Among the more unexpected appeals for peace that registered across Kenyan TV screens as the violence raged last January was that of the Kenya Association of Manufacturers (KAM).
Just days after the announcement of the results of the presidential election, KAMs chairman, Vimal Shah, issued a bleak prognosis: the countrywide violence triggered by the disputed election threatened to halt operations of all major manufacturers. Production at the plants of the associations 600 members was at a standstill.
Goods could not be delivered to west Kenya or across the border to Uganda and Rwanda markets that constituted 30% of manufacturers markets. Fighting had closed off the highway beyond Nakuru, two hours west of Nairobi. Order needed to be restored urgently.
It was an odd appeal. While the business community addressed itself to the damage the violent unrest was doing to the economy, the chaos on the streets suggested that the government was absent; that the business establishment was, in a sense, pleading with a constituency poor, young men with nothing to lose who had no stake in the very economy the business community spoke about.
There were, of course, other subtexts. The protesters were pro-Raila Odinga, Orange Democratic Movement (ODM) supporters who felt that the Electoral Commission of Kenya, in cahoots with Mwai Kibakis Party of National Unity (PNU), had conspired to steal the election. In speaking out, therefore, the business community appeared to be asking the ODM to rein in its people.
For many in the business community as well as the resurgent professional class, the first Kibaki administration had represented five years of unprecedented economic prosperity. The formal economy, after years of mismanagement under the former government of Daniel arap Moi, was booming.
In 2007, the economy had grown by over 6%; tax revenues had more than doubled between 2002 and 2007; privatization of government enterprises through IPOs on the Nairobi Stock Exchange had turned many into millionaires; there was a housing glut in the citys middle-class suburbs west of Uhuru Highway.
OUT OF TOUCH
But even as the government annually massaged employment figures, it was clear that inequality was growing. Unemployment was rife, the minimum wage was barely keeping up with inflation, and food and fuel prices were rising. Similarly, high input costs in agriculture, as well as low, irregular returns from cash crops had forced many smallholders off the land to join the ranks of the urban dispossessed.
In myriad ways, therefore, the Kibaki administration had seemed oblivious to the plight of the poor. Further still, there was a widespread perception that Kibaki, a septuagenarian, was out of touch with the youth, had surrounded himself with his friends and had favoured his Kikuyu community in skewed public appointments.
As youthful ODM supporters blocked off highways across the country and brought business to a standstill, it seemed that Kenyas secret nightmare was becoming reality: the owners of capital were at the mercy of the dispossessed.
And as the streets were rocked by police gunfire and protesting youth from the citys slums, Nairobis resurgent middle class, which had witnessed unparalleled prosperity during the first Kibaki administration, barricaded itself in the suburbs, prayed for peace and watched the country burn on CNN.
Except that the situation was a lot muddier than that. My Kikuyu drivers could not go beyond Nakuru, says Vimal Shah, the managing director of Bidco, a Nairobi-based cooking oil company with investment across East Africa. They would have to hand over the keys to Luo drivers. In Kericho (an hour west of Nakuru), we lost six or seven trucks during the fighting. The drivers if they happened to be from the wrong tribe were being attacked and in many cases killed.
If the initial objective of the violence had been a protest against the recently installed Kibaki government, this agenda soon got overtaken by another.
As ODM supporters turned against members of Mwai Kibakis Kikuyu community, and then themselves became victims of organized reprisals, it became clear that however else this conflict was explained, it was first and foremost a misdirected battle of dispossessed youth fighting against themselves.
The immediate effect of the power-sharing agreement signed by Mwai Kibaki and Raila Odinga at the end of February was to halt the violence. Crafted primarily as a result of international pressure (even as the death toll pushed past 1,000 and the numbers of internally displaced rose beyond 350,000), the deal was precipitated as much by the threat to regional economies and western interests in Kenya as by the need to create a measure of domestic political stability.
It created peace at the top or at least, a shaky pact between political elites with the promise to deal with the underlying issues in the long term.
Everybody understands that only a new constitution will move us into a real peace, says one political analyst. But Kenya is unique: the political elite is not accountable to the citizenry but to themselves.
Some eight months into the grand coalition government, it is not the violence or its deeper effects that ail the country. Rather, it is the cost of living. While, according to the Kenya National Bureau of Statistics, the economy is expected to grow by 4.5%, high fuel prices have driven up inflation (now at 27.5%) as well as electricity prices, driving up the cost of business and the possibility of looming job cuts.
While considerable damage was done to the formal economy, the earlier gloomy predictions from the Kenya Association of Manufacturers appear to have been overstated: on average, manufacturers earnings in the first quarter of this year were down only 15%.
Our forecasts anticipated sporadic urban violence, not the kind of widespread rural violence that eventually occurred, says Betty Maina, chief executive of the Kenya Association of Manufacturers. In the event, our markets in west Kenya, particularly the North Rift, were hit hardest. For manufacturers, market accessibility at the height of the crisis boiled down to choice of distributors, says Maina. You were harder hit if your distributors were not locals; you could not move.
