networks that can now be found in so many African capitals have blinded development consultants, investment bankers and politicians to the despair found outside the bubble. The headline statistics * Kenyašs economy grew 7 per cent in 2007 * often mask widening inequalities and an underclass with little to lose by hurling stones and lighting flames when aspirations are frustrated. Or take Angola. The champions of recent Africa optimism point out that it, not China, is the worldšs fastest growing economy * yet its rapacious elite makes Congošs look like mere pickpockets and its billionaires, like Nigeriašs, live amid unemployment and poverty so widespread there are no reliable statistics to describe it. For every cosmopolitan university graduate living in a comfortable suburb, there are dozens in slums and villages with no access to electricity, clean water or education. There will be some who argue that the events in Kenya will prove a rite of passage in the transition to greater prosperity and more accountable government. There are still grounds to hope that permanent damage to the social fabric can be avoided. But there is a danger that these signs of fresh disaster will stoke belief among investors that the billions being raised in western capital to meet African demand for infrastructure and corporate growth are misplaced. Rather, the crisis in Kenya should serve as a reminder that a continent so huge, complex and beset with challenges will remain vulnerable to setbacks whenever politicians have only their own interests at heart, and so long as the majority live on barely a dollar a day. The writer is the FTšs Africa editor http://www.ft.com/cms/s/0/1f73ffb6-b...0779fd2ac.html |
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