Now, it is the more mundane effects of high oil prices that present the new threats to political stability. Recently, KAM announced that if nothing were done to reduce rising electricity costs, its members would be forced to shed up to 72,000 jobs. The power bill for my members is up 95%, says Maina. Right now, it is depressed demand due to high energy costs rather than the violence, that is the real threat to business.
As the economy has expanded over the past few years, installed hydroelectric power has not kept up with demand, now estimated at 1,045MW. KenGen, the national power producer has bought two diesel-powered generators, to bridge the shortfall. With rising fuel prices, the cost of power has increased.
In the first half of the year, industrial workers issued more than 10 strike notices, five times more than the annual average of four, according to the Central Organization of Trade Unions (COTU). They were all precipitated by wage demands. In the nervous political environment, the prospect of job cuts and unmet demands for wage increases can easily turn into something else.
A SLOW-PACED RECOVERY
Recovery has also been slowed down by the fact that the disruption to business and general pessimism prevented the business community from making long-term plans. People were not making investment decisions, says Maina.
For other sectors, notably tourism, recovery has been much more difficult. We experienced an average reduction of up to 50% in the first quarter, says Wanjiru Makanga Munene, the director of tourism. The sector, hit by images of machetes and ethnic violence on international TV screens, shed 120,000 jobs. An aggressive marketing campaign, as well as positive reporting in the international media on the power-sharing agreement, have seen the sector claw its way out of the slump. Were on our way to recovery, she says. Bookings at the coast are up by 40% on average.
The idea of economic recovery, of a return to business-as-usual masks the reality of an economy that has persistently excluded its young people. Every year four million young people become eligible to vote. The country, however, continues to be governed by the independence generation, now in their 70s. It makes Kenya one of the few countries in the region where a generational succession has not taken place.
At the last election, 70% of incumbent MPs were unseated. A new crop of mostly young MPs was elected. However, none of these new entrants was included in the April grand coalition cabinet. Instead, both Mwai Kibakis PNU and Raila Odingas ODM chose to stick with the old guard, mainly former political allies and proteges of ex-president Daniel arap Moi.
Among the raft of promises the coalition government has made, the most anticipated is the delivery of a new constitution. Although the government has assured Kenyans that this will be delivered within a year, the public remains largely sceptical not least because so far the process has locked out key interest groups, including civil society.
It seemed clear that the intention was to deal with the causes of the January violence by suppressing them.
But the threat of agitation from the youth remains real to the fledgling coalition government. On the morning following the formation of the coalition cabinet, members of Mungiki, a Kikuyu militia strongly rumoured to have participated in reprisal killings in the Rift Valley, went to the streets and held the country hostage for close to a week in an orgy of looting and burning.
The Mungiki protest followed the murder of its jailed founders wife, which the group attributed to the police. In April 2007, the government declared war on the group after a spate of murders for which the group took responsibility. Since then, over 500 young men from Central Province and all suspected Mungiki members have been arrested, incarcerated and then shown up dead, their bodies dumped on the outskirts of Nairobi.
An investigation by the Kenya National Commission on Human Rights implicated the police; the police have denied responsibility.
What astounded many was the ease with which the group was able to take over the city and how long it took security forces to restore order. And while the Kibaki faction of the government rejected their demands among them, the release of the groups founder, Maina Njenga the fact that prime minister Raila Odinga was willing to give them an audience lent them fresh public legitimacy.
The groups evolution in the early 1990s gives a hint of the growing influence of such groups among unemployed youth. Set up as a cultural organization advocating a rejection of modernity and a return to Kikuyu tradition, Mungiki soon reorganized itself as a vigilante movement in Nairobis slums.
Embraced initially by slum residents long deprived of police protection and with a rapidly growing membership, the group took over public transportation in low-income neighbourhoods. In the late 1990s, the groups then spokesman, Ndura Waruinge, claimed that the group had a membership of three million.
Unlike many of the militias and private armies that had been cultivated by politicians in the 1990s, Mungiki seemed to come late to the game, only being linked to politicians in the run-up to the 2002 elections. Soon after those elections, however, the government announced a crackdown on the group, sending it underground, only for it to re-emerge at the height of the post-election crisis.
Among the most polarizing public debates on the crisis is whether the violence was planned or spontaneous. At the Commission Investigating the Post-Election Violence (CIPEV), expert witnesses have attempted to make the case that the violence was instigated by politicians. The commission has yet to deliver its report.
A submission by the Kenya National Commission on Human Rights accused senior cabinet members of being behind the violence, allegations they have strongly denied.
What would be more worrying for the political elite is the idea that militias such as Mungiki conducted the violence on their own. Because then, the youth, for so long excluded from national life, would be armed with a dangerous agenda.